Birdlife Policy Briefing in Financial Resource

Murray Cooper

BirdLife Policy Brief for CBD COP-10, Nagoya

Financial Resources Effective implementation of the CBD continues to be severely hampered by insufficient financial resources. This is a pervasive problem but at its most acute in developing countries.

An in-depth review conducted in the lead up to COP-9 found that the level of biodiversity funding decreased in the period 2002–2006 compared with 1998–2002 (UNEP/CBD/COP/9/16). In response to its recommendations, Parties adopted a new strategy for mobilising financial resources, agreed a framework for effective guidance on funding priorities to the Global Environment Facility (GEF) as the Financial Mechanism of the Convention, and initiated a process to identify innovative financing mechanisms. However, a recent analysis of trends in biodiversity funding (UNEP/CBD/COP/10/INF) shows that the funds available for biodiversity conservation declined in 2008 when compared to the levels in 2007.

Globally, spend on biodiversity is estimated as only $8–12 billion annually (TEEB, 2009), the great majority in developed countries. The annual funding gap for an effective and representative terrestrial protected areas network alone – just one component of what is needed – is about $25 billion per annum (Bruner et al., 2004). Including marine protected areas too might double this figure, to c. $50 billion, while an order of magnitude greater investment (c. $300 billion/year) could be needed for additional adaptation measures in the wider land and seascape in the face of climate change (Berry, 2009). This last figure is based on extrapolation of agricultural remediation costs in one developed country, and could well be an unreliable estimate: however, it is clear that the costs of effective conservation are at least an order of magnitude, and likely more, than current investment. At the same time, the cost of inaction and allowing the continued loss of biodiversity are far bigger, estimated to reach 7% of global GDP (i.e., c. $4.3 trillion) by 2050 (TEEB, 2009).

As the TEEB has consistently and clearly shown, the investments needed for biodiversity conservation make exceptional economic sense, as the returns on them are so much greater. These investments are also entirely manageable in relation to national budgets, and tiny in relation to the global economy. However, because the current baseline is so low, investment must be massively scaled up in percentage terms. BirdLife believes that a commitment to increase funding by at least a factor of ten would be a positive and realistic first step to take at COP-10.

Thus we strongly support the following formulation for Target 20 in the revised strategic plan: Target 20: By 2020, at the latest, capacity (human resources and financing) for achieving the three objectives of the Convention has increased at least tenfold.

To achieve this target, developed countries must fulfil their obligation to provide new and additional funds to developing countries for CBD implementation. Also,

Parties must undertake a review of the financial resources mobilisation strategy to include quantitative targets and indicators. Practically, all Parties should take steps to increase the proportion spent nationally on biodiversity (including through sectoral allocations, but excluding international flows) to at least 1% of their national budgets. To generate the necessary resources, development of innovative financing mechanisms needs to move much faster, alongside the redirection of harmful subsidies into biodiversity conservation.

Providing new and additional financial resources to developing countries In Article 20 of the CBD, developed countries agreed to provide new and additional financial resources to enable developing countries to meet the full incremental costs of implementing the CBD. In addition, the Article recognises that the extent to which developing countries will effectively implement their commitments will depend on the effective

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implementation of this provision by the developed countries.

Of the $8–12 billion spent annually on biodiversity, the flows from multilateral (mainly GEF) and bilateral development aid only account for c. $180 million and $2.5 billion per year respectively (UNEP/CBD/COP/10/INF). A large proportion of the bilateral spend is part of previously committed development aid and therefore is neither new nor additional.

There are only a handful of biodiversity-targeted assistance programmes.

Financially poor developing countries host most of the Earth’s remaining biodiversity resources, and are simultaneously faced with difficult development challenges.

In line with the leadership shown by Norway through the Climate and Forest Initiative and Germany through the LifeWeb Initiative, the developed world must now commit to providing new and additional financial contributions, at a scale commensurate to the needs, to assist developing countries to conserve biodiversity, promote its sustainable use and ensure fair and equitable access and benefit sharing.

Revamping the strategy for resource mobilisation The recently adopted strategy for resource mobilisation is ineffective, in part because it does not set quantitative funding targets with indicators for measuring progress.

At COP-10, Governments must review the strategy to incorporate an ambitious set of measurable funding targets with clear milestones and indicators. Such quantitative targets and milestones must be accompanied by a rigorous and clear reporting framework that will be useful in tracking progress towards the mobilisation of funds and linked to the achievement of the 2020 Biodiversity Targets.

Increasing the share of biodiversity to at least 1% of national budgets An analysis of International Monetary Fund (IMF) statistics regarding Government expenditures conducted by the CBD Secretariat for COP-10 (UNEP/CBD/COP/10/INF) found that environmental protection budgets were usually insignificant or very marginal elements of the budgeting process, in both developed and developing countries. In 20 developed countries, the average share devoted to environmental protection in central Government budgets was 0.60%, while the corresponding figure for a sample of 38 developing countries is 0.63%. Since biodiversity is just one of the components of the total environment budget, its allocated share is even lower. If we are to address the biodiversity crisis with the seriousness it deserves, all Governments, from developed and developing countries alike, must commit to spend at least 1% of their national budgets directly on biodiversity conservation.

To achieve this, focusing on the environmental protection budget alone is not sufficient. As part of sectoral mainstreaming, biodiversity needs to be incorporated into the budgets of all other relevant sectors such as finance, trade, climate change and energy, disaster reduction, health, agriculture, forestry and fisheries.

Speed up the development of innovative financing mechanisms Proposals in the CBD for the development of innovative financial mechanisms have been under discussion for many years. It is time now to develop and promote those that have demonstrated the best potential for success, for rapid adoption by Parties. BirdLife believes that the development of innovative financing mechanisms must be accelerated significantly. These include, for example, environmentallyfocused tax regimes and a variety of approaches for Payments for Ecosystem Services, including REDD++.

Such mechanisms must add to, rather than substitute, traditional funding from Governments, who should have the primary responsibility to provide funding for biodiversity conservation. These mechanisms must also be designed and

implemented carefully in ways that address the concerns of indigenous and local communities.

Re-direct subsidies that are harmful to biodiversity Subsidies that are harmful to biodiversity involve huge amounts. Estimates suggest that, globally, they could be in the region of $207 billion in the agricultural sector, $64–217 billion in the energy sector, $110–150 billion in road transportation, $50 billion in the water sector, $35 billion in the forestry sector and $19 billion in the fisheries sector, adding up to $485–677 billion (Kjellingbro and Skotte, 2005)! Although the redirection of subsidies often presents difficult short-term social and political issues, the reform of perverse subsidies (those that do both environmental and economic harm, which will include most subsidies harming biodiversity) is obviously highly desirable. In Nagoya, Governments should commit to re-orienting a large proportion of these funds in order to redress the damage caused to biodiversity and ecosystem services.

BirdLife International calls on, 1. The CBD to adopt the following resource mobilisation target in the revised strategic plan- Target 20: By 2020, at the latest, capacity (human resources and financing) for achieving the three objectives of the Convention has increased at least tenfold.

2. Developed countries to commit to providing new and additional financial contributions, at a scale commensurate to the needs, to assist developing countries to conserve biodiversity, promote its sustainable use and ensure fair and equitable access and benefit sharing.

3. CBD Parties to review the resource mobilisation strategy to incorporate an ambitious set of measurable funding targets with clear milestones and indicators.

4. All Governments, from developed and developing countries alike, to commit to spend at least 1% of their national budgets directly on biodiversity conservation.

5. The CBD to significantly accelarate the development of innovative financing mechanisms which must be designed and implemented carefully in ways that address the concerns of indigenous and local communities.

6. Governments to commit to reforming environmentally harmful subsidies and re-orienting a large proportion of these funds in order to redress the damage caused to biodiversity and ecosystem services.

References: Bruner, A. G., Gullison, R. E. and Balmford, A. (2004) Financial costs and shortfalls of managing and expanding protected-areas systems in developing countries. BioScience 54: 1119–1126.

UNEP/CBD/COP/9/16: Financial Resources and the Financial Mechanism - In-depth review of the availability of financial resources.

UNEP/CBD/COP/10/INF: Global Monitoring Report 2010 – Innovative Financing for Biodiversity.

TEEB (2009)– The Economics of Ecosystems and Biodiversity for National and International Policy Makers – Summary: Responding to the Value of Nature 2009.

Berry, P. (2009). Costing adaptation for natural ecosystems. Pp 90-99 in: Parry et al (2009) Assessing the costs of adaptation to climate change- a review of the UNFCCC and other recent estimates. IIED Kjellingbro, P. M. and Skotte, M (2005). Environmentally Harmful Subsidies- Linkages between subsidies, the environment and the economy. Environmental Assessment Institute.

BirdLife contact in Nagoya: Leon Bennun, Director of Science, Policy and Information Management leon.bennun@birdlife.org