A new report by the United Nations Environmental Program (UNEP) has revealed that around $7 trillion is spent annually by both public and private institutions on activities with a negative impact on nature.
This figure it states amounts to around 7% of the world’s GDP.
The report titled “State of Finance for Nature 2023” says nature-based remains underfunded globally. The document further highlights that current annual public and private investments in nature-based solutions are just $200 billion. It stated that climate, biodiversity, and restoration goals will require a tripling of finance flows by 2030 and quadrupling them by 2050.
- It states, “For the first time, this edition estimates the scale of nature-negative finance flows from both public and private sector sources globally. The figure is daunting – almost US$7 trillion per year – and is likely to be an underestimate given it includes only direct impacts.”
According to the report, private sector activities that are harmful to the environment receive around $5 trillion in investments while nature-based solution activities investments were 140 times lower at $35 billion.
The top five industries responsible for the majority of negative financial flows are construction, electric utilities, real estate, oil and gas, and food and tobacco.
- Responding to this, Niki Mardas, Executive Director of Global Canopy, remarked, “This year’s report is a stark reminder that continuing with ‘business as usual’ poses a severe threat to our planet, reinforcing the urgent need for a transition to sustainable business practices and to stop the financing of nature destruction.”
The report noted that the government’s investment in natural harmful subsidies increased by 55% to reach $1.7 trillion since 2022.
Effects of unchecked harmful activities on the environment
UNEP’s report warned that without sufficient commitment backed up by funding, greenhouse emissions will rise and put many people in warmer environments by 2070.
Specifically, it stated that the places affected by warmer weather conditions will increase from just 0.8% of the world’s landmass to around 19% in 2070 with up to 3 billion people estimated to be affected.
The economic impact of this scenario could cost the world around 11% to 14% of its GDP by 2050 if the current trajectory continues unchecked.
- It states, “By 2070, these conditions could spread to 19% of global land areas, potentially affecting over 3 billion people (Xu et al. 2020) and leading to mass involuntary migration and serious socio-economic upheaval.”
