More National Work for Biodiversity, With International Funding Support Not Clear

Elpidio V. Peria
26 October 2014

Having just actively participated in the recent 12th Meeting of the Conference of the Parties (COP) of the Convention on Biological Diversity (CBD) that was held in Pyeongchang, South Korea from 6 to 17 October 2014, developing countries such as the Philippines should now take a closer look at the decisions agreed at such meeting since the agreements there will actually mean more work at the national level for the agencies dealing with biodiversity, such as the Biodiversity Management Bureau (BMB) of the Department of Environment and Natural Resources (DENR), the Philippines ministerial agency on environment, and this work will also mean having to engage other line agencies of the government on the removal of perverse incentives, tracking and reporting of financial flows for biodiversity-related initiatives, undertaking of effective actions for mobilization of domestic resources and the establishment of safeguards for biodiversity financing mechanisms.

Looking at the big picture, the Pyeongchang COP of the CBD affirmed the targets for resource mobilization that was earlier agreed to in 2012 in Hyderabad COP 11, which is the following:

“Double total biodiversity-related international financial resource flows to developing countries, in particular least developed countries and small island developing States, as well as countries with economies in transition, using average annual biodiversity funding for the years 2006-2010 as a baseline, by 2015, and at least maintain this level until 2020, in accordance with Article 20 of the Convention, to contribute to the achievement of the Convention’s three objectives, including through a country- driven prioritization of biodiversity within development plans in recipient countries

While it seems clear that the international financial flows is going TO developing countries, a closer look at the chapeau where this paragraph is found in the decision indicates that these funds, coming from an overall substantial increase in total biodiversity related funding for the implementation of the Strategic Plan for Biodiversity 2011–2020, is to come from a variety of sources, which includes South-South transfers of resources, which are usually done by big developing countries such as China, but not yet the Philippines at this stage, which also means all these will not be solely coming from developed countries.

This is the reason why China in the closing plenary of CBD COP 12 sought a technical clarification on what these flows (Other Official Flows or OOF) mean in the Financial Reporting Framework, a document that will surely tax the efforts of the country on how to fill up its 14-page contents, which seeks to provide baseline information and reporting on the Philippines’ contribution to reach the global financial targets, under Aichi Biodiversity Target 20.

It may be good on the other hand, that this reporting scheme will already be tried out so that the Philippines will be able to say in COP 13 whether the experience has been worthwhile, or which parts it cannot really fill up, which will require more capacity-building and training or there may simply be no data available.

This reporting scheme is similar to the monitor-report-verify (MRV) system established already in the UN Framework Convention on Climate Change (UNFCCC) which is what countries will have to report on in their greenhouse gas emissions cuts, among others. Compared to the MRV system in the UNFCCC, the CBD’s Financial Reporting Framework is largely similar minus the verification part, which was what Bolivia was pushing for in the CBD negotiations on resource mobilization of which this Reporting Framework was discussed. It may be that Bolivia noticed that there is no support for its MRV system for tracking the flow of financial and technological support from developed to developing, but this is already set up here in the CBD through this Financial Reporting Framework. Perhaps Bolivia should wait in COP 13 to see what lessons can be learned from the experiences of countries who will start to fill this up starting this year onwards to 2016 when COP 13 will happen, in Mexico.

Another item that should be closely paid attention to is the Annex on Milestones for the Full Implementation of Aichi Biodiversity Target 3, or the elimination, phase out or reform of incentives or subsidies harmful to biodiversity

What was agreed to in South Korea are the following tasks that should happen in 2015:

Development and inclusion of a national target reflecting Aichi Target 3 in revised national biodiversity strategies and the inclusion of pertinent action items in revised national biodiversity action plans. Action items MAY include:
• Undertaking national analytical studies that identify candidates for elimination, phase-out or reform of incentives, including subsidies, harmful for biodiversity, and that identify opportunities to enhance the effectiveness of existing financial instruments for biodiversity and to promote the design and implementation of positive incentive measures;
• Based, as appropriate, on the analytical studies above, developing policy plans that (i) identify those harmful incentives that are candidates for removal, phase out, or reform; (ii) provide for a prioritized list of measures leading to their eventual removal, phase-out, or reform; (iii) provide for a prioritized list of measures leading to the introduction, or strengthening, of positive incentives for the conservation and sustainable use of biodiversity; (iv) provide for associated timelines and milestones for implementation;
• In cases where incentives, including subsidies, are already known to have harmful effects and are already identified as candidates for elimination, phase out or reform, foreseeing immediate policy action in form of their elimination or initiation of their phase-out or their reform;

Having been involved in the consultations for the development of the Philippine Biodiversity Strategy and Action Plan (PBSAP) 2014-2028, it seems this target was not specifically included though in the iterative process for the implementation of the PBSAP, the studies called for by what was agreed to in South Korea will have to be done, in 2015.

This is going to be an interesting study for there have been too many incentives, not only in the environmental sector but in agriculture and trade as well, that needs to be analyzed whether they are really harming or advancing the cause of biodiversity conservation and sustainable use. In the Global Biodiversity Outlook 4, what were cited as examples of subsidies for phasing out are subsidies for fuel use in the fisheries sector which promotes overfishing. In the Philippines, the advocates of anti-mining might look at the incentives being given to the mining sector as something that may need to be phased out, as they result in the destruction of biodiversity or, if that gets too difficult, DENR can also examine the various tenurial instruments it is issuing, an example is the pasture lease agreements like here in General Santos City which was reported before by one City Councilor many years back to be charging only a measly few pesos per hectare per year leading to a perverse incentive to hoard a large tract of land where only a few families benefit.

In addition to this upcoming struggle on identifying which environmental incentives or subsidies are harmful or beneficial to biodiversity, another task that will have to be looked into is Annex which relates to the establishment of Voluntary Guidelines on Safeguards for Biodiversity Financing Mechanisms.

The Philippines actually raised an issue in the negotiations for resource mobilization why are these safeguards being given a go-signal when biodiversity financing mechanisms have not been fully adopted or endorsed by the Conference of the Parties. Canada replied that way back in COP 9, in 2008, in Germany, the CBD has already adopted new and innovative financial mechanisms, which is what biodiversity financing mechanisms were then called. Upon closer examination of the said COP 9 Decision, which is Decision IX/11, para. 10, goal 4, what was adopted then was the task of exploring these mechanisms whether they would be a good means of supplementing the resource mobilization efforts for the broader goal of biodiversity conservation.

These new and innovative financial mechanisms were so controversial a draft decision on it was withdrawn in COP 10 in Nagoya as Bolivia then, echoing the views of many developing countries, looked at these mechanisms as full-on commercialization and financialization of biodiversity. These mechanisms are a way for the private sector to come in and come up with financial products and commercial schemes to make money out of biodiversity.

Now, as biodiversity financing mechanisms, for countries who are wary about what these mechanisms may bring, what the CBD COP suggests it should do is establish voluntary guidelines, mainly the application and recognition of the rights of indigenous peoples and local communities, including women, to mitigate the effects of these mechanisms when they are used in the country, or to put a level playing field between the private sector and the communities who may be disadvantaged by these mechanisms. What is clear though is that these safeguards have not yet been tried out, so we don’t really know if they will really act as a true safeguard when all these financing mechanisms will have been implemented.

These mechanisms could very well connect with REDD+ mechanisms in climate and given that the CBD also welcomed the REDD+ mechanism adopted in UNFCCC’s COP 19 in Warsaw last year, the Philippines, like any other developing country will have to figure out whether it will come out a winner or a loser in these schemes.
Finally, another set of tasks that will have to be done at the national level, by the government is annex IV of the Decision on resource mobilization which is dubbed as PROPOSALS FOR CONCRETE AND EFFECTIVE ACTIONS FOR IMPLEMENTING AICHI BIODIVERSITY TARGET 20 AND ASSOCIATED FINANCIAL TARGETS, just a sample of the things that will have to be done, albeit depending on the country’s capacity, are the following:

• Consider undertaking national assessments to capture the broad range of biodiversity values in accounting and reporting systems

Or how about

• Engaging in environmental fiscal reforms including innovative taxation models and fiscal incentives like granting tax exemptions or tax credits in national income or corporate taxation systems for biodiversity-related donations or activities; establishing ecological fiscal transfers as a means for burden sharing; and establishing reduced value added tax (VAT) rates for products that have less impact on biodiversity

Among all these other national actions to mobilize domestic financial resources for biodiversity, one good result of all these apparently difficult tasks is the recognition of “collective action”, which entails documenting the efforts of indigenous and local communities in conserving biodiversity, and as called for by the Decision, to evaluate the contribution of collective action to biodiversity conservation and resource mobilization, including by establishing pilot projects, and this is where funding may be provided to developing countries who may undertake these pilot projects.

This “collective action”, described as a non-market-based mechanism, could be the same notion that can be applied in the non-market mechanisms being discussed in the UNFCCC, though more conceptual and methodological work needs to be done to be certain what these are in relation to the mitigation actions in the UNFCCC.

Over-all, just doing all these tasks, from filling up the Financial Reporting Framework, studying which perverse biodiversity incentives to reform, establishing safeguards for biodiversity financing mechanisms and undertaking any other appropriate effective action to mobilize domestic resources for biodiversity conservation, the country is on its own, it will have to rely on its own resources and technical people to do these tasks and commitments, perhaps in undertaking pilot projects for collective action it may be able to secure international assistance, but ultimately, it will have to make do with what it has.

This is the new scheme of domestic resource mobilization for biodiversity conservation work that all countries attending the COP 12 in South Korea agreed to. Countries now will have to do more, using its own resources, and will begin not to rely in international financial resource flows. Can they manage? We will soon find out.


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