Washington, DC 2023: Investing in natural capital in the United States

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More than 50 percent of the world’s GDP ($44 trillion) is dependent on natural capital—natural assets such as water and biodiversity that are declining at an unprecedented pace. However, actors in the public and private sectors could help to reverse this trend by harnessing existing and proven approaches and technologies to take specific actions. Leveraging new legislation such as the Infrastructure Investment and Jobs Act and the Inflation Reduction Act to invest in opportunities to protect, manage, and restore nature, the United States has an opportunity to lead in addressing a host of challenges—from biodiversity loss to drought, wildfire, and food production.

On May 31, 2023, McKinsey & Company, The Nature Conservancy, and the Wilson Center convened federal, state, and Indigenous leaders, as well as representatives from the private and social sectors, for an interactive round table discussion. Discussion topics included the socioeconomic case for conservation, approaches to optimize land use planning, strategies to increase collaboration, and long-term financing approaches. There was a legitimate sense of optimism and momentum in the room, where the following key themes emerged:

  • Evolve our thinking about conservation. The challenges we face today are different to those of the past, and our conservation models and management approaches need to be adapted accordingly. Conservation efforts need to support broader socioeconomic goals, including a sustainable economy, job creation, and improved public health. Roundtable participants note that the use of working lands would need to be reconsidered, for example, as sustainable practices such as regenerative farming can achieve many of the same goals as traditional conservation, including preventing land degradation. Participants were seeking a more transparent discussion of the tradeoffs inherent in land management and bottom-up action: such as using land to generate and transmit power, while requiring highly productive farmland to meet food production goals. Overall, there was appetite for questioning “fortress conservation” models and to ensure that conservation goals are balanced with other priorities.
  • Address the need for funding by making the socioeconomic case for nature. Currently, conservation and regenerative practices are funded through government and philanthropic grants, subsidies, tax incentives, and the like. Participants observed that funding could be increased by reallocating existing subsidies, creating incentives for landholders to implement easements, and building a system to support payments for ecosystem services. As a related observation, incorporating the value of nature in private and public financial decision making could help unlock more consistent funding while driving the adoption of nature-positive practices. An opportunity to increase funding durations to better align with the inherently longer timelines of conservation projects was also noted.
  • Involve and empower local and Indigenous communities. Landowners and Indigenous communities are closest to the land and therefore the most knowledgeable about local ecosystems. They are also the most affected by land-use decisions. Harnessing local and Indigenous knowledge and empowering Indigenous peoples and local communities to own and drive sustainable-use programs can increase the durability of land management and reduce the risk of unintended consequences or pushback.

Our success in protecting and restoring nature will be won or lost on private lands.

  • Engage with private landowners. National and global conservation goals cannot be achieved without the active participation of private landholders and the private sector. Participants noted that financial incentives—such as easements, tax credits, and grants—as well as nonfinancial incentives—like eliminating certain permitting processes for conservation efforts—can encourage private landowners to voluntarily adopt conservation practices. Equally important, for some participants, was the need to understand and address disincentives—that is, why landowners choose not to implement more sustainable practices on their land. This approach can facilitate dialogue and a bottom-up planning process. In some instances, it may be necessary for the government to help establish new or emergent markets—like California’s cap-and-trade program—to bring in the private sector.
  • Build the capacity to facilitate collaboration, set standards, and provide technical assistance. Discussions highlighted how governments can maximize their impact by setting standards, providing technical assistance, and consistently tracking and communicating the impact of conservation efforts on nature; governments can also act as a facilitator for private, social, and public sector organizations to collaborate and share ideas. Public–private partnerships could be an effective approach to increase the adoption of conservation practices while keeping pace with rapid technological advancement. The public sector would need to quickly build up internal capacity and capabilities to provide this much-needed support.
  • Learn from existing conservation projects and digital tools. There are numerous examples of successful conservation projects, including Florida’s wildlife corridor, the Rappahannock Tribe’s public–private partnership with the Department of the Interior, USDA’s Partnerships for Climate-Smart Commodities, and Colorado’s soil health program. Additionally, analytical tools, such as The Nature Conservancy’s Resilient Land Map and California’s CA.Nature, have been developed to help promote and scale conservation efforts. Such existing efforts can provide a foundation for prioritizing land use, scaling proven solutions, and inspiring new programs.
  • Balance urgency with patience. While it is critical to act now, in many cases it will take years or decades to see results and a return on investment. This presents a challenge for stakeholders: companies are measured by quarterly returns, NGOs fundraise on results, and politicians are elected on what they have achieved. Setting realistic milestones and measuring and reporting on both near- and long-term results can help set expectations and generate excitement, ensuring ongoing progress.
  • Use powerful, localized communication to engage and motivate stakeholders. Place-based communication—stories and examples delivered by local messengers—typically resonates best with local communities. The goal is to engage in dialogue that uses recognizable language and trusted local voices to identify shared objectives and outcomes. Additionally, where common interests are aligned, there is an opportunity for organizations to unite and develop a single, cohesive voice and agenda.

Participants agreed that, collectively, we can meet the moment. And they shared an appetite to continue creating opportunities for the public, private, and social sectors to work together to identify and pilot replicable and scalable solutions to better manage natural capital, protect and restore nature, and generate economic opportunity.

Protecting and restoring nature is a complex puzzle where we need to fit all the pieces together to make it whole.

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