The introduction of ‘nature-smart’ policies have the potential to increase global GDP by between $50-$150bn in 2030 compared with a business-as-usual scenario, according to a new report by the World Bank.
The Economic Case for Nature, which was carried out in partnership with the University of Minnesota and Purdue University, explains countries need to internalise the value of nature in decisions at all levels and implement a series of policies that could help to reduce the risk of ecosystem collapse.
Suggested nature-smart policies include reforming subsidies currently provided to agriculture and other sectors, expanding forest-carbon payment schemes, and R&D investment in agricultural research and development.
“It is a combination of policies that shows the greatest win-wins for both biodiversity and for economies. Adding investment in research and development to the policy mix is particularly important and beneficial to developing countries,” said World Bank Lead Environmental Economist and one of the report authors, Giovanni Ruta.
Another important consideration is that the investments in ecosystem services “must be made in a way that exploits synergies with climate change mitigation and adaptation, as this strengthens the case for action”.
The report also highlights that achieving the 30×30 target – an agreement to support new global targets to protect and conserve at least 30% of global land and at least 30% of global ocean by 2030 – which G7 countries have already pledged to do, would almost completely offset the opportunity costs generated by protecting additional land to meet it.
On inaction, the World Bank’s report estimated that the collapse of select ecosystem services provided by nature – such as wild pollination, provision of food from marine fisheries and timber from native forests – could result in a decline in global GDP of $2.7trn annually by 2030.
“We have no doubt that the ambition is there, but a poorly-mixed cocktail of ambitious targets, superficial strategies, funding cuts and lack of expertise is making any tangible progress incredibly challenging” – Philip Dunne, Chairman of the Environmental Audit Committee
The report comes amid signs that policymakers are stepping up on biodiversity. According to draft documents on the Renewed Sustainable Finance Strategy, seen by RI, the EU Commission will by 2022 develop a report to present a methodological framework and assess the potential financial risks associated with biodiversity loss at both micro and macro level and explore the possible sustainable finance policy changes needed.
In addition, the UK has released its Green Financing Framework which touched on how it intends to promote nature.
Measures include an objective of the upcoming Taxonomy to protect and restore biodiversity and ecosystems, as well as the large-scale hydroelectric energy being placed on HM Treasury’s exclusion list for its Eligible Green Expenditures “due to potential risk to natural habitats”.
However, yesterday Philip Dunne, Chairman of the Environmental Audit Committee (EAC), criticised the UK Government’s policies regarding biodiversity. “Too often they are grandiose statements lacking teeth and devoid of effective delivery mechanisms. We have no doubt that the ambition is there, but a poorly-mixed cocktail of ambitious targets, superficial strategies, funding cuts and lack of expertise is making any tangible progress incredibly challenging.”
“All Government departments must consistently factor nature into policy decisions, the Bank of England should develop a nature stress-test, and the 25-year Environment Plan must have interim statutory targets to assess progress,” he added.
In other biodiversity related news, today the CBD, Business for Nature, Finance for Biodiversity Pledge, Principles for Responsible Investment, and the UN Environment Programme’s Finance Initiative released a guide for financial institutions on the importance of nature for the financial sector, how to engage in the CBD process, and take ‘biodiversity positive’ actions.
In addition, last week, the joint Study Group on Biodiversity and Financial Stability – recently launched by the Network for Greening the Financial System and the International Network for Sustainable Financial Policy Insights, Research, and Exchange – published a Vision Paper.
Biodiversity and financial stability: exploring the case for action sets out the rationale for the work of the group and proposes an initial agenda and a research focus. It will be followed by an interim report, to be published ahead of COP15.
The Study Group will publish its Final Report in February 2022, setting out a research agenda for the following years.