304. Need for Investment in Nature-Based Solutions to Avert Planetary Crisis
On May 27, the United Nations Environment Programme (UNEP) released the report “State of Finance for Nature”. In order to combat the interconnected crises of climate, biodiversity and land degradation, the report estimates that there is a need to invest a total of USD 8.1 trillion in nature-based solutions between now and 2050, with an annual investment of USD 53.6 billion. The current investment is USD 13.3 trillion per year, equivalent to 0.1% of global GDP, leaving a gap of USD 4.1 trillion in the amount needed by 2050. The report is calling for a three-fold increase in annual investment from the current level (USD 13.3 billion) by 2030 and a four-fold increase by 2050.
This will require not only a sustainable recovery from the COVID-19 pandemic, but also a structural shift in economic and regulatory incentives from harmful agricultural and fossil fuel subsidies in favor of nature-based solutions. In the framework of the Paris Agreement and the UN Decade on Ecosystem Restoration 2021-2030, which will be launched on June 5, the report calls on governments, financial institutions, and businesses to work together to promote reforestation, regenerative agriculture, and restoration of the ocean.
According to the report, so far, only about 2.5% of the economic stimulus package for COVID-19 has been allocated to natural capital conservation measures. Current investments in nature-based solutions are mainly in sustainable agriculture and forestry supply chains, private equity investments, biodiversity offsets, philanthropic capital, private finance through multilateral organizations, and forest and land use-related carbon markets. On the other hand, most of the current investments are publicly funded, with USD 180 million investment from the private sector in 2018, equivalent to only 14% of the total (USD 130 million). In climate finance, private sector investment accounts for 56%, and therefore, the challenge is to increase private capital in nature-based solutions.
The report also mentioned that forest-based solutions alone, including forest management, conservation and restoration of forest, will require USD 20.3 billion globally, equivalent to just over USD 25 for every citizen in 2021. It then calls for a combination of financial support for reforestation and conservation, and raises the need to increase the area of forest and agroforestry by 300 million hectares by 2050 compared to 2020.
In reforestation efforts, the conservation of forests and the development of technologies for their use and agroforestry in tropical regions are extremely important. Tropical forests are a treasure trove of useful timber species, but without an understanding of their complex ecosystems, forestry cannot continue to produce quality timber while maintaining forest resilience and health. JIRCAS has been working on the development of tropical forest cultivation and conservation technologies targeting useful tree species in Southeast Asia. Recently, the research project proposed by JIRCAS, “Strengthening tropical forest resilience based on management and utilization of genetic resources capable of climate change adaptation” has been provisionally selected for FY 2021 SATREPS (Science and Technology Research Partnership for Sustainable Development) project.
United Nations Environment Programme (2021). State of Finance for Nature 2021. Nairobi. https://www.unep.org/resources/state-finance-nature
Contributors: TANI Naoki (Forestry Division), OKA Hiroyasu (Director, Forestry Division), IIYAMA Miyuki (Director, Information Program)