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May 27, 2021

by UNEP’s Department of Public Communications and Information

By 2050, total investment in nature of $ 8.1 trillion is required – while annual investment should reach $ 536 billion per year by 2050 – to achieve the Interconnected climate, biodiversity and land degradation crises to be successfully tackled according to the State of Finance for Nature report released today.

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The report finds that annual investment in nature-based solutions must triple by 2030 and quadruple by 2050 from the current investment in nature-based solutions of $ 133 billion (using 2020 as the base year).

The authors of the report, which was prepared by the United Nations Environment Program (UNEP), the World Economic Forum (WEF) and the Initiative for the Economy of Land Extraction (ELD) and by the German Society for International Cooperation (GIZ) in collaboration with Vivid Economics – Urge governments, financial institutions and corporations to fill this investment gap by putting nature at the center of future economic decisions. They emphasize the need to rapidly accelerate the flow of capital to nature-based solutions by making nature central to public and private sector decisions related to societal challenges, including addressing climate and biodiversity crises.

Structural transformations are needed to close the $ 4.1 trillion funding gap by 2050 by rebuilding them more sustainably after the COVID-19 pandemic, but also reintroducing harmful agricultural and fossil fuel subsidies and other economic and regulatory incentives be created. Investing in nature supports the health of humans, animals and the planet, improves the quality of life and creates jobs. Currently, however, nature only accounts for 2.5% of the forecast economic stimulus after COVID-19. Private capital must also be increased dramatically to fill the investment gap. Developing and scaling ecosystem service revenue flows and using blended finance models as a means of raising private capital are among the solutions needed to achieve this, which also requires risk sharing by private sector companies / p> “Biodiversity loss is already costing the global economy 10 percent of its production per year. If we fail to adequately fund nature-based solutions, we will compromise countries’ capacities to advance in other important areas such as education, health and employment If we don’t save nature now, we cannot achieve sustainable development, “said UNEP Executive Director Inger Andersen.

” The report is a wake-up call for governments, financial institutions and companies to invest in nature – including reforestation, regenerative agriculture and restoration of ours Ocean, “she said, adding that countries and industry leaders will have the opportunity to do so, as will the upcoming summits on climate, biodiversity, soil degradation and food systems, as well as under the UN Decade for Ecosystem Restoration (2021- 2030).

Forest-based solutions alone, including the management, conservation and restoration of forests, require total annual spending of $ 203 billion worldwide, according to the report. This equates to a little more than $ 25 a year for each citizen in 2021. The report calls for investments in restoration measures to be combined with funding for conservation measures. This could lead to forest and agroforestry (the combination of food production and tree cultivation) increasing by around 300 million hectares by 2050 compared to 2020.

The upcoming summits on climate, biodiversity, soil degradation and food systems as well as the launch of the UN – The Decade of Ecosystem Restoration on June 5, 2021 will provide the opportunity to leverage political and business impetus to bring economic recovery in line with the Paris Agreement and the expected global biodiversity framework for the post-2020 period and thus in line with the limit warming to 1.5 ° C above pre-industrial levels; and curbing and reversing biodiversity loss.

The report’s authors say that annual private sector investment in nature-based solutions was $ 18 billion in 2018 . Private funding accounts for only 14%, including capital mobilized through sustainable agriculture and forestry supply chains, private equity investments and funded biodiversity compensation payments by private sector, philanthropic capital, private funding provided by multilateral organizations and forest and other land use carbon markets.

In climate finance, private sector investments account for most of the capital flows (56% according to the climate policy initiative). Increasing private capital for nature-based solutions is one of the key challenges for the next few years, with the focus on investing in nature to support sustainable economic growth in the 21st century.

Investors, developers, market infrastructure manufacturers, customers and Beneficiaries can play a role in creating a market in which nature-based solutions access new sources of revenue, increase the resilience of commercial activities, reduce costs, or contribute to reputation and purpose.

While a number of private sector initiatives have emerged, however, the report stresses that increasingly, businesses and financial institutions need to be part of the solution by sharing the risk and committing to drive funding and investment in nature-based solutions in an ambitious manner and with clear, time-bound goals. Investing in nature-based solutions cannot replace the deep decarbonisation of all economic sectors, but it can contribute to the necessary pace and extent of mitigation and adaptation of climate change.

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