BIOFIN Phase II extended to 2025

IKI supports countries to respond to COVID-19 and implement the global biodiversity framework.

The world’s forests, coral reefs, polar caps and glaciers are very different types of ecosystems, with one thing in common – they are all shrinking rapidly due to human activities. Today, the world turns its attention to fighting the COVID-19 pandemic. But there is a high risk that our global ecosystems are further deteriorating.

As governments revisit their spending priorities, public budgets for biodiversity conservation face the risk of being reduced in most countries. Biodiversity-related Official Development Assistance also risks a sharp reduction in the years to come. Tourism related revenues are in a freefall. The world’s national parks face unprecedented revenue losses. Tourist expenditures are likely to fall from 1 trillion US-Dollar in 2019 to between 310 and 570 billion US-Dollar in 2020, putting over 100 million jobs at risk.

And yet healthy and undisturbed ecosystems are one of the best lines of defence against future pandemics and other disasters. Under the Convention of Biological Diversity (CBD), countries around the world joined hands to turn the tide of biodiversity loss since 1992 with some promising results, albeit limited overall success. The 5^th Global Biodiversity Outlook launched in September 2020 concluded that not one of the 20 global biodiversity Aichi targets set in 2010 was fully achieved. A fundamental reason for this lack of progress is a large gap in available finance, estimated to be between 598 and 824 billion US-Dollar per year.

The UNDP-managed Biodiversity Finance Initiative (BIOFIN) was created in 2012 to help countries design effective biodiversity financing plans, putting finance at the foundation of conservation strategies. The initiative has been supported by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) from the start. BIOFIN developed an innovative methodology to help countries create national baseline measurements on their actual biodiversity spending and calculate how much finance they lack to achieve their biodiversity goals. This work in 30 countries revealed they commonly spend below 1 per cent of their gross domestic product (GDP) on biodiversity conservation.

Biodiversity finance should become a central issue for finance and planning ministries

But BIOFIN is not just about these numbers. At the core of its philosophy lies the idea that biodiversity finance should become a central issue for finance and planning ministries, who normally have the most control over public finance in a country. Equally important is the engagement with the private sector to reduce adverse impacts from their investments while catalysing investments with a positive impact. National Biodiversity Finance Plans were developed in 30 participating countries, outlining between 5 to 15 financing mechanisms that hold the strongest potential to fill the country’s finance gap. BIOFIN’s flagship output, the BIOFIN Workbook, describes how to follow each step of the BIOFIN process in detail, making it the most important product of the initiative’s first phase (2012-19).

From 2018, the second phase started and BIOFIN changed its focus starting to support countries create and improve financing mechanisms. Since then, some early results are already emerging: The Philippines adopted a 40 million US-Dollar budget proposal for their protected area system. Indonesia secured investments for a bird conservation centre amounting to 2.7 million US-Dollar. And Mexico helped redesign two environmental funds, in the process realizing cost-efficiencies exceeding 3 million US-Dollar per year as the national climate change fund – previously not operational and not focusing on biodiversity – saw a turnover exceeding 2 million US-Dollar of funding for conservation projects. Zambia adopted its first green bond framework. And Sri Lanka deployed a sustainable finance strategy to green the financial sector.

With funds from the IKI Corona Response Package, BMU was able to provide additional support to BIOFIN, extending the initiative’s work until the end of 2025. BIOFIN will continue to support countries to develop and improve financing mechanisms, providing dedicated support to countries for two emerging areas: First to respond to the COVID-19 pandemic, and second to enable implementation of the new CBD Global Biodiversity Framework, to be adopted in 2021. Four signature solutions are at the heart of BIOFIN’s continued support to over 30 partner countries:

1. Support countries to deal with the impacts of COVID-19 – greening response packages, promoting nature-based responses, restoring and consolidating revenue streams. This will include immediate support to communities in need through crowdfunding as part of BIOFIN’s ‘Keep Conservation Heroes in their Job’ campaign, having already raised over 23,000 US-Dollar to support rangers on the island of Mindoro, the Philippines, who are working to conserve the last 480 tamaraw (a type of wild dwarf buffalo). Greening measures can include the declaration of new and improved management of protected areas, tree planting campaigns and ecosystem restoration projects.
    
2. Results based and effective budgeting for biodiversity – ensuring budgets are geared towards national biodiversity goals. Countries will be supported to transition to results-based budgeting systems, aligning budget proposals with national biodiversity goals and advocating for consolidated and increased budgets by highlighting socio-economic, climate and health benefits of biodiversity investments.
    
3. Re-design interventions with harmful impacts on nature – reviewing subsidies and incentives to determine whether they could be harmful to nature and propose options to re-design them, identifying win-win options where the negative impact for beneficiaries is minimalized, ideally realizing net positive socio-economic gains. Each country starts with a brief overall analysis to verify which incentives or major budget programmes may have a negative impact on their country’s biodiversity, digging deeper to find options for reform.
    
4. Greening the finance sector – Led by Central Banks and Finance Ministries (developing green finance strategies, green credit schemes, green bonds, disclosure frameworks), countries can use a number of available tools to chart out a new course of sustainable finance, linking closely to the climate agenda.