Goal 15: Life on Land

 

Our perspectives

 

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Sustaining life on land means preserving and restoring terrestrial biodiversity and ecosystems such as forests, wetlands, grasslands, drylands and mountains by halting deforestation, fragmentation and overgrazing and reversing desertification and land degradation. Terrestrial ecosystems–comprising roughly 30 percent of the planet’s surface–provide us with sources of water, food, fuel, shelter and medicine, help mitigate carbon emissions and help us to adapt to the impact of changing climate. For example, more than 1.6 billion people directly depend on forest biodiversity and ecosystem services for their livelihoods, which also underpin the health and resilience of all our economies and societies.

Progress in preserving and sustainably using the Earth’s terrestrial biodiversity and ecosystems has been slow. Although areas that are under protection or under sustainable management have increased, pressure on biodiversity and ecosystems, such as habitat loss, degradation, poaching and wildlife trafficking and pollution, has increased exponentially.  We are losing species at a rate at least 1,000 times fasterthan the natural rate. We have lost over 130 million hectares of rainforests since 1990 and we lose dozens of species every day, pushing the Earth’s ecological system towards its limit. Between 1998 and 2013, about 20 percent of cultivated land showed persistent and declining trends in productivity, placing the lives of 1 billion people under threat.

The economic costs of ongoing biodiversity loss and ecosystem degradation are high. For example, insects and other pollen-carriers are estimated to be worth more than US$200 billion per year to the global food economy. Recent surveys suggest, however, that significant declines are occurring in many insect populations. More than 12 million hectares of land are lost to drought and desertification each year, which, if managed more sustainably, could produce 20 million tons of grain, enough to feed 40 million people for one year.

The solutions listed below provide a wide range of finance options to increase the resources that can help sustain our terrestrial legacy. These solutions do not however constitute an exhaustive or comprehensive list of financing options for SDG 15. For a more comprehensive set of solutions, please visit the BIOFIN catalogue.

 

Financing Life on Land

The earth’s soil provides over US$16 trillion worth of ecosystem services each year. Three quarters of the top global commercial prescription drugs contain components derived from plants. However, ecosystems and biodiversity values are not internalized by markets, nor are the costs of biodiversity and ecosystem loss reflected in prices. Similarly, public budgets often overlook the economic potential and negative risks associated with underfunding biodiversity and conservation. Average biodiversity expenditures as a share of total government expenditures range from as low as 0.16 percent to just 1.8 percent, according to the Biodiversity Finance Initiative (BIOFIN).   

Much greater investments are needed to maintain, protect, and restore our Earth’s valuable biodiversity and ecosystem services. For example, achieving sustainable forest management on a global scale would cost US$70-US$160 billion per year. An additional US$150-US$440 billion per year is required to halt the loss of biodiversity by the middle of this century. To fill this financing gap, countries need to mobilize a mix of public and private, domestic and international resources. At the same time, they need to be provided with adequate incentives and support to join global efforts to conserve our shared natural resources.

These investments can be primarily achieved with increased public budgets, reforms featuring green taxes and the phasing out of harmful subsidies, and Official Development Assistance (ODA). ODA can play an important role in catalysing and crowding in private investments in conservation, which make up only a small share of financial markets. Success in attracting private capital to conservation, including through green bonds and impact investment vehicles, could help transform the financing landscape for SDG 15.

Mechanisms and strategies are numerous. Debt-for-nature swaps, where a creditor forgoes receiving a portion of its debt repayments on the condition that they are invested in ecological projects, can be revamped. Pricing mechanisms—such as payments for ecosystem services—provide incentives for communities to preserve and manage natural assets and can be multiplied and scaled up. Ecological fiscal transfers can introduce conservation indices (e.g. the size/quality of protected areas) as part of the fiscal allocation formula to reward investments in conservation.

 

Related Solutions

Biodiversity offsets

Measurable conservation outcomes resulting from actions that compensate for significant residual adverse biodiversity impacts arising from development projects.

Bioprospecting

Systematic search for biochemical and genetic information in nature in order to develop commercially-valuable products and applications.

Concessions (Protected Areas)

Concessions allow people to use land or property in a protected area or natural site for a specified purpose, usually in exchange for a fee.

Crowdfunding

Approach for projects, organizations, entrepreneurs, and startups to raise money for their causes from multiple individual donors or investors.

Debt for nature swaps

Agreement that reduces a developing country’s debt stock or service in exchange for a commitment to protect nature.

Disaster risk insurance

Disaster risk insurance schemes cover—against a premium—the costs incurred by the insured entity from extreme weather and natural disasters.

Ecological fiscal transfers

Integrating ecological services means making conservation indices (e.g. size/quality of protected areas) part of the fiscal allocation formula to reward investments in conservation.

Enterprise challenge funds

Funding instrument that distributes grants (or concessional finance) to profit-seeking projects on a competitive basis.

Entrance and activity fees

Tourists pay entrance and activity fees for access to a protected area. Related-revenues can contribute to biodiversity conservation through retention by specific sites or protected area systems, revenue sharing agreements with communities, and earmarked transfers from the central government or agencies.

Environmental trust funds

Legal entity and investment vehicle to help mobilizing, blending, and overseeing the collection and allocation of financial resources for environmental purposes.

Green bonds

Bonds where proceeds are invested exclusively in projects that generate climate or other environmental benefits.

Impact investment

Investments made with the intention to generate a measurable social and environmental impact alongside a financial return.

Lotteries

Governments and civil society groups use lotteries as a means of raising funds for benevolent purposes such as education, health, preservation of historic sites and nature conservation.

Payments for ecosystem services

Payments for ecosystem services (PES) occur when a beneficiary or user of an ecosystem service makes a direct or indirect payment to the provider of that service.

Public guarantees

Guarantees can mobilize and leverage commercial financing by mitigating and/or protecting risks, notably commercial default or political risks.

Remittances (Diaspora Financing)

Private unrequited transfers sent from abroad to families and communities in a worker's country of origin.

Social and development impact bonds (Results-Based Financing)

A public-private partnership that allows private (impact) investors to upfront capital for public projects that deliver social and environmental outcomes in exchange for a financial interest.

Taxes on pesticides and chemical fertilizers

Taxes on certain pesticides and chemical fertilizers can mobilize fiscal revenues while mitigating the negative effects associated with pesticide/fertilizers application and promoting sustainable agriculture practices.

Taxes on renewable natural capital (water; timber)

Any fee, charge or tax charged on the extraction and/or use of renewable natural capital (e.g. timber or water).

Voluntary standards (finance)

Standards applicable to the financial sector that capture good practices and encourage the achievement and monitoring of social and environmental outcomes.