Finance flows into nature, biodiversity, and land protection are currently just one-third of the required total needed to align with the 1.5C temperature warming limit of the Paris Agreement and wider Sustainable Development Goals, according to a UN report published Thursday, with financing needing to double in just three years to avoid goals falling out of reach.
Only $154 billion per year currently flows into nature-based solutions, less than half of the $384 billion needed by 2025, and only a third of $484-billion investment needed by 2030, according to the UN Environment Programme’s (UNEP) second edition of the ‘State of Finance for Nature’.
The report comes on the eve of the UN’s biodiversity COP15 in Montreal that begins on Dec. 7, with a potential ‘nature positive’ target for 2030 on the table for negotiation, meaning that the level of nature and biodiversity would have to increase relative to a 2020 baseline.
But this looks like a lofty ambition, given that the UNEP report finds that ‘nature-negative flows’ from public sources are currently 3-7 times larger than investments into nature-based solutions, and need to be phased out, repurposed, or reformed as soon as possible.
MOBILISING PRIVATE FINANCE
Overall, private capital only represents a slim 17% – or $26 billion per year – of total investments into nature-based solutions, with state action providing the overwhelming majority.
According to UNEP, governments are unlikely to significantly increase current funding, that accounts for 83% of investment in nature, given the weak macroeconomic picture as well as ongoing conflict in several key regions that is draining resources.
Therefore, a key focus in Montreal is likely to be how to direct private finance to help meet biodiversity goals with negotiators looking to discuss a potential mandatory corporate disclosure for biodiversity impact as one example of raising private-sector ambition.
Initiatives may also emerge over the two-week summit in Canada to drive interest in the nascent biodiversity crediting market and other schemes.
UNEP said it will urge governments over the summit to agree to require the financial sector to align its activities with this target of nature positivity.
Flows will have to rise by several orders of magnitude in the coming years to finally start harnessing the power of nature to reduce and remove emissions, restore degraded land and seascapes, and turn the tide on biodiversity loss, the UN agency urged.
A successful transition could see private sector actors start to combine the term ‘net zero’ with ‘nature positive’ as part of their plans, though this is far from reality at present, UNEP said.
It recommended that the private sector 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 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 Andersen, 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.”
Among other key issues under discussion in Montreal is the mobilisation of resources for the implementation of the post-2020 Global Biodiversity Framework and investments in nature-based solutions.
FALLING OUT OF SIGHT
Analysis as part of the report conducted by UNEP and the Berlin-financed Economics of Land Degradation (ELD) Initiative, with support from consultancy Vivid Economics, found that limiting global warming to 1.5C rather than 2C is achievable only if action is immediate and with additional cumulative investments of $1.5 trillion to a total of $11 trillion between 2022-50, compared to the 2C target, which would require a total cumulative investment of $9.5 trillion.
This aligns with the work done as part of the UNEP carbon-focused emissions gap report published before UNFCCC’s COP27 in Egypt in November.
This additional investment to meet 1.5C would focus on sustainable agriculture and peatland restoration, with the body stating that phasing out coal and decarbonising the energy systems will not be enough without adjacent massive investments into nature-based solutions.
The 2022 version of the UNEP report also included marine ecosystems, finding that just 9% of total investments in nature-based activities target marine-based solutions, despite the large potential for oceans as a carbon sink.
By Roy Manuell – roy@carbon-pulse.com
