It is the world population’s duty to protect the planet, its environment and natural resources. The entire Gulf region has set a prime example in reducing carbon emissions by 2030. Natural climate solutions (NCS) are ways to sequester carbon through conservation, restoration, and improved land management of the world’s forests, grasslands, and wetlands. Given their potential to abate greenhouse gas emissions, their comparatively low marginal costs, and their ability to deliver other benefits, NCS are expected to be a key component of any pathway that limits global warming to well below 2 degrees Celsius above preindustrial levels.
NCS could account for 37% of total mitigation efforts—about 11 gigatons of carbon dioxide out of the net 30 gigatons that need to be abated each year—while also delivering economic and social benefits, such as restoring ecosystems and securing the transition to low-carbon livelihoods for communities that depend on natural resources.
NCS also represents a new source of potential growth for investors. Today, only about 2% of the $632 billion deployed globally each year in climate capital goes toward natural solutions. The main reasons are that investors are unfamiliar with this asset class and unsure about the returns given the volatility of carbon prices. We expect that to change over the next few years, and it seems likely that the entry of institutional investors will help mature this asset class and bring it into the mainstream.
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