Publication: Assessment and Options Analysis of Climate and Nature Financing Instruments and Opportunities: Summary Note on Financing for Climate and Nature
Date
2023-08-17
ISSN
Published
2023-08-17
Author(s)
World Bank
Abstract
Despite increasing recognition of the
material impact of nature degradation, the global financing
gap for climate and nature investments is significant and
growing. The Paulson Institute estimated in 2020 that the
biodiversity financing gap at an average of US$711 billion
per year. Government leaders and private enterprises must
accelerate and scale financial resource mobilization
strategies to close this gap. However, at a national level,
many developing countries have limited market access and
lack the fiscal space to mobilize financing at the scale
required to avoid the severe negative impacts of
biodiversity loss, nature degradation, and reduced ecosystem
services. This can precipitate countries into a vicious
circle, whereby delayed investment at scale exposes them to
the risk of ecosystems collapse. These systems also provide
essential climate benefits in terms of carbon sinks and
adaptation buffers against severe climate impacts (e.g.,
floods, droughts, storms). These natural assets underpin
economic growth of developing countries but are currently
undervalued and underinvested. Given the difficulty of
estimating the timing, progression, and extent of these
impacts and their global public good (GPG) nature, other
more immediate or visible needs tend to be prioritized.
However, when nature-related risks materialize, economic
activity is likely to contract, further reducing fiscal
space, increasing a country’s borrowing costs, and delaying investments.
Link to Data Set
Citation
“World Bank. 2023. Assessment and Options Analysis of Climate and Nature Financing Instruments and Opportunities: Summary Note on Financing for Climate and Nature. © Washington, DC: World Bank. http://hdl.handle.net/10986/40228 License: CC BY-NC 3.0 IGO.”