The world is rapidly urbanizing, putting our natural resources under increasing pressure to meet demands for infrastructure, land, water, food, and other crucial needs. Infrastructure is central to achieving the SDGs, and globally we build the equivalent of ‘one Paris per week in new structures to meet our demand for infrastructure. The natural resource implications of meeting this need for infrastructure is vast. We need to integrate nature into the design of infrastructure to minimize the negative impact of this infrastructure and make it nature positive. Meeting these increasing demands, while protecting biodiversity, places significant strain on financial resources at both national and local government levels.
A study commissioned recently by the European Commission looked at the monetary value of biodiversity loss worldwide due to not meeting the 2010 biodiversity targets
It conservatively estimated that the loss of ecosystem services and biodiversity is valued at around USD 740 billion per annum and if biodiversity continues to be lost at the projected rate, the accumulated cost of ecosystem services lost since 2000 could grow to USD 20 trillion in the year 2050.
The lack of finance is one of the greatest challenges we face to address the loss of biodiversity and the degradation of nature. We must fundamentally rethink our relationship with nature and transform our economic models and market systems.
The Biodiversity Finance Initiative (UNDP BIOFIN) estimates that over US$400 billion is needed annually to protect biodiversity. However, only a fraction of this is currently being mobilized. At the local government level, in particular, financial resources are predominantly obtained through intergovernmental transfer payments, grants, subsidies and taxes. Many of which are unsustainable over the long term. Funding for biodiversity has been further stressed under the current global COVID-19 pandemic (OECD, 2020). The World Economic Forum (WEF) 2021 Risk Report ranks biodiversity loss, infectious disease, and climate action failure among the top 4 risks by impact in the evolving risk landscape. The unfolding pandemic is having undeniable human, social and economic impacts, and has demonstrated the inherent vulnerability and inequalities of our socio-economic systems. A survey jointly conducted by the OECD and the European Committee of the Regions (CoR) indicates that most city governments expect the socio-economic crisis linked to COVID-19 to have a negative impact on their finances, with a dangerous “scissors effect” of rising expenditure and falling revenues. This “scissors effect” is felt even more acutely in developing nations.
The WEF recognizes that, “COVID-19 and nature are linked, so should be the recovery”. According to the World Economic Forum’s Future of Nature and Business Report, a nature-positive pathway in the infrastructure and built environment could create over $3 trillion in business opportunities and create 117 million jobs by 2030. And the 5th Global Biodiversity Outlook (GBO) identified sustainable cities and infrastructure as one of 8 transition pathways to living in harmony with nature and to achieving the 2050 Biodiversity Vision.
As we contemplate the path to recovery and redesign of cities, it is crucial that we consider this from a lens that recognizes planetary boundaries, where nature is part of the solution, and issues of inequality and injustice are addressed. There is thus an increasing need for resource mobilization, not only to meet many urban, social and economic demands, but importantly to ensure that the ecosystems and natural resources on which many of these demands depend, are managed sustainably. It is widely recognized that resource mobilization plays an integral part in achieving many of the current global objectives, such as the Post-2020 Global Biodiversity Framework, Sustainable Development Goals and many others.
ICLEI’s Global City Biodiversity Center (CBC) has advocated for increased resource mobilisation and investment in green and blue infrastructure, and the restoration of ecosystem services, at the city and regional scale as part of its ongoing biodiversity advocacy roadmap towards the 15th Conference of Parties of the Convention on Biological Diversity. This forms part of a collaborative action between ICLEI (on behalf of the Global Taskforce of Local and Regional Governments), the European Committee of the Regions, Regions for Sustainable Development, Advisory Committee for Subnational Governments (coordinated by Regions4 Sustainable Development and the Government of Quebec), the Group of Leading Subnational Governments toward Aichi Biodiversity Targets, and the Scottish Government. Resource mobilisation is also an important function of the Post-2020 global biodiversity framework discussion. For example, the Post2020 Biodiversity Framework-EU Support project is implemented by a high-level team of experts on biodiversity issues. Among critical issues promoted by the support project is a recent look at how to instil biodiversity into budgets and financial schemes to shift towards greener systems.
In line with these efforts to prompt discussions on a Post-2020 global biodiversity Framework the CBD has also created helpful tools to support governments in their approach to moving towards more balanced budgets that support biodiversity preservation, including the People for our Planet Aggregator. The aggregator serves as a visible demonstration of a critical mass of people demanding action for climate, nature and people. It shows growing public support for leaders taking bold action. https://www.cbd.int/article/people-for-our-planet-aggregator
To take the conversation about investment for redesigning cities where nature is part of the solution and results in no net harm to biodiversity, to a wider audience, ICLEI organized and hosted a seed session at the TNOC Festival 2021. The topic of this session, ‘Financing greener cities for the future we want’, was particularly relevant given the findings of the Dasgupta Review on The Economics of Biodiversity released in February 2021. The need for engaging investors and city administrators on the topic of investment is increasingly urgent, as city governments are facing mounting pressures to address the triple biodiversity, climate and health crises, while their revenue sources are decreasing alarmingly due to the knock-on effects of the ongoing pandemic on the economy and social fabric at both urban and national scales.
The ‘Financing greener cities for the future we want’ session took the form of a round table discussion, which brought finance experts, investors and city representatives together to engage and share insights on innovative finance approaches, products and solutions that cities could access to accelerate investment and transition in green and blue infrastructure, a green recovery, and green procurement, in order to restore ecosystems and their contribution to people and protect biodiversity. It provided the opportunity for selected Global South cities, Campinas in Brazil, Kochi in India, to pitch a project concept from their respective cities, to the panel of experts and explore potential biodiversity finance avenues, technical assistance and innovative solutions.
Photo credit : Vince Calibaut
The session was moderated by Ms Kimberley Pope, Project and Community Lead, Nature Action Agenda, at the World Economic Forum and the panel of experts were Frédéric Audras, Head of the Urban Development, Planning and Housing Department at the Agence Française de Dévelopement (AFD); Alexander Wiese, Managing Director, Co-Head Europe at Bankers without Boundaries (BWB); and Aloke Barnwal, Senior Climate Change Specialist, Programs Unit and Coordinator of the Global Environmental Facility (GEF) Sustainable Cities Impact Program (SCIP). The city pitches were presented by Gabriel Dias Mangolini Neves, Environmental Engineer at in the Green, Environment and Sustainable Development Secretariat of the City of Campinas; and Dr C Rajan, Director: Centre for Heritage, Environment and Development (C-HED), at Kochi Municipal Corporation.
The panel touched on the following issues: the most important factors that financing institutions and investors look for when considering projects and the experts shared their insights and advice on what changes could be needed to make the two cities’ pitch more attractive from an investment/financing perspective. The panellists also shared information on financing and investment mechanisms and options that are available and would be best suited to the two city pitches. There was also discussion on the key success factors and risk management mechanisms that need to be in place for investors to consider investing in projects. Finally, the panellists and city experts discussed the capacities that cities need to access finance and design innovative sustainability solutions; and identified some of the available mechanisms and options that support cities in building these capacities.
Building greener cities for a more sustainable future is possible. If we can mobilize the financial resources needed to support this transition, we will not only create new opportunities for business and new jobs for all, but we will strengthen the cities connection to nature for a more sustainable planet, for the futures we want.
Read the article in English and in French here.
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