Biodiversity Finance Lead, IFC
Climate change and the disappearance of our ecosystems are inextricably linked to each other. This means that they need to be addressed together — by transitioning our economies to climate and nature-smart practices.
In 2018, Ed Hawkins, a professor at the University of Reading, depicted 170 years of global warming by using colour-coded stripes that showed cooler years in blue and temperature anomalies in darker shades of red. Following the success of the campaign, the University of Derby used the same approach to convey the world’s rapidly disappearing biological diversity in shades of green to grey.
Climate and nature: a double crisis in the making
As many of our landscapes and ecosystems become less diverse — in part due to rising temperatures — they lose their capacity to hold carbon and could even send more of it up into the atmosphere. In addition, both climate change and biodiversity loss result from tremendous economic pressures leading to land use change, pollution and resource overuse.
Over the years, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, has built and financed a diverse pipeline of green innovations to address climate change. Having introduced new market standards and business models to finance the new climate economy, we are increasingly turning our attention to channelling funds to reverse ecosystem losses in the developing world.
Both climate change and biodiversity loss result from tremendous economic pressures leading to land use change, pollution and resource overuse.
Biodiversity finance: a new frontier
Last year, IFC’s work in this area culminated in a Biodiversity Finance Reference Guide that is helping investors, financiers, companies and governments identify investments that protect and rehabilitate biodiversity and ecosystems.
Building on this work, and efforts to create and finance a viable market to preserve oceans and waterways, we are looking into how private companies and governments might use ‘blue carbon’ markets to finance specific coastal hotspots — from mangroves to salt marshes.
The paper looks at what it will take to establish clear rules of the road for blue carbon trading, from metrics to verify the use of proceeds for blue carbon credits to how insurance companies can incentivise coastal protection into their underwriting and pricing processes. Given the urgency of this work, we invite investors to join in this effort.