Wed, Dec 13, 2023 page9

• Nature as infrastructure

  Nature has vast potential to deliver essential services. Treating it as infrastructure to be protected and enriched can be transformative

  • By Erik Berglof
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  For millennia, natural infrastructure — such as river systems, wetlands, coastal plains, sand dunes and forests — supported the development of human civilization. Our ability to harness such infrastructure, for everything from food and drinking water to storm-surge protection and flood mitigation, has been central to our success as a species, and it will prove vital to our survival.

  Technological advances propelled the evolution of infrastructure. Green turned to gray, with concrete, cable and steel delivering energy, communications and transportation — and, with them, unprecedented growth and development.

  However, while rapid modernization produced once-unimaginable prosperity, it has had grave unintended consequences, not least of which is the environmental degradation and greenhouse gas emissions that are jeopardizing our very existence.

  

  Illustration: Mountain People

  The question now is how to meet urgent environmental goals — reducing emissions and protecting and restoring nature and biodiversity — while enabling developing economies to fulfill their legitimate growth aspirations.

  The answer, as a recent report from the Asian Infrastructure Investment Bank suggests, might well begin with an explicit acknowledgement of nature as infrastructure.

  Viewing nature as infrastructure is transformative, because it forces us to think in a more systemic way. As we pursue growth and development, we must not only avoid damaging nature, we must also strengthen and enrich it through “nature-positive” investments — all while tapping its vast potential to deliver essential services.

  Biologists already do this when they benchmark how to restore degraded land. Now economists must get on board and enhance their tools for capturing the value and complexity of natural capital.

  For example, biodiversity covers not just the number of species, but also their genetic diversity and diversity of functions. Yet another dimension of biodiversity is the complex evolutionary history of species — when they were separated on the “tree of life.” It is only by deepening our understanding of biodiversity that we can comprehend nature’s full potential — and our effect on it.

  This knowledge is site-specific, and acquiring it would require contributions from scientists and local populations. The good news is that models for such collaboration already exist.

  The massive Three-North Shelter Forest Program, aimed at preventing two large deserts from merging in Northern China, was a flawed endeavor at the start, with only single tree types planted. Over the course of two decades, deeper knowledge of the local environment and the participation of local communities transformed it into a success.

  Governance and incentives are also crucial to protect and nurture natural infrastructure. In Indonesia, mangroves have long protected communities, particularly poorer households, from deadly tidal floods, but they are being depleted in regions with weaker state capacity. In Egypt, by contrast, efforts to restore mangroves have been aided by revenues from ecotourism and beekeeping, which produces honey and supports the delivery of vital pollination services.

  The nature-as-infrastructure approach demands that we assess what nature can deliver before considering gray solutions, and it can help countries close their infrastructure gaps in truly sustainable ways. However, gray infrastructure would always be necessary for growth and development. This demands that we design it better, to minimize its effects on nature.

  For example, renewable-energy infrastructure has a large ecological footprint, and road infrastructure fragments and damages ecosystems. Solutions such as colocating infrastructure on brown sites and providing auxiliary infrastructure (such as wildlife highway crossings, green urban spaces and nature-restoration offsets) can help mitigate these effects.

  Of course, financing might pose a challenge. The Kunming-Montreal Global Biodiversity Framework, agreed to a year ago, assumes that US$598 billion to US$824 billion per year would be needed by 2030 to close the biodiversity funding gap. Such sums, needed to protect and then begin to restore nature, could only be generated by valuing nature properly and creating markets that would mobilize private and institutional capital.

  To this end, “nature as infrastructure” must be developed as an asset class, using new tools and financial instruments. At the micro level, this would require better pricing of nature’s services — such as usage charges or permits and taxes for damaging activities — and adaptive local regulations.

  Micro-level policies can support the development of other financial instruments and, eventually, markets — for performance-linked bonds, policy-based lending, debt-for-nature swaps and nature credits, to name a few examples — to channel more financing into nature. Lessons from carbon markets should be heeded, to avoid repeating past mistakes.

  Special attention must be paid to low-income economies, many of which are highly vulnerable to climate change and environmental degradation, but have rich natural endowments that should be valued properly. Multilateral development banks can catalyze the nature-as-infrastructure approach, ensuring that it is incorporated into all aspects of their operations. Ultimately, this strategy should also guide individual infrastructure projects and national growth strategies.

  The consequences of the infrastructure decisions made today would be felt for decades to come. Only by committing to invest in green — and to build gray better — can we ensure we lay the groundwork for a fairer, more sustainable, and inclusive global economy.

  Erik Berglof is chief economist at the Asian Infrastructure Investment Bank.

  Copyright: Project Syndicate
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