The interactions between climate and nature finance need closer attention: optimising one without considering the other creates harmful trade-offs, an expense that can be ill-afforded as global biodiversity declines and temperatures soar, while at the same time financial resources are ever more squeezed. At a minimum, nature and climate finance should not adversely affect each other and, ideally, should produce co-benefits to maximise the effectiveness of capital deployed.

The EBRD’s GET 2030 strategy aligns the Bank’s commitment to the global target of tripling renewable energy (RE) capacity. The Bank’s 2024 ESP has also committed the Bank to support the objective of achieving the goals and targets of the Kunming-Montreal Global Biodiversity Framework (KMGBF). Taken together, these ambitions position the EBRD to lead in coordinating and supporting efforts to harmonise biodiversity and RE efforts. Therefore, we propose to host an event at COP17 which brings together the Bank’s key energy clients, policymakers (particularly from Armenia, the host), and other MDBs to discuss this topic for areas of mutual interest and opportunity. This event will respond to the COP17 priority on resource mobilisation to clarify the relationship between biodiversity and climate finance, and allowing for the development of corresponding outputs for COP31.

Global targets and their progress

Global nature recovery by 2050 is the overarching vision of the KMGBF. One of the headline targets is ‘30x30’: protecting 30% of the world’s terrestrial, water, and coastal and marine areas by 2030. Currently, only about 17 percent of land and 8 percent of marine areas are protected[1]. To meet global goals, countries need both to expand protected areas (PAs) and strengthen the governance in existing ones.

Alongside this headline target, the KMGBF also set the target that by 2030 at least 30 per cent of areas of degraded terrestrial, inland water, and marine and coastal ecosystems are under effective restoration. Achieving this target would serve to reverse the decline in ecosystem function and services, strengthening the resilience of nature and human communities.

In 2023, nearly 200 countries pledged to triple renewable energy (RE) capacity by 2030, a key step needed to meet the Paris Agreement decarbonisation targets. Current RE ambitions in NDCs account for just 12% of the global tripling pledge - 1,300 GW out of at least 11 000 GW required - meaning RE deployment needs to be expedited. That said, recent IEA analysis suggests this acceleration is underway given record-breaking RE deployment and increasing competitiveness of solar PV and wind.

While RE deployment is accelerating, making global RE tripling ambitious but achievable, progress on 30x30 is lagging.

EBRD's role

The EBRD, among other MDBs, sees that the harmonisation of nature and RE targets can be enabled through three key levers: policy and advisory reform; safeguarding and good practice; and pushing beyond compliance.

• Policy reform particularly in relation to integrated country-level spatial planning. The EBRD can support countries to identify priority areas for restoration, protection and RE deployment, in such a way that project pipelines are developed to co-deliver on NDCs and National Biodiversity Strategy and Action Plans (NBSAPs). In doing so, land pressures can be managed holistically to determine the optimal solutions to achieve national targets and streamline project planning.
• Safeguards and good practice can avoid or mitigate biodiversity impacts, ensuring that RE projects do not undermine ecosystem integrity. The EBRD has a long-standing track record of supporting clients with the integration of world-leading mitigation measures into the design and implementation of RE projects. Where projects are sited in critical habitats, the Bank’s policies further require the delivery of biodiversity net gains, which can be a key lever to improving the extent and management of PAs. At a systems level, net gains may involve strengthening regional programmes, such as invasive species control, that support wider ecosystem restoration and protection.
• EBRD will launch a guidance note on Delivering Biodiversity Gains that explores ways to deliver biodiversity gains and measure the biodiversity benefits around financed projects, going beyond compliance requirements. By creating awareness of the scalable opportunities for nature restoration, a greater number of RE projects can co-deliver on climate and nature.

Global biodiversity and climate goals: trade-off or opportunity?

On a systemic level, there is a strong interlink between climate and nature, often referred to as a nexus: physical impacts of climate change accelerate nature loss; and the degradation of nature intensify climate risks and reduce carbon sinks. Meanwhile at the project level, the climate nature interlinkage is often framed as a trade-off between their targets, particularly in relation to land use. RE requires more land than fossil fuels, while 30x30 requires more land to come under protection. Moreover, land most suitable for RE, such as uninhabited areas, mountainous regions and coastal zones, often overlaps with areas of high biodiversity value, where there are existing or potential PAs. Without coordination and planning, the pressure to deliver on nature and climate targets risks at best delaying, and at worst actively blocking one another.

Specifically, the desire for rapid RE deployment can result in fast-tracking of projects to the detriment of ecosystem integrity, particularly where biodiversity targets are not central to government decision making. In the inverse, overly rigid environmental protection policies that do not evolve with developers’ ability to integrate biodiversity considerations can slow down project roll out to the extent of discouraging investor appetite.

However, this trade-off is not inevitable. Overlaps between energy and nature priorities can create opportunities for alignment and co-benefits.