Financing Nature: Closing the Global Biodiversity Financing Gap

Background

The authors of this report point out that current economic systems promote unsustainable levels of land conversion for infrastructural and agricultural growth and natural resource extraction. They outline some economic and social reasons for protecting nature, and argue that economic systems need to be transformed to incentivize financing biodiversity conservation instead of enabling unsustainable land conversion and natural resource extraction.

Research Goals & Methods

The report discusses the economic case for biodiversity conservation, focusing on the economic and social values of nature, estimates the gap between the current total annual capital flows towards global biodiversity conservation, and recommends nine financial and policy mechanisms to close this global biodiversity financing gap. 

Conclusions & Takeaways

The authors recommend the following main financial and policy reforms: (i) reform harmful subsidies by supporting fiscal policies that incentivize spending on biodiversity conservation and disincentivize activities that are environmentally harmful, (ii) integrate biodiversity conservation risks into private investments, (iii) develop new biodiversity offset policies where none exist, and strengthen existing biodiversity offset policies, (iv) incentivize biodiversity conservation through budgetary and tax policies and monitor revenues raised for biodiversity conservation (v) require identifying natural infrastructure alternatives in all infrastructure projects, (vi) support green financial products such as green bonds, sustainability-linked loans, and private equity funds, which incentivize biodiversity conservation, (vii) include nature-based solutions such as reforestation in climate goals and enable carbon pricing programs, (viii) increase overseas development assistance and including integrating biodiversity conservation criteria in the selection process for assistance, and (ix) enable greener supply chains through production and transportation standards.