Context

• Recently, the United Nations has released the State of Finance for Nature Report 2020.

Key Highlights of 

• The annual investments in nature-based solutions (NbS) will have to be tripled by 2030 and increase four-fold by 2050 from the current level of investments.
  • The Nature-based solutions refer to sustainable management and use of nature to tackle socio-environmental challenges.
• It found that approximately $133 billion currently flows into nature-based solutions annually (using 2020 as base year).
  • The public funds make up 86 per cent and private finance 14 per cent of these investments.
• It estimated existing public and private investment directed to NbS.
  • The investments of $133 billion comprise about 0.10 per cent of global gross domestic product, most of which come from public sources.
• The largest proportion of this investment is carried out by public financial services providers, including the governments, development finance institutions (DFIs), environmental / climate funds.
  • It represents 86 per cent of total investment flows to protect biodiversity and landscapes, mixed with activities such as sustainable forestry.
  • The public sector spending for the same is dominated by the United States and China, followed by Japan, Germany and Australia.
• The US tops the list with approximately $36 billion a year in NbS spending, and is closely followed by China with $31 billion.
• The countries such as Brazil, India and Saudi Arabia are likely spending large amounts of money too, but they do not report internationally comparable data.
• The following contribute to 14 per cent of total NbS financing equal to $18 billion a year, mostly through investments in sustainable supply chains and biodiversity offsets:
  • Commercial financial institutions
  • Investors including insurance companies, asset management firms
  • Philanthropies including foundations and endowments

Future commitments under State of Finance for Nature Report

• The public and private actors will need to scale up their annual investments by at least four times to meet future climate, biodiversity and land degradation targets.
• By 2050, total investment of nature needs will amount to $8.1 trillion, while annual investment should reach $536 billion annually by 2050.
• It called for a comprehensive system and framework for labelling, tracking, reporting and verifying the state of finance for NbS.
• It recommended reforming taxes, repurposed agricultural policies and trade-related tariffs and harnessing the potential of carbon markets.

Back to Basics

About State of Finance for Nature Report

• It was jointly produced by the United Nations Environment Programme, the World Economic Forum and the Economics of Land Degradation.
• Its purpose is to provide up-to-date information about public and private sector finance that is channelled to activities and assets that can be considered NbS and to present estimates of the future needs.

• It complements the vast array of existing literature and processes that monitor specific flows of environment or development finance.

Source :DTH

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