Spending on biodiversity is not a cost but an investment with a high return to sustainable development. The international Economics of Ecosystems and Biodiversity (TEEB) reports indicate that if human kind invests in nature, the return can be as high as 50:1, or more.
This was the overall message by the UN Assistant Secretary General and Executive Secretary of the Convention on Biological Diversity, Dr. Christiana Pasca Palmer, when she addressed a high-level briefing on Biodiversity Finance in Windhoek on 6 August 2018.
The ResMob Project, implemented by the Ministry of Environment and Tourism and the GIZ, arranged the event to expose and update stakeholders in government and state entities with the following objectives:
- Understanding global financing opportunities for sustainable development and biodiversity,
- Highlighting the value of nature in Namibia and the need to invest in it, and
- Facilitating an inter-sectoral discussion on biodiversity finance.
The Minister of Environment and Tourism, Hon. Pohamba Shifeta, in his welcoming address said the international 2008 Resource Mobilization Strategy of the Convention on Biological Diversity and Aichi Target 20 both call for the increased mobilization of financial resources for the effective implementation of this important Convention.
Minister Shifeta said the high-level briefing’s importance was to stimulate the broader debate around the costs and benefits of nature conservation and environmental protection in Namibia. “Just as a private sector investor will not invest in something without knowing its likely returns, the Government must also know the value of nature, who is benefiting from it as well as the type of returns it is generating. This is vital to inform our planning and budgeting processes.”
He pointed out that:
- The value of ecosystem services in Namibia exceeds N$13 billion per year,
- Total biodiversity expenditure from all sources is slightly more than N$1 billion per year in Namibia, and
- To fully achieve the targets of Namibia’s Second National Biodiversity Strategy and Action Plan, it is estimated that the country needs to double the level of investment in biodiversity.
“We have also incorporated this call in our own Second National Biodiversity Strategy and Action Plan, and I am pleased that we have been able to conduct considerable work to identify our funding needs, gaps and priorities in the area of biodiversity management.”
Dr. Pasca Palmer in her keynote address strongly acknowledged ‘the salient and continuous actions by the Government of Namibia and the Ministry of Environment and Tourism to position and advance the biodiversity agenda as a contributor to sustainable development’.
The processes and functions that underpins biodiversity, through direct and indirect ecosystem services, support numerous development activities essential for human well-being and economic growth at large. With this comes another significant asset: that of knowledge, capacities, and skills, she said.
She alluded to three opportunities or challenges:
- Without biodiversity, its provisions and services there would be no development.
Biodiversity loss and ecosystem collapse are one of humanity’s biggest threats. The World Economic Forum 2018 Risk Report registered this loss among the top 10 global risks in terms of likelihood.Biodiversity underpins ecosystem health but also human and communities’ health. It ensures ecosystem functioning and the provision of ecosystem services which are critical for our well-being, if not survival.She referred to examples such as invasive alien species that are globally key drivers of biodiversity loss and cost. A recent study found that invasive insects alone cause costs of up to US$70 billion per annum. According the IPBES 2016 pollinator study more than three quarters of global food crops rely on animal pollination, including wild pollinators, contributing to 35 percent of the global crop production volume.In Namibia 70 percent of the population is dependent on natural resources for their livelihood, which states the strong link between natural capital and poverty eradication.
She asked how governments will address the growing demands for food that will also increase by 35 percent, water by 40 percent and energy by 50 percent by 2030 in the face of heightened demographic growth?
“How could investing in Namibia’s natural capital provide an opportunity to empower innovate and bring and new jobs to many people, especially in rural communities, while lifting them out of poverty? How can biodiversity add value to economic development plans?”
Dr. Pasca Palmer sketched the enormity of the mobilization of financial resources for biodiversity conservation and sustainable development.
“Broadly speaking, estimates show that the full value of nature to global GDP is between 75 and 125 trillion U$ Dollars. This is aligned with the global GDP itself, accounting to close to 78 trillion U$ Dollars.
For the Strategic Plan for Biodiversity 2011-2020, the global funding needs to achieve the 20 Aichi Targets were assessed in the range of 150 to 440 billion USD annually. This is merely a fraction of global GDP.”
Closing financing or reducing finance gap is critical. Dr. Pasca Palmer said this would require political will and innovative approaches to raise new funds, enhance policy alignment and coherence with the aim of transforming economies, production and consumption towards sustainability.
The established narrative should be changed, economic cases for biodiversity policies should be made and a broader engagement strategy for the various sectors is needed.
“… we need to mainstream biodiversity in public and private policy and decision making, including in public budgets at all levels.”
She lauded Namibia as the first African country to incorporate the protection of the environment in its national constitution, a fundamental step in support of biodiversity mainstreaming. Namibia has also been at the forefront of using economic valuation methodologies for showcasing the benefits generated by ecosystems and biodiversity, including through its work on The Economics of Ecosystems and Biodiversity (TEEB Namibia).
She referred to the mainstreaming of biodiversity into agriculture, forestry, fisheries, water, lands, mining, energy, wildlife; and tourism, identified in Namibia’s Vision 2030 and the five-year National Development Plans (NDP) for poverty alleviation and their links to critical natural capital.
Dr. Pasca Palmer also recognized that Namibia had done work to account for its Natural capital in using the UN System of Environmental-Economic Accounting (SEEA) and is a signatory country of the Gaborone Declaration for Sustainability in Africa – an Africa-led initiative to advance economic valuation and natural capital accounting. She encourages Namibia to call on others, at COP14 ‘to advance and champion work on this critical issue’.
2. Biodiversity finance tools can provide economic opportunities and avenues to increase cost efficiency
Namibia’s work using the BIOFIN methodology, supported by GIZ, is a noteworthy example, she noted. “Your review of biodiversity-related expenditures can provide significant insights for other countries to learn from. A critical part of this is to make more progress on removing perverse incentive policies – in particular publicly funded subsidies – that are harmful for biodiversity.” It is important to eliminate, phase out or reform subsidies that are harmful for and have negative impacts on and reduce negative impacts on biodiversity, as well as lower funding needs for biodiversity policies. At the same time saved public funds could be used for other priorities. Such an alignment of incentive policies is an important component of better policy coherence and would contribute to the more efficient use of financial resources.
“However, even with progress on these elements, public finance alone will not be sufficient to meet the biodiversity challenge. This is why Aichi Biodiversity Target 20 calls for achieving a significant increase in funding from all sources – including innovative and private finance.”
3. We need to partner with the private sector, such as banks, portfolio investment, financial institutions, insurance companies, among others.
Dr. Pasca Palmer said such entities could contribute by reflecting on their biodiversity-related risks in lending decisions and portfolios and establishing ecosystems and biodiversity as an asset class. Progress in this regard can be reviewed via tools developed by UNEP’s Finance Initiative and the Natural Capital Finance Alliance.
“Blended finance arrangements can also be examined to de-risk and catalyze private investments. Such arrangements are more advanced in sectors such as energy or water and sanitation. For biodiversity and ecosystems, we stand at the beginning, and could build on public-private partnerships, to generate opportunities for reducing the biodiversity finance gap and contribute to other policy priorities, like poverty eradication.”
Dr. Pasca Palmer concluded het address by stating:
- Spending on biodiversity is not a cost but an investment with a high return to sustainable development.
- Biodiversity finance tools can provide economic opportunities and avenues to increase cost efficiency, and
- Biodiversity finance needs to be addressed in a more systematic manner, through a “whole of a government” and “whole of society” approach.