Remarks prepared for delivery at the 7th OECD Forum on Green Finance and Investment
The COVID-19 pandemic is part of the three planetary crises: the climate crisis, the biodiversity and nature crisis, and the pollution and waste crisis - which are destroying the natural systems that allow our economies to thrive.
Over the decades, there have been many commitments to address these crises. COVID-19 has shown what happens when we do not act with sufficient speed and force on these commitments. We all need to stretch our goals, actions and financing towards what we have agreed.
What this means for the public and private finance sectors is that money has to start flowing to the right places. As you have heard many times recently, pandemic recovery provides a chance to start this process. According to UNITAR, over the next 6 to 18 months, we will need in excess of 20 trillion dollars to recover from COVID-19.
This initial injection of taxpayer funds through stimulus packages has rightly prioritized jobs and putting food on the table. But in the long-term, these funds must go towards creating a zero-carbon, nature-positive economy, in which finance fuels the energy transition, a healthy planet and green jobs.
Public money alone is not going to get the job done, however. We need private finance to mobilize trillions of dollars. Let me briefly draw on emerging insights from the Dasgupta Review on the economics of biodiversity, to be issued by Her Majesty's Treasury later this year, to illustrate why this matters.
The review finds that, for humanity to live in harmony with nature, we need a global financial system that invests in enhancing natural assets and helps mitigate risks from biodiversity loss and natural capital depletion. We are far from creating such a system. Global estimates of financial flows supporting natural assets range from USD 78 billion to USD 143 billion dollars per year. Meanwhile, the OECD estimates that governments spend around USD 500 billion dollars per year on support that is potentially harmful to biodiversity.
As highlighted by the World Economic Forum's 2020 Global Risks Report, this imbalance is exacerbating risks. The report ranked biodiversity loss and ecosystem collapse as one of the top five threats humanity will face in the next ten years.
Investors have also acknowledged the need to redirect their capital, joining many coalitions and promising to decarbonize and invest in sustainability. I would like to offer quick points on how to make sure these investments - be they in nature-positive agriculture, renewable energy, or sustainable infrastructure - count.