Publication: Mobilizing Private Finance for Nature
Loading...
Date
2020
ISSN
Published
2020
Author(s)
Editor(s)
Abstract
This paper argues that governments and regulators, supported by financial institutions and multilateral development banks (MDBs), hold the key to mobilizing private finance at the scale needed to transform the way we build, produce, and consume in order to protect nature while fostering sustainable poverty reduction. The analysis looks at two key approaches to mobilizing private finance for biodiversity. First, it assesses opportunities for ‘financing green,’ that is, the financing of projects that contribute—or intend to contribute— to the conservation, restoration, and sustainable use of biodiversity and its services to people. Second, it looks at ‘greening finance,’ that is, directing financial flows away from projects with negative impact on biodiversity and ecosystems to projects that mitigate negative impact, or pursue positive environmental impact as a co-benefit. Despite growing innovation in both categories, significant challenges to scaling up private finance remain. These include policies that exacerbate the underpricing of biodiversity; lack of data, measurement, and reporting standards; and issues with biodiversity investment opportunities, which tend to be small scale and noncommercial—making private sector financing a challenge.
Link to Data Set
Citation
“World Bank. 2020. Mobilizing Private Finance for Nature. © World Bank. http://hdl.handle.net/10986/35984 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Mobilizing Private Finance for Nature(World Bank, Washington, DC, 2023-09-25)Biodiversity and ecosystem services, or nature for short, underpin many aspects of economic activity and are deteriorating at an unprecedented level, with potentially far-reaching implications for economies worldwide. Sustained ecosystem damage can trigger regime shifts and generate systemic impacts on human well-being and economies. For example, the degradation of natural ecosystems has been associated with an increase in the probability of emerging infectious diseases. The COVID-19 pandemic is likely an example of how the disturbance of ecosystems can have systemic consequences. As biodiversity is often seen as a public and therefore open access good, its conservation, restoration, and sustainable use rely heavily on scarce public sector finance. Simultaneously, governments are spending vast amounts to promote economic activities that are potentially harmful to biodiversity. This paper argues that governments and regulators, supported by financial institutions and multilateral development banks (MDBs), hold the key to mobilizing private finance at the scale needed to transform the way we build, produce, and consume to protect nature while fostering sustainable poverty reduction. The analysis looks at two key approaches to mobilizing private finance for biodiversity. First, it assesses opportunities for financing green, that is, the financing of projects that contribute, or intend to contribute, to the conservation, restoration, and sustainable use of biodiversity and its services to people. Second, it looks at greening finance, that is, directing financial flows away from projects with negative impact on biodiversity and ecosystems to projects that mitigate negative impact, or pursue positive environmental impact as a co-benefit. Despite growing innovation in both categories, significant challenges to scaling up private finance remain. These include policies that exacerbate the underpricing of biodiversity; lack of data, measurement, and reporting standards; and issues with biodiversity investment opportunities, which tend to be small scale and noncommercial, making private sector financing a challenge. The paper provides a set of recommendations for governments, regulators, companies, financial institutions, and MDBs. These are synthesized into a set of big five approaches to mobilize private finance for biodiversity: environmental fiscal reforms to realign incentives with sustainable practices; national biodiversity data provision and planning; the establishment of a Taskforce on Nature-related Financial Disclosures (TNFD) to support biodiversity reporting; the establishment of a Nature Action 100 to drive change in the companies whose activities most threaten biodiversity; and the provision of catalytic, concessional capital for biodiversity funds and projects.Publication Implementing the Agenda of the Namibian Ministry of Environment and Tourism : A Rapid Country Environmental Analysis with a Public Expenditure Review for Aligning Policy, Institutional and Financing Priorities(Washington, DC, 2008-12)This report is organized around three thematic chapters. Chapter one looks at the contribution of the environment and tourism sector to the Namibian economy as well as at some key achievements and challenges. Chapter two describes the policy and legislative framework, and the institutional analysis of the environment and tourism sector. Chapter three examines the financing of the sector and some key budget management issues. And finally in chapter four of volume one, a set of recommendations and short- and medium-term actions are proposed that aim to assist the Ministry in the implementation of its up-coming work programs as well as the strategic plan. Chapter four of volume two includes the assessment of the financing of the sector at the local level using the example of the Erongo Region.Publication Expanding Financing for Biodiversity Conservation : Experiences from Latin America and the Caribbean(Washington, DC, 2013-01)The Latin America and Caribbean Region has been at the forefront of global biodiversity conservation, dedicating 20 percent of its land to protected areas compared to 13 percent in the rest of the developing world. This progress has stretched available budgets for conservation with estimates indicating that a twofold increase would be necessary to achieve optimal management of existing protected areas based on 2008 data. Recognizing the importance of this financing challenge, this document presents examples of how the region is successfully exploring news ways and sources of finance for biodiversity conservation. It is intended as an input to the global discussions on biodiversity financing drawing from a selective review of concrete experiences where governments are tapping nonpublic finance sources in effective partnerships. The cases reviewed point to common features contributing to their success: (i) variety in arrangements; (ii) enabling legal and institutional support; (iii) capacity based on record of experience; (iv) building social capital; (v) clarity about conservation objectives; (vi) strong government leadership in guiding biodiversity conservation policies and programs.Publication Nature Tourism, Conservation, and Development in KwaZulu-Natal, South Africa(Washington, DC: World Bank, 2003)The book provides an evaluation of, and policy advice on key environmental, social, and economic issues concerning the development of nature tourism. Using KwaZulu-Natal in South Africa as a case study, it highlights both the benefits, and trade-offs I promoting, an managing sustainable nature-tourism development, and it assesses how policy can enhance nature tourism's contribution to economic growth, poverty reduction, and conservation. The book's contributors explore three key issues. First, they consider the importance of moving beyond development of a wildlife industry, to the creation of a true nature tourism economy, that supports biodiversity conservation. Second, they explore the role of the private sector in contributing to equitable development, and job creation, while generating conservation finance. Third, they consider alternative pricing, and other market mechanisms that can help make nature tourism more viable, and growth-oriented. Ultimately, the authors argue, economic development, equity, and conservation objectives can be balanced.Publication Governance of Natural Resources in the Philippines : Lessons from the Past, Directions for the Future(Washington, DC, 2003-11-01)T his report analyzes natural resource management and governance in the Philippines, identifying recent trends, current challenges, and future goals. The first half of the report summarizes the status of the country's natural resources, describes sector policies, institutions, and budget mechanisms, and identifies impediments to improvements. The second half focuses on three crucial issues for natural resource governance: property rights, institutions, and financing. As part of its analysis of these three overarching issues, the report considers cross-cutting governance concepts such as participation, accountability, transparency, corruption, and service delivery. The report's final section offers conclusions and recommendations.
Users also downloaded
Showing related downloaded files
Publication Measuring Financial Inclusion : The Global Findex Database(World Bank, Washington, DC, 2012-04)This paper provides the first analysis of the Global Financial Inclusion (Global Findex) Database, a new set of indicators that measure how adults in 148 economies save, borrow, make payments, and manage risk. The data show that 50 percent of adults worldwide have an account at a formal financial institution, though account penetration varies widely across regions, income groups and individual characteristics. In addition, 22 percent of adults report having saved at a formal financial institution in the past 12 months, and 9 percent report having taken out a new loan from a bank, credit union or microfinance institution in the past year. Although half of adults around the world remain unbanked, at least 35 percent of them report barriers to account use that might be addressed by public policy. Among the most commonly reported barriers are high cost, physical distance, and lack of proper documentation, though there are significant differences across regions and individual characteristics.Publication Government Matters III : Governance Indicators for 1996-2002(World Bank, Washington, DC, 2003-08)The authors present estimates of six dimensions of governance covering 199 countries and territories for four time periods: 1996, 1998, 2000, and 2002. These indicators are based on several hundred individual variables measuring perceptions of governance, drawn from 25 separate data sources constructed by 18 different organizations. The authors assign these individual measures of governance to categories capturing key dimensions of governance and use an unobserved components model to construct six aggregate governance indicators in each of the four periods. They present the point estimates of the dimensions of governance as well as the margins of errors for each country for the four periods. The governance indicators reported here are an update and expansion of previous research work on indicators initiated in 1998 (Kaufmann, Kraay, and Zoido-Lobat 1999a,b and 2002). The authors also address various methodological issues, including the interpretation and use of the data given the estimated margins of errors.Publication Design Thinking for Social Innovation(2010-07)Designers have traditionally focused on enchancing the look and functionality of products.Publication Governance Matters IV : Governance Indicators for 1996-2004(World Bank, Washington, DC, 2005-06)The authors present the latest update of their aggregate governance indicators, together with new analysis of several issues related to the use of these measures. The governance indicators measure the following six dimensions of governance: (1) voice and accountability; (2) political instability and violence; (3) government effectiveness; (4) regulatory quality; (5) rule of law, and (6) control of corruption. They cover 209 countries and territories for 1996, 1998, 2000, 2002, and 2004. They are based on several hundred individual variables measuring perceptions of governance, drawn from 37 separate data sources constructed by 31 organizations. The authors present estimates of the six dimensions of governance for each period, as well as margins of error capturing the range of likely values for each country. These margins of error are not unique to perceptions-based measures of governance, but are an important feature of all efforts to measure governance, including objective indicators. In fact, the authors give examples of how individual objective measures provide an incomplete picture of even the quite particular dimensions of governance that they are intended to measure. The authors also analyze in detail changes over time in their estimates of governance; provide a framework for assessing the statistical significance of changes in governance; and suggest a simple rule of thumb for identifying statistically significant changes in country governance over time. The ability to identify significant changes in governance over time is much higher for aggregate indicators than for any individual indicator. While the authors find that the quality of governance in a number of countries has changed significantly (in both directions), they also provide evidence suggesting that there are no trends, for better or worse, in global averages of governance. Finally, they interpret the strong observed correlation between income and governance, and argue against recent efforts to apply a discount to governance performance in low-income countries.Publication Governance Matters VIII : Aggregate and Individual Governance Indicators 1996–2008(2009-06-01)This paper reports on the 2009 update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2008: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. These aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 35 data sources provided by 33 different organizations. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. The authors also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. They find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time. The aggregate indicators, together with the disaggregated underlying indicators, are available at www.govindicators.org.