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