Exceptional Yields from Natural Sources

Exceptional Yields from Natural Sources

Unraveling the Nexus Between Nature Conservation and Economic Prosperity

In today's interconnected world, crises like COVID-19 and climate change underscore the intricate links among people, the planet, and the economy. As we strive to revitalize worldwide growth and foster sustainable, resilient, and equitable development, we mustneVER ignore these connections. Nature, encompassing biodiversity and the services provided by healthy ecosystems, plays a pivotal role in this mission, particularly in developing countries where rural residents heavily rely on nature's bounty and are most susceptible to depleting it.

As global leaders gather in Montreal for COP15, United Nations summit on biodiversity, it's high time we reinforced the importance of investing in nature, in tandem with climate action. Exactly half of the world's GDP is generated by sectors such as agriculture, forestry, and fisheries, moderately to highly dependent on ecosystems, and two-thirds of food crops rely, at least partially, on animal pollination. Nevertheless, these vital natural assets are rapidly waning. Nearly one million species of plants and animals are nearing extinction, while 60-70% of the world's ecosystems are degrading at a pace that surpasses their capacity for recovery. If not addressed, low-income countries stand to lose up to 10% of their GDP annually by 2030, even if ecological collapse is confined to only a few services like wild pollination, marine fisheries, and timber harvesting.

The worsening state of biodiversity has close ties with climate change. These twin scourges are escalating the hazards for ecosystems on a global scale, with potentially catastrophic consequences. To combat climate change, we urgently require robust, thriving forests and flourishing oceans to sequester carbon dioxide, but climate change itself is jeopardizing these systems.

Preserving biodiversity and ecosystems is the key to unlocking opportunities that can help communities flourish and prosper. Estimates point to US$10.1 trillion in new business opportunities and 395 million jobs that could be created by 2030 by adopting more sustainable practices in agriculture, city planning, and energy production. The ocean economy alone has the potential to double to US$3 trillion by 2030.

To tackle both biodiversity loss and the climate crisis, climate and nature objectives need to be better synchronised. Internationally, the Convention on Biological Diversity and the United Nations Framework Convention on Climate Change should converge in their processes and ambitions. Similarly, nations must work harder to harmonise their emissions reduction targets (Nationally Determined Contributions) and their National Biodiversity Strategies and Action Plans. Moreover, at the grassroots level, communities require financial backing for investments in nature-based solutions, such as forests, which aid both climate mitigation and adaptation.

This, in a nutshell, highlights the need for a comprehensive, system-wide approach, with central governments, finance, and sectoral departments collaborating to rectify market, policy, and institutional failings. Else, misaligned incentives will continue to place an unfavorable price tag on nature's services. As it stands, governments are disbursing at least US$800 billion annually on subsidies (in sectors like fossil fuels, agriculture, etc.) that potentially harm nature. Moreover, environmental policy is often compartmentalised from development policies and strategies, with its implementation often pigeonholed in a single ministry, despite the systemic risks posed by nature loss.

At COP15, countries strive for an agreement on the Post-2020 Global Biodiversity Framework, which could catalyze the transformation required. This comprehensive framework sets out a wide range of ambitious targets, addressing the triple crises of nature loss, climate change, and contamination while also aiding in poverty alleviation. Realizing its effectiveness, however, demands addressing lingering knowledge and methodology gaps, gathering more data, developing novel tools and metrics for integrating diverse sectors, and quantifying the advantages of action.

We must also heighten efforts to bridge the biodiversity financing gap, estimated to extend as far as US$700 billion per year over the following decade. The prime focus should be on drawing in more and better private financing. We need to adopt a holistic approach that includes both greening finance (directing financial flows from harmful projects to nature-positive ones) and financing green (mobilising increased investment in conservation, restoration, and sustainable resource use).

The World Bank Group is offering its support to developing nations as they align nature, climate, and development priorities in their policymaking. Projects underway include direct conservation efforts for species and natural habitats and initiatives that bolster livelihoods dependent on natural resources, such as forests, fisheries, and agriculture.

As the foremost multilateral lender for biodiversity, the World Bank offers a variety of financial services and instruments to foster green investments. For example, Seychelles launched its first sovereign blue bond (aimed at sustainable marine and fisheries projects) with bank support. The bank introduced the US$150 million 'Rhino Bond', a trailblazing financial instrument tied to clear conservation targets that funnels private-sector capital to safeguard black rhinos in South Africa.

PROBLUE, a trust fund backed by 14 donors, has dispensed nearly US$100 million in grant financing since 2018, helping unlock US$4 billion in bank financing for projects ranging from West Africa to East Asia. The bank is also aiding countries in making global finance more sustainable, including through support for the Taskforce on Nature-related Financial Disclosures, which seeks to boost transparency and integrate nature-based concerns in financial decision-making.

Preventing further nature loss is not merely a moral imperative; it also makes good economic and development sense. We must persistently increase investments in protecting nature and embracing more sustainable practices. The future of human development hinges on it.

Mari Pangestu, as Managing Director of Development Policy and Partnerships at the World Bank, spearheads these initiatives.

Written by Mari Pangestu. Copyright: Project Syndicate, 2022 www.project-syndicate.org

Integrating Insights:

• Synergistic Environmental Benefits: Nature-based solutions like wetland restoration, mangrove protection and land rehabilitation help combat climate change while safeguarding biodiversity (1) (2).
• Ecosystem Services: These practices also conserve critical services like water filtration, flood, and fire risk reduction, and support traditional and Indigenous livelihoods (2) (3).
• Economic and Social Gains: Job creation, local economic development, enhanced food security, and resilience for communities dependent on healthy ecosystems are fostered by conservation efforts (3) (5).
• Community-Based Conservation: Empowering local stakeholders and distributing benefits can improve social justice and human rights in conservation initiatives (3).

Protecting key biomes like the Cerrado can unlock billions in economic benefits and forestall biodiversity loss threatening the economic future of sub-tropical countries (4). Case studies, such as Costa Rica, where growth and forest cover both increased, demonstrate the feasibility of merging conservation and development (5).

• Strategies for Filling the Biodiversity Financing Gap:
• Leverage Public and Private Investment: Amplify public funding for conservation and climate projects, focusing on priority ecosystems, and attract private investments through mechanisms like green bonds and incentives for sustainable practices (5).
• Enhance International Collaboration: Strengthen partnerships with multilateral organizations and conventions (like ITTO, CBD, IUCN) for large-scale and transboundary conservation efforts (5).
• Promote Community-Based and Nature-Based Solutions: Expand community-based conservation models that empower local stakeholders and distribute benefits (3) (5).
• Invest in Nature-based Solutions: Back projects providing climate mitigation and adaptation benefits along with biodiversity support (1) (2).
• Implement Policy and Regulatory Reforms: Develop and enforce guidelines for biodiversity-friendly management, as seen in ITTO's work with tropical forest countries (5).
• Employ Innovative Finance Mechanisms: Discover new revenue streams such as biodiversity credits, conservation banking, eco-tourism levies, and philanthropic contributions (5).

By blending these strategies, developing countries can overcome the biodiversity financing gap while advancing climate action and sustainable development.

1. The Post-2020 Global Biodiversity Framework, to be agreed upon at COP15, aims to catalyze transformative changes that align biodiversity conservation with economic prosperity.
2. Nature-based solutions like wetland restoration and mangrove protection not only combat climate change but also conserve critical biodiversity and essential services such as water filtration and flood risk reduction.
3. Conservation efforts foster job creation, support traditional and Indigenous livelihoods, improve social justice, and enhance food security and resilience for communities that rely on healthy ecosystems.
4. Protecting biomes like the Cerrado can unlock billions in economic benefits and safeguard the economic future of sub-tropical countries.
5. Case studies, such as Costa Rica, demonstrate the feasibility of merging conservation and development, with both growth and forest cover increasing over time.
6. To fill the biodiversity financing gap, it's crucial to leverage public and private investment, enhance international collaboration, promote community-based and nature-based solutions, invest in nature-based solutions, and implement policy and regulatory reforms.
7. Innovative finance mechanisms, such as biodiversity credits, conservation banking, eco-tourism levies, and philanthropic contributions, can be employed to discover new revenue streams for conservation efforts.
8. The World Bank supports developing nations in aligning nature, climate, and development priorities through projects that focus on direct conservation efforts, livelihood enhancements, and green investments.
9. The World Bank Group offers a variety of financial services and instruments to foster green investments, such as the Rhino Bond, PROBLUE trust fund, and support for the Taskforce on Nature-related Financial Disclosures.
10. Preventing further nature loss is not just a moral imperative; it also makes good economic and development sense, as the future of human development hinges on increased investments in nature protection and sustainable practices.

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