On World Environment Day, the state of global natural capital takes center stage. According to the Dasgupta Review, from 1992 to 2014 the value of the stock of natural capital—such as air, soils, water, and even living organisms—declined by nearly 40% per person. And despite earlier efforts to halt that decline, nature is still deteriorating globally at unprecedented rates.
On average, 30% of national wealth in Asia and the Pacific is derived from natural capital, making ecosystems not only an environmental issue for the region, but a developmental, economic, security, social, and human issue as well.
And yet nature, degraded as it is by human activity and climate change, is still the key solution to keeping countries on course in meeting the 1.5°C goal of the Paris Agreement and delivering on the Sustainable Development Goals (SDGs).
Ecosystems regulate the global climate and provide resilience against climate-related adverse events. They sequester and store greenhouse gases and remove pollutants from the atmosphere. They also regulate water flow and serve as buffers against natural disasters resulting from climate change.
Once restored, managed well and valued properly, nature can serve as the cornerstone for mitigating climate change and ensuring human survival. The consensus among the multilateral development banks is clear: Recovery from the COVID-19 pandemic needs to be oriented towards nature, inclusivity and enhanced global resilience in the face of climate change and potential crises in human health and well-being.
With this in mind, the Asian Development Bank has been working to accelerate the mainstreaming of nature into its policies, analysis, assessments, advice, investments, and operations.
A New Era of Valuing Nature
Intensive preparations are underway for completing the Post-2020 Global Biodiversity Framework (GBF), which will set targets and milestones for governments for improving the state of biodiversity and reversing trends in nature biodiversity loss. The framework is expected to usher in a new era in the valuation of nature, and to guide global financial systems towards a nature-positive transformation.
We are working with partners to: scale up finance; develop knowledge of natural capital; and generate financially sustainable projects that deliver on biodiversity and healthy ecosystems.
GBF targets include protecting a minimum of 30% of the world’s oceans and land and increasing financial resources dedicated to biodiversity to at least $200 billion annually. The GBF will be presented at the United Nations Biodiversity Conference (CBD COP 15) later this year.
This is of particular significance to Asia and the Pacific, which is home to 17 of the 36 global biodiversity hotspots, and where millions of people depend directly on nature and its biodiversity for food, livelihoods, and health.
ADB aims to serve as a regional role model in nature-positive investment, which generates a financial return while having a measurable, positive impact on natural ecosystems.
“We are working with partners to: scale up finance; develop knowledge of natural capital; and generate financially sustainable projects that deliver on biodiversity and healthy ecosystems,” said ADB President Masatsugu Asakawa.
Developing knowledge in Nature Valuation
ADB is collaborating with a broad range of stakeholders to develop knowledge in nature-positive investment and recovery, and to circulate that knowledge among policy makers and planners. This includes devising systems and tools that can be integrated into national accounting systems to measure ecosystem services and co-benefits.
“All sectors—including water, energy, finance, agriculture and rural development, industry and trade, transport and health—are dependent on nature, and its value should be reflected appropriately across these sectors,” said ADB Rural Development and Food Security (Agriculture) Chief Qingfeng Zhang.
ADB is helping its developing member countries (DMCs) with nature valuation and the integration of the growing awareness of biodiversity co-benefits into development planning and implementation, financial reform, investment, and legal and policy frameworks. The regional Natural Capital Lab is being developed to highlight transformative business models, support the development of science-based methods to value natural capital and evolve nature-centered market-based instruments.
ADB has helped to pioneer the use of nature-based solutions (NbS) in the region. Building on ADB’s on-the-ground experience, tools and guidance have been developed to support DMCs and others in designing biodiversity-sensitive infrastructure that makes use of NbS, particularly water features. Natural river systems and coastal wetlands, for example, are being used to deliver climate-resilient services such as water supply and flood management—often at considerably lower cost.
ADB is also making use of its decades of experience in fostering regional cooperation in Asia and the Pacific to implement nature-positive projects that require transboundary approaches. One such project is the Regional Flyway Initiative (RFI), which extends from East Asia down through Southeast Asia to Australia and preserves avian migratory habitats in wetlands while building climate resilience for human populations.
Under the Action Plan for Healthy Oceans and Sustainable Blue Economies, financing and technical assistance is being provided for ocean health and marine economy projects across Asia and the Pacific, focusing on sustainable tourism and fisheries, the restoration of coastal and marine ecosystems, and key rivers, reducing land-based sources of marine pollution, and improving sustainability in port and coastal infrastructure development.
Regional collaboration is also essential in halting biodiversity loss due to the illegal wildlife trade, improving air quality and dealing with organized environmental crime.
ADB supported the development of financial instruments such as green and blue bonds to jumpstart nature-positive investment. Guidance is also being provided to DMCs aiming to issue similar financial instruments.
The Blue SEA Finance Hub was developed under the Action Plan for Healthy Oceans and Sustainable Blue Economies, and the BlueIMPACT Asia Platform.
Through such tools, mechanisms and approaches, ADB is helping its DMCs transition more quickly from a development model based primarily on the over-exploitation of natural capital reserves, into one aiming for “net zero, nature positive” advancement—and a sustainable future for all.