Nature-based solutions (NbS) are now a trillion-dollar investment opportunity to address climate change and biodiversity loss.
The UNEP’s ‘State of Finance for Nature 2025’ report says that to achieve net-zero by 2050, annual investment in nature must rise from $154 billion to $384 billion. This means that there is still a 12-14-fold investment gap.
Nature-based solutions mainly refer to the process of carbon sequestration through afforestation, wetland restoration, and soil fertility enhancement. These projects absorb carbon dioxide while protecting coastal areas from disasters such as cyclones and floods. Currently, 83% of this investment comes from public sources.
However, due to the economic downturn and geopolitical instability, government allocations are not sufficient. Therefore, the private sector, especially banks and insurance companies, are being encouraged to invest in this sector. 160 world-renowned financial institutions have now united in support of this demand.
A new concept called ‘Biodiversity Credits’ is now becoming popular as part of the innovative economy. A company that harms the environment can make amends by funding reforestation or nature restoration projects elsewhere.
However, critics say that this should not become just ‘greenwashing’ or a show-off. Experts say that if managed properly, nature-based solutions are capable of absorbing 10 gigatons of carbon per year, which is 27% of current global emissions.
This investment will not only protect the environment, but also create billions of jobs in the rural economy. This ‘green economy’ will become the main focus of global climate finance from 2025 onwards.
