Finance Solutions for Nature-based Interventions: Lessons from the Biodiversity Finance Initiative (BIOFIN)

1. Finance solutions
for nature-based interventions
Lessons from the Biodiversity Finance
Initiative (BIOFIN)
Onno van den Heuvel
Istanbul, 4 October 2018

2. 1) How is biodiversity finance relevant to disaster risk
reduction finance
2) What are the main concepts of the Biodiversity
Finance Initiative?
3) From which finance biodiversity finance solutions
can we draw lessons for disaster risk reduction?
Guiding questions

3. 1) How is biodiversity finance relevant to disaster
risk reduction finance
Guiding questions

4. Answer 1
Nature based solutions can play an
important role in disaster protection

5. Answer 2
Finance solutions are multipurpose
and can be applied to different SDGs/DRR

6. 1) l
2) What are the main concepts of the Biodiversity
Finance Initiative?
Guiding questions

7. BIOFIN Phase I (2012 – 18)
Objective: Develop a new methodology
for evidence based national finance plans
BIOFIN Phase II (2018 – 22)
Objective: Implementing finance solutions
Key facts

8. Geographic coverage
14
11
Megadiverse
countries
10
12
36
Countries

9. Theoretical Framework

10. BIOFINFinanceResults

12. Policy and Institutional Review
▪ Assess economic/fiscal drivers of biodiversity
change
▪ Catalogue existing biodiversity finance solutions
▪ Review Harmful Subsidies
▪ Identify gaps in policies, legislation, fiscal
framework

13. Biodiversity Expenditure Review
How much do major actors spend on biodiversity?
Are expenditures aligned with policies?
Indirect expenditures..
Results
• 0.1 to 0.2% of GDP
• 0.2 to 1.8% of National budget
Colombia: Protection 36%, restoration 41% restoration,
Sustainable use 7%
Guatemala: Municipalities 7.5%, Central Gov 92.5%

14. Financial Needs Assessment
Make a comprehensive
estimate of the financial
resources needed to achieve
national targets
Results
• Needs, per biodiversity
goal/SDG
• Embed in medium
budgeting framework
• Develop results based
action plans

15. Biodiversity Finance Plan
Develop the most optimal mix of finance solutions
Public & Private
Traditional & Innovative
National & International
• Baseline: Data and findings from the entire process
• Basic screening: 1) Biodiversity 2) Financial impact 3) Soci-
economic criteria 4) Feasibility
• Prioritisation: Detailed screening
• Advocacy: Develop business cases and plans for the
prioritised finance solutions
• Sustainability: Institutionalise the Finance Plan

16. THE BIOFIN WORKBOOK

17. Web platform
Catalogue of
finance solutions
www.biodiveristyfinance.net

18. Catalogue of finance solutions
mobile version

19. 1. Biodiversity offsets
2. Bioprospecting
3. Biosafety fee
4. Carbon markets
5. Conservation easement (external-analysis)
6. Conservation or wildlife themed items
7. Corporate and corporate foundations'
donations
8. Corporate social responsibility tax
9. Corporate sustainability
10. Crowd funding
11. Debt-for-Nature Swaps
12. Disaster risk insurance
13. Earmarking and retention of biodiversity
revenues (self income)
14. Ecological fiscal transfers
15. Effective procurement
16. Enterprise challenge and innovation
funds
17. Environmental risk insurance
18. Financial and operational mergers
19. Green banks
20. Green bonds
21. Green lending
22. Green procurement
23. Cost effectiveness measures
24. Human resources management
25. Impact investment
26. Enhance public budget execution
27. Incentives for sustainable business
28. Enhanced Land or Marine Stewardship
29. Islamic finance
Catalogue of Biodiversity Finance Solutions
30. Lobbying for public budget allocations
31. Lotteries
32. Lower cost of capital for conservation
investments
33. Mobile banking
34. Mobilization of private donations
35. Increasing Official Development
Assistance (ODA)
36. Promoting Natural capital accounting
37. Outsourcing strategies
38. Payment for Ecosystem Services
39. Compensation for planned
environmental damage
40. Penalties and other compensation for
unplanned environmental damage
41. Promotion of sustainable tourism
42. Non-State Protected Areas
43. Financial guarantees
44. Remittances
45. Result based budgeting
46. Social and development impact
bonds
47. Sovereign Wealth Funds
48. Change subsidies harmful to
biodiversity
49. Sustainability standards and
certification (voluntary)
50. Biodiversity friendly subsidies
51. Earmarking of taxes on financial
transactions
52. Taxes, fees and quotas in the
fishery sector
53. Taxes on natural resources
(non-renewables)
54. Taxes on renewable natural
capital
55. Taxes, Fees and Royalties in the
Forestry Sector
56. Tariffs, fees and taxes in the
water sector
57. Taxes on pesticides and
fertilizers
58. Taxes and fees in the tourism
sector
59. Taxes and fees in the wildlife
sector
60. Technology upgrade and
maintenance
61. Trade finance
62. Trust funds
63. Venture capital
64. Water markets
65. Fees, penalties, and
management expenditures for
Environmental (and Social) Impact
Assessment
66. Finance for Permanence
67. Pasture (and grazing) Fees

20. Expand to other SDGs
Bhutan – 3 SDGs: Poverty, Climate, Biodiversity
Kyrgyzstan – Biodiversity & CC Adaptation

21. 1) f
2) f
3) From which finance biodiversity finance
solutions can we draw lessons for disaster risk
reduction?
8 Examples
Guiding questions

22. Policy and expenditure analysis:
- 60% of finance from public budgets
- Protected Areas increased revenues by 40% per year
- Tourism: 8.1% to the national GDP in 2016, 122,000 jobs
Finance solutions
1) Strengthen the capacity of the Ministry of Environment for
result based budgeting
2) Increasing the financial sustainability of the protected areas
system
3) Better integrated biodiversity into the EIA system (eg
hydropower) and improve the fine system for violations
1 Georgia

23. 2 Philippines
BIOFIN will contribute
towards :
• Preparation of
Implementing
rules and
regulations of the
law
• Develop an
investment
program for
protected areas

24. 3 Mongolia
New
mechanism to
calculate
pasture user
fees developed
Direct
reduction of
risk for harsh
winter disaster
known as Dzud

25. 4 Indonesia
Islamic finance & Biodiversity
▪ Integrating biodiversity considerations into the impact
framework for Green Sukuk
▪ Exploring options for biodiversity conservation using
funds from Zakat

26. 5 South-Africa
▪ Tax break for private protected areas

27. 6 Guatemala
Sportfishing revenues

28. 7 Kyrgyzstan
Results Based Budgeting
▪ New budget code (January 2017): Transition to strategic
budget planning and result-oriented budgeting.
▪ Monitoring and evaluating of effectiveness

29. 8 Costa Rica
▪ Issuance of a new green bond (MOU signed in
2018) for the purchase of land for conservation
▪ Revision of protected area finance system to
generate revenues in the long term

30. 8 Costa Rica

31. 8 Costa Rica

32. 1) Finance needs for biodiversity are limited
compared to most other areas, benefits are high
2) Each country follows a tailored approach and
found unique opportunities/solutions
3) Many elements of the BIOFIN Methodology can
be applied to other areas
Conclusions