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EU Innovative Finance Workshop

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  • CBD has a strategy for resource mobiiisationWhere is the money coming from?
  • USD tens of billions for “BD”USD hundreds of billions for “Natural Capital”Numbers are old….from the 1990’s, not economists….LAC region has some new estimates under UNDP, Andrew BovarnickNot that they are drastically wrong, just that they are not precise and impacts of climate change now must be considered.Big step for CBD and conservationists is to better understand what is needed
  • USD tens of billions for “BD”USD hundreds of billions for “Natural Capital”Numbers are old….from the 1990’s, not economists….LAC region has some new estimates under UNDP, Andrew BovarnickNot that they are drastically wrong, just that they are not precise and impacts of climate change now must be considered.Big step for CBD and conservationists is to better understand what is needed
  • Low-end is current momentum (~BAU), high-end requires increased political willCap-and-trade mechanisms not included because difficult to say how much is “new and additional” and goes directly to ecosystem preservationNatural Capital Taxes not included, because we could not do them justice in current accounting (OECD report) and future is difficult due to government capture/earmarking

Transcript

  • 1. An IntroductionTO innovativeFinancial Mechanisms
    How to raise $140 billion for natural capital
    Charlie Parker
    Head of Policy
    Global Canopy Programme
  • 2. overview
    Why are IFMs important?
    How much do we need?
    How much are we currently spending?
    What is the future scale of finance?
    Conclusions
  • 3. Why are IFMS important?
    There is currently a shortfall in biodiversity finance
    Traditional forms of finance (ODA, philanthropy) are often seen as not being able to fill the gap
    IFMs can engage with the private sector
    IFMs may internalise the externality of biodiversity loss
    BUT
    Political challenges to their implementation
    What do we mean when we are talking about IFMs?
  • 4. What are the CostsOf Conservation?
    Global Canopy Programme
  • 5.
  • 6.
  • 7. What is the Current Scaleof Finance?
    Global Canopy Programme
  • 8.
  • 9.
  • 10. IFMs under the cbd
    Under Decision IX/11B there are six sources of finance for biodiversity
    Payment for ecosystem services
    Biodiversity offset mechanisms
    Environmental fiscal reforms
    Markets for green products
    Biodiversity in international development finance
    Biodiversity in climate change funding
  • 11. Previous studies
    Gutman (2003) From Goodwill to Payments for Environmental Services
    Presents 52 financing options
    Broken down across six sources
    Public
    Private not-for-profit
    Private for-profit
    Payments for environmental products
    Payments for environmental services
    “You may need less money than you think”
  • 12. Previous studies
    Gutmanand Davidson (2008) A Review of Innovative International Financial Mechanisms for Biodiversity Conservation
    Prepared for COP 9 of the CBD
    Presents 61 traditional and innovative financing options
    Broken down across four categories
    Government sources
    Voluntary sources
    Markets and Businesses
    International Payments for Ecosystem Services
  • 13. The Little BiodiversityFinanceBOOK
    A guide to proactive investment in natural capital (PINC)
  • 14. Think PinC
    Prepared for COP 10
    Broken down into three sections:
    Generation
    Delivery
    Institutional Arrangements
    Presents 18 traditional and innovative mechanisms
  • 15. Overarching Framework …
    Financial mechanisms can be broken into three components:
  • 16. Generation mechanisms
    Based on core CBD principles of adequacy, predictability and timeliness
    Broken down across four criteria
    Scale: How much?
    Timeframe: When?
    Level: At what level?
    Market: From where?
  • 17. Generation mechanisms
    Based on core CBD principles of adequacy, predictability and timeliness
    Broken down across four criteria
    Scale: How much?
    Timeframe: When?
    Level: At what level?
    Market: From where?
    Four options: Direct, Indirect, Other, Non Market
  • 18. MARKET criteria
    Direct mechanisms
    Generate finance directly from the provision of an ecosystem service or biodiversity
    Usually local in scale
    Require strong regulation to scale up
    Examples
    Forest carbon market, direct PES mechanisms
  • 19. MARKET criteria
    Indirect mechanisms
    Raise finance by tangibly linking the value of biodiversity and ecosystem services to more traditional markets
    Larger scales are achievable
    Require some form of demand side regulation
    Examples
    Green commodities (FSC, Shade grown coffee)
    Ecotourism
    Natural Capital Bonds
  • 20. MARKET criteria
    • Other market mechanisms
    Generate finance from markets that are not linked to biodiversity and ecosystem services
    Even larger scales are possible
    Politically challenging, requires coordination
    Examples
    Maritime or aviation tax or levy,
    Financial Transaction (Tobin) tax
    Auctioning allowances
  • 21. MARKET criteria
    • Non Market mechanisms
    More traditional mechanisms that generate revenue from non-market sources of finance
    Less predictable than other sources of finance
    Require political will to scale up
    Examples
    ODA
    Philanthropy
    Subsidy reform
  • 22. Generation mechanisms
  • 23. …Under the CBD
  • 24. …Under the CBD
  • 25. What is thefutureScaleoffinance?
  • 26.
  • 27. Non-
    Market
    indirect
    Direct
    Other
  • 28. indirect
    Non-
    Market
    Direct
    Other
    Additional Sources
    What are the new and additional sources of finance?
  • 29. Other
    Markets for green products
    Biodiversity in climate change funding
    Environmental fiscal reforms
    Biodiversity in international development finance
    Biodiversity offset mechanisms
    Payment for ecosystem services
  • 30. Think PINC
  • 31. Conclusions
    There is a shortfall in finance of $ hundreds of billions
    There are a range of mechanisms that are available
    These mechanisms have different levers to scale up
    Direct: Regulation
    Indirect: Demand
    Other Market: Coordination
    Non Market: Political will
    To reach finance at scale we need to use all mechanisms.
  • 32. Thank You
    For more information visit www.globalcanopy.org
    Charlie Parker
    c.parker@globalcanopy.org