Biodiversity

Biodiversity is an essential element of life, the very fabric of "natural capital." The enormous variety and complex interactions between species, no matter how small or insignificant they might seem, keep our ecosystems functional and make our economies productive. Nature sustains livelihoods, provides nutritious food, supplies clean air and water, acts as a buffer against pandemics, mitigates climate change, and gives protection against extreme weather events.

Our biodiverse planet is threatened by unprecedented pressures from land use change, overexploitation, pollution, climate change, and invasive species – driven mostly by human activities. One million animal and plant species, out of a total estimate of 8 million, risk extinction, many within decades, according to the 2019 landmark assessment report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). Less than 13 percent of wetlands present a few centuries ago remain today and live coral reefs have nearly halved in the past 150 years, while a third of fish stocks are over-exploited. Although the pace of deforestation has slowed globally since the 1990s, it remains high with average net deforestation rate of about 5 million hectares per year (FAO 2020), affecting critical animal and plant habitats.

For the World Bank, the global decline in nature, understood as biodiversity and ecosystem services, is a critical development issue. The impacts of declining ecosystem services fall disproportionately on developing countries, including the poorest and most vulnerable populations.  Recent World Bank research estimates that, Sub-Saharan Africa and South Asia could forego 9.7 percent and 6.5 percent of their GDP annually by 2030, if vital ecosystem services, such as pollination, timber provision from forests, and food from marine fisheries collapse. The compounding impacts of nature loss, climate change, and pollution threaten hard-won development gains.

Nature loss is strongly linked to today’s most pressing development challenges. Nature’s services underpin food security, for example, as 75 percent of food crops rely, at least in part, on animal pollination and US$235 billion to US$577 billion of annual crop output is directly attributable to animal pollination (IPBES 2019; 2016). Already, 14 of the 18 assessed categories of ecosystem services have declined since 1970 (IPBES 2019). This means smaller fish catches, pollinator decline, poorer freshwater quality, and reduced ability of nature to control pathogens. The World Bank also estimates that crimes affecting natural resources and the environment inflict damage on developing countries worth more than $70 billion a year.

Nature loss and climate change are strongly interconnected: neither one can be solved independently from the other. As underscored by the World Bank Group Climate Change Action Plan 2021-2025, ecosystems play key roles in capturing and storing carbon and in mitigating the impacts of climate change. Climate change and ecosystem degradation combined can push the planet ever closer to irrevocable tipping points. Terrestrial and marine ecosystems sequester around 60 percent of gross annual anthropogenic carbon emissions, so their loss or degradation result in more carbon in the atmosphere. Without wetlands, coastal areas lack crucial protection from storm surges; when forests are lost, water supplies suffer, and torrential rains are likelier to cause landslides.

The value of nature for human prosperity and development is clear, but this is often not reflected in decisions of policymakers, investors, and consumers. Market, policy, and institutional failures are keeping economies on unsustainable development paths.  For example, misaligned policy and subsidies incentives place a negative price tag on nature’s services. The volume of subsidies that are harmful to development is at least five to six times more the amount of funding devoted to protecting biodiversity. Similarly, private finance in support of nature remains insufficient, despite growing interest in sustainable investment.

Last Updated: Oct 13, 2022

Biodiversity and functioning ecosystems are a central part of green, resilient, and inclusive development. As laid out in the World Bank Group's Approach Paper on Biodiversity and Ecosystem Services, we help countries place nature at the core of development efforts through investment in conservation, policy dialogue, analytical work, and capacity to convene partners and additional funding. A broad portfolio of investment projects is helping countries integrate nature-based solutions and nature-smart practices in sectors such as transport and urban development, agriculture, forestry, and fisheries. This includes strategic investments in watershed management, integrated coastal management, and protected areas that maintain or enhance ecosystem services while helping countries achieve their development goals, as well as their climate change commitments. World Bank projects also help countries find ways to generate revenues from biodiversity—including through nature-based tourism or payments for environmental services—that cover the cost of sustainably managing this natural capital and improve local economies. And we work closely with partners on issues including wildlife crime, forest governance, and the oceans. In Fiscal Year 2022, the World Bank’s active portfolio included $2.8 billion of direct investments in biodiversity.

The World Bank is committed to supporting the implementation of the post-2020 global biodiversity framework, set to be adopted at the 15^th Conference of the Parties of the Convention on Biological Diversity (COP-15) in Montreal, Canada. COP-15 is a critical window of opportunity to address the nature-related crises that threaten development outcomes.

As part of this agenda, support in three strategic areas can unlock impact at scale: integrating nature into countries’ development policies and strategic investments to attain a green, resilient, and inclusive development; scaling up finance in support of nature from all sources, including by ‘greening’ broader public and private finance; and better integrating investments in nature with those in climate change adaptation and mitigation.

Bringing nature at the center of green, resilient, and inclusive development in countries means defining how economic and financial incentives and regulations can better integrate longer-term sustainability considerations across sectors. This includes opportunities to boost the economy and deliver positive environmental outcomes simultaneously through nature-based solutions. The modeling and analytical work on nature the World Bank has developed provides insights on economic impacts of different policy scenarios, helping governments in this endeavor.

In partnership with the University of Minnesota and Purdue University, the Bank has developed a first-of-its-kind global integrated ecosystem–economy model, building on previous work carried out by the World Wide Fund for Nature. This work, presented in the Economic Case for Nature report, makes it possible to analyze interaction between nature’s services and the global economy, and to assess possible economic policy responses to the global biodiversity crisis.

Recognizing, measuring, and managing natural capital and ecosystem services at the country level is key to protecting biodiversity. Natural capital should be considered an asset class on its own – otherwise we risk rolling back development gains. The Changing Wealth of Nations 2021 report finds that renewable natural capital accounts for 23% of wealth in low-income countries and 10% in lower-middle-income countries. 

Making finance work for nature is a critical step. The Bank is the largest multilateral financier of biodiversity. It provides an array of financial tools to support biodiversity and ecosystems, from concessional IDA funds to blending and innovative tools that contribute to mobilize more “green finance”. At the same time, its work to develop new standards and provide data and decision-support tools for governments and financial institutions to shed light on nature-related risks and opportunities is contributing to “greening” global finance.

Nature is also at the core of World Bank Multi-donor Trust Funds, which strategically raise resources and concessional funds to blend, de-risk, and pilot new financing financial instruments, and provide analytical foundations for investment in nature:

·       The Global Program on Sustainability (GPS), which builds on the WB-led WAVES partnership, has been working with countries to incorporate the economic value of natural capital and the risks associated with its degradation in decision-making processes. We are also working to make sustainable finance part of the solution, engaging with the financial sector to support a better integration of risks and opportunities associated with natural capital into investment decisions and reporting.

·       Through PROBLUE, our program to promote the development of integrated and sustainable economic activities in healthy oceans, we are ramping up work to address marine plastics and other threats to ocean health, like overfishing and the destruction of natural habitats such as mangroves.

·       The World Bank also oversees PROGREEN, a program that addresses challenges to land-based natural assets threatened, for example, by land-use change, land degradation, desertification, and illegal logging.

Nature is also being integrated into climate action. The World Bank Group Climate Change Action Plan (CCAP) recognizes that a combined approach that addresses both climate and nature risks is needed. To help tackle these crises in tandem, the CCAP is stepping up investments in nature-based solutions and integrated management of ecosystems, and supporting development of wealth accounting, economy-ecosystem-climate modelling, as well as other efforts to bridge the biodiversity financing gap. The Climate Change Development Reports (CCDRs) further look into synergies between nature, climate, and development. For instance, Ghana’s CCDR points to the benefits of blue ecosystems to protect against the impacts of sea level increases.

Finally, given the complex links between people and land, the World Bank has adopted a more integrated landscape approach that simultaneously works on improving the resilience of both ecosystems and livelihoods. Through the Environmental and Social Framework, the World Bank screens all its investment projects under the lens of the standard on “biodiversity conservation and sustainable management of living resources,” applying a precautionary approach to project design.

Last Updated: Oct 13, 2022

Building on more than three decades of active support, the World Bank’s biodiversity portfolio over Fiscal Year 2022 comprised $2.8 billion of direct investments in nature.

The World Bank is increasingly supporting clients to implement a more integrated approach, one where sustainable livelihoods are seen as a key strategy towards protecting areas that are rich in natural capital. For instance, a project in Grenada, Saint Lucia, and Saint Vincent and the Grenadines is supporting post COVID-19 recovery by strengthening the blue economy. Among others, the project is promoting sustainable nature-based tourism, which represents the most important source of economic growth in the region, as well as fisheries and aquaculture, which provide both jobs and food. Actions also center on marine pollution and climate change mitigation, while ensuring coordination among all countries around transboundary issues to ensure long-term recovery.

Ensuring that biodiversity considerations are factored into World Bank infrastructure projects is another key area of work. For example, in the Malawi Shire Valley Transformation Project, the main irrigation canal will include a tall, permanent drop structure to prevent the possibility that invasive fish species could enter Lake Malawi, a globally renowned freshwater ecosystem with hundreds of fish species found nowhere else. In India, a World Bank-financed project has mapped the entire coastline to better manage coastal space and is providing protection for the shoreline. So far more than 1.7 million people have benefited from the program and 16,500 mangroves have been planted. Mangroves provide greater protection during extreme weather and offer ecosystem services such as biodiversity, fisheries, tourism, pollution control and carbon storage.

Ethiopia is addressing land degradation and at the same time improving biodiversity.  The Resilient Landscapes and Livelihoods Project (RLLP), the Second Resilient Landscapes and Livelihoods Project (RLLP 2) and the Climate Action through Landscape Management (CALM) program (PforR) are scaling up results of a successful, decade-long effort undertaken under the Government of Ethiopia’s sustainable land management program.  So far, about 1.9 million hectares of watersheds is now being sustainably managed, benefiting approximately 3.2 million people. This work has led to better water access, less soil erosion, improved food security, higher yields, and diversified sources of income – resulting in more resilient livelihoods. The project has also improved land tenure security, issuing 3.6 million land certificates, of which ca. 2.3 million to women. Through this work, the World Bank is also identifying biodiversity “hotspots” – areas of high biodiversity value that are in danger due to land degradation and other pressures.

In Brazil, a project is supporting adoption of an integrated landscape management approach in the Cerrado biome through, among other activities, helping 4,000 landholders and agricultural producers adopt low-carbon-emission agricultural practices and land-restoration practices through technical assistance related to habitat restoration and low carbon emissions agriculture.

In Turkey, a new project is using nature based solutions to simultaneously reduce poverty and vulnerability, including to climate change, in rural regions. The project will help restore forest landscapes, create jobs, train farmers in sustainable agriculture, and build resilient infrastructure for improved irrigation and water supply.

Examples of our financial innovation include the Wildlife Conservation Bond launched in 2022 in support of South Africa’s efforts to conserve the black rhino. The bond is an outcome-based financial instrument that channels investments to achieve conservation outcomes – measured in this case by an increase in black rhino populations. Through the bond, investors support the financing of activities to protect and grow a critically endangered species with clear conservation targets, contributing directly to biodiversity, and bringing jobs to local communities through the creation of conservation-related employment in a rural and underserved region of South Africa.

Last Updated: Oct 24, 2022

Multi-stakeholder partnerships are an important aspect of the World Bank’s environmental engagement as they pool expertise, access, and resources. These partnerships comprise the public sector, private sector, multi-lateral organizations, and civil society to advance collective action on some of the world’s most pressing biodiversity challenges.

The World Bank is the lead agency of flagship programs co-funded by the Global Environment Facility (GEF), helping convene partners, strengthen cooperation across countries and sectors, and amplify knowledge exchange. With $203 million GEF investment, the Amazon Sustainable Landscapes Program is helping protect biodiversity and ecosystems and improve integrated landscape management in priority areas of the Amazon, with projects in Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, and Suriname being co-implemented by diverse partners. The Food Systems, Land Use and Restoration Impact Program (FOLUR) is a $345 million initiative that seeks to transform food and land use systems, with focus on commodities like cocoa, coffee, and wheat, across 27 participating countries. Finally, the Global Wildlife Program (GWP) is a $230 million grant program launched in 2015 with projects across 32 countries in Asia, Africa, and Latin America & the Caribbean. The program focuses  on designing and implementing national strategies to help countries combat illegal wildlife trafficking, secure wildlife habitats, and promote wildlife-based economies.

The International Consortium on Combating Wildlife Crime (ICCWC) launched in 2010 brings together INTERPOL, the CITES Secretariat, World Customs Organization and UNODC with the World Bank in a coordinated global response to wildlife crime. ICCWC helps strengthen national law enforcement and criminal justice systems and international coordination in support of sustainable development. The Consortium has developed a Wildlife and Forest Crime Analytic Toolkit and Indicator Framework to assess and strengthen wildlife crime responses and prevention strategies. Within ICCWC, the World Bank provides technical assistance on anti-money laundering and prevention of illicit financial flows and has a strategic role by being able to elevate the environmental and wildlife crime agenda with key stakeholders at a national level.

The WBG has actively supported the establishment of the Taskforce on Nature-related Disclosures (TNFD), tasked with developing a framework to help the financial and private sector understand their risks and impacts on nature, ultimately helping promote more green finance.

Last Updated: Oct 13, 2022