by HE Ken O'Flaherty, Regional Ambassador to Asia Pacific and South Asia for the United Kingdom for COP26, delivered as a keynote address on 15 March 2021 for the webinar "Climate Change: Why should your business be interested in nature?" jointly organised by the British High Commission-WWF Malaysia-Capital Markets Malaysia.
Friends, ladies and gentlemen
It is a real pleasure to speak to investors, financial institutions and businesses in Malaysia today. My name is Ken O’ Flaherty and I am the UK Govt’s COP26 Regional Ambassador to Asia Pacific and South Asia.
2021 will be a critical year. The Covid-19 pandemic has had a devastating impact on communities around the world.
But as the world emerges from the pandemic, attention will once again shift to global issues. None more pressing than how we mitigate the effects of climate change.
The UK will play a key role this year, hosting the UN Climate Change Conference, CoP26 in Glasgow in November, working in partnership with Italy.
Friends, the global economy is recovering from the economic impact of the pandemic, which has left many countries worse off than at the height of the 2008 financial crisis.
This recovery presents the opportunity to build back better: placing priority on economic activities that are green, social and sustainable.
The call for collective action on climate change is getting louder.
The People’s Climate Vote - the biggest-ever world survey on climate change, which polled 1.2 million people across the world – published this year revealed that roughly two thirds of the global population consider climate change to be a global emergency.
We need to act now.
Despite lockdown orders and reduced economic activity, 2020 saw record temperatures.
We saw fires raging across the world.
We saw storms intensifying.
In short, the climate crisis is closing in.
But, we are seeing some acceleration in climate action. At the Climate Ambition Summit the UK held with the UN and France in December 2020, we heard from 75 leaders.
Between them, they announced 45 Nationally Determined Contributions (a.k.a. national level emission reduction pledges up to 2030), 24 net zero pledges, and 20 adaptation commitments.
All this is welcome. But it is not enough to meet the ambitions of the mid-term review of the Paris Agreement.
The latest UNFCCC Initial NDC Synthesis Report showed that the combined impact of updated NDCs of 75 countries will only lead to a less than 1 percent reduction of carbon emissions by 2030 compared to 2010 levels.
Although 122 countries have yet to submit updated or revised NDCs, we are still far below the science-based target to reduce emissions between 45-50% by 2030.
We must do more, and we must do it urgently.
Today, I want to bring your attention to the importance of putting nature at the forefront of our climate response.
The UN estimates that land and marine habitats could sequester up to one third of the CO2 emissions that needs to be mitigated to meet the Paris Agreement.
It is imperative that we protect, conserve and expand nature.
Nature and economics
A sweeping new review makes the case that nature has a fundamental economic value — and our account is badly overdrawn.
The Dasgupta report, commissioned by the UK government, underlined that the natural capital created by clean water, air, biodiversity and basic resources has been the foundation of human prosperity. But because nature has never been accorded any specific economic value, we too often treat it as infinite.
We also forget that almost everything that we create comes from nature. Not just the air we breathe, the water we drink and the food we eat, but also the raw materials like cotton, wood, metals, water, clay and petroleum to make all the things we cannot live without – clothes, electronics, furniture, houses, cars.
Securing a sustainable future may require treating nature less like lottery winnings and more like a retirement account.
Here are my top lines from the report:
• In economic terms, whilst producing capital — assets like factories and roads — doubled between 1992 and 2014, and human capital has increased by about 13%, the stock of natural capital per person declined by nearly 40%.
• Current extinction rates are 100–1,000 times higher than the planet's baseline rate and that 20% of species could become extinct within coming decades.
• Those trends are in large part a consequence of how much Earth has become a support system for a single species: human beings.
• Humans and domesticated animals used for livestock now make up 96 percent of the mammalian mass on the planet.
Our modern lifestyles are more resource-intensive, more so in the developed world.
The problem is that nature's bank account is not infinite. As we draw it down, we undercut humanity's future.
Dasgupta argues that we need to look at natural capital as we would other forms of capital, investing it wisely to ensure that future generations enjoy not just its wonder and splendour, but the raw materials every economy and person depend on.
To do so, we need to figure out ways to equitably share the planet's natural capital, instituting payments to protect the ecosystems controlled by individual nations and imposing rents for common global resources like the oceans and the atmosphere.
Nature and the economy are inextricably linked.
We and nature
Friends, our relationship with nature started to sour around the start of the industrial revolution, but only really veered off the rails as the Great Acceleration kicked in after the second world war.
In this period, booming population, trade and higher levels of prosperity led to an exponential growth of pretty much every measure of humanity’s planetary impact: resource extraction, agricultural production, infrastructure development, pollution, and habitat and biodiversity loss.
This plundering was a gamble that has long since ceased paying out. Degraded land already adversely affects the well-being of 3.2 billion people and costs more than 10 per cent of annual GDP in lost yields, poorer health and other negative impacts.
It isn’t that we have lacked good intentions in the past.
In 2010, the Convention on Biological Diversity – one of three UN bodies to emerge from the 1992 Rio Earth Summit, along with the Framework Convention on Climate Change and the Convention to Combat Desertification – agreed 20 biodiversity targets to be met by 2020, from phasing out subsidies for activities that harm biodiversity to ensuring the genetic diversity of farmed and wild plant and animal species.
One of the key targets was the amount of land to be given over to nature.
Protection for 17 percent of land and fresh water and 10 percent of the oceans was mandated. Current protection is estimated at about 15 percent and 7.5 percent, respectively.
So while some progress has been made, goals were not reached. We must do better.
Following a lost decade, and a year-long pandemic-induced delay to biodiversity negotiations, a new international agreement to conserve the world’s biodiversity is due to be signed later this year at the Convention for Biological Diversity (CBD) in Kunming, China.
Covid-19 alerted us that the destruction of nature can lead to serious threats to humanity. But it could also be the wake-up call we need for greater ambition and action.
The question is, what can we do – and is there enough time?
Science tells us that we must expand protected areas to cover at least 30 per cent of the land and sea by 2030, or “30 by 30”.
The High Ambition Coalition for Nature and People, comprising more than 50 countries co-chaired by France, Costa Rica and the UK, aims to secure international agreement for this “30 by 30” pledge.
We are encouraging Malaysia to join this initiative.
In parallel, the UN will soon launch its Decade on Ecosystem Restoration. The main aim is to prevent, halt and reverse the degradation of ecosystems worldwide.
We have reached a point where conservation is no longer enough. We must invest heavily in restoration.
The upfront costs is estimated at more than $700 billion, – but, comes with a huge pay-off.
Every dollar spent is estimated to accrue between $3 and $75 of economic benefits from ecosystem goods and services, resulting in a potential $2.1 – $52.5 trillion gain.
Far from being a luxury that cash-strapped economies can ill afford, spending money on restoring and preserving ecosystems is a necessary investment.
This investment can yield direct monetary returns, such as from sustainable wood, improved agricultural yields and ecotourism revenues.
But more importantly, investment in nature will yield eco-system services that society depends on for life on Earth: such as clean air and water, pollination, pest control, nutrient recycling, carbon sequestration, fewer animal-transmitted diseases and greater resilience to extreme weather and natural disasters.
Inaction would cost us far more. And the longer we delay this investment, the more costly it will be.
In fact, we need nature more than it needs us. So we must invest in innovations that deliver sustainable growth and environmental protection.
According to Climate Policy Initiative, an estimated $180 billion annually will be needed over this decade to cover the cost of adaptation only – a figure that the public sector cannot meet on its own.
In recognition of the shortfall, finance mechanisms have surfaced to fund nature based solutions by enabling investment from the private and public-sectors.
If we are to change and live in harmony with nature, we need a world in which every financial and investment decisions will take climate change, nature protection and sustainable land use practices into account and eventually deliver impacts on the ground.
Financing the transition to a cleaner and greener world will be the future of business.
Financial markets have the power to put us on track to meet Paris Agreement targets, net zero ambitions, and reverse biodiversity loss, while spurring growth for our nations.
There are already green shoots in the business and financing sectors.
We know what must be done and we are taking tentative steps in the right direction: investing in renewable energy; divesting from coal fired power plants; supporting growth of sustainable crop commodities; scaling up nature based solutions via market mechanisms; adopting climate-related and nature related reporting standards; and using climate scenario analysis as a risk management tool.
As we recover from the COVID-19 pandemic, we must strengthen and scale up these efforts and build back greener.
There is still just enough time to manage the pivot from the Great Acceleration to a Great Restoration: an era when humanity learns again to live sustainably and in harmony with nature.
It’s not too late. If we go towards sustainable consumption and production. If we set out enough protected areas. If we restore key land banks into thriving ecosystems. If we promote and build co-existence, address climate change, and importantly make sustainable finance work for nature, there’s no reason why biodiversity can’t flourish again. We’re not beyond the point of no return.