“State of Finance for Nature Report” demands investment in “Nature-based solutions”

What is the News?

The State of Finance for Nature Report has been released. The report recommended more investments in “Nature-based solutions”.

About State of Finance for Nature Report:
  • Released by: United Nations Environment Programme, World Economic Forum and the Economics of Land Degradation.
  • Purpose: The report tracks the global trends in public and private investment in nature-based solutions. By this, it aims to improve data quality and identify opportunities for governments, businesses and financiers.

Note: Nature-based solutions(NbS) refer to sustainable management and the use of nature to tackle socio-environmental challenges. These challenges range from disaster risk reduction, climate change and biodiversity loss to food and water security as well as human health.

Key Findings of the Report:
  • The current investments in Nature-based solutions amount to USD 133 billion. This is about 0.10% of global GDP. Public funds make up 86% and private finance makes up the remaining 14% of these investments.
  • Public Investment: The largest proportion of public investment is carried out by the United States, with approximately $36 billion a year in NbS spending. It is followed by China, Japan, Germany and Australia.
    • Countries such as Brazil, India and Saudi Arabia are likely spending large amounts of money too. But they do not report internationally comparable data, according to the report.
  • Private Investment: The private investment in Nature-based solutions is mostly contributed by
    • Commercial financial institutions,
    • Investors including insurance companies, asset management firms
    • Philanthropies including foundations and endowments.
  • Firstly, the report calls for investments in nature-based solutions to triple by 2030 and to increase four-fold by 2050 from the current level.
    • By 2050, the total investment of nature needs will amount to $8.1 trillion, while annual investment should reach $536 billion annually by 2050.
  • Secondly, the report has called for a comprehensive system and framework for labelling, tracking, reporting and verifying the state of finance for NbS. This would improve data comparability and quality as an input to future decision-making.
  • Lastly, the report has recommended reforming taxes, repurposing agricultural policies and trade-related tariffs. It also recommended harnessing the potential of carbon markets to finance Nature-based solutions.

Source: Down To Earth


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