Financing the Biodiversity Protection

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Last Updated01/07/2022

Mobilisation of private and public finance for Payments for Ecosystem Services lacks lustre.

This includes biodiversity-relevant taxes, fees, levies, tradable permits, and Payments for Ecosystem Services (PES).
Through these economic instruments, governments can affect both public and private financing flows for biodiversity.
Mobilisation of biodiversity finance through pesticide levies, admission fees to natural parks, hunting and fishing permit fees, etc. has gained governmental support.
Lack of academic research, governmental support, and political will have vexed PES.

PES: works through performance contracts.
People who can provide desired ecosystem service are rewarded based on their actions, or quantity and quality of the services themselves.
It has potential to achieve dual goals of conservation and poverty alleviation towards achievement of SDGs.
It is an important economic instrument for conservation.

PES is successfully implemented in Latin American and African countries.
South Africa: CapeNature Stewardship Programme protects biodiversity on private lands.
Kitengela: Kenya’s Wildlife Conservation Lease Programme, maintains open areas for wildlife and grazing on personal grounds.
Costa Rica’s Pago Por Servicios and Ecuador’s Socio Bosque worked for raising money.

A successful PES programme should overcome the impediments to implementation.
Limitation:
Solid institutional mechanism capable of simultaneous transfer of funds from buyers to suppliers
Monitoring through investment in local capacity building
Cost efficiency
Scope for development benefits, and
Maintaining the sustainability of funds.
Local monitoring mechanism is key to successfully implementing a PES programme.
Eg: A study (Sardana 2019) conducted in Karnataka(Kodagu) to restore native trees shows successfully designed local institutional mechanism for PES implementation.
Results of such studies offer support for potential research funding in restoration financing.
The OECD (2019) Biodiversity: Finance and the Economic and Business Case for Action highlighted importance of evaluating financial instruments’ performance in attaining biodiversity goals.

Strong policy such as TEEB India Initiative highlighting economic consequences of bioldiversity loss, would help prioritise ecosystem restoration financing through direct approach.
Global initiative:
UNEP Finance Initiative to mobilise private sector finance to benefit people and environment would help maintain the funds.

PES would allow country to fulfill its commitments to achieving the 2030 agenda for sustainable development and Paris Agreement on climate change.