COP30 will be the first to take place in the Amazon. The location could hardly be more symbolic: the world’s largest and most iconic rainforest ecosystem is nearing an irreversible tipping point. This location also serves as a reminder of the inextricable links between climate and nature, as well as past failures to properly integrate these two areas, with detrimental effects.
It is only since COP26 in 2021 that nature’s role in climate action has been more prominently recognised, as well as the critical role of finance in delivering on nature goals. At each Climate COP since, progress has been made towards greater acknowledgement and integration, such as the Global Stocktake (GST) at COP28 which launched calls to reverse forest degradation and deforestation. Now, COP30 is to establish a ‘Circle of Presidencies’, bringing together UN leaders under the Conventions on Biological Diversity (CBD) as well as Desertification (UNCCD) together with past climate presidents (UNFCCC).
From recognition to implementation
While essential, recognition is not sufficient. Implementation must follow, and implementation requires financing. That financing must also be integrated, to address the magnitude of the need across climate and nature, as well as the interlinked solutions. We need rapid action to both “green finance” and “finance green” to both reduce the harmful impacts of finance and invest in nature-based solutions (NbS).
According to the most recent UNEP State of Finance for Nature report, finance flows to nature-based solutions amount to only a third of the levels needed to reach climate, biodiversity, and land degradation targets by 2030. The financing gap for climate and net zero specifically is also staggeringly large, with a total of almost $200trn by 2050. It is only with solutions that address biodiversity and climate needs together that we can have a chance of meeting these targets.
Signs of promising integration
The planned ‘Baku to Belém Roadmap to 1.3T’ is a positive development from the COP30 presidency, focusing on leveraging finance for low-carbon and climate-resilient routes in developing nations. It is imperative that this Roadmap focuses on breaking down current barriers and disincentives which are predominately experienced in these emerging economies. Barriers such as the high costs of capital, debt levels and conditions placed on accessing climate finance, which act to prevent the flow of capital to where it is needed.
As the presidency’s letter notes, there is ample global capital to close the investment gap across nature and climate. And there are examples of action to connect nature and finance, navigating barriers whilst demonstrating alternative paths. One national example is the Canadian government’s commitment to allocate a minimum of 20% of a $5.3bn climate fund to support projects in developing nations that specifically use nature-based climate solutions. At a multilateral level, the portfolio of the Green Climate Fund (GCF) provides 45% of its funds towards NbS, making it one of the largest global public financiers for nature, despite its nominally climate-centric mandate. The significant financial investment of GCF in nature-related projects shows the enormous opportunities of combining climate and biodiversity in innovative financing approaches. It also demonstrates how framing terrestrial and marine ecosystems, coastal areas and agricultural lands as being central to GCF’s support for climate provides opportunities across climate adaptation, mitigation and biodiversity conservation.
Another recent initiative which signals this shift towards nature is the Tropical Forests Forever Facility, announced by the COP30 presidency last month. This investment vehicle is intended to channel $125bn to protect tropical forests worldwide, with heavily forested countries such as Colombia, Brazil and Indonesia set to benefit. The World Bank is to develop the fund, with developed nations contributing initial funding of $25bn and the private sector making up the remaining $100bn.
While a promising model, we must acknowledge that according to most recent data, private finance only makes up 18% of total flows to nature-based solutions. To redress this balance and make goals such as the Tropical Forests Forever Facility achievable, MDBs must support private investment in nature-vulnerable emerging nations through derisking, and banks and other investors must broaden the scope of current financing models.
The path ahead
Unlike when many of today’s climate finance structures were created, we have the benefit of experience when evolving these to encompass and integrate nature. Too often, nature-based solutions fell between the cracks of development, climate and biodiversity frameworks, and access to funds presented a challenge for emerging economies and small island nations.
Now, the interconnections are being acknowledged and solutions built around them and there are high-profile examples of effective bridging of climate and nature finance which demonstrate the path ahead. COP30, with its symbolic location at the heart of the Amazon, must be the leverage point for a rapid upscaling of finance flows to climate and nature, in recognition of their inherent interconnections.
