Firstly, saving nature is so cheap. Domestically, just £2 billion. That’s a mere 0.1% of the UK Government’s budget, and would go a long way to achieving both our land and sea nature based objectives. Globally, about $80 billion will meet most habitat and species targets, whilst UNEP estimate about $6 trillion a year would allow us to meet the entire suite of Sustainable Development Goals (SDGs). Okay, these are pretty big numbers, but they still only represent a small percentage of global financial assets, which exceed $200 trillion.
Secondly, monumental research efforts over the past decade, like the NEA/NEAFO, have revealed why investing in nature is good value, because of the vast array of life-supporting and life-enhancing benefits we now know it provides us with. As the Natural Capital Committee (NCC) explains, such investment makes compelling economic sense.
Although saving nature is cheap, crude estimates suggest we spend only about a quarter of what’s required both domestically and globally. The eternal squeeze on government finances mean we can’t rely solely on them to meet the shortfall any time soon. Our efforts at capturing these benefits has seen conservationists explore a panoply of ‘new and innovative’ mechanisms, from biodiversity offsets, payment for ecosystem service schemes, conservation covenants to new levies or green bonds. A decade of huffing and puffing has yielded some interesting research and lots of lessons learnt, but almost nothing in terms of additional money. Success may have been limited, but we probably understand a lot better what it will take to make any of these market based ideas work for biodiversity, and what government will need to do to make them effective.
By focussing on mechanisms, what we’ve always missed is a strategic framework for accelerating conservation finance. My third reason for optimism is because the NCC guidance on the Government’s 25 Year Plan appears to recommend just that. If the Government accepts the need for a clear plan, then it should help us understand where duties and responsibilities lie to maintain and enhance nature and deliver valued public goods. Finance should naturally follow from having a strategic investment plan which articulates these duties and obligations.
Fourthly, progress may have been meagre in terms of unlocking new environmental funding, but the social sector in the UK has seen much more innovation and investment from new sources in recent years. We’ve seen a new bank (Big Society Capital), new private public partnerships (social impact bonds) and new community based initiatives, from micro bonds and crowd sourcing to community shares. Not all will be replicable, or necessarily desirable, for environmental support, but they do provide plenty of food for thought. They prove that new money, and new people, can be found to invest in socially valuable projects which do not have profit making at their heart.
Finally, aligned to the above, the past decade has also seen a great innovation in the financial sector. It’s heartening to see the current profile given to the SDGs by some financial institutions, the growth in interest in Environment Social and Governance (ESG) Impact investing, and the development of new highly innovative impact investors and project developers. Transforming the prospects for conservation financing will inevitably need government to create the right legislative frameworks to facilitate new markets and create new revenue streams. We as conservationists now need to think creatively about how we can achieve conservation goals and deliver valued goods and services. Similarly, it will take financial expertise to know how to invest effectively in those assets which sustain nature and promote economic prosperity.
Now is the time to be bring government, finance and civil society together to crack this. We certainly need to take the opportunity provided by the 25 Year Plan process and the post-Brexit CAP settlement to start the conversation. If you’re free 23rd October, why not join us.
*Please contact Emma Pereira for more information on Link's seminar on investing in nature.
The opinions expressed in this blog are the author’s and not necessarily those of the wider Link membership.
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