The cost of conserving nature-rich sites such as wetlands and woodlands far outweigh the potential profit of utilising those lands for resource extraction, according to the latest report from Cambridge University in partnership with the Royal Society for the Protection of Birds.

According to the study, conserving and restoring natural sites benefits human prosperity in the long term. For the study, scientists calculated the annual net value of chosen sites if they stayed ‘nature focussed’ compared with the ‘alternative’ non-nature focus – such as forestry or farming cereals, sugar, tea or cocoa – over a period of 50 years.

Using a system called TESSA (Toolkit for Ecosystem Service Site-based Assessment), the team analysed 24 sites across six continents and calculated the monetary value of land-based on which ecosystem services it provided. At their calculations, more than 70 per cent of the sites were found to be worth more in net economic benefits to humans if left as natural habitats, and all forested sites were worth more with the trees left standing.

This comes as no surprise to Palladium Managing Partner Jose Maria Ortiz. “If policymakers and governments want to truly tackle the climate crisis, there needs to be a focus on preserving existing forests,” he says.

Ortiz notes that though forests have long been viewed as an investment liability, now is the time for enacting sweeping changes that will incentivise economic investments in the preservation of forests globally. “There is monetary value in a standing forest, and it isn’t just because of climate change,” he adds. “These forests are worth far more standing than chopped down for timber.”

As populations increase and human habitats infringe upon natural and animal habitats by cutting down forests to make room for homes and roads, planting crops and grazing livestock, humans are doing more than just killing off land – they’re moving into closer contact with wild animals, and risking increased exposure to zoonotic diseases, such as COVID-19.

But what’s the solution?

According to the authors of the study, the UK’s recent move towards a new environmental land management (ELM) system is a step in the right direction. The proposed ELM system will pay farmers for the environmental services their land provides rather than converting land for farming to meet government subsidies.

“The spirit of ELMs in England is spot on,” notes the study’s lead author Dr Richard Bradbury. But the authors add that the findings from their study shouldn’t be used to encourage the abandonment of human-dominated landscapes, rather it indicates that there are lessons to be learned on how humans treat natural capital.

For Ortiz, government tactics like ELMs are just one of a few crucial elements that will need to come together to fully support the conservation of and investment in natural ecosystems. Replacing subsidy systems that reward the degradation of nature with schemes that prioritise environmental restoration is the foundation for exciting changes.

What can then be built on this foundation are new, innovative business models that generate ecosystem services from restoring nature, in partnership with the companies that benefit from these services. These models can be not only financially self-sustaining, but also profitable. This means that private capital can be mobilised to fund the restoration of nature and move beyond environmental stewards’ long-standing dependence on charitable donations and government grants.

Achieving this could be transformational for nature.

“We have the opportunity to scale up and invest in the trade of sustainable, high-value forest commodities,” Ortiz says. “And as new solutions, like innovative business models that reflect the true value of nature, emerge, the right enabling environment will be needed to ensure these models succeed.”

Creating the ideal enabling environment will require global cooperation across the private sector, governments, and financial institutions to support a shift towards valuing what nature offers, further investing in it as a commodity, and enacting policy to protect it.

“It’s never been more imperative than the current moment to focus energies and investments on forest preservation.”

Learn more about the Nature-Based Solutions team or contact info@thepalladiumgroup.com for more information.