Saving nature requires an investment of $8.1 trillion by 2050

Nature needs an investment of $8.1 trillion between now and 2050 to successfully contain the interrelated emergencies that threaten the planet and thus humanity, warns a report released Thursday by the United Nations Environment Programme (UNEP).

"If we do not sufficiently fund nature-based solutions, it will undermine the ability of countries to make progress in other vital areas such as education, health and employment. If we don't save nature now, we will not be able to achieve sustainable development," said the UN agency's executive director, Inger Andersen.

Prepared in conjunction with the World Economic Forum and the Economics of Land Degradation Initiative, "The State of Nature's Finance" explains that while annual investment in nature-based solutions should total $536 billion per year by 2050, only $133 billion per year was allocated to nature-based solutions as of 2018.

The study specifies that, on that basis, the nature budget would need to triple by 2030 and quadruple by 2050. If this is not done, there will be a $4.1 billion shortfall by mid-century and the climate, biodiversity and land degradation crises will have advanced inexorably and will continue to worsen at an accelerating pace.

The report's authors stress the urgency of closing the financing gap and rebuilding with more sustainable models in the aftermath of the COVID-19 pandemic. This, they specify, requires structural transformations including the elimination of subsidies for environmentally damaging agriculture and fossil fuels, as well as the creation of economic incentives for clean energy and practices that benefit nature.

While recognising that investments in nature-based solutions cannot substitute for the complete decarbonisation of all sectors of the economy, they assert that they can contribute to the pace and scale needed for climate change mitigation and adaptation.

Investing in nature supports human, animal and planetary health, improves quality of life and creates jobs. Yet nature accounts for just 2.5% of projected economic stimulus spending in the wake of COVID-19, says the text, which urges governments, financial institutions and businesses to bridge the investment gap and put nature at the centre of future economic decision-making in both the public and private sectors.

It also calls for mixed financial models for investing in nature, with private sector entities sharing the risks.

"Private capital will also have to expand dramatically to close the investment gap," say the experts in the study, stressing that nature will have to drive policies that seek to solve societal challenges, as well as the climate and biodiversity crisis.

Currently, biodiversity loss already costs the global economy 10% of its annual output.

For UNEP's executive director, the report "is a wake-up call for governments, financial institutions and businesses to invest in nature, including reforestation, regenerative agriculture and the restoration of our oceans".

According to experts, investment in forests alone will require $203 billion per year, equivalent to just over $25 per year for every person on the planet by 2021, and they propose imaginative strategies that combine restoration with conservation in ways that increase forest and agroforestry areas, with the goal of gaining 300 million hectares by 2050.

UNEP says the upcoming high-level global meetings on climate, biodiversity, land degradation and food systems, as well as the launch of the UN Decade of Ecosystem Restoration on 5 June, are an opportunity to leverage public and private sector economic recovery with the Paris Agreement and the post-2020 Global Biodiversity Framework.

This would put the planet on track to limit the Earth's temperature rise to 1.5°C above pre-industrial levels, and to halt and reverse biodiversity loss.

The report indicates that annual private sector investment in nature-based solutions reached $18 billion in 2018, meaning that private finance accounts for only 14% if capital from sustainable agriculture and forestry supply chains, private investments, biodiversity offsets, philanthropic capital, financing leveraged by multilateral organisations, and carbon markets related to forests and other land uses are added together.

In climate finance, private investment accounts for 56% of capital flows.

Experts identify the scaling up of private capital for nature-based solutions as one of the central challenges for sustainable development in the coming years.

They argue that investors, infrastructure producers, customers and beneficiaries can play a crucial role in a market where nature-based solutions become a source of revenue and help economic resilience.