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Government subsidies that favor biodiversity by supporting individuals and organizations acting in biodiversity friendly ways. Subsidies can take many forms including tax relief, technical support, price support, etc. This can include biodiversity friendly businesses such as ecotourism, sustainable agriculture, non-timber forest products, reduced impact forestry, fisheries, etc.

Measurable conservation outcomes resulting from actions designed to compensate for significant residual biodiversity loss arising from project development after appropriate prevention and mitigation measures have been taken. Offsets can, for example, deliver biodiversity benefits (e.g. reforestation) through a transaction, where offset sellers (e.g. a conservation NGO) sell offsets to developers (e.g. a mining company) who seek to compensate the residual biodiversity loss. Offsets have been established in the agriculture, forest, construction, manufacturing and mining sectors. The aggregating of offsets under a policy framework can optimise the biodiversity benefit by increasing ecosystem connectivity, preventing future habitat fragmentation and creating large contiguous sites.

Bioprospecting is the systematic search for biochemical and genetic material in nature in order to develop commercially-valuable products for pharmaceutical, agricultural, cosmetic and other applications. The rationale is to extract the maximum commercial value from genetic resources and indigenous knowledge, while creating a fair compensation system that can benefit all.

The fee charged to the importer of biological material into a country. It can be used to recover the expenditures of the national agency mandated with preventing alien invasive species (AIS), health threats and other agricultural pests from entering certain geographical areas. Mostly used in island states. It can also be part of an import duty or fee.

Incentive mechanism that awards biodiversity friendly behavior or decisions a bonus payment and non-friendly a malus payment. Has been applied on private land owners to encourage establishment of spatially adjacent (or for certain species spatially dispersed) protected areas to existing protected areas by awarding the land owner a bonus payment (or to pay a malus) when the conservation is adjacent to existing protected areas. Oregon’s Conservation Reserve Enhancement Program (CREP), used malus payments to assist the recovery of salmon and trout species through the creation of riparian buffers along stream habitat.

Carbon markets aim to reduce greenhouse gas (GHG) emissions cost-effectively by setting limits on emissions and enabling trading of emission units (instruments representing emission reductions). Trading enables entities that can reduce emissions at low cost to be paid to do so by high-cost emitters, thus lowering the economic cost of reducing emissions. Carbon markets can include emission allocation credits as well as emission reduction credits such as carbon offset credits. In various carbon markets, forest or agricultural based offset credits may be used to offset industrial emission

Financial or other compensation paid by companies, private individuals, or governments for planned environmental damage as part of infrastructure or project development. Compensation levels and forms of compensation are usually determined by law and can be fixed amounts, calculated relative to investment or company sizes, or based on remediation costs and economic damages.

A conservation easement is a restriction placed on a piece of property to protect its associated resources. The easement is voluntarily donated, can generate tax credits, or can be sold by the landowner. It limits certain types of uses or prevents development from taking place on the land in perpetuity while the land remains in private hands. Easements protect land for future generations while allowing owners to retain certain private property rights. Conservation easement are traditionally incentivised with tax breaks.

Special commercial products featuring wildlife are sold at an extra price to costumers and the extra revenues are channelled to environmental causes and projects illustrated by the product/item, mostly related to conservation and the protection of wildlife. Examples include, licence plates, special ringtones and screensavers (mobile communication), gifts sold at zoos, etc.

Corporations provide support to organizations implementing sustainable development including nonprofits through direct-giving programs, private foundations, and/or public charities. As well, companies can also offer their employees’ time by encouraging employee volunteerism. A foundation can be established as part of a company’s corporate social responsibility (CSR) strategy and be funded via the allocation of a percentage of accrued profits, an endowment or other means. Annual giving could range from a few hundreds thousands of dollars to hundreds of millions. They may or may not have a specific mandate or geographic coverage. Some companies and corporate foundations have a focus on biodiversity and conservation.

Special form of government taxation that requires (usually large) companies to spend a percent of their profits every year on corporate social responsibility (CSR) – usually through financing NGOs or paying into government social investment funds. The main difference from traditional taxations is that the companies will be able to decide where to invest and implement programs. This solution has been piloted in only a few countries (e.g. India, Seychelles), with limited documented evidence of its effectiveness relative to other approaches.

The integration of sustainability thinking and practice in business operations helps companies live up to their responsibilities as global citizens and local neighbors and can significantly strengthen business resilience and profitability. Effective corporate sustainability can offer clear business benefits for operations, reputation, new products and markets, and finance and can significantly reduce business risks. A vast literature and international standards can help companies to follow more sustainable business practices.

Numerous cost-effectiveness measures can save money and improve outcomes for government, civil society organizations, and private businesses. Solutions that institutionalize cost effectiveness analysis can be done through regulatory practices, organizational or national policy approaches, and changes in organizational culture or planning practices.

The practice of securing funding for a project or business venture by a dispersed group of people: the crowd. It takes places via online platforms that connect the investor or the donor with the project owner without the intermediation of a financial organization. Different platforms coexist: reward-based where individuals support campaigns and receive some kind of reward in return; donation-based where there is no expectation to receive a tangible benefit; equity-based where individuals invest and receive equity-like shares in return; and lending-based where individuals lend money and expect the repayment of a principal with or without interest.

Through debt restructuring agreements, governments are able to write off a proportion of their foreign held debt. The savings accrued will be channelled into domestic conservation initiatives and climate adaptation programmes. This often entails the establishment of a Conservation Trust Fund to channel the funds. Debt-for-nature swaps can target both official and commercial lending, with the former being the most common scheme.

Insurance schemes that cover– against a premium– financial losses due to extreme weather and natural disasters (i.e. such as earthquakes, floods). If the event occurs, the insurer refunds a percentage of the loss. Insurance is widely used to increase households’ and enterprises’ resilience to shocks. Forests and other natural assets can be insured.

Increasing the amount of taxes, fees, and other financial revenues derived (or not) from biodiversity related resources that are earmarked (ring-fenced), retained or returned for direct use on sustainable biodiversity management. The retention or return of these revenues can align incentives of various actors, increased funding available, and improve service provision. There is a risk that they produce an incentive to overuse resources for an organization’s financial gain. This is often more politically feasible when revenue share partially goes to sustainable development. Examples – PA fees in Galapagos – all go to treasury then 50% back to municipalities, address livelihoods of artisanal fisheries to reduce pressure on biodiversity.

Tax placed on a specific financial transaction, such as the purchase or sale of equity instruments, options and forward contracts, or foreign currency transactions. The revenues obtained maybe earmarked or guaranteed for biodiversity or related spending. For example, a share of the French financial transaction tax will be allocated to the capitalization of the Green Capital Fund.

Intergovernmental fiscal transfers redistribute tax revenues across government levels-from national and regional to local jurisdictions-according to agreed principles and priorities. Integrating ecological services means including conservation indices (e.g. size/quality of protected areas) in the fiscal allocation formula-thus rewarding investments in conservation and incentivizing the expansion of protected areas, forests or other natural capital.

Cluster of cost-effectiveness measures that can enhance an organization’s procurement practices and thus free resources for programming. Typical measures include central procurement, digital procurement, process flow analysis, supplier optimization, green procurement, etc. While not specific to biodiversity, these measures can and should be considered by conservation organizations to optimize their spending practices. The resources saved can be reinvested in conservation.

Measures promoting quality spending of committed funds and removing related obstacles to effective spending. Effective budget execution (also termed delivery) is a percentage of annual public budget allocations that are actually spent by government agencies and can vary from as low as 40 percent to as high as 90 percent. Related obstacles are often due to delays in financial flows or capacity constraints. Incentives (e.g. staff incentives) and support (i.e. additional capacity) can be provided to increase the delivery. While not specific to biodiversity, these measures can and should be considered by conservation organizations.

An informal or formal commitment by a community, private landowner, NGO or corporate landowner to sustainable manage and/or formally protect a specified land or marine area. Incentives are sometimes provided to encourage or support landowner participation.

Funding instrument that distributes grants (or concessional finance) to profit-seeking projects on a competitive basis. It subsidizes private investment in developing countries where there is an expectation of commercial viability accompanied by measurable social and/or environmental outcomes. Challenge funds can mitigate market risks, while spurring innovation to fight poverty and reduce environmental degradation.

Insurance schemes that cover against environmental liabilities (i.e. the financial risk associated with environmental pollution and contamination) in exchange for a premium. In addition to preventing future expenditures and thus reducing business risks, they can provide contingent resources for immediate remedial action in the event of an environmental disaster.

Environmental (and Social) Impact Assessments (EIA) are conducted to evaluate the environmental and social risks of a development project including mining, hotels, and other large infrastructure projects. A range expenditures and investment to preserve nature are associated with the EIA process including permitting fees, expenditures for the assessment itself, expenditures for implementation of the environmental and social management plans, performance bonds, insurance products, biodiversity offsets etc. Additionnally, penalties may be directly triggered by non-compliance to the EIA and its associated management plans.

Merging two or more organizations can produce economies of scale and allow public and private organizations to substantially reduce operational and financial costs. For example, operational costs can be reduced by merging environmental trust funds and protected areas authorities with similar mandates. While not specific to biodiversity, these measures can and should be considered by conservation organizations. The resources saved can be reinvested in conservation.

Guarantees can mobilize and leverage commercial financing by mitigating and/or protecting risks (such as political, regulatory, and foreign-exchange risk), notably commercial default or political risks. Guarantee programs are often designed to help entrepreneurs obtain bank financing by dealing with collateral constraints. The guarantee functions as a promise by the guarantor to the lender that, in the event that the borrower defaults on payment, the guarantor will repay the lender a specified proportion of the foregone principal. This allows traditional lenders to take risks and learn new markets outside current risk profiles. The scheme can be attached to biodiversity related businesses which are often operating in non-mature markets and lack financial records.

State or donor-sponsored financial entity that works in partnership with the private sector to increase investments into green businesses and markets that are underserved by commercial finance. The backing from a Government (or donor) guarantee the Bank can catalyze private investments and introduce new financial products. While the emphasis has traditionally been on renewable energy, the focus of green banks can extend to other environmental areas including conservation and biodiversity.

Green bonds can mobilize resources from domestic and international capital markets for climate change adaptation, renewables and other environment-friendly projects. They are no different from conventional bonds, their only unique characteristic being the specified use of proceeds which are invested in projects that generate environmental benefits. In its simplest form, a bond issuer (public or private) will raise a fixed amount of capital, repaying the capital and accrued interests over a set period of time. Sovereign bonds and forest bonds are being issued to finance biodiversity related activities.

Lending facility by a development or commercial bank or a microfinance institution that positively screens or actively encourages environmentally beneficial loans. The facility or fund may have specific requirements for loan approval or allocation in the form of environmental criteria and assessments. Criteria can include an identified sub-sector (e.g. climate change adaptation) or reference to certain best practices (e.g. via certification of sustainable agricultural/forest management practices).

A government, company or other entity establishes and enforces procurement rules that favor or require socially and environmentally responsible products such as efficient lighting, certified paper products, certified palm oil, etc. Large companies and governments can have a significant impact on the market through green procurement.

Better management of human resources can improve an organization’s effectiveness and efficiency and is critical to achieving cost-effectiveness. A vast literature is available on strategies to improve the management of human and social capital, including through, for example, monetary and non-monetary performance incentives and training. One example is reviewing and enhancing the human resources strategy for a protected area system. While not specific to biodiversity, these measures can and should be considered by conservation organizations. The resources saved can be reinvested in conservation.

Investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return. Impact investors invest in innovative but commercially viable business in sectors like sustainable agriculture, affordable housing, affordable and accessible healthcare, clean technology, and financial services for the poor. Along with health and inclusive finance, the protection of the environment is a core area of impact investment.

Direct or indirect public transfer or other incentive to business for the adoption of sustainable business practices that help to improve biodiversity management. Explicit subsidies, financed either on-budget or off-budget (e.g. through a State Owned Enterprises), comprise monetary transfer -including income support (producer); market price support (consumer and producer); export subsidies (producer); public procurement above the market price; foregone taxation including reduced taxation, tax breaks, tax rebates, accelerated depreciation of assets; in-kind provision of inputs and services, including extension services; in-kind provision of infrastructure; provision of capital at concessional rates.

Increasing ODA flows through better programming and delivery, training on grant preparations or other targeted efforts. Official agencies, including state and local governments, or their executive agencies channel aid to recipient countries with the objective to address environmental challenges. The donor(s) transfers financial resources to awarded programmes and projects directly or indirectly through accredited agencies, private companies, and civil society organizations (NGOs). Although the most common disbursement is grant financing, funding may come in a variety of forms, including concessional loans, guarantees and equity. For the latter modalities in particular, OECD guidelines can be applied to define the type of aid provided.

Islamic finance is a unique form of socially responsible investment that abides with the Shari’ah Islamic law, principles and rules. Shari’ah does not permit receipt and payment of “riba” (interest), “gharar” (excessive uncertainty), “maysir” (gambling), short sales or financing activities that it considers harmful to society. Instead, the parties must share the risks and rewards of a business transaction. Islamic finance and particularly green Sukuk are emerging as alternative green finance products.

Lobbying for additional allocations (or retention of current allocations in case of public cuts) towards conservation and biodiversity by line ministries or national, regional and local authorities. This requires a profound understanding of the budgeting process, a strong business case, and awareness raising, advocacy and communication efforts. Lobbying strategies may target both earmarked and non-earmarked resources (e.g. emergency funds, special funds).

Governments and civil society groups using lotteries as a means of raising funds for benevolent purposes such as education, health, historic preservation and nature conservation. The lotteries are a form of gambling that involves the drawing of lots for a prize, and include instant games, lotto, and electronic terminals. In Europe and the USA, some wildlife trusts and conservation organizations receive a large part of their funding from the proceeds of lotteries.

Identify and model policy interventions that can lower the barriers that hold back private investment in biodiversity-friendly sectors. The aim is to lower the capital costs of investment and achieve a better risk-return profile for investors and for companies receiving financing. The analytical framework and model developed for renewable energy may be adapted to conservation investments.

Allows customers to conduct financial transactions using mobile devices. Due to the higher cost of traditional banking (i.e. establishment of physical presence) in developing countries, mobile banking expands financial inclusion among the poor and among populations living in remote locations. Beyond commercial banking services, the same system can be used to pay taxes, receive Government benefits or regulate other payments (e.g. payments for ecosystem services). Associated systems allow for microenterprise loans financing solar panels and other environmentally beneficial investments.

Nature and conservation receive large amount of resources from private donations and philanthropies. Different fund-raising strategies and marketing campaigns are used by non-governmental organizations and conservation societies to raise funding from private citizens including memberships, fundraising events, etc.

Formal protected areas governed (and in many cases owned and managed) by a non-state entity such as indigenous peoples and/or local communities; private individuals or organisations; or a combination of these with state involvement. This model allows for the state to forego costs of land purchase in order to establish a protected area, and often results in the management costs of the protected area to be shared between the state and the non-state entity, or carried entirely by the non-state entity.

To influence individual’s behavior in a biodiversity favorable direction using psychology rather than financial incentives. The most cited example of a nudge is the etching of the image of a housefly in the men’s urinals at Amsterdam Shiphol airport. Nudging has been applied in natural parks to reduce that incident of visitors bringing home stones by simply changing the text of the signs. In Finland forest owners’ landscape management preferences were nudged to improve social efficiency of PES schemes for biodiversity conservation which increased aggregate service provisioning. Can work as a complement to increase the effect of other solutions such as different forms of protected areas and eco- tourism.

The public and private sector outsources part of their operations to more efficient or knowledgeable business partners. The process usually requires the set up of a competitive bidding process and of a quality control process to oversee external partners’ performance. It is widely used in both the private and public sector to benefit from economies of scope and scale. While not specific to biodiversity, these measures can and should be considered by government and conservation organizations.

Fees for access to rangelands on public lands including in Protected Areas. Fees and permits are used to regulate usage and avoid overgrazing and rangeland degradation.

Beneficiaries/users of an ecosystem service, such as water regulation, make a direct or indirect payment to the provider of that service in exchange for service provision and maintenance. This “user pays” concept is that whoever preserves or maintains an ecosystem service should be paid for doing so. Beneficiaries/users of an ecosystem service can make a direct payment to the provider of that service through a private contract or an indirect payment through the intermediation of the State who charges the users through a tax or fee. Payments for ecosystem services are mostly found in the water, forest, agriculture and energy sectors. Also known as “Payment for Environmental Services”.

Compensation paid by a company and/or individual condemned for an environmental crime and/or unintentional damages to the environment. Prevalent environmental crimes include illegal wildlife trade, illegal waste, manmade disasters and spills, etc. Charges can include fixed fines, remediation costs, and economic damages. The compensation is usually determined by the law. The amount of the compensation might be determined by an assessment of economic loss and remediation costs.

Project Finance for Permanence (PFP) is an innovative approach to permanently and fully funding conservation. The terminology is borrowed from Wall Street, where a single “closing” is negotiated with Government, foundations and private donors to gradually eliminate the gap in protected areas financing. PFPs is a solution for graduating from piecemeal funding initiatives. Successful PFPs were completed in Brazil, Costa Rica and Canada.

To encourage the incorporation of natural capital into national and enterprise accounts can support better financial and economic decisions as well as influence spending and investment in the medium to long term. Natural assets are the “the naturally occurring living and non-living components constituting our biophysical environment.” They produce ecosystem services that provide great economic benefit to humanity and the planet but tend to receive inadequate financing of policy support. Better economic accounting for natural capital can assist policy makers better incorporate ecosystem services and natural capital in decision making.

The promotion of sustainable tourism through an enabling legal framework and direct or indirect incentives. Responsible travel to natural areas can provide an alternative sources of income for the conservation of protected areas and the welfare of local communities. Receipts from tourists include accommodation and catering as well as any expenditure in the country where they travel to. The Government benefits from the direct and/or indirect taxation. To promote sustainable tourism is particularly critical in the early development stages and can direct tourism investment towards sustainable infrastructure and tourism activities.

Reform, green or phase out a subsidy that directly or indirectly harms biodiversity. Subsidies can take the form of direct transfers, tax credits, and regulatory advantages that generate economic or financial benefits to the recipient. A wider definition may include implicit subsidies which are defined by the failure of internalize negative externalities to the environment (e.g. pollution). Subsidies are usually set and organized within economic sectors. Subsidies harmful to biodiversity include various measures in agriculture, fisheries, transport and infrastructure, construction, land used change, forestry and energy. Reforming or reducing these harmful subsidies can result in government savings and reduced future environmental costs.

Private transfers from a migrant worker (i.e. living in a foreign country for one year or longer) to a receiver (often but not limited to family) in his/her country of origin. When remittances are not used to respond to immediate consumption needs, they can be saved and invested at the benefit of the local economy/ community/ environment of the worker’s country of origin. Diaspora bonds, saving products and investments are all available instruments to channel resources towards conservation and other sustainable development investments.

Planning and strategic management tool seeking to link budget allocations with anticipated results. The introduction of result based budgeting (RBB) contributes to achieving cost-savings and better defining priorities in the allocation of scarce public or private resources. While considered a best practice world wide, only a few countries fully implement result based budgeting. It can also be referred to as performance based budgeting or outcome-based budgeting. Its introduction in conservation can help to mobilize additional public resources as well as to increase spending effectiveness. Results based budgeting is defined as a budgeting process which revolves around a set of predefined objectives and expected results, which, in turn, justify the resource requirements linked to outputs, and where actual performance is measured using objectively verifiable indicators.

A public-private partnership or performance-based financial tool that allows private (impact) investors to provide upfront capital for traditionally public projects that deliver social and environmental outcomes. If the project succeeds, the investors are repaid by the Government (Social Impact Bonds), an aid agency, or other philanthropic funder (Development Impact Bonds) with capital plus interest. If the project fails, the interest and part of the capital is lost. While commonly referred to as a “bond”, the solution replicates in essence a payment-for-results scheme. It cannot be compared to commercial bonds, green bonds or other impact bonds as an instrument except in that it seeks to repay capital and provide interest. The approach is also referred to as pay-for-success in the United States and as a social benefit bond in Australia. It can be applied to conservation.

State owned investment funds capitalized from balance of payments surpluses, foreign currency operations, royalties on extractive industries and other transfers and economic rent. Available resources are generally invested in capital and equity markets often through intermediaries to achieve returns. These returns are either re-invested or distributed to the Government or other recipient entities. Their investment policies can be oriented towards sustainable standards and practices-for example by investing a percentage of the capital in green bonds or impact investing. Similarly, the distribution of annual transfers may be earmarked to the environmental-particularly if the sovereign fund is capitalized from natural resource royalties.

Voluntary, usually third party-assessed, norms and standards relating to environmental, social, ethical and food safety issues, adopted by companies to demonstrate the performance of or the sourcing of their products. They include eco-labels, organic and fair trade certifications.

General (local and national) taxes and special levies charged in exchange for a service, for example water and wastewater bills, property assessments or fees/charges applied to improve the quality of the water, and developer fees which may fund water infrastructure and watershed rehabilitation.

The collection of taxes and fees (or comparable instruments such as the sale or auctioning of concessions) from the tourism sector and/or directly from tourists. This revenue can provide guaranteed financing for protected areas or other biodiversity conservation measures either through retaining fees, revenue sharing agreements with communities, or receiving earmarked transfers from the central government.