Project by CIRAD, IEEP and IBERO for the European Commission, presentation of key insights at CBD COP13 in Cancun (16 Dec 2016).

1. www.ieep.eu @IEEP_eu
Innovative mechanisms for financing
biodiversity conservation
Insights from Europe
Daniela Russi, Andrea Illes, Marianne Kettunen & Driss Ezzine-de-Blas
16 December 2016
Cancun, Mexico / CBD COP13 side event
With Funded by

2. www.ieep.eu @IEEP_eu
Taxes, tax incentives,
fees and charges
(public)
Relatively common
But only few examples
focused directly on
biodiversity
PES
(public, private & hybrid)
Mostly public finance
Local or regional scale
Key focus agricultural &
water catchments
Investment sector
(private)
Increasing interest & focus
Natural Capital Financing
Facility (NCFF) by EIB & EU
pioneering the approach
Offsetting
(public)
Controversial and not
widely used in practice
Pioneered in Germany,
France, the UK and
Sweden
Ecological fiscal transfers
(public)
New approach
Operational only in
Portugal
Incentives conservation
at local level
Business sector
(private)
Increasing interest
Focus on sharing best
practice and experiences

3. • Purpose: Compensate lower-tier governments
cover their expenditure in providing public
goods and services related to biodiversity
conservation
• 2007: Idea was pushed by the Ministry for the
Environment and accepted by the Ministry of
Finance
• Protected Areas & Natura 2000 5% (mun. <
70%) - 10% (mun. > = 70%). Share of Ecological
Component on Total Municipal Revenues: 18%
• 1995-2008: + 4 Reg PA
• 2008-2015: + 6 Reg PA
Example: Natural Ecological Fiscal Transfers (Portugal)

4. Example: Natural Capital Financing Facility
• European Investment Bank (EIB) and EU
• Pilot phase: EUR 125 million / 3 years in 2014-
2017 (with possible extension)
• Debt and equity financing, direct and
intermediated funding
• Project types: GI, PES, offsets, pro-biodiversity
and adaptation businesses
• Some promising projects in the pipeline but
most project are still immature
• Challenge: natural capital deal flow is still
absent
→ Not yet enough suitable, large enough
projects (min. EUR 5-15 million)
→ How to measure and monitor return?

5. Example: Mondelēz International
• Harmony Charter – initiative on sustainable
agriculture and biodiversity protection
• Paying premium to wheat producers who
commit to improving their production
standards (PES)
• Min 3% of every Harmony wheat field
dedicated to chosen flowers or hedges
• Covers more than 2000 farmers in Europe and
supplies 75% of west European biscuit volume
• A label is put on the products (certification)
→ Resulted in 22% reduction in pesticide
use on average in France
→ Increased sales and is well perceived
by consumers

6. Conclusions & reflections from Europe
• Increasing experience in PES development and
implementation (pollination services,
+certification)
• Cautious attitude to and several development
needs for offsetting
• Momentum behind environmental fiscal
reform (e.g. EFTs) – but still limited direct buy
in by Member States
• Public-Private emerging initiatives for investor
involvement and impact investment (e.g. EIB /
NCFF)
• Private impact investment: PES + Green
markets
• PolicyMix: Need to consider how IFMs can
work together with “traditional” public
financing instruments

7. Reflections Mexico vs. Europe
• Decentralized PES (Matching Funds):
Attracting new investments and
stakeholders (=~NCFF for biodiversity
investment)
• Continued impact evaluation of the
national program of PES: Improved
targeting and efficiency of public
spending along the last 10 years
• New partnerships between NGOs and
sustainable business coachers: New
investment opportunities (=impact
investment projects)

8. www.ieep.eu @IEEP_eu
Thank you!
Daniela Russi drussi@ieep.eu
Andrea Illes ailles@ieep.eu
Marianne Kettunen mkettunen@ieep.eu
Driss Ezzine-de-Blas ezzine@cirad.fr