A total investment in nature of US$8.1 trillion is needed by 2050 to tackle climate, biodiversity, and land degradation, according to the State of Finance for Nature report. Nature-based solutions will have to triple by 2030 and increase four-fold by 2050, from the current level of $133 billion.
In particular, structural transformations are needed by repurposing harmful agricultural and fossil fuel subsidies.
“The report is a wake-up call for governments, financial institutions and businesses to invest in nature,” said UN Environment Programme Executive Director, Inger Andersen. “If we do not save nature now, we will not be able to achieve sustainable development.
“Biodiversity loss is already costing the global economy 10 per cent of its output each year. If we do not sufficiently finance nature-based solutions, we will impact progress on education, health and employment.”
The authors urge governments, financial institutions and businesses to place nature at the heart of economic decision-making.
Nature currently only accounts for 2.5 per cent of projected economic stimulus spending in the wake of Covid-19.
Private capital will have to be scaled up to close the investment gap. Blended finance models are needed as a means to crowd in private capital.
“Investments in nature-based solutions cannot be a substitute for deep decarbonisation”
Forest-based solutions alone will need $203 billion in total annual expenditure globally, according to the report. That is equivalent to just over $25 per year for every citizen.
Coupling investments in food production and tree growing could expand restored and conserved land by 300 million hectares by 2050.
Annual investment by the private sector in nature-based solutions amounted to just $18 billion in 2018 or 14 per cent of investments.
This is low compared to climate finance, where private sector investment accounts for most capital flows, 56 per cent according to the Climate Policy Initiative.
Investments in nature-based solutions cannot be a substitute for deep decarbonisation of all sectors of the economy, but they can contribute to the pace and scale of climate change mitigation and adaptation.
The upcoming summits on climate, biodiversity, land degradation and food systems, along with the UN Decade on Ecosystem Restoration are an opportunity to link economic recovery with the Paris Agreement.
The report was produced by the UN Environment Programme, the World Economic Forum and the Economics of Land Degradation Initiative hosted by the Deutsche Gesellschaft für Internationale Zusammenarbeit, in collaboration with Vivid Economics.