Thought Leadership Thought Leadership Natural allies Nature-based solutions for climate and biodiversity A report by The Nature Conservancy and the UBS Sustainability and Impact Institute January 2024 Contents Executive Summary .............................................................................................................. 3 1. Working with nature to tackle climate change.................................................................. 4 2. Harnessing nature: Strategies for swift action ................................................................. 13 3. How to ensure NCS delivers ........................................................................................... 19 About the Institute............................................................................................................. 20 Disclaimer .......................................................................................................................... 21 Author: Susan Cook-Patton (TNC) William Nicolle (UBS) Peter Ellis (TNC) Preston Welker (TNC) Melissa Gallant (TNC) Peter Benham (TNC) Sara Leavitt (TNC) Editor: Juhi Singh Project Management: Jackie Bauer (UBS) Preston Welker (TNC) Stevica Levajkovski (UBS) Reviewers: Katharine Hayhoe (TNC) Mike Ryan (UBS) Jackie Bauer (UBS) 2 Executive Summary Our reliance on nature is absolute. Human society can no longer afford to choose between its progress and environmental sustainability. Today, the imperative is clear: The world must invest in and work with nature to address both the climate and biodiversity crises, for the sake of current and future generations. Leveraging every proven and scalable tool we have to avoid these crises escalating is crucial. Reducing fossil fuel emissions is at the forefront; yet additional climate mitigation strategies are also needed, particularly in the land sector. Natural climate solutions (NCS) offer some of the most immediately scalable and cost-effective options for this additional climate mitigation, reducing greenhouse gas emissions from land use as well as capturing carbon from the atmosphere in the biosphere. NCS encompass a range of practices aimed at protecting, managing, and restoring forest, grasslands, wetlands, and agricultural lands. However, not all land management practices qualify as effective climate solutions. To be considered as such, they must deliver measurable climate mitigation that exceeds baseline conditions and persists over time. They must not compromise biodiversity and must be equitable and developed in partnership with local communities. When executed effectively, NCS can also contribute to cleaner air and water, improved livelihoods, and more resilient communities. While new tools are available to optimize climate returns from finite investments, NCS implementation is currently hindered by insufficient policies and lagging financial investment. Governments can help by redirecting subsidies from environmentally harmful activities toward climate-positive ones. Corporations can help by reducing emissions within their own supply chains, financing environmentally sustainable practices, and funding additional climate initiatives through high-quality carbon markets. Financial institutions have a role to play as well, by supporting more climate- and nature-positive investments and fostering new transition finance mechanisms. No sector can accomplish these goals single-handedly. Only through synergistic collaboration can a naturepositive world become reality. Find more insights in our latest white paper: “Bloom or bust—Aligning technology and finance to address biodiversity challenges” www.ubs.com/bloom-or-bust 3 1. Working with nature to tackle climate change At a glance • • • Natural climate solutions (NCS) can effectively reduce greenhouse gas emissions from land use and agriculture, and capture carbon in ecosystems. NCS are nature-based, sustainable, additional, measurable, and equitable. They can be highly cost-effective and scalable in the near term. NCS can be categorized into three main types—land protection, improved management, and restoration—each of which varies in terms of cost-effectiveness, speed of mitigation impact, and additional benefits offered. 1.1. Nature offers scalable solutions to reduce emissions today The climate crisis looms larger with each passing year. It’s clear from the science that “every bit of warming” 1 contributes to more severe, and often exponentially rising,