Financing the Biodiversity Protection

Contact Counsellor

Financing the Biodiversity Protection

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

Incentives for biodiversity protection

  • 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.

Increasing ecosystem services

  • 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.

Global practices

  • 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.

Why PES not received academic, research, and policy prioritisation in India?

  • 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.

Other Initiatives

  • 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.

Prelims take away

  • Payments for Ecosystem Services (PES)
  • TEEB initiative
  • UNEP Finance Initiative
  • OECD