Nature-based solutions include conservation, restoration, and land management projects that generate carbon credits by avoiding, reducing or sequestering greenhouse gas emissions.
Looking at the potential for NbS to deliver on international objectives for climate, biodiversity, and land degradation it has been estimated that global flows into NbS need to quadruple to at least USD 500-970 billion per year by 2050 (UNEP, 2021). While the market for and investment in NbS has developed, it is still at an early stage, and dominated by public funds, which have limited scope to increase. Private finance will therefore need to be mobilized at scale to address this gap.
However, misunderstanding and misuse of NbS have led to applications that cause harm to biodiversity and communities and threaten to erode stakeholders’ trust in the approach. According to a study by Terranomics for WWF-UK and the Climate Solutions Partnership between WWF, HSBC and WRI, barriers to greater investment in NbS projects include high-level project risks, supply, and transparency on returns and impact:
Project investors increasingly perceive that maximizing project crediting potential does much to ensure projects’ financial viability and attractiveness; meanwhile, minimizing project risks protects their investments while facilitating greater chances of long-term success. Further, Investors increasingly recognize that higher-value projects that can mitigate risks are more likely to perform well, contribute positively to climate goals, and create lasting benefits for ecosystems and communities. By focusing on both these elements, investors can confidently support sustainable initiatives that align with both economic and environmental objectives.
However, the complexity of NbS projects are usually quite high. Skillsets required range from ecology and conservation management, project management, financing, business development, sales and marketing, and stakeholder management, particularly when engaging responsibly with indigenous communities. The practitioner community definitely needs new solutions to meet market demand and help drive the magnitude of investment required to deliver on international objectives for climate, biodiversity, and land degradation.
