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DUBAI / COP28 FINANCE FOR NATURE
STORY: DUBAI / COP28 FINANCE FOR NATURE
TRT: 02:19
SOURCE: UNIFEED
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 09 DECEMBER 2023, DUBAI, UNITED ARAB EMIRATES / FILE
FILE - DUBAI, UNITED ARAB EMIRATES
1. Wide shot, COP28 venue
09 DECEMBER 2023, DUBAI, UNITED ARAB EMIRATES
2. Wide shot, press conference room
3. SOUNDBITE (English) Pei Chi Wong, Senior Research Associate, Global Canopy:
“$7 trillion: so, that is the magnitude of financial flows with direct negative impacts on nature. That is a very large number. $5 trillion of private investment has direct negative impacts on nature, which means that these are 140 times larger than private investments into nature-based solutions. The remaining $2 trillion in public funding goes to environmentally harmful subsidies. And that has increased massively as well.”
4. Wide shot, press conference room
5. SOUNDBITE (English) Pei Chi Wong, Senior Research Associate, Global Canopy:
“The top five industries that are linked to nature's negative financial flows are construction, electric utilities, real estate, oil and gas, and food and tobacco, which touch on every aspect of our daily lives.”
6. Wide shot, press conference room
7. SOUNDBITE (English) Mirey Atallah, Head, Nature for Climate Branch, UN Environment Programme (UNEP):
“In general, environmental degradation is seen as a long-term economic cost rather than a short-term financial return, and we need to start flipping that so that we internalize the cost of nature degradation and that starts providing also a stronger incentive for governments, for public institutions, for regulators in order to go in the direction to steer investments in the direction of nature positive.”
8. Wide shot, press conference room
9. Close up, COP 28 flag
10. SOUNDBITE (English) Niki Mardas, Executive Director, Global Canopy:
“$7 trillion per year: it's a vast amount of capital into destroying nature, which in turn impacts the climate and impacts people. But on the other side of the ledger, it is 200 billion on the positive side. And the single biggest action we can take for nature, climate and people is to green finance. We need to finance green. We also need to green that 7 trillion finance. Otherwise, we'll always be stuck in the loop.”
11. Wide shot, COP28 venue
According to a new report, close to $7 trillion is invested globally each year in activities that have a direct negative impact on nature from both public and private sector sources.
The UN Environment Programme (UNEP) launched this year’s State of Finance for Nature report at a press conference today (9 Dec), COP28’s thematic day on nature, land use, and oceans.
For the first time, this edition estimates the scale of nature-negative finance flows from both public and private sector sources globally.
According to the report, close to $7 trillion is invested globally each year in activities that have a direct negative impact on nature from both public and private sector sources - equivalent to roughly 7 percent of global Gross Domestic Product (GDP).
The report finds that 2022 investments in nature-based solutions total approximately $200 billion, but finance flows to activities directly harming nature were more than 30 times larger.
It exposes a concerning disparity between the finance volumes to nature-based solutions and nature-negative finance flows and underscores the urgency to address the interconnected crises of climate change, biodiversity loss, and land degradation.
UNEP warned that nature-based solutions are dramatically underfunded.
Annual nature-negative investments are over 30 times larger than financing for nature-based solutions that promote a stable climate and healthy land and nature.
According to UNEP, to meet the sustainable development goals, these numbers must be flipped – with true custodians of the land, such as Indigenous Peoples, among the chief beneficiaries.
The findings are based on an analysis of global financial flows, revealing that private nature-negative finance flows amount to US$5 trillion annually, 140 times larger than the US$35 billion private investments in nature-based solutions.
The five industries channeling most of the negative financial flows – construction, electric utilities, real estate, oil and gas, and food and tobacco – represent 16 percent of overall investment flows in the economy but 43 percent of nature-negative flows associated with the destruction of forests, wetlands, and other natural habitats.
The report identifies a significant financing gap for nature-based solutions, with only US$200 billion allocated in 2022, led by governments, who contributed 82 percent (US$165 billion), while private finance remains modest at US$35 billion (18 percent of total nature-based solutions finance flows).
During an interview at COP28, Niki Mardas, Executive Director of Global Canopy, which partnered with UNEP for this report, said, “$7 trillion per year: it's a vast amount of capital into destroying nature, which impacts the climate and people. But on the other side of the ledger, it is 200 billion on the positive side. And the single biggest action we can take for nature, climate and people is to green finance. We need to finance green. We also need to green that 7 trillion finance. Otherwise, we'll always be stuck in the loop.”
Government spending on environmentally harmful subsidies in four sectors - agriculture, fossil fuels, fishery, and forestry - is estimated at US$1.7 trillion in 2022.
As leaders gather in Dubai this week, reforming and repurposing environmentally harmful subsidies, particularly fossil fuels and agriculture, will be critical.
Fossil fuel subsidies to consumers doubled from US$563 billion in 2021 to US$1.163 billion in 2022.
To meet the Rio Convention targets on limiting climate change to 1.5C, as well as the Global Biodiversity Framework target to set aside 30 percent of land and sea by 2030 and achieve land degradation neutrality, finance flows to nature-based solutions must almost triple from current levels (US$200 billion) to reach US$542 billion per year by 2030 and quadruple to US$737 billion by 2050.
Both public funding and private investment need to increase dramatically, in conjunction with the re-alignment of finance flows that harm nature.
While public funding will continue to play a critical role, private finance can potentially increase its share of nature-based finance from 18 percent to 33 percent by 2050.
Nature-based solutions provide critical investment opportunities, as they are cost-effective and provide multiple benefits.
Investment opportunities in sustainable land management can increase fourfold by 2050 based on the long-term profitability of sustainable food and commodity production - critical to catalyzing private investment.
Protecting diverse ecosystems is highly cost-effective, representing 80 percent of the additional land needed for nature-based solutions while absorbing just 20 percent of additional nature-based solutions financing by 2030.
Given the global scale of global degradation, restoration provides massive opportunities to strengthen ecosystem function and resilience to deliver the ecosystem services that people rely so heavily upon.
The report suggests that simply doubling or tripling investment in nature-based solutions will not be sufficient to reach the three Rio targets unless the almost $7 trillion finance flows to nature-negative practices are dramatically reduced and ideally repurposed in favor of nature.
A major turnaround for nature is needed.
The financial sector and businesses must increase investments in nature-based solutions and implement incentives to redirect finance from harmful activities, fostering positive outcomes for nature.
Government policies are crucial in creating an enabling environment for nurturing investment opportunities.
Notably, investment prospects in nature-based solutions are flourishing, driven by overhauling global sectors such as food, extractives, real estate, and infrastructure—major contributors to nature's decline.
These opportunities rival those arising from the climate crisis, presenting a pivotal moment for impactful change.
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