Drought is an increasingly urgent and systemic problem. More than a quarter of the global population live in countries facing extremely high water stress, exacerbated by climate change, with expected shocks to food and energy security, water availability and ecosystems.

Decades of research have shown that if stakeholders from across society work together on innovative nature-based solutions (NbS), it is possible to neutralise some of the worst impacts of droughts, floods and other extreme weather events. Despite the proven value of NbS, the latest research shows that far more investment is nature-negative than positive, with government spending on environmentally harmful subsidies three to seven times greater than public and private investments into NbS. Public and private finance for NbS is currently less than half of the USD 384 billion per year needed by 2025.    

The UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) works to support decision-makers to create improved systems for predicting and monitoring the impacts of drought on ecosystems and economies. UNEP-WCMC currently supports the Intergovernmental Working Group on Drought, providing independent expertise to national decision-makers from around the world as they negotiate a way forward towards stronger global and regional policy frameworks to address drought risks sustainably.

To further advance this conversation, on 22 August during World Water Week in Stockholm, UNEP-WCMC co-organised a talk show with a range of stakeholders working on NbS for drought resilience. Julieta Lahud Vega, Programme Officer in UNEP-WCMC’s Nature-Based Solutions team, chaired the event, which explored how different actors are making strong financial and business cases for NbS to tackle drought. Here, we highlight some of the key points made by the panellists.

‘It makes economic sense to invest in drought resilience’: Daniel Tsegai, Programme Officer at the UN Convention to Combat Desertification

“The severity and frequency of drought is increasing. It is coming harder and faster, as a result partly of climate change. We need to be more prepared, we need to move from a reactive to a proactive approach. Drought is not just a temporary crisis any more, it is a constant systemic risk.

“Land restoration is inexpensive, simple and accessible to all. When we talk about land restoration, I think it is important to remember that it is about sequestering carbon, increasing water storage capacity of soils and increasing agricultural production.

“But restoration alone is not enough. We have to manage and protect land. The good news is that 130 countries have committed to setting land degradation-neutrality targets, and more than 70 countries have developed national drought plans based on the principle of risk reduction to become proactive. There is a lot being done and I think we are on the right track.

“One thing that is very important is the economics of drought preparedness. We need to make the case that it’s not only about avoiding a disaster – that you are saving lives and livelihoods when you are prepared for drought – but that it makes economic sense. We can sensitise decision-makers and make the case for the benefits of action versus the cost of inaction; the benefit-cost ratio of which can be as high as 10:1. It makes economic sense to invest in drought resilience.”

‘The private sector can see the multiple benefits of NbS for water security’: Naabia Ofosu-Amaah, Senior Corporate Engagement Advisor for Water and Resilience at The Nature Conservancy (TNC)

“At TNC, we think that NbS should really be considered as an area that can mitigate flood, drought and aid climate adaptation. We have carried out research with UN and private sector partners into the multiple benefits of NbS; climate adaptation was an area that really came through as being critical – and we’re hearing that from the private sector [who are telling us]: ‘We’re seeing the impact of floods, droughts and also want to see the multiple benefits of NbS to biodiversity, ecosystems, socio-economic benefits, as well as climate mitigation.'

“Examples of NbS that TNC has identified in an upcoming report include native vegetation restoration, finding natural floodplain areas to recharge aquifers, and agricultural best management practices.

“We have seen increased interest and investment coming from the private sector, which is coming from a risk-mitigation perspective and also from looking at cost-effectiveness. One initiative that can bring those multiple benefits can save on cost, and also see a greater return on investment over time.

“One example is our work in Cape Town, which saw its worst drought between 2015 and 2018. Working with private sector partners we looked at invasive species removal, allowing natural vegetation to increase. This led to a 24 per cent increase in dry season water availability – the equivalent of about two months’ supply for the city. That was one-tenth of the cost of other solutions like desalination, water reuse or additional groundwater exploration, and helps us to truly see that return on investment for NbS and mitigating drought.”

‘The co-benefits add to the business case for NbS’: Alex Mung, Global Director for Water Sustainability at AB InBev

“As the world’s leading brewing company, water is absolutely critical to our business. At AB InBev we often say ‘No water no beer’, and it’s absolutely true.

“For our breweries, having a secure and reliable water supply is absolutely necessary, but also we understand clean water for growing the crops that go into our beer is essential. So not only from our brewery standpoint but for our supply chain, water and the impacts of drought are essential. That’s why we have made a very strong commitment to have a measurable improvement on water availability and quality across 100 per cent of our high-water-risk sites.

“When we talk about NbS and making the business case for it, it’s not just about water. We use a number of interventions, projects and programmes working with great partners such as TNC and WWF across many of our sites. The multiple co-benefits of this on climate, biodiversity add up so that it makes great sense.

“We get water infiltrated back into the system, supporting a rebalancing of the water system for many of our breweries, but what’s really interesting for me is in some our projects, like in Brazil for example, we also have seen the re-emergence of local natural vegetation and local species of animals that before were hardly seen.

“Yes, it’s water for our business but also the biodiversity benefits, carbon benefits, add to the business case – so what we try to do is create that holistic business case.”

The panellists agreed on and emphasised the need for cross-sectoral work for drought resilience. While NbS bring multiple co-benefits, they operate in a different time and geographical scale from traditional interventions, so seeing benefits might take longer for certain NbS interventions. In the immediate term, governments and policymakers should lead the discussion on investing in drought resilience and NbS with a proactive approach rather than reactive, while the private sector should understand the costs of inaction and benefits of investing.

Julieta Lahud Vega, Programme Officer at UNEP-WCMC

It was striking to hear the panellists’ emphasis on the value of nature-based solutions in terms of their effects on water availability, ecosystem health, community well-being and carbon sequestration. In recent years, predicting and monitoring returns on investments in nature-based solutions has become feasible for private sector companies. These systems can show quantitative evidence to company directors about the difference that they can make in their choices to work with local and national governments for nature and social objectives by building better monitoring systems into their operations.

Caroline King-Okumu, UNEP-WCMC’s Deputy Head of Nature-Based Solutions

Advancing global understanding of and progress on NbS for drought

The coming months will be a crucial period in creating high-level momentum for the global agenda on drought resilience, and UNEP-WCMC looks forward to providing ongoing support to policy leaders.

A new global flagship report, ‘The Economics of Resilience to Drought’, which will feature NbS, is being prepared by the German development agency GIZ’s Economics of Land Degradation Initiative, with inputs from the UNCCD, UNEP-WCMC and others, with the aim of being ready in time to inform discussions at the UNCCD COP16 in November 2024.

As the UNCCD’s Daniel Tsegai pointed out during the World Water Week panel discussion, innovative financing is urgently needed for drought resilience. This, he said, is a “key pillar” of the International Drought Resilience Alliance (IDRA), a coalition established at COP27 last year of more than 30 countries and 20 organisations that is working to build high-level commitment on drought resilience. UNEP-WCMC welcomes the establishment of IDRA and looks forward to its work at COP28 in a few months.

Alongside its work in support of the Rio conventions, UNEP-WCMC works to advance understanding of NbS for drought resilience through multiple projects. On the EU Horizon 2020 Rexus Project, UNEP-WCMC researchers are working alongside colleagues in a consortium of 17 scientific institutions and partners. Rexus is generating evidence to strengthen the business cases for NbS as a way to deliver water, food and energy security in five drought-prone regions of Europe. UNEP-WCMC is leading a component of the Rexus project’s work in Europe on assessing and incorporating NbS to water-energy-food-ecosystem planning and adaptation, with the aim of developing a decision support tool to demonstrate various advantages and returns on investment from NbS.

UNEP-WCMC’s teams also work on a diverse range of other projects helping countries and the private sector understand water usage and sustainability. These include tools to navigate ecosystem-based adaptation measures, helping the private sector assess water use and dependencies via our ENCORE tool and as a result of our input into the emerging Taskforce on Nature-related Financial Disclosures framework, as well as developing in-country projects working with governments, researchers and communities to help transform national economies following the 2021 Dasgupta Review.

All images courtesy of World Water Week