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Quito Seminar Discusses Biodiversity Finance

8 April 2012: The Quito Seminar on Scaling Up Biodiversity Finance addressed the issue of innovative financial mechanisms within the broader context of scaled up biodiversity financing, as an attempt to facilitate the formal negotiations towards and during the 11th meeting of the Conference of the Parties (COP 11) to the Convention on Biological Diversity (CBD).

Organized by SwedBio with the support of five governments (Ecuador, India, Japan, Norway and Sweden) and the CBD Secretariat, the seminar took place from 6-9 March 2012, in Quito, Ecuador. The event gathered approximately 80 participants, including government negotiators, academics, civil society and indigenous peoples representatives.

Maria Schultz (Sweden) and M.F. Farooqui (India) co-chaired the seminar and prepared a summary. In his statement, CBD Executive Secretary Braulio Dias noted that the issue of financial resources is an unfinished business from COP 10, adding that the Convention needs to agree on a feasible strategy to mobilize the technical, human and financial resources to enable parties achieve the Aichi targets. He drew attention to the methodological and implementation guidance, developed by the CBD Secretariat and incorporating comments and submissions from parties, regarding the 14 indicators adopted at COP 10 for monitoring resource mobilization efforts, which will be discussed at the fourth meeting of the Working Group on Review of Implementation (WGRI-4) for further fine-tuning. He also highlighted the regional workshops organized by the CBD Secretariat to help parties elaborate country-specific financial plans in the framework of updated national biodiversity strategies and action plans; as well as the global assessment of the resources required to achieve the Aichi targets, conducted by a regionally-balanced high-level panel chaired by Pavan Sukhdev and co-sponsored by India and the UK.

The Seminar aimed to explore and contribute to understanding, and seek to clarify areas of convergence and divergence regarding ways to scale up the mobilization of financial resources to support the achievement of the 2020 Aichi Biodiversity Targets, included in the Strategic Plan for Biodiversity 2011-2020. The Seminar did not intend to draft formal recommendations, but to enhance understanding among participants with a view to facilitate discussions at WGRI-4 in May 2012 and COP 11 in October 2012. It included a mix of keynote presentations, case studies and small group discussions. Among others, participants discussed the institutional, political, social and cultural framework in which the biodiversity financing mechanisms operate, concluding that good governance, rights-based frameworks and establishment of safeguards are the key prerequisites for the functioning of any biodiversity financing mechanism, and recognizing that communities and countries have a right to refrain from using mechanisms they consider inappropriate and develop mechanisms they consider appropriate for their specific context. Discussion about biodiversity financing was divided into sources of revenue, appropriate delivery mechanisms and use.

A general understanding was that for resource generation, public fiscal measures and reforms are key, including but going beyond official development assistance. It was widely recognized that the business sector has an important role to play both as a change agent and as a source of tax revenue. Regarding delivery mechanisms, the seminar had a strong focus on the importance of relevant institutions. The core message from the report submitted by Norway – “ Can Markets Protect Biodiversity?” by Professor Arild Vatn – seemed to have a considerable impact on the meeting. He concluded that markets for biodiversity are challenging to establish and run. It underscores that transaction costs are high and, as biodiversity is a public good, free-riding is a problem. It stresses the importance of government actions for setting up and maintaining markets. He also showed that for most new biodiversity-related market mechanisms, governments were still the sole or primary provider of finance. He added that in the case of payments for ecosystem services (PES), almost all of the buyers of the services (99% in developed countries and 97% in developing countries) have been government.

Seminar participants concluded that economic incentives can play an important role for reaching the Aichi Biodiversity Targets, and that governance and institutional frameworks, including safeguards, are critically important for all financing mechanisms for biodiversity. [Meeting Website] [Meeting Documents] [Co-Chairs' Summary] [CBD Executive Secretary Statement]