Friday, December 4, 2020

Rebuilding Cities to Generate 117 Million Jobs and $3 Trillion in Business Opportunity with Nature-Positive Strategy

COVID-19 recovery packages that include infrastructure development will influence the relationship between cities, humans and nature for the next 30 to 50 years. With the built environment home to half the world’s population and making up 40% of global GDP, cities are an engine of global growth and crucial to the economic recovery.

Research shows that nature-positive solutions can help cities rebuild in a healthier and more resilient way while creating opportunities for social and economic development. The World Economic Forum’s new Future of Nature and Business Report found that following a nature-positive pathway in the urban environment can create $3 trillion in business opportunity and 117 million jobs.

“Business as usual is no longer sustainable,” said Akanksha Khatri, Head of the Nature Action Agenda at the World Economic Forum. “Biodiversity loss and the broader challenges arising from rapid urban population growth, financing gaps and climate change are signalling that how we build back can be better. The good news is, there are many examples of nature-based solutions that can benefit people and planet.”

Cities are responsible for 75% of global GHG emissions and are a leading cause of land, water and air pollution, which affect human health. Many cities are also poorly planned, lowering national GDP by as much as 5% due to negative impacts such as time loss, wasted fuel and air pollution. However, practical solutions exist that can make living spaces better for economic, human and planetary health.

The study, in collaboration with AlphaBeta, highlighted examples of projects deploying nature-positive solutions and the business opportunities they create.

Cape Town: Cape Town was just 90 days away from turning off its water taps. Natural infrastructure solutions (i.e. restoring the city’s watersheds) were found to generate annual water gains of 50 billion litres a year, equivalent to 18% of the city’s supply needs at 10% of the cost of alternative supply options, including desalination, groundwater exploration and water reuse. 
Singapore: Singapore’s water leakage rate of 5% is significantly lower than that of many other major cities thanks to sensors installed in potable water supply lines. Globally, reducing municipal water leakage could save $115 billion by 2030. Returns on investment in water efficiency can be above 20%.
Suzhou: Suzhou Industrial Park’s green development in China has seen its GDP increase 260-fold, partially through green development. The park accommodates 25,000 companies, of which 92 are Fortune 500 companies, and is home to 800,000 people. The park has 122 green-development policies, including stipulations on optimizing and intensifying land use, improvement of water and ecological protection, and the construction of green buildings. As a result, 94% of industrial water is reused, 100% of new construction is green, energy is dominantly renewable and green spaces cover 45% of the city.
San Francisco: San Francisco requires new buildings to have green roofs. The “green” roof market is expected to be worth $9 billion in 2020 and could grow at around 12% annually through 2030, creating an incremental annual opportunity of $15 billion.
Philippines: The loss of coastal habitats, particularly biodiverse and carbon-rich mangrove forests, has significantly increased the risk from floods and hurricanes for 300 million people living within coastal flood zones. A pilot project in the Philippines, one of the countries most vulnerable to climate change, is monetizing the value of mangroves through the creation of the Restoration Insurance Service Company (RISCO). RISCO selects sites where mangroves provide high flood reduction benefits and models that value. Insurance companies will pay an annual fee for these services, while organizations seeking to meet voluntary or regulatory climate mitigation targets will pay for blue carbon credits. 

Overall, restoring and protecting mangrove forests in human settlements can reduce annual flood damage to global coastal assets by over $82 billion while significantly contributing to fighting climate change.

The report identifies five complementary transitions to create nature-positive built environments and outlines the business opportunities and potential cost savings for programmes targeting urban utilities for water, electricity and waste, land planning and management, sustainable transport infrastructure and the design of buildings.

Office space the size of Switzerland
Global examples call out areas to be improved. For example, an estimated 40 billion square metres of floor space is not used at full occupancy during office hours – an area roughly equivalent to the size of Switzerland. The COVID-19 upheaval has prompted a surge in flexible and remote working models in many countries – greater application of such models could help reduce the need for private office space in the future.

Governments’ role to raise and steer finance
The report calls for both government officials and businesses to play their part in raising and steering finance for sustainable urban infrastructure. “Regulations in areas including urban master planning, zoning and mandatory building codes will be critical to unlocking the potential of net-zero, nature-positive cities and infrastructure,” said Khatri. “We are at a critical juncture for the future of humanity. Now is the time to treat the ecological emergency as just that. A net-zero, nature-positive path is the only option for our economic and planetary survival and how we choose to use COVID-19 recovery packages might be one of our last chances to get this right.”

The Report is available free of charge at:

The Future of Nature and Business sets out how 15 transitions across the three systems can form the blueprint of action for nature-positive transitions which could generate up to US$10.1 trillion in annual business value and create 395 million jobs by 2030.

COVID-19 has brought the Great Acceleration to a screeching halt. Hundreds of thousands of people have died and entire sectors of the economy have stopped operating. All because a novel zoonotic disease, possibly triggered by human disturbance of nature, became a pandemic. As of June 2020, governments and international organizations have invested close to $9 trillion to try to prevent the most immediate human and economic impacts. But despite these efforts, the global economy is expected to contract by 3% in 2020, affecting the jobs and livelihoods of millions of people. page 4
A pragmatic framework for the industry to lead the transition towards a nature-positive economy.... can unlock an estimated $10 trillion of business opportunities by transforming the three economic systems that are responsible for almost 80% of nature loss.
The first report of the World Economic Forum’s New Nature Economy Report (NNER) series, Nature Risk Rising, highlighted that $44 trillion of economic value generation – over half the world’s total GDP – is potentially at risk as a result of the dependence of business on nature and its services.
Key Findings at a Glance

There is no future for business as usual – we are reaching irreversible tipping points for nature and climate, and over half of the global GDP, $44 trillion, is potentially threatened by nature loss.

Fighting climate change is essential but not enough to address the nature crisis – a fundamental transformation is needed across three socio-economic systems: food, land and ocean use; infrastructure and the built environment; and energy and extractives.

80% of threatened and near-threatened species are endangered by the three systems, which are responsible for the most significant business-related pressures to biodiversity; these are also the systems with the largest opportunity to lead in co-creating nature-positive pathways.

15 systemic transitions with annual business opportunities worth $10 trillion that could create 395 million jobs by 2030 have been identified that together can pave the way towards a people- and nature-positive development that will be resilient to future shocks.

The global food, land and ocean use system, including its full supply chains, represents around $10 trillion of GDP (12% of global GDP) and up to 40% of employment...This system already places enormous strain on planetary boundaries, with the threats relating to it impacting around 72% of all threatened and near-threatened species. [It] is already delivering very unequal outcomes in food security, nutrition and health, such that the hidden costs of the food, ocean and land use system – an estimated $12 trillion – now exceed its contribution to global GDP.

Six complementary socio-economic transitions can together place the food, land and ocean use system on a pathway to sustainable, naturepositive development. Together, the business opportunities associated with these six transitions could create almost $3.6 trillion of annual additional revenue or costs savings while creating 191 million new jobs by 2030.
Five complementary socio-economic transitions can together place the infrastructure and built environment system on a pathway to sustainable, nature-positive development. Together, the business opportunities associated with these five transitions could create over $3 trillion of additional annual revenues or cost savings and create 117 million jobs by 2030.
Accounting for an estimated 23% of global GDP and 16% of employment, the extraction, production, manufacturing and generation of energy and materials is both a major contributor to global economic growth and a major threat to biodiversity. Its negative externalities – air pollution and carbon emissions – equate to $9 trillion annually or around 10.5% of global GDP.
We estimate that the total annual investment required through 2030 for all opportunities identified across the three systems is around $2.7 trillion (Figure E4). Although significant, this investment is comparable to the recent stimulus package of $2.2 trillion announced by the United States in March 2020 in response to COVID-19. However, the nature of these investments might prove a greater challenge in raising capital. Investment needs are often located in emerging markets, where small and medium-sized enterprises typically lack the direct access to capital markets of larger firms and require smaller average investment size and novel payback models that can increase transaction costs and risks.

The first report of the World Economic Forum’s New Nature Economy Report (NNER) series, Nature Risk Rising, highlighted that $44 trillion of economic value generation – over half the world’s total GDP – is potentially at risk because of the dependence of business on nature and its services. 7 Biodiversity loss and ecosystem collapse ranked as one of the top five threats humanity will face in the next 10 years, according to the World Economic Forum’s 2020 Global Risks Report.... In the Asia-Pacific region, for instance, the “natural” disasters in 2018 impacted 50 million people and cost the region $56.8 billion. These disasters were exacerbated by environmental damage as the coastal ecosystems that could have protected the region from flooding and other extreme weather events had previously been destroyed. Globally, pollinator populations have declined, putting at risk the production of global crops with an annual market value of between $235 billion and $577 billion – because these crops depend on animal pollination.
Agriculture and land use alone are responsible for around 30% of global greenhouse gas (GHG) emissions, over 70% of freshwater use and over 80% of tropical deforestation and habitat loss, and it is the largest producer of wastewater of all three systems. Over a third of crops are produced for and fed to livestock, and over a tenth are used for biofuels and cotton fibres. At the same time, 35% of food produced is either lost or wasted. How and what we consume – particularly resource-intensive, animalbased protein and clothing – has been increasingly raising alarms. The equivalent of one garbage truck of textiles is landfilled or burned every second, meaning $500 billion is lost every year as a result of discarded clothing. The impact of humans on the ocean is expanding, too. To cope with the decreased catch in their traditional fishing grounds, commercial fishing fleets are targeting new species and expanding to new areas, raising the total area fished from 60% to 90% of the world’s oceans. 30 As a result of industrial fishing, 93% of fish stocks today are fished at or beyond maximum sustainable levels.

World Economic Forum
Press Release dated 24 September 2020

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