The second edition of the State of Finance for Nature report launched 2 December 2022 reveals that nature-based solutions are still significantly under-financed. If the world wants to halt biodiversity loss, limit climate change to below 1.5C and achieve land degradation neutrality by 2030, current finance flows to NbS must urgently double by 2025 and triple by 2030. Delayed action is not an option in the face of the devastating effects of climate change, the extinction crisis, and severe land degradation globally.

The first edition of the report indicated that annual investments in nature-based solutions will have to triple by 2030 and increase four-fold by 2050 from the current investments into nature-based solutions of USD 133 billion (using 2020 as the base year).

The UN Environment Programme (UNEP) released a report on the ‘state of finance for nature,’ finding an investment gap of USD 165 billion per year from G20 countries for nature-based solutions, in order to meet currently agreed global targets by 2050. The biodiversity and climate finance gaps are emphasized in the draft post-2020 global biodiversity framework and the 2021 Glasgow Climate Pact.

Nature-based solutions (NbS) refers to a range of actions that rely on investing in nature to resolve societal challenges. NbS can include, for example: improving carbon sequestration on agricultural lands and peatlands; restoring mangroves to defend against flooding; and protecting global biodiversity through forest and other land conservation.

MORE from previous editions related :
Released on 26 January 2022, the report titled ‘The State of Finance for Nature in the G20 Leading by example to close the investment gap’ was led by UNEP, the World Economic Forum, and the Economics of Land Degradation (ELD) Initiative. The authors write that in the context of the latest findings from the Intergovernmental Panel on Climate Change (IPCC) and the 2021 UN Food Systems Summit, the role of investment in NbS “is clear: it tackles these interlinked crises.”

At the upcoming 15th meeting of the Conference of the Parties (COP 15) to the Convention on Biological Diversity (CBD), governments are expected to adopt a post-2020 global biodiversity framework, containing several targets. As currently drafted, Target 19 calls to “increase financial resources from all sources to at least US$200 billion per year … to meet the needs for implementation, commensurate with the ambition of the goals and targets of the framework.” At the Glasgow Climate Change Conference (UNFCCC COP 26) in November 2021, governments adopted the Glasgow Climate Pact. It notes the need to significantly increase support for developing country Parties, “beyond USD 100 billion per year.”

To meet all agreed targets on biodiversity, climate, and land restoration by 2050, annual investment from G20 countries in nature-based solutions needs to increase by at least 140% – or an additional USD 165 billion per year. The authors suggest that this amount should be divided among four categories of nature-based solutions: forestry, silvopasture, mangrove restoration, and peatland restoration.

The report also finds:

The business and investment case for nature needs to be made stronger.
G20 countries should seize opportunities to increase investment in non-G20 countries, which can often be more cost-effective and efficient than investing in similar nature-based solutions internally. For example, “the average cost of converting land from other uses to nature-based solutions in G20 countries is USD 2.600/hectare, while the same costs only USD 2,100/hectare for non-G20 regions,” according to Nina Bisom, ELD; and
Developed countries should tie “nature and climate conditions” to fiscal stimulus measures.

A previous ‘State of Finance for Nature’ report was released in 2021, and focused on tripling investments in nature-based solutions by 2030. That publication identified a USD 4.1 trillion financing gap in nature based solutions between 2020 and 2050.