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Colección: INTERAMER
Número: 69
Año: 2000
Autor: Ramón López and Juan Carlos Jordán, Editors
Título: Sustainable Development in Latin America: Financing and Policies Working in Synergy

Introduction

Biodiversity is mostly considered a public good that provides global, national, and local benefits but for which it is difficult to mobilize financing. Adequate financing for its conservation and sustainable use remains a very challenging endeavor. At the heart of this challenge lies the reality of the low perceived financial and political value of biodiversity, which is linked to often nonexistent or ill-defined property rights, and to insufficient knowledge about biodiversity and how to measure its socioeconomic value. In addition, there is a (wrong) perception that the protection of biodiversity does not directly affect the daily lives of increasingly urban populations (as do sanitation, air pollution control, etc.). Other contributing factors are multiple institutional and enforcement failures and, finally, often perverse or conflicting incentives.

The public-good aspects of biodiversity require governments to play an active role in formulating incentive and regulatory frameworks that assign it a higher priority than is currently the case. Additionally, the governments have international obligations under the 1992 Convention on Biological Diversity (CBD) to carry out conservation measures in their countries (NC-IUCN and TransGlobal, 1998).

Concerning the nature and volume of demand for biodiversity finance, the following can be stated:
  • The volume of demand for financing biodiversity conservation and its sustainable use is still difficult to quantify. More work should be done in this area. Rough estimates extrapolated from Colombia’s strategic action plan suggest that such demand may be on the order of 1% of GDP, or $16 billion a year. (Ministerio de Medio Ambiente, 1998).
  • Traditionally, resources for biodiversity conservation have been provided in government budgets, which have been diminishing, and international ODA plans. As a positive financial development, private-sector investment and financing are increasing (NC-IUCN and TransGlobal, 1998).
  • There are promising business opportunities that seek to use biodiversity sustainably. These include sustainable agriculture, ecotourism, non-timber forest products, bioprospecting, and sustainable forestry; many of them involve potentially growing markets and could become models for promoting sustainable investment and trade patterns through private-sector participation.
  • Access to a mix of financial instruments in the form of grants, special credit lines, risk and long-term capital, and guarantees could facilitate certain business opportunities in biodiversity conservation, as could a favorable and transparent regulatory and business environment. Unfortunately, these conditions are often lacking in the region.