BIODIVERSITY FINANCE - NRE

BIODIVERSITY FINANCE 

Malaysia Biodiversity Seminar 

Kuala Lumpur, December 18-19, 2012 

Midori Paxton 

Biodiversity and Ecosystems Team – UNDP /GEF 

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Outline 

1. CBD policy background on biodiversity finance 

2. UNDP-EC Supported Biodiversity Financing Project 

• Biodiversity Financing Problem Tree 

• Four Solutions 

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1. CBD policy background on biodiversity finance 

COP-9 2008 – Strategy for Resource Mobilisation (SRM - Decision IX/11B): 

8 Goals, incl. exploring 6 types of (comprehensive) new and innovative 

financial mechanisms 

COP-10 2010 Package: ABS Nagoya Protocol (X/1), CBD SP 2011-2020 (X/2) 

Review SRM (X/3A) with 15 indicators 

COP-10 2010 CBD SP 2011-2020 (X/2) with Aichi Target 20: 

COP 11 decision XI/4. Review of Implementation of the Strategy for 

Resource Mobilization, including the establishment of targets 

Preliminary reporting framework (15 indicators) and 

methodological and implementation guidance 

CBD 

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15 INDICATORS 

1. Aggregated financial flows – 9 categories 

2. No. of countries that have: a) assessed BD values; b) identified and reported funding need, 

gaps and priorities; c) developed national financial plans for BD; and d) been provided with 

necessary funding and capacity building. 

3. Amount of domestic financial support per annum 

4. Amount of funding provide through GEF and allocated to BD focal area 

5. Level of CBD and Parties’ support other financial institutions. 

6. No. of international financing institutions, UN organisations, funds, programmes and 

development agencies with biodiversity policy. 

7. No. of Parties that integrate considerations on BD and ES in development plans, strategies 

and budgets 

8. No. of South-South cooperation initiatives 

9. Amount and no . Of S-S and N-S technical cooperation and CB initiatives supporting BD 

10. No. of global initiatives for BD financing 

11. Amount of financial resources from all sources from developed to developing countries for 

achieving the Convention’s objectives 

12. And for implementation of the Strategic Plan for Biodiversity 2011-2020 

13. Resources mobilised from the removal, reform or phase-out of incentives, including subsidies 

harmful to biodiversity , which could be used for the promotion of positive incentives 

14. No. of initiatives and respective amount from new and innovative financial mechanisms – ABS 

15. No. of ABS initiatives and mechanisms, consistent with the Nagoya Protocol 

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Global Picture: Baseline finance flows – Where it is delivered? 

Little Biodiversity Finance Book 2012: US$ 52 billion in 2010 

Needs – US$ 290 billion per year? 

78% generated 

59% used 

(19% transferred) 22% generated 

41% used 

(19% received) 

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2. The UNDP-EC Project 

Building Transformative Policy and Financing Frameworks 

to Increase Investment in Biodiversity Management 

• Contribute to closing the global financing gap for the conservation and 

sustainable use of biological diversity by assisting countries in identifying, 

accessing, combining and sequencing sources of biodiversity funding to meet 

their specific needs. 

• EUR 6.4 million – 4m EC + 2.4m others incl. GEF (NBSAP) 

• 3 years from Oct. 25, 2012 

• Project Manager – on board during the early 2013 

• Pilots in 8 countries: Argentina, Ecuador, Kazakhstan, Malaysia, Seychelles, South 

Africa, The Philippines, Uganda – in MAL part of the NBSAP project. 

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Biodiversity challenge – Problem Tree 

Biodiversity and ecosystem 

services are not adequately 

protected and maintained 

Insufficient funding for 

biodiversity conservation 

and management 

measures, both nationally 

and globally 

Severe impact of proximate 

drivers of biodiversity loss 

(habitat loss, overexploitation, 

IAS, pollution, 

climate change) 

Biodiversity is not valued by and 

integrated into national and sectoral 

planning and measures (ultimate 

drivers), and governance mechanisms 

are weak

Solutions to the biodiversity challenge 1: Valuation - making the 

business case for investment 








and globally 










are weak 

Comprehensive quantitative information on the values of 

biodiversity and ecosystem services, especially the economic value, 

is missing or incomplete 

1. VALUATION 

Apply economic valuation methodologies 

at national level to increase and 

disseminate the knowledge base on the 

economic value of biodiversity and 

ecosystem services

Solutions 1: Valuation - making the business case for investment 

Supported under the NBSAP Project 

How to conduct valuations most effectively and efficiently? 

• Target audience - government, sectors, local communities – different 

approaches needed 

• Impact on Policy and Behaviour/Practice 

• WAVES, TEEB 

• Targeted national sectoral-level economic valuations 

• Trade-off analyses between maximization of short-term 

gain/production and ES maintenance 

• Risks 

• Do economic valuations really make the case? Always on “our side”? 

• Risk of commodification – real or exaggerated, what safeguards? 

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Solutions to the biodiversity challenge 2: Mainstreaming: 

reducing drivers/costs, increasing resources 








and globally 










are weak 




2. MAINSTREAMING 

Apply methodologies at national level in 

order to enhance mainstreaming of 

biodiversity into national and sectoral 

planning and enhance governance 

1. VALUATION 





ecosystem services

Solutions 2: Mainstreaming: reducing drivers/costs, increasing resources 

• How to mainstream most effectively and efficiently? 

• Build on economic valuations 

• Back up by legal/policy framework - fiscal reform, incentives, laws and regulations, 

official procedures 

• Target 1: Government 

• Biodiversity Policy - How to raise its profile? 

• Must target Ministry of Finance. EPU and other key ministries 

• National committees with relevant ministers and CSO 

• Ombudsman/Ombuds Committee 

• Target 2: Sectors 

• Relating BD & ES benefits to sectoral outputs and benefits, under BAU vs 

Sustainable Ecosystem Management scenarios 

• What is the cost of mainstreaming = of a paradigm change from BD-negative to BDpositive 

economy/development ? Trade offs? Political will. 

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Solution 3: Finance gap assessments 

Donors not ready to give adequate/more 

funding for biodiversity management without 

proper knowledge of the funding gap 

Governments, especially in 

developing countries, lack capacity 

and resources to respond to 

biodiversity needs and monitor the 

activities under implementation 

Information lacking or 

insufficient on the financing 

gap (current expenditures, 

their (cost-) effectiveness, and 

the expenditures needed) 




3. FINANCE GAP 

Develop and test 

methodologies to determine 

the funding gap: current 

spending, (cost-) 

effectiveness, needs 





and globally 










are weak 









1. VALUATION 





ecosystem services

Finance gap assessment : What is Biodiversity Financing? 

CBD’s Preliminary Framework 

Category A : Activities where BD protection is the main purpose 

Category B: Activities related to policy development and administration carried 

out in part or entirely by environmental agencies and enables BD programme 

mgt 

Category C: Activities related to sustainable use and sustainable mgt that have 

co-benefits for BD 

Category D: Activities related to sustainable production and consumption 

where the responsibility lies with multiple government entities, the private sector 

and the general public 

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Finance gap assessments: baseline flows, effectiveness, needs, gaps 

Aichi Targets Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 

1 Public awareness 16 1 1 1 1 1 1 1 1 0 2 2 0 1 0 1 0 0 1 1 

2 Econ val integrated 

3 Perv. subsidies red. 49 1 0 3 5 5 5 5 3 1 4 4 4 4 3 0 0 0 0 2 

4 SCP plans 

5 Habitat loss halved 

6 Sust fisheries 

7 Sust agri & forestry 

8 Pollution reduced 

9 IAS reduced 

10 CC ocean impacts 

11 PA/MPA coverage 

12 Spp. cons improv 

13 Maintain agrobiod 

14 E. S. maintained 

15 Ecos resilience & C 

16 ABS operational 

17 NBSAP implement 

A first attempt at gauging the cost reduction potential 

Range: 0 = no impact to 5 = very strong impact 

Reference 

• Same $$$ of investment? 

• Or: expand analysis using needs assessments figures? 

18 TK respected 

19 Knowl/sci/tech 

20 Fin Res enhanced 

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Solution 4: Finance mechanisms 

Donors not ready to give adequate/more 

funding for biodiversity management without 

proper knowledge of the funding gap 

Governments, especially in 

developing countries, lack capacity 

and resources to respond to 

biodiversity needs and monitor the 

activities under implementation 

Information lacking or 

insufficient on the financing 

gap (current expenditures, 

their (cost-) effectiveness, and 

the expenditures needed) 




4. FINANCE MECHANISMS 

Identify, access, combine and 

sequence additional financing 

to justify and secure 

adequate/ increased funding 

by government and donors 











and globally 










are weak 









1. VALUATION 





ecosystem services

Finance mechanisms: Financing Potential b y 2020 

US $ 

billion 

40 

35 

30 

25 

Financing potential by 2020 

(2012 Little Biodiversity Finance Book) 

20 

15 

10 

Max 

Min 

5 

0 

*: adapted after: 2012 Little Biodiversity Finance Book 

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The UNDP-EC BD Financing Project 

Components 

1. Integrate biodiversity and 

ecosystem services in sectoral and 

development policy, planning and 

budgeting 

2. Assess financing and governance 

needs for the management and 

conservation of biodiversity and 

ecosystem services 












3. Identify, access, combine and 

sequence different sources of funds 

to meet biodiversity financing needs 

4. FINANCE MECHANISMS 

Identify, access, combine and 

sequence additional financing 

to justify and secure 

adequate/ increased funding 

by government and donors 

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Components 

Develop frameworks 

and methodologies 




budgeting 





Globally coordinated 

with country input 

ditto 

Integrating and contributing to 

CBD Resource Mobilisation 

Strategy & Reporting 

Framework 




ditto 

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Components 



Test in 8 pilot 

countries 




budgeting 







ditto 

Standardised 

Standardised 

Nested in 

Support to 

NBSAP 

Review 

(National 

Steering 

Committees) 




ditto 

Country-specific 

CBD 

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3. The UNDP-EC Project 

Components 



Test in 8 pilot 

countries 

Refine and 

disseminate 




budgeting 



Standardised 







ditto 

Standardised 

ditto 




ditto 

Country-specific 

ditto 

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Biodiversity Public Expenditure and 

Institutional Review (BPEIR) 

Analyse how domestic/external sources of funding have 

been allocated and managed to date. 

Consistency with national priorities and BD Vision 

Policies: development and sectoral policies, incentives and 

subsidies 

Institutions: general planning and budgeting institutions, 

sectoral institutions and agencies for NR and 

environment, sectoral institutions making 

economic decisions 

Expenditures: positive and negative expenditures 

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Thank you! 

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