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
  • EU Innovative Finance Workshop

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

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