Finance Mechanisms for Biodiversity - OECD Finance... · CBD decision text refers to six...
Transcript of Finance Mechanisms for Biodiversity - OECD Finance... · CBD decision text refers to six...
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Finance Mechanisms for
Biodiversity Examining opportunities to scale-up resources and
design and implementation considerations to
address challenges
Katia Karousakis and Edward Perry
Environment Directorate, OECD
CBD COP11, October 2012
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Widely recognised that 2010 biodiversity targets were not met. CBD COP10 led to agreement on Aichi 2011-2020 targets. Will need to significantly scale up biodiversity outcomes...
CBD decision text refers to six “innovative financial mechanisms”
- Environmental fiscal reform
- Payments for ecosystem services
- Biodiversity offsets
- Markets for green products
- Biodiversity in climate change funding
- Biodiversity in development finance
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CBD Context
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• What are these mechanisms, their purpose and applicability?
• How much finance have they mobilised and what opportunities are there to scale-up?
• What are the key design and implementation issues for environmental effectiveness, cost effectiveness and distributional equity (i.e. environmental and social safeguards)?
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Questions examined
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Finance mechanism
Scope of finance
Source of finance
Direct vs. Indirect finance
Impacts on drivers
Beneficiary vs. polluter
Static and dynamic efficiency
EFR Local, national
Private (& public)
Direct Yes - direct
Polluter Yes
PES Local, national, international
Private & public
Direct Yes - direct
Beneficiary Yes
Biodiversity offsets
Local, national
Private (& public)
Direct & indirect
Yes - direct
Polluter Yes
Markets for green products
Local, national, international
Public Indirect Yes - indirect
N/A No
BD in climate funding
Local, national, international
Public and private
Indirect
Depends Polluter Depends
BD in development finance
Local, national, International
Public (& private)
Indirect
Depends N/A Depends
Summary characteristics of mechanisms
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Environmental fiscal reform
• Total revenue from environmentally related taxes in OECD countries in 2010: slightly below USD 700 billion
– but taxes on pollution and resources (i.e. most relevant to biodiversity) constitute a very small fraction of this
> Large potential to be scaled-up
Examples:
- subsidy reform (Norway, fisheries)
- taxes on groundwater extraction, fertilisers and pesticides - entrance fees to national parks, etc
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How much finance have they mobilised?
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Source: OECD/EEA environmentally related taxes database 6
Revenue from environmentally related
taxes as percentage of GDP
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Per c
ent
of G
DP
Other Motor vehicles Energy
*: 2009 figures
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• PES: more than 300 programmes worldwide
– 5 national programmes alone channel > USD 6 billion p.a. (OECD, 2010)
– Payments for watershed services > USD 9 billion in 2008 (Parker and Cranford, 2010)
• Biodiversity offsets: 45 programmes worldwide - mobilised USD 2.4-4 billion in 2011 (Madsen et al, 2011)
• Markets for green products: green commodity markets on the rise, some fetch price premiums
– Eco-tourism, organic food, sustainable fisheries and timber
– 8% of wild caught seafood is Marine Stewardship Council certified
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How much finance have they mobilised?
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• Biodiversity in climate change funding: not tracked. Total climate change finance estimated at USD 70-120 billion in 2009-2010 (north to south flows) (Clapp et al, 2011); biodiversity related climate finance may approximate USD 8 billion
• Biodiversity related ODA (development finance): estimated at USD 6.6 billion in 2010 (OECD DAC, 2011)
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How much finance have they mobilised?
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Trends in biodiversity-related aid - bilateral commitments, USD billion, constant 2010 prices
Source: OECD DAC 2011
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• Determining business as usual baselines is important for many of these mechanisms (e.g. PES, biodiversity offsets, biodiversity in climate change funding)
• Targeting of PES in Forest Conservation Fund programme in Tasmania, Australia led to 50% increase in cost-effectiveness greater biodiversity benefits with available budget
• Need more attention to monitoring, reporting and verification to evaluate programmes , assess progress, and improve over time – biodiversity relevant ODA can play a key role
• Identify winners and losers of policies – build in well-targeted compensatory measures for low-income households; tax free threshold for essential use... (social safeguards)
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Design and implementation issues –
some examples
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• All these mechanisms have an important role to play in scaling up biodiversity outcomes – some mobilise finance directly
• Given that costs of inaction are in many cases considerable, urgent need for:
i. Broader and more ambitious application of policies and mechanisms – including those that engage the private sector
ii. More efficient use of existing financial resources channelled to biodiversity conservation and sustainable use
• Attention to how mechanisms are designed and implemented is key to ensure effective outcomes
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Key messages
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Thank you!
For further information on OECD work on the economics and policy of biodiversity, visit:
www.oecd.org/env/biodiversity
Key policy areas:
Biodiversity Indicators, Valuation and Assessment
Economic Instruments, Incentives and Policies for Biodiversity
Biodiversity Finance, Development and Distributional Issues
Contact: [email protected]
Forthcoming work: Green Growth and Biodiversity; Finance Mechanisms for Biodiversity