Nature-based Solutions and Natural Capital

Nature-based Solutions (NbS) to climate change address challenges such as climate change, access to water, social and economic development, and disaster risk by putting nature and people at the heart of the solutions.

Nature-based solutions help to create new jobs and economic growth, through the manufacture and delivery of new products and services that enhance the natural capital rather than deplete it. 

From reducing deforestation to improving the health and livelihoods of communities or helping to finance renewable infrastructure to decarbonize energy supplies, these projects play a vital role in the global transition to Net Zero carbon.

Natural Capital is the world’s stocks of natural assets including soil, minerals, air, water and biodiversity (other kinds of capital are: Business, Infrastructure, Human, Intellectual and Social capital). These assets provide a range of ‘ecosystem goods and services’ that enable us all to survive and thrive. The most obvious goods include the food we eat, the water we drink and timber we use for building and for fuel.

Ecosystem services include climate regulation, carbon sequestration, natural flood defense, water filtration, species habitat, and human health and wellbeing.

Biologically diverse ecosystems are capable of producing a greater flow of ecosystem goods and services. As with financial investing into a portfolio of assets, it is important to be diversified and enhance the value of a wide set of natural assets. And as the reduced diversification in financial investing introduces large known or unknown risks, major human intervention in specific areas of natural capital has a negative impact on the provision and sustainability of the production and flow of other ecosystem goods and services into the future. Among the examples are intense agricultural harvesting that instreases the risk of turning land to sterile and reducing food security, monoculture forests that have low tolerance to climate change and many others.

New markets are emerging which are capable of paying owners of natural capital for the benefit these assets provide. This is because the benefits of these ecosystem services are being better recognized and valued. Increasing political urgency around the effects of climate change and biodiversity loss are heavily influencing government policy and regulation. The pressure is building on society to offset an environmental impact with an equivalent or positive net gain elsewhere. That is imperative to happen until our technology and cultures advance significantly, to a degree that such compensating will no longer be needed.

Biopikilo is at the forefront of these developments, leveraging expert know-how and networks to scale such Nature-Based Solutions.

The figure above displays examples of ecosystem services.

Degraded ecosystems lose their inherent ability to provide these goods and services. Deforestation, for example, compromises freshwater, food, energy, and medicines. It also increases the risks of disease and pest outbreaks to crops, animals, and humans as well as drought, deadly flash floods, and landslides with large damages to infrastructure like dams and roads. 

Reference: Asian Development Bank