Governments urged to redirect $1trn of 'planet-wrecking' subsidies to nature conservation and restoration
Governments collectively funnel more than $1trn of subsidies into businesses that harm nature, including fossil fuel majors, mining giants and industrial agriculture, every year.
That is according to new research from think-tank Global Canopy, which was set up to prevent the destruction of natural habitats. The organisation’s ‘Little Book of Investing in Nature’ includes data from organisations including the World Economic Forum, WWF and the UN, alongside analysis and commentary from experts at the International Development Finance Club (IDFC) and Cornell Atkinson Center for Sustainability.
The book outlines how the funding gap for conserving and restoring biodiversity at the level needed to prevent the Earth’s sixth mass extinction is likely to reach up to $824bn by 2030 in a business-as-usual scenario. Costs will mount if historic underfunding by governments and the private sector persists in tandem with trends like global temperature increase and deforestation continuing. At the same time, natural disasters are likely to become more frequent and more intense in the coming years.
Global Canopy posits the re-allocation of funding currently set aside for subsidies as a means of closing this funding gap. Some $1trn is allocated by governments annually to what Global Canopy describes as “activities that are harmful to nature”, including fossil fuel exploration and extraction, large-scale mining operations and the clearing of forests for food production.
The book outlines how governments in Switzerland, South Africa and Kyrgyzstan have reformed subsidy schemes for agriculture in a bid to protect biodiversity. The UK’s Agriculture Bill is designed to have the same impact, but experts have debated whether it will be successful unless more detailed criteria are added.
Of course, the private financial sector has also been accused of financing high-emitting companies as well as corporates implicated in plastics pollution or linked to the destruction of terrestrial and marine habitats.
The Little Book of Investing in Nature urges large companies in this space to go beyond setting new climate targets for financed emissions and to launch and scale up innovative financial mechanisms which deliver net-positive environmental impacts across the board. It provides dozens of case studies, including Credit Suisse and Rockefeller Asset Management’s Ocean Management Fund, which raised $212m pre-launch.
The biodiversity financing gap could be reduced by some $327bn by the actions of the private sector, Global Canopy concludes.
“We can finance our way back to a healthy planet, but this will mean re-thinking the rules for the finance sector,” co-editor of the Book, Professor John Tobin of the Cornell Atkinson Center for Sustainability, said.
“The current focus on short-term economic returns, to the exclusion of the impacts of any collateral environmental or social damage caused by investment activities, must be turned upside down. We need to develop and incorporate new metrics that recognise the value brought to us by nature - and real leadership by governments and financial institutions to drive this change through.”
The publication of the Book comes ahead of the 15th Biodiversity COP, which is taking place in Kunming, China, in the second quarter of 2021. The COP is regarded as one of the most important to date, as world leaders will agree on biodiversity targets through to 2030, after all nations failed to meet the previous Aichi biodiversity targets.
At the summit, the UN will unveil a ‘Paris-Agreement-style’ deal for nature. The latter half of 2020 saw the UN launching a Leaders Pledge for Nature – a precursor to this official deal, based around its headline commitment to protect and restore 30% of habitats and created in recognition of Covid-19-related delays to the conference.
Aside from preventing species loss and improving the ability of habitats to sequester carbon, meeting the 30% target is likely to provide a $500bn economic boost, according to one major study.
However, there are concerns around how governments will define habitats as ‘protected’ or ‘restored’. The Wildlife Trusts estimates that 68% of the Sites of Special Scientific Interest (SSSI) in Wales and 60% in England are significantly degraded. The proportions for Northern Ireland and Scotland stand at 39% and 35% respectively. Moreover, some NGOs are warning that some governments could meet the 30% target in ways that impede on the rights of indigenous peoples.