Nature Positive Aotearoa: The Economic Case for Action

I was lucky enough to attend the Global Nature Positive Summit in Sydney earlier this month and hear Ken Henry talk to the “economic opportunity of our lifetime”.? Consistent with Ken’s assessment of the opportunity for Australia, last week our team at EY and WWF New Zealand produced the report, "A Nature Positive Aotearoa: The Economic Case for Action", which is a first-of-its-kind attempt to value the financial opportunity of taking action to protect and restore nature in Aotearoa New Zealand.?

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The report comes at a critical time. Globally, we are facing twin crises of climate change and biodiversity loss. Here in Aotearoa, we have the highest proportion of threatened native species in the world. Over a third of our indigenous species are now threatened or at risk of extinction. The recent devastation caused by Cyclone Gabrielle has shown us the enormous cost of climate inaction and pushed our native species even closer to the brink. We now understand that we cannot solve the climate crisis without impacting our ability to solve the nature crisis.?

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There is some progress. Last year, 196 nations adopted the Kunming-Montreal Global Biodiversity Framework (GBF), setting out an ambitious plan to halt and reverse biodiversity loss by 2030 from a 2020 baseline. Our report explores what it would mean for Aotearoa New Zealand to meet key targets within this framework and what the economic impacts would be.?

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The headline finding is striking: taking action to protect and restore nature in line with the GBF could deliver a cumulative net benefit to New Zealand's economy of NZ$270 billion over the next 50 years. While there is a need for further local research to gain additional clarity over the magnitude of the potential benefits, the overall finding, that nature positive action provides significant and direct financial value, agrees with economic research conducted globally and in Australia.?

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Some key findings from our analysis:?

• Meeting GBF Target 2 (restoring 30% of degraded ecosystems) and Target 3 (conserving 30% of land and sea areas) makes economic sense. While there are upfront costs, the long-term benefits far outweigh these.?

• Nature-based solutions can play a crucial role in our climate response. Actions like wetland restoration and native planting could sequester an additional potentially saving the government billions in avoided international carbon credit purchases.?

• Protecting our natural assets safeguards our tourism industry and supports our services sectors. Our ability to enjoy and experience nature underpins significant economic activity.?

• Nature provides resilience, brand enhancement, cost savings and revenue diversification opportunities for our primary industries, with the opportunity to transition to additional new revenue streams.?

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The report also highlights the urgent need to increase investment in nature to reap these benefits. We estimate that investment needs to increase by ~6.5 times current levels, to enable the transformation required.?

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There is also an inevitable lag between mobilising finance, undertaking activities, and seeing the desired effect on biodiversity. This increases the pressure to act quickly, as importantly, our analysis shows that the longer we wait, the more costly action becomes.?

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We looked at the enabling actions which would help unlock additional investment in nature and provide financial returns to those investing in restorative actions.? These included:?

• Building on global work and establishing “Nature Positive” frameworks, which would provide pathways for products to be sold with a “nature positive” premium and return value to those companies committing to these targets.?

• Developing credible domestic carbon or biodiversity credit markets. These can either be voluntary or linked to regulatory requirements or the NZ ETS in the future.? This would allow those landowners and users undertaking the action to receive a financial return.?

• Improving the geospatial data and modelling of the financial “impact functions” identified in the report (plus others) so we can more precisely measure on a location-specific basis the types of restorative action that might be appropriate and their potential financial return of those actions to the landowner or user, through improvements in productivity, efficiency, resiliency, health and diversification.???

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We have a chance to realign our relationship with nature, to build a more resilient and sustainable economy, and to enhance what makes Aotearoa truly special.?

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I encourage you to read the full report and join the conversation on how we can accelerate action towards a nature-positive future for Aotearoa. The time for action is now.?

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