Naturally tackling climate change

“Together, the loss of nature and climate change are the ‘twin emergencies’ facing humanity; turning a blind eye to either can leave businesses vulnerable and exposed to risks.” This quote from the WWF’s The Nature of Risk Report neatly sums up the issues at hand. Human activity has resulted in devastating changes to our climate and natural ecosystems. If we do not take action now, the downside risks to businesses, livelihoods and global economies will only become more severe.

The state of nature

The effects of climate change are well known, with the latest Intergovernmental Panel on Climate Change (IPCC) report indicating “code red for humanity”. The human impact on nature is equally alarming. In terms of species abundance, the world is currently experiencing its sixth mass extinction event. One million, or 25%, of animal and plant species face extinction, a rate that is 1000 times higher than the expected background rate without human intervention. Furthermore, we reached Earth Overshoot Day in July 2021, the date when humanity’s demand for ecological resources and services in a given year exceeds what earth can regenerate in that year. That leaves five months in 2021 of unsustainable production.

The link between nature and climate change

The link between climate change and nature is crucial. We know that the destruction of natural habitats decreases climate resilience. It causes the carbon stored within those habitats to be released into the atmosphere and the carbon sequestration and sink function they provide to be lost. It also reduces the land’s ability to adapt to extreme weather events caused by climate change. Furthermore, climate change exacerbates the drivers of nature loss. Studies show that climate change is responsible for 11-16%i of biodiversity loss and will continue to damage our natural habitats.

While the spotlight has been on climate change, the focus on nature is catching up and will form part of the discussions at Glasgow’s COP26. There is also the 2021 UN Biodiversity Conference (CBD COP 15), which specifically aims to address nature recovery. Suggested targets include a net-zero loss of nature from 2020, with a net-positive scenario by 2030, and full recovery by 2050. In addition, the recent creation of the Task Force for Nature-related Financial Disclosures (TNFD) follows a similar ambition to the Task Force for Climate-related Financial Disclosures (TCFD), and aims to deliver a framework to guide nature-related financial reporting.

Nature as a climate solution

To tackle climate change, we need to focus on cutting carbon emissions and rapidly decarbonising the economy. But that inextricable link between nature and climate means that the restoration of the natural environment, through better management of our land and oceans, can also play a critical part. This concept is often referred to as Nature-based Solutions (NbS). These are best described by the International Union for the Conservation of Nature (IUCN) as “Actions to protect, sustainably manage, and restore natural or modified ecosystems that address societal challenges effectively and adaptively, simultaneously providing human wellbeing and biodiversity benefits.” You can find out about nature as a climate solution here.

Mechanisms for nature as a climate solution

NbS to tackle climate change and help nature recovery require substantial public and private funding. For private funding, the main mechanism to value the use of NbS for climate change is through the creation of carbon credits, which can either be used by the investor of the NbS for their own offsetting purposes or sold on the carbon market. In the future, we expect more mechanisms to put financial values on nature recovery, such as biodiversity credits or for wider ecosystem services.

So which NbS are best suited to help tackle climate change? Studies have shown carbon sequestration rates from a variety of NbS, including improved grasslands, hedgerows and seagrass. But in the UK, there are currently only two NbS where existing frameworks can quantifiably account for carbon reduction and provide a verifiable and externally approved offset. These are woodland creation and peatland restoration. This will evolve as other carbon frameworks area also being developed for wider habitat ranges.

Principles for using nature as a climate solution

There are some key considerations for using NbS to ensure wide-ranging positive impacts and to avoid unintended consequences. For example, some approaches to optimising carbon sequestration may not necessarily be in the best interest for biodiversity. Therefore, any NbS require a set of best-practice principles to ensure that the focus on reducing carbon is balanced with potential conflicting interests. Below are a few key principles that we recommend.

Keep it local: Ensure that any NbS match local habitat recovery requirements. For example, using native species and linking into local wildlife networks.
Keep it balanced: While carbon might be the focus, ensure that nature recovery is optimised as much as possible by targeting wider biodiversity and environmental net gain.
Keep it measured: Ensure continuous assessments to measure and quantify carbon, biodiversity, wider ecosystem services, and societal benefits.
Keep it additional: For any NbS to be credible, they also have to prove additionality, where the activity to create the NbS is distinct from its baseline state.
Keep it people-focused: For NbS to be successful, they need to work in harmony with people. Therefore, full consultation and active engagement with local stakeholders is a necessity. This allows the site to be enhanced for wider social requirements and benefit, for example better access to nature and educational opportunities. This also avoids unintended negative impacts or displacement issues.
Keep it transparent: Follow a robust and transparent reporting framework, which is subject to external audit and scrutiny.
Keep it holistic: If NbS are used for carbon-offsetting, they should only be provided to those who can show that they are following the ‘Oxford Principles’ii, and are actively reducing the carbon and environmental impact in their own business activities.

In summary, NbS enable both carbon reduction and nature recovery. The solutions have wide-reaching financial, environmental and social benefits. Most importantly, any NbS need to be held to the highest standards of governance and need to work in balance with reducing carbon emissions and environmental impact within wider business activities.

i Citi GPS (2021) Biodiversity: The Ecosystem at the Heart of Business [online]. Available at: https://ir.citi.com/gps/IfLxkvXYpBe%2BIkzx33IDstLbBb6tXWm3K6VxJuEfb9YC5DQcPgnnXAtB26SMWii%2FnpqxQ4TGOxM%3D (accessed 05/08/2021).

ii The Oxford Principles for Net Zero Aligned Carbon Offsetting, September 2020 [Myles Allen, Kaya Axelsson, Ben Caldecott, Thomas Hale, Cameron Hepburn, Conor Hickey, Eli Mitchell-Larson, Yadvinder Malhi, Friederike Otto, Nathalie Seddon, & Steve Smith]