International development finance – including climate finance – is undoubtedly a key enabler of investments in nature-based solutions (NbS) in developing countries. Many developing countries rely highly on external financial assistance to supplement domestic government revenues to invest in sustainable socio-economic development, and environmental conservation and protection. This is especially true for those classified among the least developed countries (LDCs) and small island developing states (SIDS). External finance will likely remain essential for implementing NbS in LDCs and SIDS.
The authors acknowledge that it is difficult to accurately assess how much international development finance is being mobilized for NbS, and that results should be treated as illustrative. Nevertheless, they argue it is important to compile data using different approaches so that decision makers can understand the variation rather than relying on single sets of figures.
The assessment of the OECD data set found that:
The authors also carried out a scoping review of a small subset of projects from SIDS and LDCs, and found that it is unclear how benefits for both people and biodiversity are achieved. The authors point out that If this reflects a wider pattern, meaning project activities are not explicitly designed to reflect ecosystem challenges and co-benefits are just assumed, then current estimates of NbS funding are likely to be masking a more significant finance gap.
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