Date : 31/05/2023

Relevance: GS-3 : Biodiversity and Environment

Key Phrases: Carbon emissions, devise innovative finance, agnostic solutions, Sustainable Development Goals (SDGs), Convention on Biodiversity, Sharm-el-Sheikh.

Context:

• Carbon emissions and biodiversity losses pose significant threats to humanity, resulting in imbalances and environmental crises caused by human activities.
• The vulnerability of socially and economically weaker sections is worsened by their disadvantaged position, but even the more privileged individuals are not immune to these threats.
• It is essential for the privileged few to devise innovative financial solutions to address these crises effectively.

Key Highlights:

• At the 27th Conference of Parties (COP27) summit in Sharm-el-Sheikh, Egypt, a Loss and Damage (L&D) Fund was established to assist developing countries particularly vulnerable to the adverse effects of climate change, although the finer details of the fund are still under negotiation.
• Previous commitments made by rich countries, such as the annual $100 billion pledge at the 2009 Copenhagen Summit, have not been fulfilled, raising doubts about the implementation of future promises.
• The 15th Conference of Parties to the Convention on Biodiversity (COP) resulted in a global commitment to increase international financial flows from developed to developing countries to at least $30 billion per year by 2030, with additional commitments to mobilize $200 billion annually for biodiversity funding by 2030. However, a clear roadmap to achieve these targets is lacking.
• The creation of an overarching fund for environmental recovery and innovative finance requires exploring various proposals, including global carbon taxes, digital services taxes, property taxes, airplane taxes, and financial transactions taxes.
• Delivering meaningful financing solutions is closely linked to efforts to achieve the Sustainable Development Goals (SDGs), particularly SDG 13 on climate action and SDG 15.5 on halting biodiversity loss and habitat degradation.
• Engaging private capital financing plays a crucial role in filling the gaps in global sustainable financing, especially in emerging markets and developing economies where governments face capacity constraints.

Grave Threats Posed by Rising Carbon Emissions And Biodiversity Losses:

• Climate Change and Carbon Emissions:
  • Global Warming: Increasing carbon emissions, primarily from the burning of fossil fuels, contribute to the greenhouse effect, leading to global warming. This phenomenon disrupts climate patterns, causing extreme weather events, rising sea levels, and changes in precipitation patterns.
  • Environmental Disruptions: Climate change disrupts ecosystems and natural habitats, leading to the loss of biodiversity, changes in species distributions, and increased risk of species extinction. This disrupts the delicate balance of ecosystems and impacts ecological services essential for human survival.
• Biodiversity Loss:
  • Ecosystem Disruption: Biodiversity loss, driven by factors such as habitat destruction, pollution, invasive species, and climate change, undermines the stability and functioning of ecosystems. This disruption affects ecosystem services vital for human well-being, including food production, water purification, climate regulation, and disease control.
  • Extinction Crisis: The ongoing loss of species at an alarming rate threatens the Earth's biodiversity. Extinctions disrupt ecological relationships, reduce genetic diversity, and limit the potential for future adaptations. The loss of keystone species can have cascading effects on entire ecosystems.
• Human Health and Livelihoods:
  • Public Health Risks: Climate change intensifies health risks, including the spread of infectious diseases, heat-related illnesses, and food and waterborne diseases. Changes in ecosystems can also increase human exposure to vector-borne diseases.

How are socially and economically weaker sections affected by these threats?

• Health Risks: Vulnerable communities often have limited access to healthcare services and are more exposed to the health risks associated with climate change and biodiversity loss. They are more likely to reside in areas with poor air quality, increasing their susceptibility to respiratory diseases and other pollution-related illnesses.
• Displacement and Migration: Climate change-induced events such as floods, droughts, and storms can lead to the displacement of communities, particularly those living in low-lying coastal areas or regions prone to natural disasters. Socially and economically weaker sections are often less equipped to cope with such displacements and may face challenges in finding new homes, livelihoods, and social support systems.
• Food and Water Insecurity: Vulnerable populations heavily rely on natural resources for their sustenance and livelihoods. Changes in climate patterns, including irregular rainfall and droughts, can adversely affect agricultural productivity and access to clean water. This exacerbates food and water insecurity among socially and economically weaker sections, leading to malnutrition, hunger, and waterborne diseases.
• Economic Vulnerability: Marginalized communities, often dependent on natural resources for their livelihoods, face economic vulnerabilities due to the degradation of ecosystems and loss of biodiversity.

Importance of Innovative Finance Solutions in Dealing with Climate Change and Biodiversity Conservation.

• Mobilizing Adequate Funds:
  • Climate change and biodiversity conservation require significant financial resources to implement mitigation and adaptation measures, protect ecosystems, and support sustainable development.
  • Traditional sources of financing may not be sufficient to meet these funding needs.
  • Innovative finance solutions can help mobilize additional funds from diverse sources, including public, private, and blended finance, to bridge the financing gap.
• Leveraging Private Sector Engagement:
  • The private sector plays a vital role in driving sustainable economic growth and innovation.
  • Innovative finance solutions encourage private sector engagement by creating financial incentives and mechanisms that align with sustainable development objectives.
  • This can include impact investing, green bonds, sustainable investment funds, and other financial instruments that attract private capital towards climate-friendly and biodiversity-focused projects.
• Fostering Technology and Innovation:
  • Innovative finance solutions facilitate the development and deployment of new technologies and innovations to tackle climate change and biodiversity loss.
  • They provide financial support for research and development, technological advancements, and scaling up innovative solutions.
  • This helps drive progress in renewable energy, sustainable agriculture, waste management, and other sectors critical for mitigating climate change and conserving biodiversity.
• Enhancing Resilience and Adaptation:
  • Climate change poses significant risks and challenges, particularly for vulnerable communities.
  • Innovative finance solutions enable the implementation of climate adaptation strategies, such as building resilient infrastructure, promoting sustainable land and water management, and enhancing disaster risk reduction measures.
  • These initiatives help communities adapt to the changing climate and reduce vulnerabilities.
• Promoting Conservation and Restoration:
  • Biodiversity conservation requires effective management of ecosystems and protection of endangered species.
  • Innovative finance solutions support conservation efforts by funding protected areas, wildlife conservation programs, habitat restoration projects, and sustainable tourism initiatives.
  • They also promote nature-based solutions, such as reforestation and ecosystem restoration, which contribute to climate change mitigation and biodiversity conservation simultaneously.
• Encouraging International Cooperation:
  • Innovative finance solutions can foster international cooperation and collaboration in addressing climate change and biodiversity conservation.
  • By facilitating financial flows from developed to developing countries, these solutions promote global solidarity and collective action.
  • They help build trust, share best practices, and ensure a more equitable distribution of resources and benefits among nations.

Conclusion:

• As the ill effects of climate and biodiversity losses take a toll on the planet and the human race, the world urgently needs an overarching framework that is transparent, verifiable, agnostic and accountable.
• Targets set by the international community can only be met if it follows up with timely allocation of the required funds, which will require exploring a variety of resources through a bouquet approach.
• Since we face a race against time to leave a cleaner and greener world for future generations, the delivery of critical action should not merely be adequate, but also timely.

Source: Live Mint

Mains Question:

Q. Discuss the importance of innovative finance solutions in dealing with climate change and biodiversity conservation.(150 Words).