www.ieep.eu @IEEP_eu

Innovative mechanisms for financing biodiversity conservationInsights from Europe

Daniela Russi, Andrea Illes, Marianne Kettunen & Driss Ezzine-de-Blas16 December 2016Cancun, Mexico / CBD COP13 side event

With Funded by

www.ieep.eu @IEEP_eu

Taxes, tax incentives, fees and charges

(public)

Relatively commonBut only few examples focused directly on biodiversity

PES (public, private & hybrid)

Mostly public financeLocal or regional scaleKey focus agricultural & water catchments

Investment sector (private)

Increasing interest & focusNatural Capital Financing Facility (NCFF) by EIB & EU pioneering the approach

Offsetting (public)

Controversial and not widely used in practicePioneered in Germany, France, the UK and Sweden

Ecological fiscal transfers (public)

New approachOperational only in PortugalIncentives conservation at local level

Business sector (private)

Increasing interestFocus on sharing best practice and experiences

Click on icon to add different picture

Click on icon to add different picture

Click on icon to add different picture

• Purpose: Compensate lower-tier governments cover their expenditure in providing public goods and services related to biodiversity conservation

• 2007: Idea was pushed by the Ministry for the Environment and accepted by the Ministry of Finance

• Protected Areas & Natura 2000 5% (mun. < 70%) - 10% (mun. > = 70%). Share of Ecological Component on Total Municipal Revenues: 18%

• 1995-2008: + 4 Reg PA• 2008-2015: + 6 Reg PA

Example: Natural Ecological Fiscal Transfers (Portugal)

Example: Natural Capital Financing Facility

• European Investment Bank (EIB) and EU• Pilot phase: EUR 125 million / 3 years in 2014-

2017 (with possible extension)• Debt and equity financing, direct and

intermediated funding• Project types: GI, PES, offsets, pro-biodiversity

and adaptation businesses• Some promising projects in the pipeline but

most project are still immature• Challenge: natural capital deal flow is still

absent→ Not yet enough suitable, large enough

projects (min. EUR 5-15 million)→ How to measure and monitor return?

Click on icon to add different picture

Click on icon to add different picture

Example: Mondelēz International

• Harmony Charter – initiative on sustainable agriculture and biodiversity protection

• Paying premium to wheat producers who commit to improving their production standards (PES)

• Min 3% of every Harmony wheat field dedicated to chosen flowers or hedges

• Covers more than 2000 farmers in Europe and supplies 75% of west European biscuit volume

• A label is put on the products (certification)

→ Resulted in 22% reduction in pesticide use on average in France

→ Increased sales and is well perceived by consumers

Click icon to add picture

Conclusions & reflections from Europe

• Increasing experience in PES development and implementation (pollination services, +certification)

• Cautious attitude to and several development needs for offsetting

• Momentum behind environmental fiscal reform (e.g. EFTs) – but still limited direct buy in by Member States

• Public-Private emerging initiatives for investor involvement and impact investment (e.g. EIB / NCFF)

• Private impact investment: PES + Green markets

• PolicyMix: Need to consider how IFMs can work together with “traditional” public financing instruments

Reflections Mexico vs. Europe

• Decentralized PES (Matching Funds): Attracting new investments and stakeholders (=~NCFF for biodiversity investment)

• Continued impact evaluation of the national program of PES: Improved targeting and efficiency of public spending along the last 10 years

• New partnerships between NGOs and sustainable business coachers: New investment opportunities (=impact investment projects)

www.ieep.eu @IEEP_eu

Thank you!

Daniela Russi drussi@ieep.eu Andrea Illes ailles@ieep.eu

Marianne Kettunen mkettunen@ieep.euDriss Ezzine-de-Blas ezzine@cirad.fr