The fact that wetlands are shrinking amidst rapid development is common knowledge, and also that the world is more climate insecure than ever as the ability of wetlands to regulate water regimes, buffer extreme events, store carbon and support local livelihoods is being rapidly reduced.
At the same time, the evidence base on the value of wetlands is also fast building up, in the form of global synthesis as ‘TEEB – Water and Wetlands’ and numerous national and sub-national valuation assessments. The assessments underline that the costs of inaction are high, yet little progress in being made in making investments available to secure wetlands and make climate adaptation more efficient and effective.
During the Adaptation Futures conference in Rotterdam, Wetlands International convened a session ‘Liquid Assets and Adaptation Futures’ with financial sector experts to identify pathways for better recognition of wetland values in adaptation planning by governments, private sector and investors.
Patrick ten Brink (Institute of European Environment Policy, Brussels) presented the evidence base on economic values of wetland ecosystem services, and the rapid progress being made in linking these values to public finance decisions. It makes economic sense to prevent wetland degradation as the costs of not doing so are disproportionately higher, entail technological barriers and often the thresholds of ecosystem resilience are breached to a point of no return.
Peter Odengho (Government of Kenya) echoed the need for hard numbers to take policy decisions, also stressing that the economics of wetland restoration needs to take into account social equity considerations, as public investments are often political choices. The case for wetlands as public goods, to be secured through public finances, was more than made by the two presenters.
Frederik Classen (Aidenvironment) opined that articulating values alone was not sufficient to make a business case for investing into restoration of wetland ecosystems. Rather tangible connections between between wetland functioning and businesses need to be made. These could be from perspective of internal business processes or from the broader environment in which businesses are located. Frederik stressed the importance of crafting appropriate investment vehicles to connect finance to restoration projects and businesses. Clarity of ownership and leadership were central to this proposition.
Nancy Saich (European Investment Bank) added three important dimensions to the discussion. For investors to participate in wetland restoration, ‘bankability’ was central. In addition, restoration plans would need to stand the test of ‘financial risk screening’, and be designed at ‘viable scales’ optimizing transaction costs entailed in such financing.
Deric Quaile (Shell International) called for a greater scrutiny of the ecosystem services values as the line between stock (the natural capital of wetlands) and flows (ecosystem services derived from natural capital stock) were often blurred. Deric also advised considering ecosystem services of wetlands from a ‘business risk’ perspective. Loss of wetland ecosystem services, did translate into process and value risks – calling for businesses and their investors to finance wetland restoration as a risk mitigation strategy.
Rasmus Valanko (World Business Council for Sustainable Development) made a pitch for enhancing the evidence base on the linkages between wetland restoration and business decision-making. He also called on the significance of ‘champions’, both in the public and private finance space, to spread the message for more affirmative action for wetland restoration as a pathway for climate security.
The take home message from the session was clear. In the last six decades, Wetlands International, working with its partners and stakeholders has created a substantial evidence base, which calls for urgent action to halt wetland loss. We have also demonstrated community managed wetland restoration that contributes not just to biodiversity conservation but also livelihoods of communities that depends on wetlands.
These are strong reasons for governments to consider wetland restoration as a component of public finance decisions. But there is a compelling need to get the corporate sector and businesses on board – a water and climate insecure economy affects everyone in society. While public finance can work on principles of subsidization, securing private finance needs better articulation and connections of wetland ecosystem services with risks to business environments and processes. Wetland restoration would need to be efficient in terms of financial metrics as well to get private investors on board. Articulating wetland values seems to be an important first step in this direction.