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Let's stop pitting nature against the economy 

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By Pascal Asselin

· 4 min read

The existing financial contradiction needs to be reversed. It involves subsidizing activities harmful to biodiversity to sustain our economies while setting goals for its improvement. This situation implies that we consider these two issues independently, whereas they are closely intertwined. 

Even today, the financial world (both public and private) allocates capital 35 times more to activities directly impacting nature negatively. However, redirecting financing towards nature is both imperative and a precondition for a desirable future for our economies. 

Negative private financial flows are 140 times greater than private investments in favor of nature 

The numbers speak volumes. Each year, nearly $7 trillion in financial flows have a direct negative impact on nature compared to $200 billion allocated to nature-friendly solutions (State of Finance for Nature, UNEP, 2023). Within this total, negative private financial flows are 140 times greater than private investments in favor of nature. On the public front, harmful subsidies are 10 times more significant than private ones and have increased by 55% in one year. 

On the other hand, NbS are severely underfunded, with only one-third of the necessary levels to achieve climate, biodiversity, and soil degradation goals by 2030, despite an 11% increase in one year. While no one can be considered a top performer, governments still contribute 82% to nature financing, while private actors represent 18% of flows, half of which are channeled through compensation mechanisms. 

Once this assessment is made, no one can deny the absolute necessity of reversing our economic perspective. We need to foster the emergence of economic and financial models inherently centered on nature. 

If biodiversity collapses, so does our economic system. 

60% of global GDP directly or indirectly depends on nature 

In a world of limited resources, envisioning unlimited growth is unrealistic, especially when we realize that nature directly or indirectly impacts 60% of global GDP (World Economic Forum, 2022). Redirecting financial flows towards nature-friendly actions and solutions is primarily a matter of common sense because almost everything depends on it. If biodiversity collapses, so does our economic system. 

Ecosystem services are among the most threatened sectors as they directly benefit from what nature provides. Agriculture, the timber industry, aquaculture, or professional fishing are directly dependent on it and represent, in France alone, over 1 million jobs. Already in 

2016, it was estimated that 80% of French jobs depended directly or indirectly on biodiversity...

It's also forgotten that nature is the primary supplier to the economic world. It provides 100% of the raw materials that we then transform into furniture, textiles, automotive parts, fuel... 

Another way to consider nature and the economy as a whole is to look at the costs incurred by the degradation of living things. According to a 2020 WWF report, it is estimated at $500 billion per year by 2050. By this date, nearly $10 trillion will have been lost, equivalent to the 

economies of the UK, France, India, and Brazil combined. This assessment takes into account the costs of natural disasters, debilitating shortages in entire economic sectors, stalled industries... not to mention the countless increases in global prices and social consequences that will result from this economic decline. 

Positioning nature at the heart of our economic and financial logic ensures sustainable growth. Today, we are following the opposite model dictated by economic logic, which compels us to find alternatives or abandon certain activities. 

Given its trickle-down effect to all economic actors, especially private ones, the starting point should be the "greening" of the financial world. That is, redirecting financial investments towards projects compatible with planetary boundaries, an inclusive financial system that also supports vulnerable populations facing climate change. However, companies also have a crucial role to play, as do governments through incentives and public policies. 

Despite the magnitude of the challenges, a "proximity bias" seems to persist. This refers to individuals' tendency to assign more importance, interest, or emotional value to events or situations physically close to them. As a result, distant events are minimized and perceived as less urgent. 

Fortunately (or unfortunately), more and more companies are directly experiencing the effects of the degradation of living things and are no longer subject to this bias. However, economic and financial actors capable of reversing our model still seem distant from these real impacts. But for how much longer? 

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Pascal is co-founder of MORFO, a company focused on reforestation efforts as a solution to fight climate change. With a background in entrepreneurship, Pascal has a track record of creating businesses focused on tackling challenges within the sustainability sphere.

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