31.05.2021 |

$ 8.1 trillion needed by 2050 to solve “planetary emergency”, UN report

We need to tackle the climate, biodiversity & land degradation crises (Photo: CC0)

Investments in nature-based solutions will have to triple by 2030 and increase four-fold by 2050 if the world is to meet its climate change, biodiversity and land degradation targets. This is the message of the “State of Finance for Nature” report, published on May 27th by the UN Environment Programme (UNEP), the World Economic Forum (WEF) and the Economics of Land Degradation Initiative. “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,” UNEP Executive Director Inger Andersen and Klaus Schwab, WEF Executive Chairman, write in the foreword to the report. And the new report assesses how much money would be required to finance this action. “Biodiversity loss is already costing the global economy 10 % of its output each year,” Andersen warned. “If we do not sufficiently finance nature-based solutions, we will impact the capacities of countries to make progress on other vital areas such as education, health and employment.” She added that we will not be able to achieve sustainable development if we do not save nature now.

The report compares existing capital flows to recognised investment needs in order to quantify how serious governments, businesses and financiers are about tackling the biodiversity, land degradation and climate crises. “The findings are clear: we are not investing nearly enough in nature,” Andersen and Schwab write. According to the report, we are currently investing USD 133 billion per year into nature-based solutions (using 2020 as base year). Public-sector financing accounts for 86% of this money and private finance for 14%. Of the public funds, over a third is invested by national governments into protection of biodiversity and landscapes. Nearly two-thirds is spent on forest restoration, peatland restoration, regenerative agriculture, water conservation and natural pollution control systems. Looking to the future, investments in nature-based solutions ought to at least triple in real terms by 2030 and increase four-fold by 2050 if we are to solve the planetary emergency. This acceleration would equate to cumulative total investment of up to USD 8.1 trillion, and an annual investment rate of USD 536 billion. Forest-based solutions alone would amount to USD 203 billion per year. That is equivalent to just over USD 25 per year for every citizen in 2021. Silvopasture solutions would require USD 193 billion and peatland restoration 7 billion per year. According to Reuters, Andersen said during the report launch that the total amount of 8 trillion may sound large but “it’s peanuts when we are frankly talking about securing the planet and our very own future”. She stressed that “our health, the quality of our lives, our jobs, temperature regulation, the housing we build and of course the food we eat, the water we drink” all depend on well-functioning natural systems.

The authors of the report argue that structural transformations are needed to close the USD 4.1 trillion finance gap between now and 2050, by building back more sustainably in the wake of the Covid-19 pandemic. A recent study revealed that out of USD 14.6 trillion the world’s 50 largest economies announced in fiscal spending in the wake of COVID-19, just USD 368 billion or 2.5% were directed towards green initiatives. “The lessons are not being learned,” the authors criticize. “As governments plan their COVID recovery policies stimulus plans, we urge world leaders to ensure that public funding helps meet objectives under the Paris Climate Agreement and serves to halt and reverse the loss of biodiversity.” The authors also call on governments to redirect harmful agricultural and fossil fuel subsidies and to create other economic and regulatory incentives. “It is important to reform and repurpose environmentally harmful subsidies to level the playing field and create fiscal space for nature-based investment,” the authors write. “These also include subsidies to adopt sustainable practices and taxes to raise the costs of damaging activities.” They quote Costa Rica as an example where a 3.5% tax on carbon emissions has been introduced. According to the report, this tax has reduced fossil fuel use and raised revenue which is used to support agroforestry, conservation and reforestation. Similarly, in Peru, the Sanitation Sector Law was updated in 2016 and requires utilities to direct 1% of revenues towards improvements in water quality.

“The report is a wake-up call for Governments, financial institutions and businesses to invest in nature – including reforestation, regenerative agriculture, and restoration of our Ocean,” Andersen said. The upcoming summits on climate, biodiversity, land degradation and food systems, as well as the launch of the UN Decade on Ecosystem Restoration on 5 June 2021, provide an opportunity to harness political and business momentum to align the economic recovery with the Paris Agreement and the anticipated post-2020 Global Biodiversity Framework, and thus be consistent with limiting warming to 1.5° C above pre-industrial levels, as well as halting and reversing the loss of biodiversity, the UNEP press release concludes. (ab)

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