Two men at a pond wash and bathe in the shadow of wind energy in West Bengal Country, India. Credit: Climate Visuals

By Umar Manzoor Shah
NAIROBI & SRINAGAR, India, Jan 22 2026 (IPS)

The world is pouring trillions of dollars each year into activities that destroy nature while investing only a fraction of that amount in protecting and restoring the ecosystems on which economies depend, according to a new United Nations report released on January 22.

The State of Finance for Nature 2026 report by the United Nations Environment Programme finds that finance flows directly harmful to nature reached USD 7.3 trillion in 2023. By contrast, investment in nature-based solutions amounted to just USD 220 billion in the same year. The imbalance means that for every dollar invested in protecting nature, more than USD 30 is spent degrading it.

“Globally, finance flows continue to be heavily skewed toward negative activities, which threaten ecosystems, economies and human well-being,” the report titled Nature in the red. Powering the trillion dollar nature transition economy says. Nearly half of global economic output depends moderately or highly on nature, yet current financial systems continue to erode what the authors describe as humanity’s collective nature bank account.

Nathalie Olsen of the Climate Finance Unit at UNEP  and the report’s lead author said that the barriers to reforming environmentally harmful subsidies are primarily political and structural, rather than economic.

“Our report identifies several key challenges in this regard. On the political front, entrenched interests pose a significant obstacle. Many harmful subsidies benefit powerful industries, such as fossil fuels and industrial agriculture, which actively resist change,” she said in an exclusive interview with IPS.

An ex-coal mine reworked as North Macedonia’s first large solar plant. Credit: WeBalkans EU/Climate Visuals

She added subsidy reform often leads to increased costs for consumers or producers in the short term, making such reforms politically unpopular, even when the long-term benefits are clear. Furthermore, many subsidies are deeply embedded within tax codes and budget structures, making them difficult to isolate and reform.

According to Olsen, structural challenges also play a crucial role. She says that the subsidies tend to create path dependency, establishing business models and infrastructure investments that lock in nature-negative practices.

“For instance, free or underpriced water can lead to the depletion of aquifers for irrigation, while fossil fuel subsidies artificially lower energy costs across the economy, including for products like fertilizers. Despite international commitments, such as the Global Biodiversity Framework (GBF) Target 18—which aims to reduce harmful incentives by at least USD 500 billion per year—implementation remains weak due to a lack of political will.”

Economically, however, the case for reform is strong, according to Olsen.  She says that reforming harmful subsidies would free up government resources for nature-positive investments and reduce economic risks.

“Currently, the USD 2.4 trillion in public environmentally harmful subsidies far exceeds the USD 220 billion invested in Nature-based Solutions.

Successful reform is feasible.

As highlighted in our Nature Transition X-Curve framework, it requires just transition strategies to support workers and businesses during the shift, clear communication about long-term economic benefits, concurrent investment in nature-positive alternatives, and gender-responsive approaches to ensure equitable outcomes,” She said.

Olsen  says that notable examples, such as Costa Rica’s fossil fuel levy financing reforestation and Denmark’s energy taxes supporting the transition to wind energy, demonstrate that reform is politically achievable when accompanied by visible investment in sustainable alternatives.

The report warns that business as usual will deepen ecosystem degradation and expose economies to rising risks. It argues that governments, businesses, consumers and investors still have the power to redirect capital flows and unlock resilience, equity and long-term growth if they act quickly.

In 2023, public and private finance that directly damaged nature totaled USD 7.3 trillion. About USD 2.4 trillion came from public sources, mostly in the form of subsidies that hurt the environment. These included USD 1.1 trillion for fossil fuels, about USD 400 billion each for agriculture and water use, and significant support for transport, construction and fisheries.

Private finance made up the larger share, at about USD 4.9 trillion. A small number of high-impact sectors received the majority of these flows. Utilities alone accounted for around USD 1.6 trillion, followed by industrials at USD 1.4 trillion, energy at about USD 700 billion and basic materials, including fertilizers and agricultural inputs, at a similar level.

The report notes that public subsidies and private investment often reinforce each other, locking capital into nature-negative sectors. Below-market prices for water, energy and other government-provided goods encourage overuse of natural resources and increase financial risks over time.

Against this backdrop, finance for nature-based solutions remains limited. Total global spending on nature-based solutions reached USD 220 billion in 2023, a modest five percent increase from the previous year. Public finance dominated, accounting for about USD 197 billion, or roughly 90 percent of the total.

Transition pathways to nature-positive outcomes. Credit: UNEP

“Our Nature Transition X-Curve framework shows these tools work best when deployed together—combining regulatory “push” (disclosure, subsidy phase-out) with financial “pull” (de-risking, incentives). Over 730 organizations representing $22.4 trillion in assets have adopted TNFD, showing willingness exists when clear frameworks are provided. The challenge isn’t lack of tools—it’s political will to deploy them at scale,” Olsen said.

Public domestic expenditure was the single largest source of funding, reaching USD 190 billion in 2023, as per the report. Spending on biodiversity and landscape protection grew by 11 percent, although support for agriculture, forestry and fisheries declined. Even so, public spending on nature-based solutions remains small compared to the more than USD 2 trillion governments spend each year on environmentally harmful subsidies.

Official Development Finance targeted at nature-based solutions reached USD 6.8 billion in 2023. This represented a 22 percent increase from 2022 and a 55 percent rise compared to 2015. The report describes development finance as a critical enabler for scaling nature-based solutions in developing countries, while warning that geopolitical pressures could constrain future budgets.

Private finance for nature-based solutions reached USD 23.4 billion in 2023. Although small in absolute terms, the report says these flows show positive momentum. Biodiversity offsets channelled more than USD 7 billion, certified commodity supply chains attracted over USD 4 billion, and biodiversity-related bonds and funds mobilized around USD 5 billion. Nature-based carbon markets accounted for about USD 1.3 billion.

“With the right enabling environment, standards and risk-sharing instruments, private capital could scale rapidly and become a game changer in closing the nature-based solutions finance gap,” the report says.

To meet global commitments under the three Rio Conventions on climate change, biodiversity, and land degradation, the report estimates that annual investment in nature-based solutions must rise to USD 571 billion by 2030. This would require a two-and-a-half-fold increase from current levels. The report projects that annual investment needs will reach approximately USD 771 billion by 2050.

The report frames investment in nature-based solutions as a form of essential maintenance for natural infrastructure. It highlights evidence that restoring degraded land can yield returns of between USD 7 and 30 for every dollar invested, if ecosystem services such as water regulation, soil fertility and disaster risk reduction are taken into account.

A review cited in the report found that in 65 percent of disaster risk reduction projects, nature-based solutions were more effective at reducing hazards than traditional engineering approaches. Floodable wetlands and permeable pavements in cities are two examples. They soak up stormwater and take some of the stress off drainage systems.

Despite these benefits, the authors contend that increasing investments in nature won’t suffice unless they eliminate harmful finance. Nature-negative finance, they say, remains the single biggest obstacle to a transition toward nature-positive outcomes.

The report introduces a new analytical framework called the Nature Transition X curve. The framework illustrates the dual challenge facing policymakers and investors. On one side, harmful activities and finance flows must be reduced and phased out. On the other hand, investment in nature-based solutions and other nature-positive activities must be scaled up rapidly.

Olsen said that the X-Curve is a diagnostic tool helping policymakers identify context-specific leverage points, sequence reforms to build political support, and ensure coherence between phasing out harmful finance and scaling up nature-positive alternatives.

“This is not just an environmental agenda but an economic transformation,” the report says. Redirecting harmful subsidies, integrating nature into fiscal frameworks and mobilizing private finance are described as central to building resilient and inclusive economies.

Olsen told IPS news that there is a need for a “Big Nature Turnaround” that repurposes trillions of dollars currently flowing into destructive activities. Key priorities include reforming environmentally harmful subsidies, aligning national budgets with biodiversity and climate targets, and mandating disclosure of nature-related risks and impacts.

More than 730 organizations have now adopted the Taskforce on Nature-related Financial Disclosures framework, representing assets under management worth USD 22.4 trillion. According to the report, this growing awareness of nature-related financial risks is starting to influence corporate and investment decisions, although progress remains uneven.

The report also points to rising legal and regulatory pressures. In some jurisdictions, courts are increasingly questioning whether financial leaders are meeting their fiduciary duties if they ignore environmental risks. At the same time, the authors warn that regulatory rollbacks in other regions could create uncertainty and delay action.

While the scale of the challenge is daunting, the report strikes a cautiously optimistic tone. Better data, a clearer framework, and growing awareness are creating conditions for faster action. The transition to a nature-positive economy, the authors argue, could unlock a trillion-dollar nature transition economy across sectors ranging from food and agriculture to construction, energy and urban infrastructure.

“Turning the wheel towards nature-positive finance is essential,” the report concludes. Without a decisive shift in how money flows through the global economy, the gap between what nature needs and what it receives will continue to widen, with profound consequences for ecosystems, livelihoods and long-term economic stability.

IPS UN Bureau Report

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The Solar Kiosk with goods inside. A part from perishable foodstuffs/soft drinks they include solar energy accessories and phone chargers. Credit: Justus Wanzala/IPS

By Justus Wanzala
Olkiramatian, Kenya, Dec 7 2015 (IPS)

This market centre in the arid Lake Magadi region, Kajiado of Southern Kenya is with no grid electricity. The area is inhabited by the pastoralist Maasai community. With climate change affecting their pastoral way of life, the community is increasingly adopting a more sedentary life but without amenities.

The centre is hot and dusty. Much as the area enjoys bright sunshine during the day, the situation changes to pitch dark after sunset. But in the last two years, the market centre is witnessing a transformation. It is becoming a beehive of activity.

This is courtesy of Solar Kiosk Kenya Ltd. that installed a retail kiosk, called the SOLARKIOSK E-HUBB. The E-HUBB, designed by GRAFT (partners and co-founders of SOLARKIOSK AG, the Berlin-based mother company), is a modular solar-powered structure that can be easily implemented in remote communities.

The E-HUBB outlet enables and empowers local entrepreneurship and the sustainable development of Base-of-the-Pyramid (BOP) communities by selling essential food ingredients, vital energy services, solar and clean energy products and connectivity solutions. By the end of 2015, SOLARKIOSK will have implemented over 100 E-HUBBs on three continents.

A SOLARKIOSK E-HUBB is a solar-powered autonomous business hub. It uses solar power to generate electricity for rural off-grid communities for various uses. It is a decentralised, easy to maintain source of energy. Kiosk operators are able to use the power during the day and continue operating late into the night.

Solar Kiosk Kenya Ltd manages operations in Kenya and uses a business model that enables a local entrepreneur to sell solar products and provide solar powered services to their community. It is a commercial enterprise which stations solar-powered units in kiosks in Kenya’s remote and peri-urban areas, thus creating a triple impact: social, environmental and economical.

Its impact amplifies the link between energy and development. To the residents of Olkiramatian the dream of ever accessing a clean source of energy was just a farfetched one to the residents.

Like elsewhere in remote areas of Kenya, Olkiramatian residents rely on kerosene lanterns or diesel generators which are not only noisy but also polluting.

Jan Willem Van Es, Managing Director of Solar Kiosk Kenya said, “Solar power is a renewable energy form with a potential to accelerate growth of remote areas with connection to electric power grid.”

He noted, “The structure is a modular and expandable kit-of-parts that can be transported and deployed in remote off-grid areas. The E-HUBB at Olkiramatian was the fourth to be installed in the country.”

“The E-HUBB combines a state of the art design with a total of 2Kilowattsolar panel capacity on the roof as well as enough battery capacity to operate for at least 24 hours without sunshine,” he said.

The SOLARKIOSK impact on residents of Olkiramatian is noticeable. Seuri Lesino, the SOLARKIOSK operator at Olkiramatian says that he opens his E-HUBB for a few more hours at night generating extra revenue for the family.

“Initially, to run a business here after sunset you had to rely on kerosene lanterns which could hardly provide enough light, but nowadays if you come at night, you will be mistaken to think that you are in a town. We operate till midnight and residents have come to like it, the power is abundant,” said Seuri.

“The2kw E-HUBBin Olkiramatian installed in 2013 generates electricity capable of powering a television set, printing services, document lamination, and phone charging, barber and photocopy services,” he said.

In addition to energy services and food staples, the E-HUBB sells a wide range of solar products as well as energy efficient cook stoves, farm waste charcoal briquettes and other sustainable goods. Van Willem says that the kiosks are also equipped with internet services in addition to being a platform for businesses like beauty salons, hairdressers, movie and sports viewing halls.

“In the future, we can expand this E-HUBB into its own mini mall, if another entrepreneur comes around with the aim of offering butchery services for instance, additional panels can be provided and this applies to service providers like telecommunication companies keen to put up network masts,” Jan Willem explained.

Area Chief Josphat Maiponyi says that SOLARKIOSK has enabled availability of services and products that initially were not previously accessible. They include cold drinks and perishable products that are now present courtesy of refrigeration services. “Harnessing of this free and abundant sunshine has borne dividends,” he said. He adds that residents used to move long distances to charge their phones but it is no longer the case.

Maiponyi says that the elders use a temporary hall set up close to the kiosk to conduct their meetings even after sunset. Fredrick Sankori, a primary school pupil from the neighbourhood says he finds the hall handy to his school homework late in the evening, taking advantage of the light provided and not being effected by the bad smoke of the kerosene candles.

SOLARKIOSK spurs local development by enhancing communication and entrepreneurship, offering a safe place to the residents to meet their friends. The kiosks are assembled in Kenya with the parts being brought in from Germany. Soon the kiosks will also be manufactured locally in Kenya. Currently, there are 23 SOLARKIOSK E-HUBBsin Kenya offering not only services to thousands of Kenyan but also employment to many local people. SOLARKIOSK AG is operating also in Ethiopia, Tanzania, Rwanda, Botswana and Ghana.

The United Nations Environment Programme (UNEP) Lighting Assessment undertaken in 2010 indicated that the off-grid population in Kenya was 34 million out of the country’s population 40.5 million people. This may slightly increased but indicates the need for efficient off grid systems particularly in rural areas.

Globally 1.5 billion people live without electricity access. Some 800 million are in Africa. Unsustainable and dirty fuels provide much of their energy despite abundant sunshine.

Fortunately, off-grid communities like Olkiramatian can benefit from the immense solar resources of the African continent and access sustainable energy. The outcome is a significant change in livelihood.

According to the World Bank, Kenya has an estimated solar radiation potential of at 4-6 kWh/m2/day, which can effectively end energy poverty if optimally harnessed.

Jan Willem’s concern is however that poor transport network and general infrastructure in rural Kenya could undermine investment in providing more SOLARKIOSK E-HUBBs as off grid energy solutions.

“There hasn’t been much goodwill from authorities, we would welcome any support from the government,” he said.

He suggests that if the kiosks are embraced by local governments, they can open up rural market centres to spur entrepreneurship and economic development through the provision of affordable, reliable and clean energy.

Similar views are expressed by Peter George, Global Village Energy Partnership’s (GVEP) Head of Advisory Services who says that infrastructure is a challenge to renewable energy companies targeting remote communities. GVEP is involved in initiatives to reduce poverty and increase energy access in Kenya.

George says investment in renewable energy is vital because it conserves the environment and creates jobs. “Tangible and real development can only occur through sustained and enough energy generation in country.” he said. He adds that the more widespread the energy access, the easier it is for a country to tackle poverty.

“It is for this reason that we’re supporting companies like SOLARKIOSK who invest in the provision of energy to off grid communities,” he said.

(End)