Resource Mobilization and Financial Reporting under the CBD Closing finance gaps

1. Resource Mobilization and Financial Reporting under the CBD Closing finance gaps Sub-regional workshop on financial reporting and resource mobilization for the Pacific Avarua, Cook Islands, 5-6 October 2015 Markus Lehmann Secretariat of the Convention on Biological Diversity

2. Closing the finance gap

3. National financial plans From 3rd Column question 5 Specify the actual sources 1 – (2+3)

4. Sources of finance CBD Strategy for Resource Mobilization (IX/3; see XII/3 Annex IV): • international financial flows from all sources (public and private) • Biodiversity ‘co-benefits’ in climate financing • Budgetary allocations for biodiversity and associated ecosystem functions/services in national and relevant sectoral budgets • “Demonstrate that budgetary allocations for biological diversity and its associated ecosystem functions and services in national budgets are investments contributing to wider solutions to the challenges of food security, water management, disaster risk reduction, livelihoods, poverty reduction and inclusive economic growth, by integrating biodiversity outcomes in development programmes and projects.” (decision XI/4, annex IV) • Environmental fiscal reforms including innovative taxation models and fiscal incentives; see also Aichi Target 3: • Eliminate, phase out, reform harmful incentives • Establish positive incentives; fiscal transfers

5. Sources of finance (cont.) • Payment for ecosystem services schemes • Enabling conditions for biodiversity offset or compensation mechanisms • Biodiversity criteria in national procurement plans and policies, national strategies for sustainable consumption and production, and similar planning frameworks • Business and biodiversity platforms, networks and/or partnerships, with a view to further engaging the private sector • National ranking and/or top runner lists of private and public sector companies that dedicate resources to biodiversity • Eco-labelling • domestic environmental funds

6. Sources of finance (cont.) “urges Parties to consider undertaking, as appropriate, a review and assessment of existing legislation and policies governing biodiversity financing mechanisms, with a view to identifying opportunities for mainstreaming biodiversity and strengthening current policies and their complementary safeguards” (decision XII/3, para 17)

7. Budgetary allocations Some progress is being made... • Aconstant figure of 13% of total annual income and expenditure of development funds of the country across relevant fiscal years were projects for relevant agencies (DCIE and NFMRA) • More data and analysis would be needed to determine the details. Nauru, 5th National Report

8. Budgetary allocations However... Available information on external and local funding for biodiversity during this reporting period is incomplete, and in different currencies which makes analysis difficult. Some projects are not directly for the biodiversity focal area however they contribute indirectly to the maintenance of ecosystems services such as forest replanting schemes and agroforestry projects in the GEF climate change focal area. (…) The lack of activities to implement the main goal of securing long term financial sustainability is perhaps indicative of the high level of donor dependence in biodiversity conservation, the dominance of project-based modality in donor funding, and the lack of local budget appropriation for conservation activities. It’s been noted elsewhere in this report that a key indicator of effective mainstreaming is the increasing percentage of local funding committed to biodiversity conservation. Using this indicator, biodiversity conservation is far from effectively being mainstreamed. (…) On the other hand, available funding e.g. from GEF SGP for community based projects, are under-utilized. Samoa, 5th National Report

9. Adressing harmful incentives: milestones Adopted by COP-12 (decision XII/3, para 21 and Annex I)

10. Harmful incentives: addressing obstacles Possible responses to obstacles encountered in implementing incentive reforms: • increase transparency • change the terms of the policy debate by challenging misconceptions • make heard the voices of those who are disadvantaged by the status quo • recognize that a range of options is available to meet societal objectives • better target existing subsidies and improve subsidy design (including possible conditional subsidies), consistent and in harmony with the Convention and other relevant international obligations, taking into account national socio economic conditions • seize and create windows of opportunity (e.g., policy reforms, legal and international obligations) • accompanying or transitional measures. (see decision XII/3 Annex IV, para 34)

11. Harmful incentives in the region Importance of the issue recognized in national reports… “Development of plans and policies to control i) the over-exploitation of marine resources (eg. sea cucumbers used for income generation) and ii) the fishing destructive methods, Review environment licensing system under the Environment legislation to effectively manage the impacts of economic developments (commercial food processing facilities), Support the existing private and public partnership for the recycling facility through the provision of capacity building and public awareness programs., Support the establishment of community-based conservation initiatives (eg. Mangrove replanting, turtle monitoring, community food security program, and Ecosystem Base Adaptation approach)” Kiribati, 5th National Report “There is some awareness that certain existing incentives, for example in the fishing and tourism industry, may have negative ramifications for biodiversity status by for example maintaining otherwise uneconomical fishing capacity, but no detailed assessment has been undertaken as yet. The Government’s Blue Economy documentation (GoS 2014) does recognise the need to address this aspect in marine and coastal economic activities.” Seychelles, 5th National Report

12. Harmful incentives in the region …but not every subsidy is harmful for biodiversity… “Government currently provides a fuel subsidy for local Niueans with aluminium boats for fishing. This was originally introduced to “level the playing field” for local artisanal fishermen when a fishing processing factory began operating in Niue and commercial long-liners, paying no local fuel tax and selling their by-catch into the local market at discounted prices. The subsidy has remained in place since the closure of the factory, and has partly served to keep people fishing in the face of rising fuel price. There is no suggestion that the subsidy has had any significant impact on biodiversity as local fishermen are from around the island, small numbers of highly migratory fish like tuna and wahoo which move widely around the Pacific. There are no plans to phase out this subsidy.” A form of positive subsidy for the artisanal fishery has been the on-going program to place and maintain Fish Aggregating Devices (FADs). These serve to aggregate the small fish on which the larger pelagic fish feed and take the fishing pressure from canoes and powered boats off the areas immediately adjacent to the coast.“ Niue, 5th National Report

13. PES • Private schemes: • scheme funded by a company • Applicability? • Public schemes • E.g. financial rewards in the context of community co-management • “Progress has been made towards conducting of the PES feasibility study e.g. the REDD+. This may provide alternative revenue to substitute logging and eventually phasing it out. The Ministry of Tourism is promoting ecotourism and a few feasibility studies were also conducted.” • Solomon Islands, 5th National reports • See CBD Technical Series no 56 (case studies and lessons learned on incentive measures) • https://www.cbd.int/doc/publications/cbd-ts-56-en.pdf

14. Offsets ‘Private’ offsets or compensation schemes • See examples under http://bbop.forest-trends.org/ Public offsets: based on a legal requirement and an associated enabling environment • Physical offsets vs compensation payments • Specific safeguards for offsets; for instance: offset or compensation schemes to: • ensure that they respect the mitigation hierarchy • Ensure that they implement current levels of biodiversity protection in the planning system • Ensure that they are not used to undermine unique components of biodiversity (XII/3 Annex IV)

15. Safeguards for financing mechanisms Voluntary guidelines on safeguards (XII/3, Annex III) • Both opportunities and risks need to be taken into account • Safeguards to promote the positive effects and avoid or mitigate unintended negative effects on biodiversity and livelihoods • Recognize the role of biodiversity and ecosystem functions for local livelihoods and resilience, as well as biodiversity’s intrinsic values • Carefully define the rights and responsibilities of actors and/or stakeholders in biodiversity financing mechanisms, with the effective participation of all actors concerned • Safeguards to be grounded in local circumstances, be developed consistent with relevant country-driven/specific processes as well as national legislation and priorities, and take into account relevant international agreements, declarations and guidance • Put in place appropriate and effective institutional frameworks, including enforcement and evaluation mechanisms that will ensure transparency and accountability

16. Criteria for selecting financing mechanisms

17. Roundtable Suggested questions • What are the main funding sources/mechanisms, nationally and regionally? • Where do you most opportunities for generating additional resources? • What are existing risks and obstacles? • What could be done to address/overcome those?