Rewetted area of RSPB Lake Vrynwy Nature Reserve, (c) Alex Falkinham (rspb-images.com)
Jenna Coull is the Principle Economist for the RSPB. She joined the RSPB earlier this year, bringing with her several years of experience from both the private and public sector.
Yesterday saw the celebrity endorsed launch of the Nature 2030 campaign calling for radical new commitments for nature. Included in this was a ‘Nature Recovery Obligation’ on businesses to ensure the private sector plays a role in financing nature.
It pays to protect nature now
A report published by Bloomberg this spring concluded that safeguarding the Earth’s biodiversity now, is far less expensive than paying to restore it later. They estimated that the cost of safeguarding the most fragile natural resources today amounts to $166bn per year, rising to $1 trillion by 2030. If we do nothing, by 2030 the cost will almost triple to $2.7 trillion a year. A failure to address the problem at all will have catastrophic effects on nature and society, as we rely on nature for food and a habitable planet.
The argument for early action is not new. In 2006 Nicholas Stern, author of the Stern Review and ex chief economist for the World Bank, noted that ‘the benefits for strong and early action (on climate change) far outweigh the economic costs of not acting’. Yet humans are biased towards the present, placing greater value on a £1 today than in the future. This may go some way to explaining why warnings by Stern, and more recently by Dasgupta, have gone largely unheeded.
Mind the – finance – gap
Despite the need to act now, finance is sparse. The Green Finance Institute estimated that to meet UK’s nature related outcomes would need funding of approximately £6 billion a year over the next 10 years. The UK government has set a goal to mobilise £500m of private sector recovery in England by 2027, rising to more than £1 billion per year by 2030. Even if private finance in devolved nations increases in proportion with this ambition, the size of the finance gap will still be in the billions. In terms of public funding, the Government is largely silent; there are no targets, nor any tracking of progress or spend.
Nature Recovery Obligation
This is where a ‘nature recovery obligation’ could help by compelling key sectors to disclose their impacts on nature and publish Nature Positive Plans, integrated with 1.5°C-aligned climate transition planning, setting out how operations will make a positive contribution to nature’s recovery, without relying on offsetting. After avoiding and reducing harm, the new Nature Recovery Obligation would require companies to fund nature’s recovery. This could go someway to closing the finance gap - although the estimate of finance raised through this policy is unclear.
Environmental markets need clarity
For private investment to scale up, environmental markets need to be operating well. A key challenge for almost all privately financed project is who pays for the initial inception and scoping work. This matters when change is needed at scale, projects need to be environmentally credible, and provide a financial return. There is undoubtedly a role for government to improve information around these markets, set standards, and if necessary, regulate.
Government has taken its first tentative steps, updating the Green Finance Strategy and publishing the corresponding Nature Market Framework this spring. They have commissioned the British Standards Institute to support in providing consistent standards and principles across markets. We welcome this development, while stressing the urgency of this work and the complexity of the issues - time is of the essence if we are to meet COP15 2030 commitments on nature.
The RSPB and green finance
The RSPB has a dedicated Conservation Investment (CI) team who are exploring these market issues and supporting the development of new environmental markets (such as Biodiversity Net Gain). CI work with partners on projects on and off our estates, and with colleagues across the RSPB including economists.
Setting nature up for success?
As well as financing, we need to ensure that nature is woven into the fabric of our economic system. This starts at the highest level of measuring economic performance; there is an emerging consensus that narrow definitions of success such as GDP is flawed. We need to reform fiscal tools such as taxation to protect nature; currently inheritance tax penalises landowners for converting land to habitat restoration. Businesses need to engage, and if necessary be regulated to protect nature. Finally, incentives are needed to change consumer behaviour (e.g. changes to VAT to promote consumption of ‘greener’ goods) which in turn pressurises businesses and political leaders to do the same. There is much to do.
Links to relevant blogs:
- RSPB| Time to correct the disconnect at the Treasury - Nature’s Advocates - Our work - The RSPB Community
- RSPB | Tax: a neglected tool in the nature emergency? - Nature’s Advocates - Our work - The RSPB Community
- RSPB | Why business has a crucial role in helping to save nature - Nature’s Advocates - Our work - The RSPB Community
RSPB press releases:
- Co-op and the RSPB join forces to preserve nature’s carbon ‘stores’
RSPB Nature and Economics policy website:
- Valuing Nature
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