On April 6, 2023, MORFO hosted its first webinar on Climate Strategy and Nature-based Solutions: Anticipating (R)evolution, moderated by MORFO CEO and co-founder Adrien Pages and joined by renowned experts Francisco Maciel, Liliana Andrea Martinez Sarmiento and Felipe Faria.
Speakers included:
Responsible for project implementation and global biodiversity at South Pole. South Pole develops and implements global strategies that transform climate action into long-term business opportunities for Fortune 500 companies, governments and organizations worldwide.
Senior Advisor to the VC Fund for Forests and Climate Change at KPTL. KPTL is the result of the merger between A5 Capital Partners and Inseed Investimentos, two of Brazil's most competent venture capital firms with over 15 years' experience.
Regional Manager for Latin America at Partnerships for Forests and Brazil Director at Systemiq Ltd, a company that identifies and invests in innovation that can bring about essential systemic change by providing seed funding, business strategy advice and mobilizing their network to help scale up ideas.
Summary
This webinar addressed the most important questions on the topic of climate change and the significant positive global impact that CSR objectives can have on an organization's sustainability actions, discussing in particular:
- The revolution represented by the necessary scaling-up of NBS solutions, in particular reforestation,
- Monitoring solutions, their opportunities and limitations,
- Financing challenges.
One point was clear: there is no single nature-based solution to climate change and biodiversity loss. Different approaches are needed to meet and adapt to different challenges. "We need to find several solutions, with an emphasis on biotechnology and biomimicry," says Francisco Maciel.
That's why our speakers addressed three key necessities for nature-based solutions to develop and succeed: the role of technology, the importance of working with local people and how this positively influences project costs, and finally a comprehensive list of the challenges and opportunities facing these solutions today.
The role of technology in the expansion of nature-based solutions
Time is one of the main challenges when it comes to implementing nature-based solutions to climate change. Technology and innovation could play an enormous role in the rapid expansion of these solutions. Undoubtedly, the urgency of the climate change crisis requires us to develop rapidly in order to accelerate processes.
"Betting on technology is a choice we have to make today, because we don't have time to make mistakes." - Francisco Maciel
When we talk about technology, we're mainly talking about data, which is essential for nature-based solutions. Today, we are still working mainly with data that is only generated by annual reports. Traceability, monitoring and others technology still require a great deal of research and improvement, both in terms of cost and productivity. However, once we develop technology based on collected data and artificial intelligence, we will be able to develop this technology exponentially, enabling solutions to be scaled up.
"If the technology isn't developed, we won't be able to scale up or improve the quality of our restoration actions." - Adrien Pages
We need technology not only for data, but also when on the field, without replacing what has already been created by local people, but complementing what is already in place by providing them with the tools they need to move faster and give them value. People - like Brazilian NGOs, for example - are looking for and waiting for these new technological tools.
Moreover, technology must be open and accessible to all. Knowing how and who should use the data, as well as how to share it with local communities, is even more crucial in order to make decisions using this information.
"Developing technology, and more specifically data technology, is important, but using it wisely and making it accessible to the right people is even more crucial." - Liliana Andrea Martinez Sarmiento
The Materials Review Board (MRB) system that was being developed for the United Nations REDD+ Program in Honduras reveals just how vital it is for everyone to have access to data technology. In discussing solution options with communities and trying to identify areas of high biodiversity concentration, the issue of fishing emerged as it is a fundamental resource for the local population, both economically and for survival. Monitoring the area became beneficial not only for the project, but also for the livelihood of local people, providing them with information on the fish population.
"Another major challenge is to create people-centric benefit distribution mechanisms, an issue that technology could help solve in the future." - Felipe Faria
Local populations need to be brought into the equation by adopting nature-based solutions on a larger scale, hence the need to listen to their needs
Discussions during the webinar focused mainly on MORFO's nature-based solution: reforestation. The concept of forest restoration is changing, and understanding biodiversity with the use of native and non-native species is the way forward for the new way of looking at reforestation.
"It's crucial to keep in mind traditional methods of preservation, restoration and sustainable use while restoring forests" - Liliana Andrea Martinez Sarmiento
Reforestation isn't just about replanting, it's about recreating ecosystems, and including local populations into the equation. It is essential to change the way we think about forest restoration and to develop solutions in collaboration with local communities. In turn, the knowledge of local populations combined with science enables us to create technological tools to collect data and scale up reforestation projects. According to Adrien Pages, scaling up reforestation projects does not mean forgetting local populations, but responding to the urgency of the climate crisis. Depending on who manages the projects locally, regionally or nationally, this is not necessarily better or worse, but what is important is to keep these solutions people-centered - taking into account their culture, traditions, governments, etc.
"We need to show that forest restoration can benefit everyone." - Adrien Pages
To cooperate and meet their needs, we need to understand the real benefits for local communities. Climate change is not a direct benefit that people will see, but the issues of biodiversity protection and adaptation are what could affect them most. By linking their problems to our solution, we can build a project with them. The idea is for them to take power and manage their own project, ensuring its sustainability even after completion, making it their project, not ours.
"One mistake we must not make when talking about people is to consider that they lack the will to change." - Adrien Pages
When we involve local people in ecosystem restoration or conservation, most of them recognize and understand the problem, but they don't know what path to take to find a solution. There are two main steps to get people to understand where we're coming from: first, show them the solution, then make it accessible and easy. In this way, we create incentives by proving to these communities that they will benefit. Felipe Faria takes Brazilian cattle breeders as an example, pointing out that this is the country's biggest deforestation sector. He explains that we could explain to them that planting trees on their land would enable them to have more water for their livestock, thus making farmers understand the importance of nature-based solutions for their own benefit. Legal structures are also useful in getting people to change.
How can corporations reduce project costs?
The biggest problem with restoration projects today is their cost, especially those aimed solely at carbon absorption and sequestration. So, a big question today is how to reduce costs such as identifying areas, increasing yields, lowering planting and operating costs, etc. Other important elements that are overlooked in the early stages of projects are often those that prevent improvement. In the example of the livestock sector in Brazil, the lack of improvement in the sector is caused by a lack of knowledge and planning.
Two examples of player cooperation with projects
- A sustainable footwear company producing natural rubber in Acre, Brazil, introduced a new sourcing approach that included the creation of a bottleneck protocol. This enabled the company to pay for raw materials by stacking a series of benefits from payment to the environmental and social sectors. This would multiply the value of raw materials by 3 to 5 times, making a huge difference to the rubber company.
- The coconut industry in Para, Brazil, is working on more competitive approaches to enable farmers to take charge of their own expansion. This can solve problems such as technical systems and access to credit, but also add value to production and increase shared benefits.
These examples show two different sectors, which include forest land conservation and restoration, and how they cooperate to share risks, costs and benefits. Both include transforming mindsets to integrate local people into projects, as well as gaining a competitive perspective through cooperation, which Felipe Faria believes is crucial to a company's growth.
Challenges and opportunities in financing and scaling up nature-based solutions in forests, particularly in developing countries
In addition to the many opportunities for financing and scaling up nature-based solutions, there are also a number of challenges. In this webinar, our speakers discussed these issues, agreeing on the various problems we will have to face and what could potentially enable the implementation of these projects on a large scale.
Challenges
- The massive cost of large-scale nature-based solutions
In 2021, $154 billion was invested in nature-based solutions to combat climate change. To meet the United Nations' climate targets by 2023, this investment will have to be tripled.
Considerable funds are needed for research, design, development and the creation of technology. To achieve our objectives, we will need to redirect the funds available. We already know how to invest in innovation, but not in green finance. Brazil's national interest rate is 13.5% (for comparison, it's 5% in the USA), yet these funds are not geared towards nature-based solutions to climate change. It will take a lot of work to overshadow this type of interest rate, and it will also take time to see how public and private investments are directed towards green infrastructure.
- Crisis mentality leads to delusion
The urgency of the climate crisis drives us to want immediate solutions that can be applied right now, yet we're talking about subjects that are only just beginning to be studied. The reality is that the will to stop climate change is not matched by the results of solutions we don't yet have. Reforestation and restoration are not just about landscaping, but also about ecosystems and economies, which are initiated and implemented by people.
- Developing countries
The feasibility of projects in developing countries depends on the willingness of investors to commit to unproven solutions. The financial gap for developing countries is problematic, as they need the support of other countries and the private sector to invest in nature-based solutions. What's more, it's not easy to find or access land in developing countries, not to mention the uncertainty about governments' willingness to cooperate.
- Government cooperation
The only way to create a framework to encourage and develop incentives for nature-based solutions is for policies to agree with them: so there's a huge need for an additional legal structure. However, even if there is land to develop projects, public policies can also create a barrier to the development of this type of project. What has been very successful in one country cannot simply be replicated in another.
- Data inequality
One of the main data challenges is that not all countries have the same data (in terms of quantity or quality), and the data they do have is not easily accessible. Consequently, investments need to be made in initial baselines.
What's more, data transparency is a topic that covers a wide range of issues concerning how we can use it, whether different stakeholders can use the data, and so on.
- Calling on R&D
There is a huge need for R&D investment in both the private and public sectors. It is crucial to give prominence to the research that has already been carried out in the public sector.
- Cohesion between players
A key point on which we need to focus is how to cooperate with more recognized and consolidated players who could lead the market through cohesion in terms of transparency, quality and trust.
Opportunities
There is huge potential for expansion in nature-based solutions and developing markets.
Let's take Brazil as an example: 35 years ago, we didn't believe the country could produce scientific research. Today, after tons of investment, it has one of the best technological packages, and is constantly increasing productivity. The same mindset should be applied to database solutions.
We don't attach the same importance to the same things as before. We need to protect what already exists by working with ancestral traditions and values. In this way, we move towards an economy of construction and protection, which is why we should concentrate our efforts on this subject.
Communities are interested in protecting nature and are ready to participate, and the private sector is ready to finance. We need to bring big investments into developing countries through ecological and environmental causes, through ecosystem restoration for example, which creates economic opportunities for developing countries.
