“Without a doubt, our economy has been able to compete in areas like the attraction of tourism… not mass tourism that exploit[s] our natural resources ….but rather, tourism that [preserves the] natural heritage of Costa Rica.. [and].. biodiversity, which is a very important contribution in terms of creating jobs…and microenterprise[s]. -Laura Chinchilla Miranda, President of Costa Rica (Source: National Geographic and IDB documentary Wild Wealth)

“The model that we have used for development in Latin America has been an extractive model …and we've lost great elements of biodiversity… [We need] a different model that's based on sustainable use of some of these elements in a way that can generate economic development." -Cristián Samper, Director of the Smithsonian Institution's National Museum of Natural History (National Geographic and IDB documentary Wild Wealth)

The IDB’s Biodiversity Platform

The Inter-American Development Bank is seeking feedback on our “Biodiversity Platform”--an unprecedented effort on our part to maintain the LAC region’s remarkable biodiversity to the benefit of economic growth and well-being for all.

The Platform seeks to establish new ways of doing business for the Bank so that public and private investments will fuel growth, improve human well-being, alleviate poverty, reduce environmental risks—and at the same time--protect our region’s natural assets.

As a first step towards a fully endorsed Initiative, we have developed this Platform to help frame potential areas of action and to solicit feedback on the general direction being proposed.  

Why Focus on Biodiversity?
With 40% of the world’s biodiversity, the Latin America and Caribbean region possesses a vast and unique source of capital—natural capital. If these assets are wisely managed, biodiversity holds significant promise for long-term growth and prosperity. Well-managed biodiversity along with the ecosystem services that it provides can help the region meet the ever-increasing demand for energy, water, food, land and other natural resources as it grapples with a growing population that may total 700+ million people by 2030.   

Our Challenges
Investing in biodiversity poses definite challenges. For example, measuring the full economic value of ecosystems—including indirect benefits and non-use values—can prove difficult. In addition, most LAC countries still need to develop the capacity to regulate interactions between markets and ecosystems. Factors such as lack of political will, limited enforcement, and insufficient technical capacity make effective governance problematic.

Our Opportunities
Only by identifying and addressing challenges like these can we maximize opportunities. From developing sustainable business models to increasing investments in natural resource protection, there are multiple opportunities to facilitate growth in LAC. And due to the region’s strengths in physical, biological, and human capital, there is ample room to make development both socially and biologically sustainable.

Leveraging our strengths and experience
The IDB has a long history of success in financing conservation and ecosystem services. We work with countries in many stages of the project cycle and our projects to date cover a broad variety of objectives, biomes, issues, and actors. We use a mix of financing tools and market-based approaches, and we bridge the public and private sectors. With both regional scope and in-country presence, IDB has direct access to the national policy makers responsible for the development agenda.

Of course, there are also areas where we can improve. For instance, we want to enhance metrics for measuring impact on biodiversity conservation, create effective demand within countries for a sustainability agenda, mainstream biodiversity more systematically in all economic sectors, and increase awareness of biodiversity benefits, to name a few. We have much to learn from LAC countries, NGOs, corporations, researchers, scientists, and others who work with these issues every day. We want to build on our strengths to accomplish more.

Proposed areas of action and investment
We have identified four themes where the Platform can support investment, knowledge development, and capacity building. Within these areas, we want to:

  • Promote full understanding of the value and benefits of managing natural capital
  • Support the mainstreaming of biodiversity into economic sectors
  • Help countries achieve more effective biodiversity governance, policies and investments
  • Create new business opportunities that enhance the value of LAC’s biodiversity

Mainstreaming and accounting for the value of ecosystems
How do decision-makers value and incorporate the benefits of ecosystems—and what are the costs to ecosystems when we use them to produce goods and services? For example, how can we determine the value of coastal ecosystems that protect communities from natural hazards? Or forests that provide flood mitigation protection?  A strong case has been made in the past few decades for supporting conservation by taking advantage of the business opportunities that can be derived from new and sustainable uses of biodiversity.

However, valuing, quantifying, and accounting for the benefits ecosystems provide is challenging and complex.  Key lines of action for the Bank could include:

  • Attaining cost savings from ecosystem investments that reduce risk of  natural disasters and for ecosystem-based adaptation (using biodiversity and ecosystem services as a part of an overall adaptation strategy to help people adapt to the adverse effects of climate change)
  • Valuing the on-farm ecosystem service benefits of planting patches of native vegetation
  • Quantifying the supply chain impacts from production of food
  • Mapping ecosystem service flows to determine least-damaging placement of infrastructure projects  and thereby reducing, avoiding, and mitigating impacts to these resources

Beyond these potential lines of action, the Bank could:

  • -Actively pursue an agenda of systematically mainstreaming biodiversity and ecosystem services in that part of its portfolio that until now has not internalized these considerations.
  • Establish a niche in providing model energy generation, agriculture, extractives, and infrastructure and by providing private sector with financial incentives and technical support to ensure sustainable and inclusive growth with a strong biodiversity component.

Maintaining the biodiversity endowment
How do we protect and maintain the areas that serve as refuges for biodiversity? Over the past 20 years, hundreds of new protected areas (PAs) have been established in LAC so that today, 20% of the region’s land is protected—the highest share in the world. And we know they can provide economic benefits for local communities and beyond. However, a large number of these PAs are fragmented, poorly managed, and underfunded. The Platform recommends a number of actions including:

  • Support sustainable financing of protected areas (terrestrial and marine) and enforcement capacity
  • Consolidation of biological corridors in both public and private lands
  • Supporting regional ecosystem-based biodiversity conservation
  • Integrate climate change adaptation into conservation strategies

Promoting private sector investment in biodiversity
How can we further engage the private sector in LAC as a key player in the sustainable use and conservation of biodiversity?  We need to promote new business models that will help the private sector avoid risks from the impacts on ecosystem services caused by their operations.  These models might include promoting innovation in biodiversity-related products and biotrade and scaling up financing for viable green industries such as agriculture, forestry, and bioprospecting.

As part of the Platform, the Bank could increase its involvement by following up on these four opportunities:

  • Directly supporting policy and a regulatory environment for private sector investments in sustainable use of biodiversity and ecosystem services
  • Directly supporting biodiversity-related and biodiversity-enhancing businesses through technical assistance
  • Providing incentives for innovative applied research and early-stage investments in emerging opportunities capitalizing on biodiversity and ecosystem services in a sustainable and equitable manner
  • Providing financing (including guarantees) to scale up investments

Strengthening Governance and Policy Framework
Improving environmental governance holds the promise of greatly leveraging the region’s natural capital in a sustainable manner. However, effective governance poses several challenges, including the weak capacity of Governments to enforce and monitor their policies –for protected areas, land-use planning, and property rights. In addition, there’s a lack of knowledge about the social and economic benefits of biodiversity conservation and a strong need for the coordination and evaluation of conservation policies.

  • The Platform looks at several ideas for action:
  • Supporting the creation of an enabling environment for the private sector to invest in biodiversity conservation and ecosystem services
  • Strengthening the security of land tenure and improving land administration services.
  • Building capacity of government officials to apply existing indigenous and traditional natural resources management legislation that can ensure effective participation of indigenous and traditional peoples
  • Support for the integration of policies into economic sectors

The Platform in action
The Biodiversity Platform is meant to transform the way the Bank does its business and achieves its sustainability and biodiversity conservation goals. New resources, tools, and procedures are needed to make this work. Here’s a brief description of the operational components we are considering:

Supply the funds to get it done
Create a financing mechanism to support the preparation of loans and loan components to leverage Bank and other financing for investments in the thematic areas.

Awareness, knowledge, and capacity
There is a need to raise awareness, support knowledge development, and increase capacity both within the region and the Bank. Policymakers and professionals working in the energy, agriculture, infrastructure, and extractive industry sectors require a basic understanding of the benefits of biodiversity conservation (i.e. case studies, know-how to apply methods, tools for mainstreaming) within their sector. In addition, training, recruitment of environmental economists and biodiversity specialists, strengthening of regional professional networks, and establishing of monitoring systems are also needed.

Mainstreaming in country programming and sector work
The Bank knows that country dialogues and strategies are often developed in the absence of a sustainability framework. Therefore, resources and training could be provided to prepare Country Environment Assessments and sector studies, and notes could be developed using a framework to inform country strategies.

Put safeguard policy into practice
IDB can strengthen the proactive use of its Environment and Safeguards Compliance Policy (OP-703) by enhancing the practical application of the concept of ecosystem services (i.e. quantitative and monetary ecosystem services analyses to be included in the cost-benefit analysis of alternatives, baseline analyses of ecosystem services, and scenario modeling of impacts on ecosystem services).

Cement strategic partnerships
Strategic partnerships between IDB and regional institutions, governments, bilateral donors, foundations, private sector companies, the scientific community, NGOs, and civil society can help solidify endorsement of the Initiative, create new knowledge, bolster resources for implementation, disseminate results, and ensure transparency.

Evaluate for impact and accountability
The Bank intends to develop a Results Framework for the Biodiversity Initiative to ensure results can be reported and that there is overall accountability to our Board and member countries.

What do we need from you?
We need your guidance and best thinking as we prepare the Bank’s Biodiversity Initiative. Some of the things we’d like to know include:

  • If you are a Public Sector partner, what themes identified in the Platform are most compelling to you and why? Which themes are not? And what kind of governmental policies and regulations that protect the value of biodiversity and enable investment could the Bank be most helpful with?
  • If you are a Private Sector partner, what market prospects do you see for biodiversity-based commercial products and services? And what are the enabling conditions and incentives that would help promote private investments in these areas?
  • If you are a NGOs, foundation, or civil society representative, how could the IDB adequately address the needs of the poor and of local communities when addressing conservation of biodiversity? And how could the Bank best engage civil society and get input on specific areas, programs, and projects as the Initiative is finalized and implemented?
  • If you are a member of a Scientific Communities and Research Institutions, what research priorities in regards to biodiversity do you feel the Bank should support, and why?  And how could we best partner with you to tackle those priorities?

How to get involved
We are presenting our Platform at the Rio+20 Conference on Sustainable Development and will be seeking input from interested parties over the next six months. We will also be conducting four highly interactive regional stakeholder consultations.

Once we’ve synthesized and incorporated all the input, we will present a revised Platform to the IDB Board of Directors in December 2012. Upon their approval, we will launch the Biodiversity Initiative in March 2013. The Bank is wants to hear from you. Please check our website and let us know your opinion.

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