Double Financing into Nature-based Solutions to Deal with Global Crises – UN report
By Sharon Atieno
Unless investments into nature-based solutions (NbS) are quickly doubled from the current USD 154 billion/year to USD 384 billion/year by 2025, climate, biodiversity and land degradation goals will be out of reach.
This is according to a new United Nations report dubbed the State of Finance for Nature.
The report notes that NbS have the potential to tackle a range of challenges in an integrated manner including limiting global warming to below 1.5°C, halting biodiversity loss, achieving land degradation neutrality, and meeting the Sustainable Development Goals.
“The science is undeniable. As we transition to net-zero emissions by 2050, we must also reorient all human activity to ease the pressure on the natural world on which we all depend” said Inger Anderson, Executive Director of UN Environment Programme (UNEP).
“This requires governments, business and finance to massively step up investments in nature-based solutions because investments in nature are investments in securing the future for generations to follow.”
According to the report, nature-negative flows from public sources, which are three to seven times larger than investments into NbS need to be phased out, repurposed or reformed.
Harmful subsidies are highest in the energy sector, estimated to range from USD 340 to 530 billion/year and in the agriculture sector, estimated at around USD 500 billion/year.
Additionally, private capital, which only represents 17% (USD 26 billion) of total investments into NbS, will also have to rise.
To do so, it must increase investments in sustainable supply chains, reduce activities with negative impact on climate and biodiversity and offset unavoidable impacts through high integrity nature markets, pay for the ecosystem services it uses and invest in nature positive activities.
Similar to the findings of the 2022 Emissions Gap Report, the analysis by UNEP and the BMZ-financed Economics of Land Degradation (ELD) Initiative with support from Vivid Economics by McKinsey finds that limiting global warming to 1.5°C, rather than 2°C, is achievable only if action is immediate and with additional cumulative investments of USD 1.5 trillion to a total of USD 11 trillion between 2022 – 2050, compared to the 2C target (with a total required cumulative investment of USD 9.5 trillion).
This additional investment will focus on sustainable agriculture and peatland restoration. Phasing out coal and decarbonizing the energy systems will not be enough without adjacent massive investments into NbS.
Jochen Flasbarth, State Secretary in the Federal Ministry for Economic Cooperation and Development (BMZ), said: “While the world is enduring multiple crises, this report provides clarity: It shows that, by significantly increasing public and private investments in nature-based solutions, it is possible to tackle climate change, biodiversity loss and land degradation – and at the same time harness many societal and economic benefits. We need to act now.”
This second edition of the report also included marine ecosystems, noting that a small share, 9%, of total investments in NbS target marine based solutions. This is despite the ocean representing over 70% of the Earth’s surface and absorbing around 25% of all carbon dioxide emissions, making it one of the world’s largest carbon sinks while also providing 17% of the world’s protein.
The report is cautions that lots of short-term efforts to boost Gross Domestic Product (GDP) by Governments, without paying attention to the fact that nature underpins many economies, will impose greater costs for both present and future generations in the years to come.
It highlights the importance of focusing solutions on transitioning economic activity towards practices that address the key drivers of biodiversity loss, land degradation and the climate breakdown.
While the protection of 30% of the land and ocean by 2030 pledged by the G7 countries is important, for which the finance gap is estimated to be USD 17-22 billion per year by 2030, this report provides evidence that more finance needs to flow towards the restoration of natural vegetation and afforestation.
The report comes a week before governments from across the world are set to gather for the UN Biodiversity Conference (COP 15) in Montreal, Canada, where they will adopt a landmark agreement to halt and reverse nature loss by 2030. Among the key issues under discussion is the mobilization of resources for the implementation of the Post-2020 Global Biodiversity Framework and investments in NbS.
Along with partners, UNEP is urging governments to provide an agreement that sets a clear mandate for countries to require the financial sector to align its activities with nature positive goals.