Building Biodiversity BusinessReport of a Scoping Study

Joshua Bishop, Sachin Kapila, Frank Hicks, Paul Mitchell

Presentation to Conservation CEO’s11th October 2006

Source: Chape, S., Harrison, J., Spalding, M., and Lysenko, I. 2005. “Measuring the extent and effectiveness of protected areas as an indicator for meeting global biodiversity targets”Phil. Trans. R. Soc. B, 360, 443–455.

Progress on protected areas but much more needed to stem biodiversity loss

Growth in PA numbers and area Red List Index for birds

Adapted from: Butchart, S.H.M., Stattersfield, A.J., Baillie, J., Bennun, L.A., Stuart, S.N., Akçakaya, H.R., Hilton-Taylor, C., and Mace, G.M. 2005. “Using Red List Indices to measure progress towards the 2010 target and beyond”Phil. Trans. R. Soc. B, 360, 255–268.

The biodiversity financing gap and mainstreaming opportunities

Booming global carbon markets:

Total value of carbon contracts, US$ millions, reported by Natsource; IETA; World Bank (2005); Point Carbon (2006)

Start of European ETS (Jan 2005)

- A wave to ride and guide

- A model for biodiversity?

0

5,000

10,000

15,000

20,000

25,000

30,000

2003 2004 2005 2006U

S$ M

illio

ns ETS CDM & other

0

20

40

60

80

100

120

1998 1999 2000 2001 2002

US$

Mill

ions

(Projected)

How to stimulate biodiversity conservation by the private sector?

• Sticks

• Carrots

• Flexibility

Increase the penalty for damage / loss of habitat

Increase the reward for conservation effort

Consumers choose how much based on preferences

Producers choose level of performance based on costs

Scoping Study - Terms of Reference

Take a “snap-shot” of the current biodiversity business landscape

Review existing policy, legal and fiscal frameworks that enable biodiversity businesses to grow and develop

Assess the level of technical knowledge and material available with regards to biodiversity business tools

Analyse a range of approaches to financing biodiversity businesses

The process so far

• Scoping study: Jan-Sep 2006• Interviewed ~160 people in >50 orgs.• Expert workshop: May 2006• Draft report under-going review (>1000

people)

Findings 1: Sector Analysis

Direct• Bioprospecting• Biodiversity offsets• Biod. mgmt. services• Ecotourism• Sport hunting & fishing

Indirect• Agriculture• Forestry• Fisheries• NTFPs• Biocarbon• Watershed payments

Gaps & opportunities

What is working / not?

Key players

Where is it?

Status & Trends

What is it?

Sector

Findings 2: Mechanism analysis

• Enabling policy– Voluntary as well as mandatory– Corporate, local, national, international

• Business tools– Product development, quality control, supply-chain

management, marketing, biodiversity reporting• Financing instruments

– Grants, debt, equity

Finance

Enablingpolicy

Business tools

Assist NTFP producers with new product development, quality control, marketing and supply chain mgmt.

Provide investment capital to NTFP enterprises that adopt best

management regarding sustainable harvesting and local

community support

Help NFTP producers over-come regulatory hurdles to register their products and

enter new markets

Support independent certification of NTFP sustainability

The BBF

Think TankPolicyLegal

Fund

Debt / equity investments

Match Maker

Business development assistance

Review & evaluation of

business tools

Pipeline identification

CertificationMetrics

Workshop recommendations(Wye River, 30-31 May 2006)

• Enlist other partners

• Enabling policy is critical

• Focus on large-scale, systemic change

• Aim to ‘kick-start’ the biodiversity market

• Nurture a BBF on the back of a few ‘best bets’

• Sell-on successful pilots to bigger investors

• Develop clear targets and indicators of success

• Focus on constraints to biodiversity business

Selecting ‘best bets’ for potential pilot projects

• Biodiversity benefit• Pro-poor rating• Internal rate of return• Scalability• Timing• Risk• Relevance to IUCN, Shell & others

Best bet 1: Conservation Carbon

What?• Expand market for biodiversity-friendly

carbon offsets to mitigate climate changeHow?• Develop models, metrics and standards for

large-scale land use change• Mobilize buyers of carbon credits through

forest, wetland and/or soil conservation

Best bet 2: Biodiversity OffsetsWhat?• Provide site-based conservation to compensate

for the residual, unavoidable habitat loss caused by projects with a direct ‘footprint’ on land or sea

How?• Develop policy, tools and capacity to ensure

credible biodiversity offsets (BBOP)• Set up private conservation bank(s) for voluntary

and compliance markets• Promote a biodiversity “no net loss club”

– Site-level pilots and information sharing (BBOP)– Biodiversity reporting and compensation targets– Group-level offset policy with 3rd party verification

Best bet 3: Sustainable Biofuels

What?• Develop markets for biodiversity-friendly and

pro-poor biofuelsHow?• Develop meta-standard and multi-commodity

certification protocols for biofuel feed stocks (oil palm, sugarcane, soya, etc)

• Stimulate supply via direct investment in sustainable producers and marketing

• Research and development on biofueltechnology (e.g. perennial feed stocks)

Best bet 4: Biodiversity Management Services

What?• Support improved biodiversity management in

private companies and public agenciesHow?• Set up commercial consulting firm(s) targeting

leadership companies• Promote best-practice biodiversity management

tools, capacity-building, verification services

Next steps

• Revise and publish Phase 1 report• Agree TOR and funding for Phase 2• Build core team and partnerships• Business development phase

– Business plans for ‘best bets’– Pilot projects to test concept

Are we on the right track?

• Choice of best bets (Conservation carbon, Biodiversity offsets, Bio-fuels, Biodiversity management services)

• Process (scoping, reporting, business planning, pilots, eventually a ‘facility’)

• Partners (IUCN and Shell, with Forest Trends and others)

Thank you!

Contemporary challenges of biodiversity conservation

• Over-exploitation of biological resources• Under-supply of ecosystem services• Unfair distribution of costs and benefits• Inadequate government response

Biodiversity conservation must become…

• Bigger

• Better

• Faster

From US$10 Billion/year to $100 Billion/year or more?From 12% of land area to 15% plus marine PAs

More cost-effectiveSocially equitableWealth enhancing

Keep pace with land use change, biotechnology, climate change, public preferences