As the world heads towards negotiations on the post-2020 Global Biodiversity Framework, nature is still under-financed, the second edition of the State of Finance for Nature revealed on Thursday.
“If we are to limit global warming to below 1.5 degrees Celsius, halt biodiversity loss, achieve land degradation neutrality, and meet the Sustainable Development Goals, dramatic and urgent action is required on emissions reductions, the conservation of nature and sustainable consumption and production,” says the UN report.
Nature-based solutions provide an opportunity to tackle a range of challenges in an integrated manner. Yet finance flows to nature-based solutions are currently only $154 billion per year, which is less than half of the $384 billion per year investment in nature-based solutions needed by 2025 and only a third of investment needed by 2030 ($484 billion per year).
“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 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.”
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 mobilisation of resources for the implementation of the Post-2020 Global Biodiversity Framework and investments in nature-based solutions.
UNEP, along with partners, 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.
Tackling climate change, biodiversity loss and land degradation with immediate action requires that current global investments need to increase by $230 billion each year to 2025. Governments currently provide 83 per cent of nature-based solutions finance flows, yet will be unlikely to dramatically increase these flows due to fiscal challenges linked to conflict, debt and poverty.
Therefore, the private sector must significantly increase investment from current levels of $26 billion per year (17 per cent). 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.
The analysis by the UN Environment Programme (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 degrees Celsius, rather than 2 degrees, is achievable only if action is immediate and with additional cumulative investments of $1.5 trillion to a total of $11 trillion between 2022-2050, compared to the 2-degree target (with a total required cumulative investment of $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 nature-based solutions.
This is congruent with the findings of the 2022 Emissions Gap Report.
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 updated version of the report has broadened to marine ecosystems, concluding that a small share, nine per cent, of total investments in nature-based solutions target marine based solutions.
Disproportionately, the ocean represents over 70 per cent of the Earth’s surface and absorbs around 25 per cent of all CO2 emissions, making it one of the world’s largest carbon sinks while also providing 17 per cent of the world’s protein.