A Decade of Development Finance for Biodiversity

Executive summary

Addressing biodiversity loss is central for sustainable development in both developed and developing countries. Yet, financing falls significantly short of meeting the urgent challenge of halting and reversing biodiversity loss.

This report analyses the contribution of development finance for biodiversity for the decade 2011-20, coinciding with the implementation period of the Convention on Biological Diversity (CBD) Strategic Plan on Biodiversity and its Aichi Targets – the roadmap driving international development co-operation action for biodiversity over that decade. It also looks in more detail at how this development finance is allocated by bilateral Development Assistance Committee (DAC) donors. It finds that:

• DAC members that are Parties to the CBD collectively achieved the Aichi Target 20 on resource mobilisation, as it relates to development finance. This holds true under two scenarios (i.e., using 100% of ‘principal’ and ‘significant’ biodiversity-related development flows reported to the OECD; as well as applying a 40% coefficient to ‘significant’ flows).

• Biodiversity-related official development finance (ODF), which includes official development assistance and other official flows, almost doubled over 2011-20 – from USD 5.4 billion to USD 10.4 billion (based on a conservative estimate using a 40% coefficient on ‘significant’ flows). This was primarily driven by bilateral DAC donors, who accounted for 73% of total ODF flows, with multilateral providers accounting for the rest (22%).

While total global biodiversity finance is estimated to have increased over the past decade, the biodiversity finance gap is still large, estimated at USD 700 billion per year, as stated in the recently agreed Goal D of the Kunming-Montreal Global Biodiversity Framework – which should be paving the way for action on biodiversity until 2050. Although ODF is an essential element of total global biodiversity finance, it cannot mend the gap alone, even if it were to increase substantially, including with contributions channelled through the multilateral system. The amounts of private sector finance leveraged by ODF remains low (under USD 150 million on average for the period 2017-20) and call for an urgent assessment of the situation, as well as for an exchange among DAC members on lessons learnt, challenges and good practices. It will also be important to evaluate how ODF can better support the transformational changes necessary to transition to more sustainable pathways and how private finance can be leveraged to an order of magnitude closer to USD billion than the current USD million.

Recommendations

Increase development finance for biodiversity

• DAC members, as well as other providers, would need to increase their ODF for biodiversity-related activities in line with the recent resource mobilisation strategy of the Global Biodiversity Framework. DAC members should also grow ODF for biodiversity as a core or principal objective and ensure that flows balance marine and terrestrial biodiversity hotspots in middle-income countries, on the one hand, with finance for least-developed, small island developing states and fragile contexts, where nature underpins sustainable development, on the other hand.

• Multilateral institutions can also increase their biodiversity activities, also in line with recent requirements put forward by the Global Biodiversity Framework, and mainstream biodiversity more actively into their policies and operations, in line with the MDB Joint Statement on Nature, People and Planet and the Global Biodiversity Framework.

• Public interventions (bilateral and multilateral) will need to work harder to mobilise more private finance, which will be key for filling the funding gap. This can be achieved by leveraging existing and developing new financing tools, resources and partnerships.

• Private philanthropic actors could increase their role further by joining forces with public providers of development finance for biodiversity, thus enhancing their impact and learning.

Use development finance more strategically, coherently and effectively

• Donors can do more to mainstream biodiversity across the full range of their activities. In addition, donors could consider moving to longer-term, more flexible modalities of development co-operation, in line with the functioning and needs of natural ecosystems and biodiversity.

• Donors need to find ways to assess the volume of ODF that is potentially harmful to biodiversity and to evaluate how ODF can better support the transformation towards net zero, climate resilient and nature positive pathways.

• Donors should minimise trade-offs and maximise synergies across biodiversity, climate and other environmental dimensions. Failure to do so could lead to resource inefficiencies and impaired outcomes.

• Governments worldwide need to identify and reform potentially environmentally harmful support across a range of sectors, including mining, energy, agriculture and fisheries – and all providers will need to help partner countries to do so through capacity development.

• Donors need to be more rigorous at monitoring development finance interventions to support biodiversity and their outcomes. It is essential to understand when, where and why interventions have been successful in the past to pave the way to scaling them up.

Reinforce the quality and consistency of reporting on biodiversity-related ODF

• Resolve inconsistencies in how the Rio Markers and the SDGs are applied and interpreted by countries.

• Address the transparency, data gaps and inconsistencies in the tracking and reporting of development finance for biodiversity beyond the DAC. Many multilateral institutions still need to identify their biodiversity-related flows to the OECD and strengthen public reporting more widely. Non-DAC, South-South and triangular co-operation providers could also report to the OECD on biodiversity. While work is ongoing to enhance the quality and scope of data available on biodiversity, further guidance for bilateral donors may be necessary for them to track mobilised private finance and for multilateral donors aiming to target biodiversity-related activities.

• Increase transparency and unify standards across reporting obligations to the OECD and CBD; and provide more disaggregated information when reporting. This will improve data quality and comparability, simplifying data exchange and scrutiny, as well as communication.