Why include nature in the CCDR analysis?
CCDRs identify and prioritize the most impactful actions to align a country¡¯s climate and development goals. Nature is essential to both. There is ample evidence that nature supports people, livelihoods, and job creation, enables other economic sectors from agriculture to transport, and makes cities greener and more livable. Nature is also central to climate change mitigation and adaptation. The CCDRs published to date look at nature in different ways, as natural resources vary from country to country. As a result, nature comes up more prominently in some CCDRs than in others.
How do CCDRS look at nature?
CCDRs reflect the different aspects of nature and environmental issues. We refer to nature as renewable natural capital (for instance, landscapes, forests, oceans, soil, and wild animals) and the benefits they provide, also known as ¡°ecosystem services.¡± This includes provisioning services (such as fish, timber, or energy); regulating services (like nature¡¯s capacity to absorb carbon, reduce erosion and flooding, and regulate rainfall); and ¡°cultural¡± services (like local beliefs or tourism). All CCDRs discuss carbon emissions from land sources, including forests, while some also consider the role of nature-based solutions, and others look more closely into the benefits of different ecosystem services for growth and poverty reduction.
CCDRs identify and prioritize the most impactful actions to align a country¡¯s climate and development goals. Nature is essential to both.
What is nature¡¯s contribution to adaptation and mitigation?
CCDRs show that improved management and conservation of nature can help with adaptation and resilience to climate change. For example, Indonesia has a very ambitious target of restoring and conserving around 600,000 hectares of mangroves ¨C the largest such effort in the world ¨C because mangroves can protect against storm surges, capture carbon, provide habitats for biodiversity to flourish, among other benefits.
In many countries, addressing challenges related to nature is critical for climate change mitigation for three reasons:
- First, nature can act as a source of emissions when degraded. Standing forests, for example, store vast quantities of carbon that are released if cleared. In Indonesia, preventing these emissions by reducing deforestation and fires will account for over 60% of the country¡¯s Nationally Determined Contributions (NDCs).
- Second, nature-based solutions have important co-benefits. In Brazil, curbing deforestation is not just essential to fight climate change globally, but would also help improve water supply and reduce climate-related risks in agriculture.
- And third, the restoration of nature (forests, marshes, seagrass, etc.), is often an effective option for carbon sequestration. This is particularly valuable for offsetting certain industrial and transport emissions that are hard to mitigate (although emissions reductions in those sectors remain necessary).
Nature can act as a source of emissions when degraded. Standing forests, for example, store vast quantities of carbon that are released if cleared.
How do CCDRs account for the value of protecting a forest or preserving biodiversity?
Many ecosystem services provided by nature (pollination, clean air from trees, fertile soils) are hard to measure and are often undervalued in economic decisions. Some CCDRs use ¡°nature-aware¡± macroeconomic models that allows us to understand the impact of changes in these ecosystem services. Other CCDRs complement the Bank's standard macroeconomic models with an in-depth analysis of how the loss of ecosystem services impact local communities and vulnerable groups, as well as its effects over time, which can be large.
For example, in some CCDRs we used ¡°biophysical models¡± to better understand the complex dynamics behind changes in natural resources. In the China CCDR, spatial analysis helped identify the best places to restore natural ecosystems without affecting food security, while increasing carbon sequestration by 33.9 percent and protecting biodiversity. The Malawi CCDR assessed how land conditions affect a whole range of other aspects, such as flooding and agricultural productivity - and then calculated the economic cost of these impacts. The analysis showed that land degradation would increase infrastructure damage by as much as 25 percent by 2050.
We are now also working across teams to mainstream ecosystem services into the Bank's macroeconomic models so that future CCDRs will more fully account for the contribution of nature to mitigation, adaptation, and economic growth. This work builds on our experience in natural capital accounting ¨C putting the value of a country¡¯s environmental assets into their balance sheets -- and other analytical work.
What do CCDRs reveal about the connection between nature, poverty, and development?
Nature is an important engine of growth. For instance, through sustainable forestry measures (like restoring degraded forests or managing protected areas better), Ghana could simultaneously achieve net zero-deforestation, transform its forests into carbon sinks, expand economic returns from timber extraction, and benefit 6.1 million people through 2050.
The analysis we conduct as part of the CCDRs gives us a deeper understanding of the interaction between nature and climate change ¨C including how it affects vulnerable and poorer people. For example, the Ghana CCDR highlighted how heat stress could specifically affect the agriculture sector and lead to income losses, especially among the poorest people. The Rwanda CCDR projected that water availability will be a binding constraint to growth and highlighted protecting nature as one key intervention to address it.
The CCDRs give us a deeper understanding of the interaction between nature and climate change ¨C including how it affects vulnerable and poorer populations.
The relationship between nature, jobs, and productivity is both direct and indirect. Investing in nature, for instance by planting new forests, can generate short-term jobs: preparing the soil, planting the trees, etc. More important, it can unlock longer term jobs in sectors up and down the value chain linked to the production of timber and other forest products, to agroforestry, to increased tourism, etc. And there is also an indirect effect. Agriculture and other sectors rely on nature¡¯s regulating services, like healthier soils: investing in nature thus benefits other parts of the economy, indirectly creating more jobs and income.
Poorly designed policies can also have an impact on poverty. Think of land management. Taken in isolation, nature conservation policies could have a negative economic impact in the short-term - for instance if they limit the expansion of agricultural activity. But, as the Indonesia CCDR concluded, when conservation policies are part of a package of interventions that includes restoration and improving agricultural productivity, the outcome can be pro-poor.
As we deepen our understanding of the interlinkages of nature, climate, and development, what can we expect from future CCDRs?
Mitigation features prominently across the CCDRs, partly because mitigation goals are well defined in Nationally Determined Contributions. Going forward, we hope that stronger analytics can ensure that nature is seen as a more central component of development and climate adaptation efforts.
There is also room to enhance our analysis on the ocean (for instance, the potential of blue carbon or the impact of climate change and overfishing on fish stocks) and to refine the spatial analysis on poverty. Over time, CCDRs will help us develop a more nuanced understanding of land use transitions and the policies that can enable them.
