Climate Change; Better Finance For A Better Greener World

Over 37,000 alien species have been introduced by humans around the world and the threat posed by these invasive alien species are underappreciated, according to a groundbreaking report by the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES).

The whole world is much worried about climate change and destruction to the biodiversity with the United Nations and other agencies calling for an investment of 8.1 trillion dollars till 2050 to overcome the present scenario.

In an annual report titled ‘State Finance For Nature’  , the agencies said “a total investment in nature of 8.1 trillion dollars is required between now and 2050 – while annual investment should reach 536 billion dollars annually by 2050 – in order to successfully tackle the interlinked climate, biodiversity and land degradation crises.”

The UN Environment Programme (UNEP)the World Economic Forum (WEF) and the Economics of Land Degradation (ELD) Initiative hosted by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) brought out the report in collaboration with Vivid Economics.

In the report, the organisations called on the governments, businesses and financial institutions to fill the investment gap by placing nature at the heart of economic decision making in the future. They wanted the political as well as financial institutions to accelerate capital flows to nature-based solutions by making nature central to public and private sector decision-making related to societal challenges, including tackling the climate and biodiversity crises.

Climate Change; Unlocking potential 

The ‘State Finance For Nature’ stressed for structural transformations to close the 4.1 trillion dollar financial gap between now and 2050. This can be achieved by building back more sustainably in the wake of the Covid-19 pandemic. They also suggested repurposing harmful agricultural and fossil fuel subsidies and creating other economic and regulatory incentives. The authors wanted investment in nature that supported human, animal and planetary health, improved quality of life and created jobs.

The Study, however, said that nature currently only accounted for 2.5% of projected economic stimulus spending in the wake of Covid-19. “Private capital will also have to be scaled up dramatically to close the investment gap. Developing and scaling up revenue flows from ecosystem services and using blended finance models as a means to crowd in private capital are among the suite of solutions needed to make this happen, which also requires risk-sharing from private sector entities,” the report said.

UNEP Executive Director Inger Andersen opined that biodiversity loss already cost the global economy 10 percent of its output each year. “If we do not sufficiently finance nature-based solutions, we will impact the capacities of countries to make progress on other vital areas such as education, health and employment. If we do not save nature now, we will not be able to achieve sustainable development,” she said.

She stressed that the report is a wakeup call for everyone.  She wanted to have more investment in reforestation, regenerative agriculture and restoration of Ocean.
Climate Change; Investing smarter 

In the report, the authors stated that forest-based solutions alone, including the management, restoration and conservation, required 203 billion dollars in total annual expenditure globally. The report suggested coupling investments in restoration action with financing conservation measures, which could result in increasing forest and agro-forestry area approximately by 300 million hectares by 2050.

The agencies pointed out that the forthcoming summits on climatebiodiversityland degradation and food systems, as well as the launch of the UN Decade on Ecosystem Restoration on June 5 gave an opportunity to harness political and business momentum to align the economic recovery with the Paris Agreement.

Making nature a business and investment case

The report said that private investment accounted for only 14 per cent including capital mobilized through sustainable agricultural and forestry supply chains, private equity investments, biodiversity offsets financed by private sectors.

It also said that private sector investment accounted for most capital flows (56% ) with respect to climate finance. “The scaling up of private capital for nature-based solutions is one of the central challenges of the next few years with a specific focus on investing in nature to support sustainable economic growth in the 21st century,” the report said.

The report also talks of already emerged private sector-led initiatives. However, the report stressed the need for companies and financial institutions to be more part of the solution by sharing the risk and committing to boost finance and investment in nature-based solutions in an ambitious way and with clear, time-bound targets.


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