Is investing in nature a solution to economic and environmental problems?

Harnessing nature may boost our efforts to tackle climate change. Using these nature-based solutions can also bring economic opportunity and improve human health and wellbeing.

Climate change is widespread, rapid and intensifying, according to the latest report from the Intergovernmental Panel on Climate Change (IPCC, 2021). And it is accelerating an unbalancing of the natural world, through extreme weather events.

At the same time, ecosystems are degrading fast – leading not only to the loss of species but also the ‘services’ that they provide, such as temperature regulation, water purification, carbon storage, crop pollination and their myriad benefits for human life.

Nature is our strongest ally in the struggle to keep the earth at a habitable temperature. Climate change solutions based in nature may also help to address the economic and social problems of inequality, government budgets under pressure and finite natural resources.

What are nature-based solutions?

‘Nature-based solutions’ are based on a simple – and old – idea. When nature is healthy, it delivers multiple benefits and services – not only for the environment, but also for human health and wellbeing, as well as for economies and societies.

These solutions, based in nature, generally need to ‘solve’ multiple challenges – benefitting both humans and nature simultaneously.

Nature-based solutions can include:

Green infrastructure – such as permeable surfaces, green walls and green roofs.
Soil conservation and recovery – for example, by increasing soil moisture, organic matter and biodiversity and reducing soil erosion through sustainable land-use schemes, careful, evidence-based planting and organic agriculture.
Protecting settlements from floods and seas – including through restoring or creating wetland areas, saltmarshes and riparian parks.
Enhancing biodiversity and its services – for example, by restoring ecosystems or creating insect-friendly urban green spaces.
Regenerating places and connecting communities – including through urban food growing and community gardens,
Improving air quality and lowering temperatures in our cities – such as increasing green planting schemes and the abundance of city trees.

How can they help society and the economy?

Nature-based solutions can create green jobs and business opportunities, for example, in landscape architecture, ground maintenance, construction, horticulture and agro-forestry. Other roles include wildlife officers, outdoor educators, urban farmers and more.

As well as creating sustainable occupations, nature-based solutions can also save money. Improved water management or recreational services can help to save money at household and government levels – for example, roof gardens and urban parks provide cooling, which would have otherwise been artificially produced via air conditioning. Studies suggest that green roofs can bring energy savings of between 15% and 45% of annual energy consumption from reduced cooling costs (Anderson and Gough, 2022).

They have also been shown to reduce the concentration of air pollutants, specifically ozone and nitrogen dioxide (Anderson and Gough, 2020). One European project – Green City Solutions – has developed the ‘CityTree’: vertical panels that contain hardy, pollution-processing plants such as moss, which can help to clean the air at a fraction of the cost and space of conventional plantings, and can be set up in transport hubs and school playgrounds.

Before 1998, Augustenborg in Sweden was an area that suffered from socio-economic decline and frequent flooding from overflowing drainage systems. But retrofitting sustainable urban drainage systems in the neighbourhood – done by creating ditches, retention ponds, green roofs and green spaces – has been found to have positive effects on biodiversity, rainwater runoff rates and community cohesion, while lowering unemployment and tenancy turnover rates.

Further, other nature-based solutions, such as urban farming, can improve diets and food security, connect communities and give a potentially important boost to household budgets.

Basing solutions on nature's designs is often effective and frugal, as is the case with urban green spaces. These lower the impact of the ‘urban heat island effect’ – when natural land is replaced by buildings and pavements, which absorb and retain heat (Jandaghian and Berardi, 2019).

This is especially important when we consider that there is a physiological upper limit to humans’ capacity to adapt to rising temperatures (see Figure 1). There are business benefits too: ecosystem-based adaptation to prevent climate-related flooding, for example, can prevent damage to infrastructure, saving private companies and insurers lost revenue.

Figure 1: Wet bulb global temperature

Source: Science for Environment Policy, adapted from Ariel’s checklist.
Note: based on temperature and humidity, assuming a clear sky (maximum solar load) and atmospheric pressure of 1 ATA (760 mm Hg).

But these approaches do not necessarily represent a silver bullet to the environmental challenges we face. Climate mitigation policies can lead to the pursuit of nature-based solutions with low biodiversity value, such as planting non-native monocultures. In China, for example, this practice has led to a drastic reduction in the water table.

Further, not every kind of ‘green’ intervention is sustainable and they can have other unintended effects – even if many are well intentioned. For example, ecological gentrification of city areas can raise property prices, and alter housing opportunities and the commercial infrastructure supporting lower-income communities.

Evidence on the extent of their impact is also limited at present and what is available focuses more on environmental impact than health and social effects (Seddon et al, 2020). It is also skewed in favour of the Global North, while the Global South remains more vulnerable to the effects of climate change (Chausson et al, 2020).

A recent handbook presents a comprehensive framework for more robust evaluation and monitoring to determine their performance, cost effectiveness and the conditions required for effective delivery (Dumitru and Wendling, eds, 2021).

Despite the lack of consistent, accurate data, one comprehensive review found that 59% of nature-based interventions reduced the effects of climate change, including flooding, soil erosion and loss of food production (Chausson et al, 2020). Other work has shown their effectiveness at reducing temperatures in the long term (Girardin et al, 2021).

What do nature-based solutions cost?

The value of the total benefits from nature-based solutions are complicated to calculate and riddled with assumptions. But some initial attempts show that, generally, the value of the benefits would easily exceed the cost, as nature is doing much of the work.

For example, at the global level, the cumulative costs of inaction to address land degradation are high: between 1997 and 2011, the world lost an estimated $6-11 trillion (£5-9 trillion) per year from land degradation. The costs of restoring natural ecosystems, rewarding agriculture that keeps soils healthy, and incentivising greener business models have been estimated to cost far less at $2.7 trillion per year (£2.2 trillion).

The global benefits of restoration have been estimated to exceed the costs by an average margin of ten to one. One example of land restoration on a massive scale is the Great Green Wall project – an African-led solution aiming to grow an 8,000km natural barrier to desertification stretching the entire width of Sahelian Africa. The project will also help to provide food security, jobs and livelihoods for the millions who live along its path.

Evidence suggests that these investments are worth making and prevent further spending down the road (Anderson and Gough, 2022). Analysis from an urban forestry project in Toronto indicates that every dollar spent returns $1.35-3.20 worth of benefits to the city’s residents.

Indeed, the returns from a regenerative restoration economy that reduces greenhouse gas emissions, land degradation, and biodiversity loss are estimated to be worth $125-140 trillion annually – up to one and a half times global GDP of $93 trillion in 2021. Nature-positive business models have also been estimated to create 395 million jobs by 2030.

It is worth emphasising that at any scale, equitable, inclusive governance of nature-based solutions can be expected to lead to fairer distribution of the benefits, leading to better socio-economic outcomes.

It has also been estimated that nature-based solutions also have the potential to deliver over a third of the climate mitigation effort needed until 2030 to keep global warming well below 2°C. Currently, only a tiny proportion of climate funding is invested in these types of interventions.

We know that significant investments are needed to decarbonise the economy and tackle climate change – why not use that money to benefit health, wealth and nature at the same time?