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Discussion Brief: Enhancing the financial sustainability of biodiversity conservation - conclusions from a review of experience in German development cooperation

Authors:
  • Environment Management Group

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Key messages: • Financial resource mobilisation needs to go hand in hand with efforts to slow the drivers of conservation costs and to improve effective spending capacity. • Constraints to financial sustainability of biodiversity conservation are highly diverse and need to be better understood at country level. • Innovative financing mechanisms can deliver multiple benefits, but only if their design is carefully fitted to context. • Landscape approaches to conservation broaden the funding base and/or narrow the funding gap and make clear that investing in healthy ecosystems is critical for livelihoods and development.
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However, the situation may be more complex than
numbers suggest. Regarding the problem, we do not lose
biodiversity and ecosystems primarily for lack of adequate
conservation funding. And regarding response options,
we must also ask: How should the limited available re-
sources be used? For directly tackling biodiversity threats,
for addressing the underlying drivers, or rather for
strengthening the nancial management and fundraising
capacity of implementing organisations? As country con-
texts dier, so do the likely answers.
We propose the following key messages for discussion. ey
are based on a short review of experiences with nancing
biodiversity conservation in protected areas (PA) and their
surrounding landscapes. For this, the lessons from Ger-
man development cooperation in eight partner countries
have been examined1. ese ndings are not meant to be
representative of any group of countries or nancing in-
struments. ey nonetheless propose a shift in perspective
in the international biodiversity nancing debate: We ma y
need to move from a focus on reducing the funding gap
by means of innovative nancing mechanisms towards
thinking ‘innovation’ more broadly.
1. Financial resource mobilisation needs to go hand
in hand with eorts to slow the drivers of con-
servation costs and to improve eective spending
ca pacity.
Rather than the total additional amounts made avail-
able, it is the capacity for overcoming various constraints
which shapes the degree to which funds meet needs and
Key messages:
Financial resource mobilisation needs to go hand in
hand with eorts to slow the drivers of conservation
costs and to improve eective spending capacity.
Constraints to nancial sustainability of biodiversity
conservation are highly diverse and need to be better
understood at country level.
Innovative nancing mechanisms can deliver multiple ben-
ets, but only if their design is carefully tted to context.
Landscape approaches to conservation broaden the
funding base and/or narrow the funding gap and make
clear that investing in healthy ecosystems is critical for
livelihoods and development.
e nancial resources needed for globally implementing
the Aichi Biodiversity Targets have been estimated at
US$ 150–440 billion per year (CBD COP11, 2012) – of
which perhaps 10% are currently available. Signicant
eorts have been undertaken in many countries to increase
funding for biodiversity conservation. Nonetheless, this
funding shortage remains immense, acute and chronic.
1 The full study and a more comprehensive list of conclusions and
recommendations can be made available upon request.
Authors: Berghöfer A., Emerton L., Moreno A., Rode J., Schröter-Schlaack C., Wittmer H., van Zyl H.
Discussion Brief
Enhancing the nancial sustainability
of biodiversity conservation
Conclusions from a review of experience in German development cooperation
In cooperation with
November 2016
aligning systems for budget allocation and operational
planning; increasing the transparency in spending
ows; enhancing management eectiveness; diversifying
governance towards co-management and delegated man-
agement regimes; setting incentives for inter-sectoral
collaboration. Depending on country contexts, these
activities can have signicant potential to ensure better
conservation outcomes for the funding available.
erefore, development cooperation should take a holis-
tic approach and provide nancial as well as technical
assistance, in order to tackle the various constraints to
nancial sustainability of biodiversity conservation.
2. Constraints to nancial sustainability of biodiver-
sity conservation are highly diverse and need to be
better understood at country level.
e international debate on mobilising additional
nancial resources should reect more closely the
diverse (sub-)national contexts of conservation. e
political, economic, nancial and capacity-related con-
straints dier substantially from country to country,
and also within countries. erefore, the systematic
analysis of these constraints is a key phase for mobilis-
ing nancial resources as part of a more comprehensive
nancing strategy for biodiversity. However, capacities
and resources for systematic analysis and strategy
development are often limited.
deliver conservation outcomes. ese constraints refer
e.g. to an enabling governance environment, the stability
of funding ows, the exibility with which they can be
used, the quality and reliability of nancial planning,
and the capacity and motivation to eectively conduct
conservation tasks on the ground. A focus on lling
the ‘funding gap does not capture these more complex
requirements for sustaining conservation.
Furthermore, this gap is not xed per se: It is signif-
icantly increased by drivers of biodiversity loss that
increase conservation costs, including local, national and
international demands for natural resources. Here, the
market and policy incentives which stimulate the unsus-
tainable use of these resources need to be addressed.
On the other hand, the gap can be narrowed by
improving eectiveness on the spending side. It is
unrealistic to assume that in many countries there
are management instruments and implementing
structures in place that only need additional funding
to turn conservation commitments into a reality on
the ground. In fact, where big funding meets dicult
contexts, conservation becomes expensive, rst of all.
It can stimulate conict, corruption and investments
in over-ambitious technology or infrastructure.
Improving the capacity for eective conservation
spending is an under-estimated opportunity in biodiver-
sity nancing. ere is a menu of options, including:
Rethinking the funding gap of conservation
Comparing cost estimates of conservation action with available funding falls
short of describing – and responding to – the funding gap:
Required funding depends on both the drivers of biodiversity loss, which
increase conservation costs, and on cost savings realised from improve-
ments in effective spending capacity and in cross-sector collaboration.
Improving the nancial sustainability of conservation, therefore, requires
tackling various constraints related to cost drivers and spending effective-
ness – in addition to mobilising further resources.
Cost
Time
tackle drivers of
conservsation cost
ll funding gap
improve effective
spending
enhanced nancial
sustainability of
conservation
required funding
available funding
One example for such systematic analysis oers the
BIOFIN initiative, developed in view of targeted
resource mobilisation for National Biodiversity
Strategies and Action Plans (NBSAPs). e BIOFIN
conceptual model encompasses a spectrum of issues. It
facilitates examining contexts, estimating conservation
costs, and assessing the means of nancing them.
What is needed now is the further grounding of such
eorts: Adaptation of the analytic framework to the
varying knowledge gaps and knowledge needs in
dierent country contexts; cross-checking for further
synergies with strategy developments in other sectors,
or at other policy levels; support and incentives to
apply the solutions identied. When done as a col-
laborative exercise, such analysis can build critically
needed capacity and generate momentum. It promotes
a shared understanding across sectors of what needs to
be done and where to start.
3. Innovative nancing mechanisms can deliver mul-
tiple benets, but only if their design is carefully
tted to context.
In many countries the bulk of conservation funding
comes from regular government allocations and ODA.
‘New’ mechanisms, such as optimized entrance fees,
conservation trust funds, payments for ecosystem
services (PES), biodiversity osets, or green bonds have
received a lot of attention in the hope that they gener-
ate additional funding, also from the private sector.
New mechanisms can in fact deliver multiple benets,
beyond additional funding. For example, careful de-
sign of disbursement procedures of conservation trust
funds, paired with regular audits, have been found to
improve the quality, eciency and accountability of
conservation management.
While there are important successes, new mechanisms
have in some places either failed or not taken o, even
if funding was made available for their initial set-up.
e main reason: New mechanisms tend to require
new skills, institutions, partnerships, and regulations
– this takes years to decades to develop. erefore,
careful adaptation of a mechanism’s design to its
operating environment is required. e site-specic
pre-requisites are rarely fully anticipated. It appears
therefore promising to rst focus on improving the
design and functioning of existing nancing mech-
anisms. For new mechanisms, experts and decision
makers benet from jointly exploring and comparing
alternative design options to nd a suitable t for their
specic socio-economic and institutional setting.
4. Landscape approaches to conservation broaden the
funding base and/or narrow the funding gap and
make clear that investing in healthy ecosystems is
critical for livelihoods and development.
A landscape approach encompasses protected and sus-
tainably managed areas and aims at accommodating
conservation and sustainable development objectives.
Several models of integrated approaches exist, such as
biosphere reserves or ecological corridors. In practice,
collaboration between agencies and across sectors is
often hampered by institutional barriers and lack of
incentives. Furthermore, dierent sector programmes,
e.g. for rural economic development, water security,
climate adaptation, build on concepts and terminology
which are not always mutually understood/used across
sectors. (Subnational) NBSAPs can act as potent
catalysts to intensify cross-sector coordination and
collaboration.
From a nancing point of view, managing biodiversity
conservation as part of a wider landscape approach has
substantial advantages: if conservation action is ne-
tuned and implemented with reference to other policy
objectives, costs can be lowered (from preventing
counter-productive parallel programmes in dierent
policy areas), and costs can be shared (among two or
more sectors in joint programmes).
More fundamentally, such linking up with other policy
objectives can help to show that investing in biodiversi-
ty and in the maintenance of healthy ecosystems is not
a luxury: It directly contributes to securing livelihoods,
and increasing (sustainable) development options. A
focus on ecosystem services can deliver the evidence
and arguments of why and where in the landscape this
makes particular sense. For example, it can reveal the
dependence of an urban area on a well-conserved up-
stream watershed, or it can pinpoint the probable loss
in agricultural productivity in case natural habitats for
insect pollinators are being destroyed.
e landscape approach underlines: No country can
aord to lose functioning ecosystems – inside but espe-
Examples of biodiversity nancing in German development cooperation
In Namibia, Germany supports the NBSAP process and the application of the BIOFIN assessment methodology. Also,
strategic environmental planning eorts lay the ground for integrated conservation in a landscape approach. Further-
more, a new trust fund is being supported explicitly geared to building management and negotiation capacities for
community conserved areas.
In
Madagascar, Mauretania, Cameroon,
and other countries, Germany supports conservation trust funds with
a range of adapted governance structures, funding portfolios, and disbursement procedures. Trust funds stabilise
funding ows for protected areas and multi-party governing structures guide future conservation investments.
In
Côte d’Ivoire
, Germany invests in the eective spending capacity and consolidation of several national parks,
and supports sustainable livelihoods in their surrounding landscapes. Equipped with up-to-date management plans
and an analysis of ecosystem service benets from parks to the agricultural sector, national partners now invite
companies to co-nance conservation.
In
Vietnam,
Germany supports forest protection contracts and PES schemes that have been found to provide
critical income to forest holders and communities in regions surrounding protected areas, thereby compensating for
park-related local opportunity costs. ese additional income streams to the inhabitants of surrounding landscapes
critically complement government allocations to PAs core activities.
In
Mexico
, Germany supports the development of the ecological corridor Sierra Madre Oriental as a model for
integrated landscape approaches. Stretching across ve states the corridor brings together public and private sector
actors and NGOs who now jointly plan and coordinate their investments into spatial planning, sustainable agricul-
ture or sustainable tourism programmes in support of biodiversity conservation.
cially also outside protected areas – at large scale. e
associated losses in benets from nature will come at
high societal cost. is is evident in cases where coastal
development has replaced mangrove belts, resulting in
increased exposure to oodings. It is less obvious, but
equally critical, where ecosystem degradation results for
example in the gradual loss of erosion control or local
climate regulation benets. Considering such linkages
holds important potential, both, for targeting conser-
vation spending and for mobilising funds and political
backing for biodiversity conservation.
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behalf of the authors Mr Augustin Berghöfer (augustin.berghoefer@ufz.de)
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Disclaimer:
This discus sion b rief is for inf ormat ion pur pose s. Its conte nt and  ndings
are intended to ser ve as technica l input for the ongoing discussions on
resource mobilisation for biodiversity. The authors’ analysis, views and
reco mmend ations expre ssed in this r epor t do not n eces sar ily re ect those
of BMZ/GIZ/KfW or any of the involved institutions and organisations.
GIZ is responsible fo r the con tent of this publ ication.
On beha lf of:
Germ an Fede ral Ministr y for Ec onomic
Cooperation and Development (BMZ)
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53113 Bonn, Germany
Bonn, 2016
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