Finance Solutions for Nature 2025

# Solution Definition Scalability Nature impact 28 Philanthropic finance Charitable donations, including for nature projects, where outcomes are typically tracked and payouts sometimes linked to outcomes.High; philanthropies have historically mobilized significant resources for environmental causes, but scale is limited versus markets.Medium; funded initiatives are generally small-scale and target setting is mixed; stronger when structured as catalytic capital. 29 Public grants Direct government contributions for specific activities, often one-off payments supporting conservation or restoration. Medium; reliant on budgetary process and government priorities. Medium; target setting and monitoring are usually inefficient; funded initiatives can be larger in scale than philanthropy but strongest when structured as catalytic capital. 30 Conservation easementsVoluntary land-use restrictions to protect resources, which can generate tax credits or be sold by the landowner; also include concession agreements as rights-based mechanisms. Medium; depend significantly on regulatory support and enforcement capacity.High; easements ensure permanent conservation. 31 Advance market commitments (AMCs)Commitments from a company or government entity to offtake a product or service at a guaranteed future price; also called procurement or offtake agreements.Low; as success depends on bespoke commitments. Medium; as track record is mixed and shows that guaranteed purchases may not always lead to measurable nature outcomes. 32 Jurisdictional approachesCollaborative funding models where a combination of public, private and philanthropic sectors pool resources to de-risk nature projects; include supply chain projects in landscapes and some REDD+ projects.Medium; as each contract is bespoke and success depends on sustained capital influx from all sources.Medium; generally set up for strong outcomes and with good governance, but results vary. Fiscal and regulatory measures* 33 Ecological fiscal transfers (EFTs)Fiscal transfers that reward expanded conservation of protected areas and higher generation of ecosystem services flows.Reliant on budgetary process, legislation and complex coordination across ministries and subnational governments.Strong impact measurement and outcome tracking as funds are tied to environmental performance; success emerging in China, India and Brazil. 34 Environmental/ externality taxes Taxes to discourage activities or products with negative environmental impacts, e.g. carbon tax, land degradation tax, water tax.Reliant on political alignment and legislation; challenges with trade competitiveness and perceptions of fair pricing. Excellent financial incentives to curb nature-negative behaviour; can generate new funds for nature projects and stimulate demand for market-based solutions. 35 Environmental subsidiesSubsidies aimed at reducing environmental harm or promoting positive behaviours.Reliant on sustained public funding and policy stability, as well as transitioning stakeholders on current subsidies to new regimes. Excellent in theory as they provide financial incentives for nature-positive behaviour, but evidence of success is mixed. 36 Betterment levies A tax on land value increase due to public infrastructure development, including nature- based solutions.Similarly reliant on political priorities and budgetary processes.Effectiveness linked to how levies are reinvested. 37 Incentive mechanismsFinancial or non-financial incentives used to reward nature-positive activity by corporates and communities, e.g. no-claims bonus, green procurement bonus.Depend on regulatory and policy support and structuring is bespoke and complex. Directly encourage nature- positive activities, though track record is hard to ascertain. * Fiscal and regulatory measures are not explored in this research.TABLE A2 Finance solutions for nature (continued) Finance Solutions for Nature: Pathways to Returns and Outcomes 42