What is the Best Way to Invest in Nature?

The world wants to invest in natural ecosystems – but what is the best way to do this?

The past few months has seen climate change and the loss of biodiversity thrust to the top of the headlines. Greta Thunberg and her school strikes, as well as the Extinction Rebellion protests in London have ensured that politicians, businesses and journalists have been forced to confront the issue of anthropogenic climate change. Earlier in May the UN released a comprehensive report whose findings are unequivocal in highlighting the role of humans in bringing one million species to the brink of extinction.

The two issues are inextricably connected. It is increasingly clear that the activities of the human race across our planet are leading directly to impacts on natural ecosystems that put the survival of wild species at risk, and by extension threatens the very life systems that support human life. Insects that pollinate plants that produce human foodstuffs, marine species that we harvest for feeding millions of people, and trees and plants that regulate water flows and soil fertility are being extinguished and lost through unsustainable and poorly planned land use practices, overdevelopment of natural habitats and pollution of the environment.

Consumer Concerns

And all this comes a year after public awareness was dramatically stimulated around the issue of plastics in the environment by David Attenborough’s nature documentary series Blue Planet II. People are more and more aware that action must be taken to address these issues that threaten our own livelihoods and basic health. Children are now the ones obliging their parents to change their habits around the use of plastic bags, recycling of household materials and many aspects of modern life that depend on fossil fuels. And public opinion seems to be significantly shifting to a place where people want to know how they can affect change, and how to influence governments and policy makers to deliver sustainable solutions to transport and power generation that give consumers low carbon choices.

Corporate commitments

And the business world is also making serious moves to address the same issues at a company level. In a serious attempt to contribute meaningfully to slowing biodiversity loss and reducing atmospheric carbon dioxide levels, many companies have made announcements in the last 12 months which have described enormous financial commitments to investing in nature and natural ecosystems. These commitments have been made based on many years of scientific research and thinking that has identified the need for finance to be directed to what some call “natural climate solutions”, also sometimes described as “nature-based solutions to climate change”. This recognition of natural systems being part of an investment strategy is a hugely significant step in addressing the imbalance in the global financial system which has traditionally excluded the costs of business that are borne by nature (free ecosystem services such as water and clean air) and the impacts of business paid for by nature (such as pollution).

But now that these companies have decided to invest in nature, what are the best ways to deploy the finance? There are many ways to conserve, preserve, protect and even restore nature, but which offers the best value for money, and which are the most effective in combining the double challenge of preserving biodiversity and reducing carbon emissions?

Tree planting

Planting trees has always been a very popular activity for charities, NGO’s and local conservation groups. In Europe where forests were historically lost during the industrial age, this is almost a cornerstone of culture, and because of this, tree cover in Europe, and in some parts of North America, are now well managed and often expanding in areas. 

But these areas of planted trees are not forests – they are almost always plantations characterised by geometric lines of a single species of pine or fir tree.

“there is no doubt that super-aggressive tree planting efforts that are not done with consideration of the historic ecosystem will be a bad investment.”

Joseph Veldma

For this reason, tree planting either locally or at scale does not contribute materially to biodiversity conservation. It is also not always a meaningful way of achieving significant emission reductions and thereby contributing to climate change mitigation. Recent research and associated reports help to highlight the limitations of tree planting as a way of dealing with our two related challenges. One report looks at how important it is to consider the impacts of tree planting in respect of the original ecosystem. One author, Tom Crowther who is an advisor to Plant for the Planet, emphasises that tree plantingis “no quick climate fix. It can take 30 to 40 years of growth for the carbon storage to reach its full potential.”

His colleague, Joseph Veldman of the department of ecosystem science and management at Texas A&M University, adds that “reforestation can play a role in carbon sequestration’ and goes on to say that “there is no doubt that super-aggressive tree planting efforts that are not done with consideration of the historic ecosystem will be a bad investment.”

And a recent review in The Economist looking at the Great Green Wall project in China, further illustrates that even with massive resources, centrally planned programmes and a long term vision, large scale tree planting is still a very poor substitute for natural forest management and ecosystem restoration. A figure of 15% tree survival is given, and this reflects the experience of many other tree planting initiatives from around the world over the past half century. For every 100 trees only 15 survive to maturity – is this a good investment, or can funds be better and more effectively spent?

Ecosystem restoration – tree planting by another name?

Many countries, organisations and companies are increasingly using the term “ecosystem restoration” or habitat regeneration” to distinguish their efforts from straight tree planting. But again the reality is complex, as a report published by the Yale School of Forestry and Environmental Studies makes clear. The researchers emphasise the need to be honest about what creating new forests actually means, and they are insistent that planting monocultures does not equal creating forests. They conclude that only restoring natural ecosystems can deliver the climate mitigation and biodiversity benefits that we all seek.

The report also references an article published in Nature in April that reinforces their position. The damning assessment analyses the small print of government declarations about what kind of forests they planned to create to meet their obligations under the Paris Agreement. The researchers discovered that 45 percent of promised new forests will be monoculture plantations of fast-growing trees like acacia and eucalyptus, usually destined for harvesting in double-quick time to make pulp for paper.

“policymakers are misinterpreting the term forest restoration [and] misleading the public.”

Simon Lewis and Charlotte Wheeler

The study’s two main authors, geographer Simon Lewis of Leeds University and tropical forest researcher Charlotte Wheeler of Edinburgh University, commented in a blog that “policymakers are misinterpreting the term forest restoration [and] misleading the public.” It is, they say, a “scandal.”

Save what we have first?

All this concern over the validity and value of tree planting, forest restoration and habitat regeneration initiatives begs the question “what is the best way to address biodiversity loss and at the same time make a contribution to mitigating climate change?”

As Tom Crowther says when assessing tree planting, “a more immediate benefit can come from halting deforestation, which costs our planet around 15 billion trees each year.” Carbon Tanzania has always firmly held this to be the best way to deliver climate benefits while protecting biodiversity and supporting local resource owners to improve their livelihoods – and the mechanism is called REDD!

Click here if you would like to learn more about our approach to REDD.

Written by Carbon Tanzania Director – Jo Anderson