CONSERVATION FINANCE. 1. Conservation Finance? 2. CFA 3. Servicing PA

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Randolf Shelton
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1 CONSERVATION FINANCE 1. Conservation Finance? 2. CFA 3. Servicing PA

2 Conservation Finance and the CONSERVATION FINANCE? CFA?? 1. The other side of the coin to address challenges in Biodiv conservation and increase protection

3 CONSERVATION FINANCE? THE CHALLENGES TO ADDRESS total investments in conservation are inadequate Lack of long-term & stable investments into conservation Adverse impacts of private financial flows The Earth s natural capital is under-valued Ref. Conservation Finance Guide, 2003

4 Insufficient total investment in conservation. Increasing total funding x 2 / x6 Conservation Finance and the TOTAL PA NEEDS? CFA?? $7,18 b/yr $14,3 b/yr Butchard et all (2015)

5 Total Needs: A lot? Combining all these costs for site protection/ management (Target 11) and those for species conservation (Target 12) yields a total cost of almost $80 billion annually 50% of bankers bonuses paid in 2011 by major Wall street banks ($156 billion) <20% of annual global consumer spending on soft drinks (US$469 billion) <10% of environmentally harmful fossil fuel subsidies (US$1,000 billion), or world military expenditure (US$1,700 billion) <5% of the estimated net value of ecosystem services lost per year (>US$2,000 billion)

6 INISTRUMENTS? Lack of long-term & stable investments into conservation Establishing long-term, reliable sources of financing Number of CTFs ~ 80 Capital Raised Number An of CTFs estimated ~ 55 $900 million Worldwide (74% in LAC, 10% in Asia, 9% in Africa, and 7% in Europe). Ref. Conservation Finance Guide, 2003 Source: Rapid Review of Conservation Trust Funds updated

7 INISTRUMENTS?

8 INISTRUMENTS? Masoala NP Supply of finance (Park Owned Capital and Foreign Development Assistance through Projects) $ $ Financing gap Demand for finance (as planned in annual work plan) FAPBM $ PEIII additionnal fund $ $ $ FAO Nord-Pas de Calais CI KFW investment fund $ Zurich Zoo / WCS

9 Conservation Finance and the CONSERVATION FINANCE? CFA?? Inadequate total investments in conservation Mechanisms and channels: Lack of long-term & stable investments into conservation Adverse impacts of private financial flows The Earth s natural capital is under-valued Ref. Conservation Finance Guide, 2003 Increasing total funding x 10? Establishing long-term, reliable sources of financing Total # of CTF and endowment increased; Compensation Addressing adverse impacts of private financial flows (e.g. unsustainable logging, mining) + positive enforcement Assessing values and developing markets that value and pay for the critical services provided by intact ecosystems (eg. carbon sequestration, watershed protection)

10 Conservation Finance and the CONSERVATION FINANCE? CFA?? 2. Supply side of conservation finance, namely the perspective of investors and their investment approaches New environmental business opportunities are being missed Capturing the rent of development Financial investment in Nature: a new impact investment class Overcoming financial constraints to new env. Business opportunities (e.g., ecotourism, organic agriculture, shade coffee) Compensation and offsets (when residual impacts can not be eliminated); natural resource exploitation rent Growing appetite for financial products that offer natural wealth preservation (must be linked to measured impacts in terms of conservation and in terms of socio-economic dev)

11 CONSERVATION FINANCE ALLIANCE 600 CFA members Ray Victurine WCS Charles Besancon CBD Lifeweb Sylvie Goyet FIBA 5 Executive Committee members Lorenzo Rosenzwei gfondo Mexicano John Adams UBS-Arbor Environm ental Funds EFWG Scott Lampman, USAID & Chris Stone, GCF CI Africa Env Funds Edwin Wanyonyi, Kenya WSF & and Carl Bruessow, Mulanje TF PA Finance Andrew Bovarnik, UNDP & steering group Innovativ e Finance Ray Victurine, WCS & Josh Donlan, ACS CFA Secretariat (at Funbio)

12 THE CFA IN ACTION Engaging, informing, convening and influencing key constituencies

13 Pavilion: over 20 sessions with an average of 100 pax 2 sessions in stream 1 CF Journey THE CFA AT WPC

14 THE CFA IN ACTION Developing tools to optimize conservation finance capacity worldwide

15 THE CFA IN ACTION Catalyzing innovative approaches for sustainable financing a collective able to settle upon common research or evaluation questions

16 CFA AT THE SERVICE OF PA? exert the appropriate advocacy in policy and technical fora for promoting a comprehensive approach to sustainable conservation finance for PA, including tools to measure and value PA resources, carry business planning and financial analysis, and assess revenue potential. lobby for more effective and increased public spending in PA (MOF) with more appropriate indicators that capture and report the PA contribution to economic dev (results, management, economic) Ref. guide to increase public budget for PA systems: lessons from Chile, Guatemala and Peru, UNDP Jan 2015

17 CFA AT THE SERVICE OF PA? Promote tools to monitor PA finance provision and status + to measure results and impacts of conservation finance investments Enhance capacity of members/partners/pa to work on finance needs and provision, and on creation of appropriate and effective mechanism (CTF)

18 CFA AT THE SERVICE OF PA? Proactively engage to capture compensation and offset potentials (legislation, IFI, business and voluntary) Helping create a conservation finance asset class.

Potential + for Biodiversity Offsets Offseting as a conservation tool used

legislation that simply enabled offsets.

offsets grew from about $1.8-2.9 billion to $2.4-4 billion from 2009 to 2010.

19 Potential + for Biodiversity Offsets Offseting as a conservation tool used since the 1970s since 2007 legislation that requires offsets has overtaken legislation that simply enabled offsets.. Combining regulated and voluntary sectors, the global annual market for offsets grew from about $ billion to $2.4-4 billion from 2009 to It is projected that offsets could generate up to $5.2 to 9.8 billion annually by 2020, primarily driven through regulation

Our research suggests private investors wealthy individuals, pension funds and other institutional investors and even mainstream retail investors

conservation finance requires banks, financial intermediaries, and NGOs to take on new roles and challenges.

20 Our research suggests private investors wealthy individuals, pension funds and other institutional investors and even mainstream retail investors could supply as much as $200 billion to $300 billion per year needed to preserve the world s most important ecosystems The shift to investor-driven conservation finance requires banks, financial intermediaries, and NGOs to take on new roles and challenges. Investor-driven CF The main constraint in satisfying this appetite is the underdevelopment of investable projects with clear risk-return profiles and understandable conservation benefits.

FINANCING BIODIVERSITY CONSERVATION: Challenges and Opportunities

FINANCING BIODIVERSITY CONSERVATION: Challenges and Opportunities IUCN-The World Conservation Union CSERGE-Centre for Social & Economic Research on the Global Environment A report from Financing Biodiversity