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To Reach Our Climate Mitigation Goal, We Must Grow The Market For Natural Solutions


Justin Adams

Executive Director of the Tropical Forest Alliance (seconded to the TFA from The Nature Conservancy)

December 2015

An aerial view showing deforestation for cattle ranching at São Félix do Xingu, a municipality in the Brazilian Amazon that has one of the highest rates of deforestation in the country. The Conservancy works here to implement strategies to control deforestation and promote the responsible production of soy and beef among farmers and ranchers. Photo © Haroldo Palo, Jr
An aerial view showing deforestation for cattle ranching at São Félix do Xingu, a municipality in the Brazilian Amazon that has one of the highest rates of deforestation in the country. The Conservancy works here to implement strategies to control deforestation and promote the responsible production of soy and beef among farmers and ranchers. Photo © Haroldo Palo, Jr

Making choices is what distinguishes us as humans. The world may have signed up to an agreement on climate at the 21st Conference of Parties (COP21) in Paris in December, but we face the same choices today as we faced two weeks ago. Only now, we are armed with the knowledge that leaders from nearly 200 countries around the world are supportive of taking a different course of action from business-as-usual development.

There has been plenty of analysis on the Paris agreement itself and the process it took to get there. There are many groups celebrating; there are others attacking the agreement—that it is too much, it’s too little, or it’s too late. There are sectors of society who choose to ignore it, and there are even more—many hundreds of millions of people—for whom it is simply unknown given the scale of other challenges in their lives. But it will have an effect on the choices we all make about the type of society in which we live. And we will start making those choices now.

The biological bridge to a carbon-neutral world

One of the most important elements of the agreement is that it sets the properly ambitious goal of a climate-neutral world sometime after 2050 but before 2100. This means a commitment to limiting the amount of greenhouse gases emitted by human activity to no more than the level that it can be sequestered.

And while the Paris agreement is hopefully a turning point for speeding up the deployment for low- or zero-carbon renewable energy technologies and phasing out of fossil fuels, it also explicitly references the huge, beneficial role that nature can play in carbon storage.

Carbon storage can be done mechanically by locking CO2 in geological reservoirs (what most people think of when they hear “carbon capture and sequestration”), but it it can also be done naturally – and often more cost-effectively – by conserving and restoring our forests, soils and wetlands and better managing our working lands.

In fact, the forest and land-use sector can deliver at least 20 percent of the carbon mitigation the world needs by 2030—serving as a critical biological bridge to a climate-neutral world, where time is now of the essence.

Indeed, it is increasingly clear that if we are to stand any chance of reaching the 1.5° or 2.0° Celsius ambition laid out in the agreement, natural solutions have to be encouraged and incentivized at a similar level to the incentivizing renewable energy solutions have already seen.

To that point, there was an important announcement on the first day of the summit—by the UK, German and Norwegian governments—but it received relatively little attention from the mainstream media. The three governments entered into a joint agreement pledging $5 billion to reduce carbon emissions caused by tropical deforestation, known as REDD+ (Reducing Emissions from Deforestation and Forest Degradation). The pledge will pay around $800 million a year starting this year, with finance reaching $1 billion per year by 2020.

Their announcement also made the crucial point that investing in natural solutions is an investment in the “the vital role forests play for livelihoods, sustainable development, adaptation, biodiversity and other valuable ecosystem services they provide.”

Expanding private capital investment

Five billion dollars is a lot of money, but it is not enough. The G20 Global Infrastructure Initiative estimates that global infrastructure investment will increase to $70 trillion over the next 15 years. In the face of that scale of development pressure, we need to mobilize trillions of dollars of private capital to invest in natural solutions to climate change.

At the Global Landscapes Forum event that ran in parallel with the COP, The Nature Conservancy hosted panel discussions with the Tropical Forest Alliance 2020 to look at the ways in which we can expand private capital investment into sustainable landscapes. On the one side, we have seen an incredible increase in the level of corporate commitments—such as the New York Declaration on Forests—that provide the ambition for transforming supply chains. But on the other side, we also need to work harder to find ways to tap into the capital markets and unlock the trillions of dollars that could flow into a world of more sustainable growth.

Many projects—across a variety of sectors in agriculture and forestry—are already economically viable in their own right and can deliver greater carbon benefits. Other types of projects will require greater incentives to compensate for higher risks and/or lower returns.

At the Conservancy, we are working with business and government partners around the world on these strategies already, including nutrient management and soil carbon strategies in the United States; improved forest management strategies in the United States and Indonesia; economically viable reforestation work in China; and financial innovation that is improving cattle ranching in Kenya and Brazil.

There is of course a role for carbon markets to provide the additional incentive many of these programs need. California’s carbon market is an example of pioneering action at the sub-national level that goes some way to incentivize better land use. But there is still the potential to go much further.

And there are other examples of financial innovation already incentivizing natural solutions to development challenges. Take water funds for example—an innovative market-based solution for water security that the Conservancy has been a leading player in developing and bringing to Latin America, North America and Africa. Water funds gather investments from water users and direct the funding toward the conservation of upstream lands that filter and regulate the downstream water supply in major population centers. I recently attended the launch of the São Paulo water fund in Brazil and witnessed the significant support for this initiative from across public and private sectors. And, importantly, while the main goal may be improving water quality, these activities also benefit climate mitigation and biodiversity protection.

Land is our most precious resource. It fuels our society through food, fiber and energy production and harbours critical biodiversity. But it is also our greatest global carbon sink technology. To achieve the world’s new climate mitigation goals, we must be able to maximize the potential of our lands as a climate solution. It is a matter of choice, and that choice is ours.

Originally Posted on Conservancy Talk

December 20, 2015