Jo Anderson, CEO and Co-founder at Level
Nature loss and the mitigation of climate change are two of the most pressing environmental challenges of our time, requiring concerted global action and innovative approaches. Despite significant progress made through traditional donor-driven conservation efforts, the persistent decline in biodiversity and rampant deforestation underscores the need for a new approach.
Uniting Conservation and Finance
Traditional methods to conservation have often relied heavily on donor funding, which can be inconsistent or insufficient to address the scale of the challenges at hand. In this context, private financing emerges as a possible solution. By integrating funding mechanisms into global financial systems, it is possible to mainstream conservation within economic frameworks and establish sustainable links between global economies and conservation projects on the ground.
In addition, by incorporating financial incentives, such as biodiversity crediting (digital representations of avoided biodiversity loss or enhancements), it is possible to encourage private investment into conservation efforts and close the gap between conservation vision and actionable initiatives. Ensuring that projects are not only sustainable but economically viable in the long term.
Challenges in Market-Based Approaches
While market-based strategies offer promise, they also present challenges that must be addressed to maximise their effectiveness. One such challenge is establishing high-integrity demand for biodiversity credits, as well as addressing supply and demand imbalances in the market. Frameworks like the Taskforce for Nature-Related Disclosures (TNFD) and the EU Nation Restoration Law play a pivotal role in fostering transparency and accountability within the market.
Overcoming these challenges requires effective delivery mechanisms and a commitment to addressing the root causes of biodiversity loss, such as deforestation and habitat destruction. Indigenous peoples and local communities (IPs and LCs) serve as frontline stewards, safeguarding a staggering 80% of the world’s remaining biodiversity. However, despite their invaluable contributions, they often bear the financial burden of conservation efforts. This disparity underscores the urgent need for a fair and transparent market for biodiversity credits, one that equitably distributes financial risk and supports IPs and LCs through community-led approaches.
By addressing these challenges head-on, private financing can unlock new opportunities for conservation and sustainable development.
The Economic and Cultural Imperatives of Conservation
Forests, beyond their critical role in climate mitigation, hold crucial socio-economic significance, especially for IPs and LCs worldwide. The protection of forests not only ensures the preservation of vital biodiversity and ecosystem services but also presents a superior return on investment compared to alternative land uses.
Private financing holds the potential to empower IPs and LCs to sustainably manage forest ecosystems. By integrating forest conservation into broader conservation endeavours, private financing not only preserves biodiversity but also safeguards cultural heritage and traditional livelihoods. Moreover, it presents an opportunity to preserve indigenous knowledge and cultural heritage, fostering long-term sustainability.
However, investments crucial for the success of nature-based solutions (NBS) projects encounter significant hurdles due to the lack of robust evidence showcasing both ecological impacts and social value, particularly concerning the involvement of Indigenous peoples and local communities. To address this challenge, methodologies must be developed to provide assurance to project developers and bolster investor confidence. Real-time monitoring tools are indispensable, enabling comprehensive evaluations and facilitating transformative change.
Efforts to evaluate and comprehend social value within conservation initiatives are also gaining momentum. However, there is a notable absence of NBS initiatives actively engaging and learning from the wisdom and lived experience of these. In 2023, Level evaluated the last six years of Carbon Tanzania’s flagship Yaeda Valley project using the social return on investment (SROI), methodology.
The results showed an SROI of $25 for every $1 invested, alongside revealing tangible benefits like enhanced agriculture and livestock conditions, motivating continued community forest protection. This approach aligns impact with the showcasing diverse social and economic benefits from NBS revenues – a vital step for integrating the value of nature into the global economic system. By amplifying the voices of those at the forefront of environmental conservation, we pave the way for a more equitable and sustainable future, where indigenous communities are empowered to thrive as guardians of our planet’s resources.
Integrating IPs and LCs into the global financial system through conservation initiatives not only enhances economic resilience but also strengthens their role as custodians of biodiversity and cultural heritage.
Looking to the Future
Private financing holds immense promise as a catalyst for positive change on a global scale. Only through shared responsibility, sustainable practices, community engagement and integrating IPs and LCs into the global financial system, we can address the complex challenges of biodiversity loss and climate change and pave the way to sustainable global change.
