Biodiversity And Ecosystems - Financing The Future

In this article, Namita Vikas opines that the world needs a significant investment to tackle the interlinked crises of climate, biodiversity, and land degradation. Research has shown this figure to be $8.1 trillion by 2050, with an annual global investment of $536 billion. An enabling ecosystem to foster partnerships between grassroots stakeholders, policymakers, and the private sector, can help biodiversity and ecosystem-oriented adaptation finance to flourish.

- Namita Vikas

Ecosystems underpin the existence and functioning of all life forms by creating conducive environments for biodiversity to thrive in. In turn, biodiversity supports all the natural capital present in the world and consequently, the goods and ecosystem services they generate for humanity. An estimated $44 trillion1 of economic value generation, that is, about 50 per cent of global GDP, is moderately or highly dependent on nature. Consequently, the global resource extraction rate has risen from 27 billion tonnes in 1970 to 92 billion tonnes in 2017.2

The inherent interlinkages between ecosystems, biodiversity, climate, and human life reveal the implications of climate change on living environments. With climate change rapidly escalating into a crisis, biodiversity loss ranks as one of the top five threats3 to mankind by severity or impact for the third year in a row for FY 2022-23. If business as-usual' continues, then biodiversity loss will represent an economic loss of approximately $479 billion per year.

Climate discussions and negotiations are moving towards mobilizing finance for climate action and transitioning to a low-carbon economy. Global climate finance, inclusive of public and private finance, reached $632 billion in the year 2019–20,5 drastically falling short of the $5 trillion needed annually by 20306 to contain climate change. Moreover, over 90 per cent of climate finance in 2020—$571 billion—is largely skewed towards mitigation through renewable energy, green buildings. On the other hand, a mere $46 billion went towards adaptation and $15 billion to cross-cutting sectors covering both mitigation and adaptation.