A report by the UN Environment Programme (UNEP) and the Economics of Land Degradation (ELD) Initiative – an initiative aiming to integrate the true value of land into decision-making processes and promote sustainable land use – finds that nature-based solutions (NbS) are “significantly under-financed.” The analysis suggests that to halt biodiversity loss, limit climate change to below 1.5°C, and achieve land degradation neutrality (LDN) by 2030, current finance flows to NbS must double by 2025 and triple by 2030.
The second in a series that aims to inform public and private actors about progress against global targets and the extent to which finance flows are aligned with them, the State of Finance for Nature 2022 report quantifies public and private finance flows to NbS to tackle biodiversity loss, climate change, and land degradation.
The report indicates that current finance flows to NbS are at USD 154 billion per year. This is less than half of the USD 384 billion per year needed by 2025 – and a third of the USD 484 billion per year needed by 2030. It also shows that today, investment in marine NbS makes up only 9% of total investment in NbS, and nature-negative expenditures “far outweigh” investments in NbS.
Investments in nature are investments in securing the future for generations to follow.
— Inger Anderson, UNEP Executive Director
With sufficient finance, however, NbS can “provide the means to cost-effectively reach climate, biodiversity and land degradation neutrality targets.” The report shows that a rapid doubling of finance flows to NbS can halt biodiversity loss, reduce emissions by 5 GtCO2 per year by 2025 and by 15 GtCO2 per year by 2050 to achieve the 1.5°C scenario, and help restore nearly 1 billion hectares of degraded land. It points out that private sector investment in NbS must increase in the coming years “by several orders of magnitude” from the current USD 26 billion per year, which represents 17% of total NbS investment, with the rest provided by governments.
To enable these increases, the report calls for rapid alignment of policies, regulations, economic activity, and financial flows with biodiversity values and with the Paris Agreement on climate change. It recommends:
- Financing green, including by increasing direct finance flows to NbS through public domestic spending, nature-focused Official Development Assistance (ODA), and ensuring that multilateral development banks (MDBs) and others prioritize green finance;
- Greening finance, with companies and financial institutions transitioning to “net zero, net positive” and equitable business models in the short term; and
- Increasing inclusion by ensuring that public and private sector efforts to increase NbS investments integrate just transition principles and protect human rights.
“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 UNEP Executive Director Inger Anderson at the report’s launch on 1 December.
Produced with support from Vivid Economics by McKinsey, the report comes a week before the commencement of the 2022 UN Biodiversity Conference, which is expected to adopt the post-2020 global biodiversity framework. [Publication: State of Finance for Nature 2022] [Executive Summary] [Publication Landing Page] [UNEP Press Release]