As the world gears up for two pivotal global conferences – UNFCCC COP27 and CBD COP15 – that will set the stage for climate and biodiversity action, the Green Policy Platform (GPP), through its initiatives and partnerships, is working to ensure that natural capital is part of the conversation.
Over the last few years, the GPP has worked closely with partners on two major initiatives: Economics for Nature (E4N) and Natural Capital for African Development Finance (NC4-ADF).
E4N started in 2017 with the goal of encouraging robust natural capital approaches and supporting the internalization of the value of nature in development, economic, spatial and green growth planning processes. It has been led since its inception by the Green Economy Coalition in collaboration with the Green Growth Knowledge Partnership (GGKP), WWF France, and the Capitals Coalition.
NC4-ADF is led by the GGKP and the African Development Bank (AfDB), in partnership with the E4N team and WWF Africa. The project aims to lay the foundation for natural capital-based green economies in Africa by mainstreaming natural capital in AfDB’s development finance operations and its support to regional member countries.
In October 2022, E4N wrapped up six years of collaboration by bringing together leaders in the natural capital space for a roundtable discussion on Nature-Positive Economies: The Next Frontiers. Participants shared lessons learned – good and bad – from the programme and looked to the next horizon for nature-positive economies, as well as possible future partnerships.
Momentum builds for financing nature action
One area where work has been rapidly accelerating is in mainstreaming natural capital into finance. A number of events reflect this momentum:
In October 2022, the World Resources Institute (WRI), Global Facility for Disaster Reduction and Recovery (GFDRR), AfDB and GGKP held a workshop on better adoption of nature-based solutions (NbS) in sub-Saharan Africa. The workshop brought together practitioners and experts from across sub-Saharan Africa and the world. The cross-sectoral discussion and knowledge exchange generated insights on overcoming the barriers to mainstreaming NbS in policies and infrastructure design, as well as financing and funding strategies to scale up NbS investments for the region.
Another highlight was the launch of the flagship Debt-for-Nature-Swaps report published by AfDB, the Potomac Group and WWF. The collaboration’s objective is to mobilize finance to preserve natural capital in Africa. Debt-for-nature swaps are innovative financing tools that aim to reduce countries’ debt burdens while also financing nature and thus advance broader development goals. An approach to this is writing off portions of existing debt obligations or refinancing through more favourable, sustainability-focused transactions. Countries could forgive a portion of another country’s sovereign debt in exchange for conservation commitments.
Also in October, all nine multilateral development bank (MDB) signatories of the joint nature statement met virtually to reflect on the progress made so far, strengthen the dialogue between the MDBs and recommit to achieving the goals agreed to in the statement. The pledge, made at COP26 in Glasgow, reinforces the inclusion of and continued mainstreaming of nature into MDBs’ policies, investments and operations. Key to that is further cooperation among the signatories as they pursue their objectives.
Additionally, during GGGI’s Global Green Growth Week, GGKP and AfDB held a joint session on knowledge sharing and capacity building around natural capital in the NC4-ADF project. The presenters, Sun Cho (GGKP) and Dr Innocent Onah (AfDB), highlighted the work both organizations have done to mainstream natural capital into African development finance. With the project’s support, AfDB has begun to shape an institutional framework that better integrates natural capital into its operations. Two examples of this progress are the recent renaming of AfDB’s African Natural Resources Management and Investment Centre from its former name of African Natural Resources Centre, and the integration of "valuing natural capital" as one of three key pillars of the centre’s upcoming strategy, along with natural resources governance and investment facilitation in support of nature.
Coming soon
An upcoming GPP event with AfDB and WWF on 27-28 October in Maputo, Mozambique, will focus on enhancing capacity for natural capital approaches for a green economy. Given Mozambique’s leadership in natural capital, the country was selected as the pilot case for applying a natural capital approach for development finance under NC4-ADF.
A natural capital assessment for the infrastructure finance project “Pemba-Lichinga Integrated Development Corridor” was conducted, with the aim of providing a practical example demonstrating the added value of assessing infrastructure projects under a natural capital lens. A public portion of the event will highlight the findings of the report, then an in-person test-run training on natural capital approaches will be conducted to identify specific capacity and knowledge needs that should be reflected in future training modules.
In November 2022, GGKP, together with its partners, will also co-host two side-events at COP27 in Sharm El-Sheikh, Egypt, with a focus on natural capital and accelerating circularity. Attend in person or virtually, and keep an eye out for further developments through the GGKP COP27 event page.