State of Finance for Nature 2021-Tripling investments in nature-based solutions by 2030
The main purpose of the report is to provide up-to-date information about public and private sector finance that is channelled to activities and assets that can be considered NbS and to present estimates of the future needs.
This Report complements the vast array of existing literature and processes that monitor specific flows of environment or development finance, such as those established under the three Rio Conventions (CBD, UNCCD, UNFCCC), under the Organization for Economic Co-operation and Development (OECD), as well as other multi-partner platforms (e.g. Climate Policy Initiative, Aid Data, IATI) or private sector initiatives (e.g. Bloomberg, Thomson Reuters).
This report estimates existing public and private investment directed to NbS and estimates the size of the gap relative to the investment rate needed in coming decades.
- Section 2 estimates current NbS investment.
- Section 3 estimates future investment needs to meet societal objectives and shows the gap.
- Section 4 lays out evidence and hypotheses that explain current levels of underinvestment and identifies opportunities to scale up NbS.
- Section 5 concludes, sets out recommendations and proposes a way forward.
Throughout the report, there are a number of case studies that have been collected from the literature and through a call for projects that the project team put out. Case studies showcase opportunities for both the public and private sectors.
The participating organizations foresee this report becoming an annual publication. Producing the report annually will show trends in public and private investment related to NbS and it will help decision-makers assess how on track the world is to meet international commitments related to biodiversity, climate change and land degradation.
No one can be in any doubt that we are in a planetary emergency. The interrelated crises of biodiversity loss, land degradation and climate change — driven by unsustainable production and consumption — require urgent and immediate global action.
- The new “State of Finance for Nature” report assesses how much public and private investment is being directed towards nature-based solutions and provides insights into the extent to which governments, businesses and financiers are “walking-the-talk”.
By comparing existing capital flows to recognized investment needs, the report quantifies how serious governments, businesses and financiers really are about tackling the biodiversity, land degradation and climate crises.
- The findings are clear: we are not investing nearly enough in nature. Indeed, investments in nature-based solutions will have to triple by 2030 and increase four-fold by 2050 if we are to have a shot at solving the planetary emergency.
In comparing existing capital flows to NbS-relevant sectors to the needs of international targets related to addressing the climate crisis, land degradation and reversing biodiversity loss, it is clear that investment needs will have to almost triple by 2030 and increase to over USD 536 billion/year by 2050, at least four times the amount invested today.
The way to overcome this investment gap is to place nature at the heart of how economic growth is generated in the future. Instead of disinvesting from nature, the focus should be on investing in nature to support sustainable economic growth in the twenty-first century.
In order to meet future climate, biodiversity and land degradation targets, public and private actors will need to scale up their annual investments by at least four times over the next three decades (Figure 6).
- By 2050, total investment needs will amount to USD 8.4 trillion cumulatively, reaching over USD 536 billion per year, four times the amount invested today. These estimates are based on an immediate action scenario, in which the global community is assumed to act now to halt climate change at 2 degrees; reverse loss and stabilize biodiversity intactness by 2050 at today’s levels; and stop land degradation. Decisive action begins in 2020 in this scenario.
Economic modelling was used to estimate the costs of switching from a business-as-usual trajectory to a trajectory that is aligned with climate change, biodiversity and land degradation targets.
The methodology (see Annex for more detail) estimates the future NbS investment under climate and biodiversity targets (land degradation is considered implicitly), for four asset types: forests, mangroves, peatland and silvopasture. These four were chosen because they are expected to make the largest contribution to these objectives in the future.
- NbS solutions can address all three Rio Conventions’ goals simultaneously, by providing applicable solutions to counter the adverse effects of climate change, environmental and land degradation, and biodiversity depletion. The CBD, UNFCCC and UNCCD have all considered NbS as an approach to meeting the goals of each convention, as outlined in Box 3. Note: NbS are related to climate as well as biodiversity and land degradation targets, while natural climate solutions are only related to climate.
Galvanize political and business momentum to protect and restore our earth. The upcoming summits related to climate, biodiversity, land degradation and food systems as well as the launch of the UN Decade on Ecosystem Restoration provide opportunities to harness political and business momentum by putting NbS as a central pillar across all these key events. Any strategy that aims to repair our relationship with nature and to harness the potential of NbS would need to strongly feature protection and conservation measures for high carbon value ecosystems like peatlands, mangroves and primary forests as a central pillar
Annual report on the state of finance for nature: This current report will be the inaugural report in a series to track global trends in public and private investment in NbS, to compare trends, improve data quality and showcase opportunities for governments, businesses and financiers.
Four specific areas will be addressed in the next report: The scope in the next report will cover both the terrestrial and marine environment more comprehensively and it will put forward land degradation targets.
Read the full text report State of Finance for Nature. Tripling investments in nature-based solutions by 2030
The UNEP has produced the report alongside the World Economic Forum (WEF) and the Economics of Land Degradation (ELD) Initiative, hosted by German development agency GIZ in collaboration with Vivid Economics.