The international economic and financial architecture and policy priorities must be aligned with the goal of advancing an equitable, global nature economy for nature markets to have an impact on any significant scale, the Taskforce on Nature Markets (TNM) said in its final report, released Thursday.

The high-level taskforce was established last year, and delivered its final recommendations at a one-day finance side event to the Amazon Summit in Belem, Brazil.

“Nature markets are a bridge to a total shift in our economic system,” Sandrine Dixson, chair of the European Commission’s Economic & Societal Impacts Group and a taskforce member, said in a statement.

“We can’t stop at placing a value on nature. A real transition requires not only financing change through low carbon and nature-based solutions, but changing our financial and economic systems to truly service people, planet, and prosperity at the same time.”

While the taskforce has released several interim reports, including on principles to underpin the biodiversity credit market, its final report was based around seven high-level recommendations for what is needed to make nature markets work:

• Align economic and financial architecture with an equitable, global nature economy
• Policy alignment of central banks and supervisors
• Aligning public finance with the needs of an equitable global nature economy
• Make food commodity markets accountable
• Secure improved economic benefits for nature’s stewards
• Address nature crimes
• Converge measures of the state of nature and make data easily available

While the report considered all types of nature markets, it noted that the fifth recommendation – ensuring better benefits for Indigenous peoples and local communities – is a particular challenge for credit markets, such as carbon credits with nature co-benefits as well as biodiversity credits.

The report found that the global economy is dependent on the unsustainable overuse of nature and that a pivot is required, avoiding a piecemeal approach that would likely be ineffective and too slow.

“What is needed is a more systematic and ultimately, systemic design undertaken collaboratively at the highest levels, encouraging ambition, leadership, trust, and increased coherence,” the report said.

The best way to achieve that would be to work through international channels, according to the taskforce.

“This should notably include the G20, starting with Brazil’s presidency in 2024, given the country’s pre-eminence as a major nature economy and its public commitment to addressing the climate and the nature emergency,” it said.

G7, climate and nature COPs, the IMF annual meetings, the WTO and UNCTAD, and BRICS summits are other venues where such a pivot must be raised, the report said.

Meanwhile, the taskforce stressed that while it had been considering ways to make nature markets work, that does not mean that market-based solutions should be the only, or even primary, approach.

“Indeed, the balance of the Taskforce’s findings argue that the opposite is the case – that most solutions are underpinned by political and policy actions needed to transform the basis on which enterprises, markets and economies use, invest in, trade, and pay for nature,” it said.

BIG ASK

The major realignments proposed by the taskforce appear to be a big ask at a time when G20 ministers as recently as last month failed to agree on several climate issues or even agree that the world should phase down fossil fuel use.

But the taskforce was adamant that each of its seven recommendations builds on processes that are already happening.

“We have highlighted some of these emergent shifts that we can and must harness. Ranging from the early considerations of climate and broader sustainability issues by the world’s central banks and financial regulators through to windows on the workings of soft commodity markets, and convergence in approaches to measure nature,” the report said.

“There is, in short, nothing in the recommendations that is not practical and implementable.”

Even so, some taskforce members noted that these processes might not move along entirely smoothly.

“We are entering into an era of political and legal battles of jurisdictions, with nature and climate as the centre of gravity, resulting in new forms of trade and protectionisms becoming viable again,” said Carlos Lopes, a professor at the Mandela School of Public Governance and chair of the African Climate Foundation’s advisory council.

Another member, Global Environment Facility CEO Carlos Manuel Rodriguez, said major policy changes would be crucial if the world is to get to where it wants to go.

“Earmarking funds for new environmental projects is not enough. Countries must also stop subsidising nature-harming industries and deploy national resources to support sustainable activity that can change the trajectory of the global economy,” he said.

The taskforce was initiated by Geneva-based NatureFinance.

By Stian Reklev – stian@carbon-pulse.com

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