Biodiversity is currently declining at an unprecedented rate in human history. Approximately 40% of Earth’s land surfaces are now considered degraded, with around 75% having undergone significant change. Additionally, 66% of the oceans face increasing cumulative impacts, and over 85% of wetlands have been lost. Grasping the implications of this rapid decline in biodiversity is essential for advancing conservation efforts.

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The importance of diversity

Plants play a vital role in human survival and well-being, providing the oxygen we breathe and the food we eat.Plant diversity is essential for climate stability and ecosystem services, such as the provision of nutrients and water. Jacolette Adam, Owner of Exigent Environmental Group, specified “A more diverse plant community is more resilient to disturbances, such as extreme weather events, invasive species, or disease outbreaks, providing stability to the functioning of ecosystems.” However, plant species are disappearing at a rate 500 times faster than they did before the existence of humans. It is estimated that approximately three-quarters of the world’s “undescribed” plant species are already at risk of extinction.

Climate change is one of the main drivers of biodiversity loss. As mentioned by Adessou Kossivi, Regional Lead Africa for the Global Network of Civil Society Organisations for Disaster Reduction (GNDR), “Climate change is a risk driver and a root cause of biodiversity loss. It is crucial to plan inclusively and comprehensively to protect biodiversity, as it can mitigate climate change while being threatened by it. Integrating biodiversity into climate negotiations is essential for effective mitigation and overall environmental health.” By enriching and strengthening plant diversity and ensuring a variety of species, we create ecosystems capable of surviving different harsh climates and withstanding the negative impacts of climate change.

The need for strategic conservation

According to projections by the World Bank, the partial collapse of certain ecosystems is expected to incur an annual cost of 2.7 trillion USD by 2030.Additionally, the World Economic Forum (WEF) estimates that more than 44 trillion USD of economic value generation, equivalent to over 50% of global GDP,  relies heavily or moderately on nature and its services.While these figures underscore the urgency of addressing biodiversity loss, they remain broad estimations. Without precise accountability, policymakers and businesses may find it challenging to comprehend the extent of the risks associated with biodiversity loss. Dominic Ziegler, Founder and CEO of Arbofino, pointed out “A major challenge is measuring the economic impact of biodiversity loss. It is crucial for companies and governments to understand the consequences of biodiversity collapse. We need to quantify these changes and their effects on ecosystems, which will highlight the importance of biodiversity and engage stakeholders in addressing the crisis.”

Aro Ratovonomenjanahary, former Biodiversity Senior Expert at Eramet further explained “The economic context is crucial as it creates pressure and threats on natural resources management. Thus, conserving biodiversity becomes challenging in regions where economic constraints prevent conservation efforts. Achieving a balance between local needs and biodiversity preservation requirements is essential.” Costa Rica, recognized as one of the world’s most biodiverse regions, experienced significant forest loss between 1940 and 1983, leading to the depletion of approximately 50% of its original forests. However, the nation has since then emerged as the only tropical country to actively halt and reverse deforestation. Through innovative strategies, Costa Rica has successfully restored 60% of its rainforests. This transformation was facilitated by a system of incentives that reward landowners for preserving and nurturing forests. The removal of detrimental subsidies played a pivotal role in driving the country’s conservation efforts. The nation’s natural capital is now estimated to be worth at least 15 billion USD annually, equivalent to 23% of its GDP in 2019. Over 40% of this value is derived from cultural services such as recreation and tourism. Additionally, essential regulating services – including climate regulation, erosion prevention, and pollination – contribute approximately 35% of the total ecosystem service value.

External costs, such as those related to climate change or air pollution, are frequently omitted from corporate balance sheets but are ultimately borne by society.Recent data from the International Monetary Fund (IMF) indicated that these subsidies and external costs surpass 7 trillion USD for fossil fuels alone, constituting 7.1% of the global GDP. Esteban Brenes, Senior Director for Conservation Finance at WWF, stated “We need to improve land tenure and governance and rethink land planning, land management, and natural resource planning. Financial incentives are the key drivers. We must change how these incentives work and reform our financial sector to pull the necessary levers for change.”

Moving forward

According to Beatriz Merino, Director of Financial Institutions Europe at The Nature Conservancy, “With biodiversity loss and nature-related risk and opportunities increasingly becoming an area of focus for financial institutions, regulatory bodies, and government policy play a crucial role to encourage proactive monitoring, assessment, and disclosure of these risks. This can support decision-making to reduce negative impacts on biodiversity and increase positive outcomes. Integrating nature into decision-making and disclosure has the potential to shift financial flows towards better outcomes for nature.” In this context, the Task Force for Nature-Related Disclosure (TNFD) serves as a crucial tool for financial institutions to identify the risks and impacts of biodiversity within their portfolios. By recognizing these risks and impacts, institutions can then take proactive measures to mitigate and reverse their effects. Moreover, the Corporate Sustainability Reporting Directive (CSRD) will further facilitate alignment among institutions in their reporting practices.

Costa Rica’s pioneering efforts in biodiversity preservation provide a compelling roadmap for other nations to follow. A key aspect of this initiative involves reforming harmful subsidies and incentives, while simultaneously implementing positive policies aimed at redirecting financial resources away from activities detrimental to the environment.Moreover, it is essential to mainstream biodiversity conservation efforts across various sectors and increase financing for such initiatives. Costa Rica’s notable success also includes the implementation of a successful program for payment for ecosystem services. Such programs can foster economic growth, promote engagement with indigenous communities, and facilitate ecosystem restoration.

Governments tackle climate change and biodiversity loss through distinct international agreements such as the UN Framework Convention on Climate Change (UNFCC) and the UN Convention on Biological Diversity (CBD). It is crucial for governments to proactively align and engage in these frameworks, establishing clear targets and commitments. Addressing both climate change and biodiversity loss simultaneously is essential, as this approach is the only way to achieve the ultimate goals of preservation and regeneration. Integrating efforts to address biodiversity loss is fundamental to societal well-being and economic growth. Government action, coupled with initiatives for nature education and awareness, plays a crucial role in driving change and fostering a deeper understanding of biodiversity loss. By collectively embracing these measures, we can strive towards a more sustainable future for both humanity and the planet.

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