Stretching from the Drakensberg Mountains in the west to the Indian Ocean in the east, KwaZulu-Natal is one of South Africa’s most biodiverse provinces. But over the past 30 years, deteriorating river water quality and increasingly frequent flooding have taken a heavy toll on its towns, businesses, and citizens. But there is hope for KwaZulu-Natal — and for other environmentally distressed regions.
One city in KwaZulu-Natal, eThekwini, has shown what an effective response looks like by implementing a comprehensive programme to restore and protect its rivers using nature-based solutions. In addition to collecting more than 100 tonnes of waste and clearing 98 hectares of invasive species, the initiative has created more than 1,000 jobs since its launch in 2022.
The eThekwini Municipality has succeeded by putting nature at the heart of its climate action plan. But success stories like this are still few and far between. Nature-based investments, including sustainable agriculture, are already proving profitable and scalable, and have the potential to create 395 million jobs by 2030. Yet, globally, nature-based solutions receive only 15 per cent of the investment of traditional climate solutions such as clean energy and low-carbon transport. Even harmful subsidies receive 3-4 times more funding than nature-based investments.
As a result, we face a catastrophic and irreversible collapse of our planet’s ecosystems, a point highlighted at last year’s United Nations Climate Change Conference (COP28) in Dubai. To avoid this outcome, progress is needed in a number of key areas.
First, public and private economic actors need to integrate nature into their decision-making. Fortunately, a number of tools and frameworks are now available to help businesses and investors identify nature-positive solutions, such as the Kunming-Montreal Global Biodiversity Framework, the Taskforce on Nature-Related Financial Disclosures, the Science Based Targets Network, the Finance Sector Deforestation Action initiative and the Nature Action 100 initiative.
Central banks and financial regulators can encourage businesses to contribute to conservation and restoration by providing nature-related financial risk assessments. The central bank of Zambia, for example, recently integrated biodiversity into its green lending guidelines, so that more financing is directed to activities that promote biodiversity conservation and restoration. The framework complements green bond guidelines previously developed by the country’s Securities and Exchange Commission.
Governments should also better coordinate nature-based initiatives — and climate action more broadly — across ministries and countries to avoid competing agendas. One model, implemented in Rwanda, focusses on measuring and valuing nature. By collecting data on how natural resources contribute to the economy, the Natural Capital Accounts for Ecosystems ensures that this information informs economic policy and development planning across ministries.
In terms of international coordination, fora such as COPs can help drive progress. At COP26, more than 140 world leaders committed to “halt and reverse forest loss and land degradation by 2030” while supporting the livelihoods of people who depend on forests and achieving sustainable development. At COP27 and COP28, they demonstrated their continued commitment to achieving this goal, with countries such as the Democratic Republic of Congo and Ghana announcing innovative investment partnerships.
A third imperative is to strengthen the pipeline — and attractiveness — of nature-positive projects. Because such projects often have high upfront costs or long payback periods, few meet investors’ criteria. It does not help that financial institutions and capital markets tend to view nature-related investments as having an unfavourable risk-return profile.
Concerted action is needed to support project development, for example through regenerative value chains and highly integrated carbon and biodiversity markets. This would facilitate the aggregation of projects to reach sufficient scale to offer attractive returns to investors.
At the same time, efforts must be made to reduce the cost of capital, for example by improving risk sharing and mitigation. Multilateral development banks have a key role to play, not only in reducing and pooling risk, but also in providing transitional signals to the wider system to mobilise private capital. More generally, there is a need to improve the quality and quantity of development finance, with more resources going to resource-rich emerging market and developing economies (EMDEs).
For some countries — those currently facing the triple crisis of climate, biodiversity, and debt — sovereign debt solutions will be needed. The 61 EMDEs most vulnerable to debt distress today need $812bn in debt restructured across all creditor classes. Debt relief would free up resources, while robust new climate finance targets would ensure that these resources are channelled into pro-nature initiatives.
The final step is to ensure that climate and nature-related investments, initiatives, and policies are equitable and inclusive. Currently, only 25 per cent of pledged finance reaches projects on the ground. In Asia and sub-Saharan Africa, smallholder farmers, who are responsible for 80 per cent of food production, spend up to $368bn a year on building their resilience to climate change.
Meanwhile, less than 1 per cent of total climate finance goes to indigenous peoples and local community groups, who manage a quarter of the planet’s land, with a carbon sequestration capacity of 300 billion tonnes. Giving these groups direct access to finance and respecting their land rights is not only a moral imperative, it is essential to preserving the nature on which we all depend.
In terms of political momentum, financial innovation and technological capacity, the stage is set for rapid progress in nature restoration and conservation. World leaders must seize this moment to build a transformative investment agenda that recognises that our planet, let alone our economies, cannot survive without nature. As Kenyan President William Ruto once said, “When we put nature on our balance sheets, you’ll know [that] Africa is wealthy”.
Razan Khalifa Al Mubarak is the UN Climate Change High-Level Champion for COP28 and President of the International Union for Conservation of Nature. Bogolo Kenewendo is Special Advisor to the UN Climate Change High-Level Champions for COP27-29 and a former minister of investment, trade, and industry of Botswana.
Copyright: Project Syndicate, 2024.
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