Earth Day 2023: Nature is a key partner in the fight against climate change
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Article Type
Sustainability Soapbox
Topic
Responsible Investing
Published
April 20, 2023
Read time
4 mins
Author
Ritchie Thomson
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Climate change and nature are fundamentally connected. Unmitigated climate change can lead to significant loss of biodiversity, but if the current rate of nature loss and degradation continues, then the effects of climate change will be amplified - potentially leading us beyond climate tipping points. Nature has the potential to an invaluable partner in our fight against climate change.

 

It is estimated that the biosphere and oceans currently sequester around 55% of anthropogenic greenhouse gas (GHG) emissions1, and this is where nature-based solutions come in.

Source: WWF

 

Nature-based solutions are actions to protect, sustainably manage, and restore natural and modified ecosystems. Some examples include afforestation, mangrove protection, agroforestry, and green roofs and walls in urban areas.

 

Although there is debate around the exact climate mitigation potential of nature-based solutions, there is broad consensus that it is large2. Unlike engineered-based mitigation solutions, such as carbon capture technology or direct air capture technology, nature-based solutions exist today and are cost effective to implement.

 

In addition to carbon mitigation benefits, nature-based solutions offer various co-benefits, including climate change adaptation, improving biodiversity, improving human health, and providing sources of income.

 

Take the example of mangrove forests. These are estimated to store up to four-times as much carbon as land-based forests and sequester carbon 40% faster. In addition, they also protect coastal areas from extreme weather and coastal erosion and are significantly more cost effective than concrete sea walls. And we have not even begun to talk about the biodiversity benefits, which can in turn lead to greater economic potential to local communities, through activities such as tourism or sustainable fishing.

 

Investment in nature-based solutions has thus far been mainly the domain of government or philanthropic funders, but there is still a significant funding gap relative to what is required. Private investment can help meet this gap. Unfortunately, for a variety of reasons such as deal size, revenue streams and risk/return profile, these projects often do not attract private investors. The exception to this is the carbon offset market, where corporates can offset their own emissions by purchasing carbon credits linked to nature-based solutions that remove carbon from the atmosphere. Although carbon offsets can play an important role in mitigating climate change, companies must ensure that reducing their emission footprint is central to their decarbonisation strategy before offsets are used.

 

In a recent study from the WWF and South Pole3, they identified 16 bankable nature-based solutions deals covering a range of different ecosystems. The study highlights that ultimately there is no one-size-fits-all solution, and to scale up nature-based solutions projects, collaboration between different stakeholders is vital at all levels.

 

Clearly the climate mitigation potential of nature-based solutions is significant, while also providing other environmental and social benefits. However, to unlock this potential, significant investment is required. Private investors can play a key role, although work is still required to increase their commercial appeal.

 

1s09_2020_global_perturbation.png (2300×1175) (universitetetioslo.no)

2Nature-Based Solutions - Net Zero Climate

3How to attract commercial investment for nature-based solutions? (southpole.com)

 

 

Important disclosures

Author

Ritchie Thomson
Senior Responsible Investment Associate

Ritchie Thomson is a senior responsible investment associate responsible for analyzing and monitoring key climate change issues facing companies and industry sectors.

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