State of Finance for Nature 2022

• 27 Dec 2022

Recent Context

• The second edition of the State of Finance for Nature report launched on December 01, 2022, reveals that nature-based solutions are still significantly under-financed.
• The report was released jointly by the UN Environment Programme (UNEP) along with
  • The Economics of Land Degradation initiative of the Federal Ministry for Economic Cooperation and Development (BMZ) of Germany;
  • United Nations Convention to Combat Desertification (UNCCD); and
  • European Commission.
• The report comes 10 days after the end of the UN Framework Convention on Climate Change (UNFCCC) Conference of Parties 27 (COP27) and a week before the start of the UN Conference on Biodiversity (COP15 CBD) in Montreal.

Key Highlights

• If the world wants to halt biodiversity loss, limit climate change to below 1.5⁰C and achieve land degradation neutrality by 2030, current finance flows to Nature-based Solutions (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 key focus should be on doubling finance flows to NbS and reducing it for activities that increase greenhouse gas (GHG) emissions.
• Public funds make up 83% of the total and the private sector contributes approximately 17%.
• Total finance flows to NbS have increased by USD 3.9 billion from USD 150 billion (SFN 2021) to USD 154 billion per year.
• This represents year-on-year growth in investment of 2.6% in real terms across the sum of public and private financial flows.
• Finance flows to marine NbS are roughly USD 14 billion, 9% of total (terrestrial and marine).
• Annual domestic government expenditure in marine NbS is over USD 10 billion per year, including spending on marine protected areas, sustainable management of fisheries and research and development of fisheries.
• Public financial support for nature-negative activities ranges from USD 500 to 1,100 billion per year at present, which is three to seven times larger than current investments in NbS.

What is Nature-based Solution (NbS)?

• The NbS refers to sustainable management and use of nature to tackle socio-environmental challenges, which range from disaster risk reduction, climate change and biodiversity loss to food and water security as well as human health.
• NbS creates harmony between people and nature, enables ecological development and represents a holistic, people-centred response to climate change.