First, let me say something which has to be very basic to our understanding of these three different nature markets. They are deeply intertwined. They're actually not three different markets—they're really one challenge we face in the shifting ecology of the planet.

That challenge of global warming, water scarcity (and) the fact that the global water cycle is out of kilter, and the progressive loss of biodiversity, are reinforcing each other. And they now form a vicious cycle. If we don't manage water well—if we let soil health deteriorate, lose moisture in the soil, and degrade the wetlands—we also reduce carbon sequestration, which accelerates global warming. And global warming then dries the soil, leads to further problems with the forests, and you get that vicious cycle. So, we are dealing with something that the science is very clear on, but it must be reflected in our governance approaches, our policies, and our financing strategies. Including one of the important areas of potential, which is in developing the market for credits. Just like we've got carbon credits, we need to develop the market for water credits and biodiversity credits. I’ll come back to that in a moment.

Nature-based solutions are an extremely important part of climate change mitigation. You can argue about exactly what percentage of mitigation should come down to nature-based solutions, but we know that there's much good that arises from nature-based solutions. It’s not just about reducing carbon emissions or capturing more carbon, but also about the co-benefits of nature-based solutions: reducing heat, reducing the spread of diseases, and a whole set of other benefits.

But think of nature-based solutions not just in terms of carbon. Think of nature-based solutions as a way of managing water, reducing carbon emissions, and preserving biodiversity. Because when you put them together, the ripple effects give them a much larger impact.

To give you an example. We need to transform the agri-food industry. Regenerative agriculture, which is already well underway in many parts of the world, will help preserve soil health, preserve carbon in the soil, and improve yields with appropriate incentives and technologies. They help farmers and consumers. And you have to remember that the agri-food industry is also the biggest source of deforestation and the loss of biodiversity.

Think of rice, which is a major issue in Asia especially, but also in some other parts of the world. We have to move, fundamentally, from the predominant system of rice cultivation—the flooding of padi fields, which leads to high methane emissions, farmers pumping water from underground using energy, and a significant amount of water being wasted.

With more sustainable rice production—using techniques like direct seeding of rice, and alternate wetting and drying, you can save 50 percent of methane emissions, 30 percent of water, and some 60 percent of energy. And improve yields at the same time. So, it's an example of how you can address several problems at the same time.

This brings me to financing, because nature-based solutions are significantly underfunded. It’s rested largely on governments. The private sector is still at the nascent stage of getting into nature-based investments as a way of addressing climate change.

The carbon credits market already has an ecosystem. There are integrity issues and greenwashing issues, but improvements are being made. The ICVCM, the Integrity Council for the Voluntary Carbon Markets, and the SBTI, the Science-Based Targets Initiative, and others —there's a lot of good work taking place to improve integrity and trust in the markets. And I believe this is going to be a significant source of financing for nature-based solutions.

Now, we can't—I think it will be very difficult—to create a whole ecosystem for sustainable water credits, and biodiversity credits, side by side with carbon credits. It can be done in theory, but it's going to exhaust the private sector, and it's going to exhaust negotiators.

Much better that we work on a reliable carbon credit system. And have water and biodiversity credits stapled on. They are still in their infancy. There are biodiversity credits that are currently being stapled on, but it's being done qualitatively because we don't yet have precise, quantitative ways of assessing biodiversity benefits in a way that can be compared across different projects, regions, and geographies.

In other words, there's no common currency. But even the qualitative approach has led to a premium on carbon credits that have biodiversity stapled onto it. We can do the same with water.

And remember: water will not just enhance the value of the carbon credits. The benefits of sustainable water practices can be reaped earlier and in a way that local communities see as benefiting themselves. It's not just for the markets—people see the benefits.

I think the WEF should work with other coalitions to develop some rigor in this process. How do we develop the biodiversity and water credit markets? And ideally, from a practical point of view, how do we then staple them onto carbon credits in a new, high-integrity, nature-based carbon credits market?