Nature Positive

Last year we lost an area of forest equivalent to almost half of the size of Azerbaijan, (the next climate COP host) and 55% of financial institutions with the greatest ability to impact deforestation rates don’t even have a public deforestation policy yet.  On the other hand, the annual economic gain from a deforestation-free future is estimated at US$ 895 billion by 2030, with the biggest driver of that gain being a reduction in environmental costs of US$440 billion a year.

Meeting the increasing demand for food can’t come at the expense of further destruction of critical biomes. Agriculture, forestry and other land use activities accounted for almost a quarter of global emissions in the past decades and over a quarter of global forest loss is due to deforestation through permanent land use change for the production of commodities, including beef, soy, palm oil, and wood fiber. The agri-food sector needs to invest $205 billion annually (2% of its revenue), to meet climate targets. Investing in more sustainable ways of growing food, such as smart agroforestry and restoration of unproductive, degraded lands, can help governments and businesses reduce their portfolio exposure to land degradation. The majority of commodity-driven deforestation needs to be halted by 2025 and land “conversion” eliminated by 2030.

Carbon markets working well can be a rapid response mechanism that enables responsible businesses to act today. Corporate leadership on climate means science-based strategies to reduce emissions and invest in high-quality carbon credits. Carbon markets could contribute up to 32% of the global cumulative potential of nature-based solutions with a market value projected to reach between US $5-30 billion per year by 2030. However, in the last three years, only 1.2% of the annual cost-effective potential of NbS has been unlocked by this mechanism. Supporting the transformations underway to build an end-to-end integrity framework for the voluntary carbon market could be a game changer for mobilizing much-needed private finance for climate action and nature-based solutions.

Indigenous Peoples protect more than 80% of global biodiversity while representing only 5% of the population. They are, however, more often than not, not rewarded for their invaluable stewardship. Direct funding for tenure rights and forest management of Indigenous People and local communities amounted to less than 1% of international climate development aid in the last decade. To build a real nature-positive economy, 30% of all public climate finance for nature-based projects and investments should include direct participation from Indigenous People and local communities, following the targets set by the Global Biodiversity Framework.

Global warming poses a threat to the sustainability of many economic sectors and this is why all levels of government must prioritize building an economy that benefits nature as a climate solution. Public funding can be used as an investment to attract private capital, create blended finance opportunities, and mobilise resources via de-risking tools. Countries need to commit to creating stronger policies and financial mechanisms to fulfill both existing and new commitments. This includes increasing guarantees for nature and climate-linked sovereign financing, making the Loss and Damage Fund operational to aid populations vulnerable to climate change, creating reliable carbon crediting systems under Article 6, increasing funding for Jurisdictional REDD+, and enhancing the New Quantified Climate Finance Goal (NQCG) to surpass the $100 billion pledge. This funding should explicitly support nature-based solutions and originate from both private and public sector resources.