Well-functioning biodiverse ecosystems are the foundation of sustainable development. Nature supports land management, productive marine life and soils, supplies clean water and air and provides the most cost effective solutions to environmental risks. In other words, nature underpins functioning of our society, and there is an increasing evidence that investing in natural capital creates long term socio-economic benefits.
There is common misunderstanding that financing biodiversity is the same thing as putting a price tag on nature and letting the market solve the problem. In fact, financing biodiversity does not usually rely on markets or even valuation. The potential of scaling-up biodiversity financing often depends on government intervention including their role in the development of safeguards.
The new Policy Report by Stockholm Resilience Center analyses how to develop and implement safeguards for scaling up biodiversity financing under Convention on Biological Diversity (CBD) and proposes guidelines and elements for safeguards in Biodiversity Finansing Mechanisms (BFMs). A special focus is made on the so-called “new and innovative financial mechanisms” (IFMs) under the CBD’s strategy for resource mobilization which are: payments for ecosystems services, biodiversity offsets, environmental fiscal reform, international development finance, markets for green products and climate financing with co-benefits to biodiversity.
Initially referred to the defensive approach deployed by the World Bank, the term “safeguards” was first used in the 1990s in reference to policies for preventing unintended negative consequences for people and ecosystems arising from international interventions.
“Safeguards in BFMs” refer to measures for maximising the protection of biodiversity and people’s livelihoods while minimising negative impacts. Rather than defining a set of safeguards, the focus of this study is to examine the notion of safeguards and explore elements and guidelines that can be useful for the design and application of safeguards in BFMs.
The paper provides general recommendation that are meant to be applicable to all the BFMs while also taking into consideration the interconnectedness of BFMs’ risks and opportunities.
It was concluded that scaling-up biodiversity financing can be a means for meeting the CBD Objectives and the Aichi Biodiversity Targets, but the action framework has to consider effects of BFMs interventions on people’s rights and livelihoods, especially in regard to indigenous peoples, local communities and women.
Researchers suggest to use the rights/responsibilities based approach for the design of financial mechanisms. This approach is based on the ethical values and can potentially improve equity and build better trust between the stakeholders. Under this approach indigeneous people or local communities are not merely stakeholders, but right-holders with statutory rights and obligations. Unlike the approach based on defensive demands of marginalized people, the rights-and-duties approach is aimed at building concensus based on mututal recognition of rights and duties all the stakeholders have in regards to biodiversity.