Building Biodiversity Business Report of a Scoping StudyJoshua Bishop, Sachin Kapila, Frank Hicks, Paul Mitchell Presentation to Conservation CEO’s 11th October 2006
Progress on protected areas but much more needed to stem biodiversity loss Growth in PA numbers and area Red List Index for birdsSource: Chape, S., Harrison, J., Spalding, M., Adapted from: Butchart, S.H.M., Stattersfield,and Lysenko, I. 2005. “Measuring the extent A.J., Baillie, J., Bennun, L.A., Stuart, S.N.,and effectiveness of protected areas as an Akçakaya, H.R., Hilton-Taylor, C., and Mace,indicator for meeting global biodiversity targets” G.M. 2005. “Using Red List Indices to measurePhil. Trans. R. Soc. B, 360, 443–455. progress towards the 2010 target and beyond” Phil. Trans. R. Soc. B, 360, 255–268.
The biodiversity financing gap and mainstreaming opportunities
Booming global 30,000 carbon markets: 25,000 - A wave to ride 20,000 US$ Millions ETS CDM & other and guide 15,000 - A model for 10,000 biodiversity? 5,000 0 120 2003 2004 2005 2006 (Projected) 100 80US$ Millions 60 Start of European ETS 40 (Jan 2005) 20 0 1998 1999 2000 2001 2002 Total value of carbon contracts, US$ millions, reported by Natsource; IETA; World Bank (2005); Point Carbon (2006)
How to stimulate biodiversity conservation by the private sector?• Sticks Increase the penalty for damage / loss of habitat Increase the reward for• Carrots conservation effort• Flexibility Consumers choose how much based on preferences Producers choose level of performance based on costs
Scoping Study - Terms of Reference Take a “snap-shot” of the current biodiversity business landscape Review existing policy, legal and fiscal frameworks that enable biodiversity businesses to grow and develop Assess the level of technical knowledge and material available with regards to biodiversity business tools Analyse a range of approaches to financing biodiversity businesses
The process so far• Scoping study: Jan-Sep 2006• Interviewed ~160 people in >50 orgs.• Expert workshop: May 2006• Draft report under-going review (>1000 people)
Findings 1: Sector AnalysisSector What Status & Where Key What is Gaps & is it? Trends is it? players working / opportunities not?Indirect• Agriculture• Forestry• Fisheries• NTFPs• Biocarbon• Watershed paymentsDirect• Bioprospecting• Biodiversity offsets• Biod. mgmt. services• Ecotourism• Sport hunting & fishing
Findings 2: Mechanism analysis• Enabling policy – Voluntary as well as mandatory – Corporate, local, national, international• Business tools – Product development, quality control, supply-chain management, marketing, biodiversity reporting• Financing instruments – Grants, debt, equity
Help NFTP producers over- come regulatory hurdles to register their products and Assist NTFP producers with enter new markets new product development, quality control, marketing Support independent and supply chain mgmt. certification of NTFP sustainabilityEnabling Businesspolicy Provide investment capital to tools NTFP enterprises that adopt best management regarding sustainable harvesting and local community support Finance
The BBF Review & evaluation of Business development business tools assistance Think Tank Match Maker Policy Legal Certification Pipeline Metrics Fund identification Debt / equity investments
Workshop recommendations (Wye River, 30-31 May 2006)• Enlist other partners• Enabling policy is critical• Focus on large-scale, systemic change• Aim to ‘kick-start’ the biodiversity market• Nurture a BBF on the back of a few ‘best bets’• Sell-on successful pilots to bigger investors• Develop clear targets and indicators of success• Focus on constraints to biodiversity business
Selecting ‘best bets’ for potential pilot projects• Biodiversity benefit• Pro-poor rating• Internal rate of return• Scalability• Timing• Risk• Relevance to IUCN, Shell & others
Best bet 1: Conservation CarbonWhat?• Expand market for biodiversity-friendly carbon offsets to mitigate climate changeHow?• Develop models, metrics and standards for large-scale land use change• Mobilize buyers of carbon credits through forest, wetland and/or soil conservation
Best bet 2: Biodiversity OffsetsWhat?• Provide site-based conservation to compensate for the residual, unavoidable habitat loss caused by projects with a direct ‘footprint’ on land or seaHow?• Develop policy, tools and capacity to ensure credible biodiversity offsets (BBOP)• Set up private conservation bank(s) for voluntary and compliance markets• Promote a biodiversity “no net loss club” – Site-level pilots and information sharing (BBOP) – Biodiversity reporting and compensation targets – Group-level offset policy with 3rd party verification
Best bet 3: Sustainable BiofuelsWhat?• Develop markets for biodiversity-friendly and pro-poor biofuelsHow?• Develop meta-standard and multi-commodity certification protocols for biofuel feed stocks (oil palm, sugarcane, soya, etc)• Stimulate supply via direct investment in sustainable producers and marketing• Research and development on biofuel technology (e.g. perennial feed stocks)
Best bet 4: Biodiversity Management ServicesWhat?• Support improved biodiversity management in private companies and public agenciesHow?• Set up commercial consulting firm(s) targeting leadership companies• Promote best-practice biodiversity management tools, capacity-building, verification services
Next steps• Revise and publish Phase 1 report• Agree TOR and funding for Phase 2• Build core team and partnerships• Business development phase – Business plans for ‘best bets’ – Pilot projects to test concept
Are we on the right track?• Choice of best bets (Conservation carbon, Biodiversity offsets, Bio-fuels, Biodiversity management services)• Process (scoping, reporting, business planning, pilots, eventually a ‘facility’)• Partners (IUCN and Shell, with Forest Trends and others)
Contemporary challenges of biodiversity conservation• Over-exploitation of biological resources• Under-supply of ecosystem services• Unfair distribution of costs and benefits• Inadequate government response
Biodiversity conservation must become…• Bigger From US$10 Billion/year to $100 Billion/year or more? From 12% of land area to 15% plus marine PAs• Better More cost-effective Socially equitable Wealth enhancing• Faster Keep pace with land use change, biotechnology, climate change, public preferences
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