‘Commercial capital must be deployed to meet global climate and conservation targets’
Dr Max Graham, Founder and CEO of international conservation charity Space for Giants, tells the Commonwealth Business Forum in Rwanda why the natural world must be valued in the mainstream economy
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No one can claim to be unaware that our planet is in big, big trouble; with human-induced global warming and species extinction occurring at unprecedented rates.
Sadly, all efforts to avert these crises to date have failed. Not one of the 20 targets set by world leaders at the Convention on Biological Diversity in 2010 has been met.
The 2015 United Nations Paris Agreement was hailed as a major success to limit global warming, yet it failed to deliver the USD 100 billion pledged to the nations which have contributed the least to global warming but are set to be devastated by its impacts.
The good news is that there are more reasons today to be hopeful for the future of life on earth than at any point since the industrialisation revolution. Innovative ways to finance nature conservation fuel this hope.
In Rwanda, there is the miraculous story of our cousin, the Mountain Gorilla. This is a species that was once hunted for the lucrative pet trade, to make ashtrays, or simply for food.
And yet last year, for the first time since records began, numbers of mountain gorillas, increased to over 1,000 individuals, taking them off the list of species that are critically endangered with extinction. There have been many tales of heroism in the field contributing to this happy tale, not least the protection offered by Rwanda.
But the fundamental factor contributing to this story of hope is economic. Mountain gorillas have contributed to the economic development of Rwanda to the tune of nearly USD 100 million a year, through tourism revenue alone. Each gorilla is worth up to USD 5 million in their lifetime.
It is no wonder that Rwanda’s government is planning to expand its iconic mountain gorilla park by 20%.
The simple lesson here is that the protection of the environment can be successful when it is in the economic interests of nation states and their citizens.
Covid has sadly laid bare the vulnerability of tourism as a source of income for conservation, as protected area budgets in many countries have been decimated by the abrupt halt of revenue.
But even before Covid, there were many key landscapes in desperate need of funding where tourists simple don’t and won’t go.
However, today there is more capital available to invest in the protection of the environment than ever before. Most of the managers of the trillions of dollars of private capital consider the protection of the environment not just a ‘nice to have’ but a necessary outcome of investment. The environment is at long last being valued and included in the mainstream economy.
There are multiple ways that capital has been deployed for environmental conservation. Perhaps one of the most interesting tools is debt for nature swaps, where foreign debt is purchased at a discount by conservation-minded organisations and exchanged to finance national government commitments to nature conservation. More than a billion dollars of conservation finance has been generated through this financial instrument.
Carbon credits represent another tsunami of opportunity. Carbon credits can be generated by restoring and conserving natural ecosystems through avoided deforestation and by restoring the sequestration capacity of natural habitats.
Today, 25% of the world’s largest companies have committed to going net zero. These commitments alone translate to an estimated annual demand for voluntary carbon credits of between one to two million Gigatonnes by 2030.
Meeting this demand could generate up to USD 100 billion every year by 2030; ironically the same amount that wealthy nations committed to providing the global south back in Paris in 2015.
Carbon markets - rather than tourists - could quickly become the single most important source of revenue for the protection of nature, simultaneously driving the creation of millions of jobs.
Space for Giants, the organisation I founded, recently co-founded a nature-based carbon credit company with Bacchus Capital called Green 14. It has taken us two years to build a pipeline of approximately 20 carbon projects across eight countries, each involving the restoration of a protected area. This pipeline could generate in the order of 100 million tonnes of carbon credits over the 25-to-30-year lifetime of the projects. I spoke to one potential customer a few weeks ago. They want to buy 100 million tonnes of carbon credits every year. That’s just one company.
To unlock the remarkable power of carbon markets, national governments need to create an enabling environment for the development of carbon projects.
More than anything governments need to do what corporations have done which is to move environmental sustainability, specifically carbon finance, into the office of the executive.
If all of this can happen then carbon can finally become the transformative commodity for nature and for climate that many of us in the conservation sector have been dreaming of.
For more information on the Commonwealth Business Forum in Rwanda click here.
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