Unbearable cost of nature loss

Businesses have to adopt nature-positive transitions while pursuing carbon neutrality

About one year after President Xi Jinping announced China's ambitious carbon emissions targets, the National Development and Reform Commission released the Action Plan for Carbon Dioxide Peaking Before 2030 in October 2021, which constitutes the start of the "1+N" policy framework for realizing the carbon peaking and carbon neutrality pledges. The continuously developing policy framework will guide the most relevant industries, including but not limited to energy, construction and transport, to advance their progress toward carbon neutrality. This is an unprecedented momentum in the fight against climate change and will also have a positive impact on another critical issue, the nature loss crisis. According to the Global Assessment Report on Biodiversity and Ecosystem Services of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, climate change is responsible for 11-16 percent of biodiversity loss.

Climate change and nature loss are intertwined crises. If the Chinese government and businesses only accelerate actions to achieve the carbon emissions reduction goals, it would never be enough to guarantee the resilience of the Chinese society and the Chinese economy.

According to the report "Seizing Business Opportunities in China's Transition toward a Nature-positive Economy" published by the World Economic Forum earlier this year, 65 percent of China's GDP is at risk from nature loss. About two-thirds of China's economic sectors are highly relevant to the three socioeconomic systems that need immediate nature-positive transitions: food, land and ocean-use; infrastructure and the built-environment; and energy and extractives. Businesses' impact and dependencies on nature are often overlooked because they are usually hidden in the supply chains. As companies are proactively thinking about how to become carbon neutral, they should seize the opportunity to address the intertwined crisis together, under the guiding philosophy of building an "ecological civilization".

Like climate change, nature loss is an urgent challenge to be addressed. However, unlike climate change, it can seem overwhelmingly complex as it cannot be represented by a single metric like carbon. But this is a pressing problem where the cost of inaction is far greater than the cost of action. Businesses can already start with the nature-positive transitions closely connected to their actions toward the dual carbon goals, while also releasing new growth potential.

First, the energy transition ranks as the top priority in pursuing carbon neutrality. Making sure that the production of the infrastructure for renewable energy starts from a responsible supply chain of raw materials, while the siting, design and operation of renewable energy plants based on a careful assessment of their impact on the surrounding natural ecosystem can ensure that the country's energy transition is not at the expense of nature. By 2030, the nature-positive expansion of renewables could generate $157 billion of new business opportunities and 7.87 million jobs.

Second, there is a significant opportunity to rethink how resources are used and pursue circular and resource-efficient models for materials. One of the key tasks is to develop a circular economy and improve resource use efficiency. This transition will not only serve the compliance purpose but also has the potential to generate $381 billion of annual business opportunities and 10.04 million sustainable jobs in China by 2030. The biggest business opportunities are hidden in circular models for automotive, appliances and electronics, as well as improving the end-use efficiency of steel.

Third, establishing transparent and sustainable supply chains for soft commodities and materials. In the process of reviewing carbon emissions within supply chains, businesses can also review the impact on nature in parallel. In 2022, the Carbon Disclosure Project added six more questions about biodiversity impacts into their Climate Change questionnaire. In China, the transition of establishing transparent and sustainable supply chains for its food, land- and ocean-use systems can generate $95 billion of business opportunities by 2030, such as in the field of reducing food loss and waste in the supply chain, and create more than 2 million jobs, and the technologies in energy and mining supply chains can create $14 billion in business value and more than 1.4 million jobs, according to the estimates in the WEF report.

Last but not the least, promote and implement nature-based solutions. Conserving and restoring land and marine areas, especially forests, peatlands and mangroves, could deliver a significant portion of the mitigation needed to hold warming to the Paris Agreement goal, while the other services that natural ecosystems provide should not be neglected. Nature can be used as infrastructure and a key tool for climate adaptation. For example, wetlands can purify wastewater, store water and supply water; mangroves can protect against wind and waves and reinforce dams. Meanwhile, forests in cities can clean the air, help reduce the urban heat-island effect, form a better microclimate, create habitats for plants and animals, provide shade and shelter for people, and improve residents' physical and mental health. Building natural systems for water supply can potentially create business opportunities worth $21 billion and 688,000 jobs by 2030.

In 2022, the long-awaited Phase II of the 15th meeting of the Conference of the Parties to the Convention on Biological Diversity will take place in Kunming, China. The parties will agree on a Post-2020 Global Biodiversity Framework, which will guide the global action toward being nature-positive by 2030. As nature is accelerating toward the irreversible tipping point of collapse, there's no doubt that 2020 to 2030 is a particularly valuable decade for nature and people.

Akanksha Khatri is head of Nature and Biodiversity at the World Economic Forum. Susan Hu is a specialist of Nature Action Agenda at the World Economic Forum. The authors contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily. Contact the editor at editor@chinawatch.cn