BIOFIN Catalogue of Finance Solutions

BIOFIN Catalogue of Finance Solutions

The biodiversity finance landscape is changing. Both domestic and international financial flows have grown and the range of financing instruments, providers and delivery mechanisms now available is significantly wider than ever before. This online “catalogue” is a comprehensive list of these instruments, tools and strategies that are applicable to the field of biodiversity finance. Each catalogue entry is a mechanism or “finance solution” and includes a brief description as well as links to guidance material or case studies.

The searchable catalogue below provides a listing of all solutions profiled. Solutions can also be searched by the financial result they produce, the financial instrument they rely upon, whether they are public or private finance, and the economic sector in which their use is most prevalent.

This finance solutions catalogue is open source and is available for anyone to use. BIOFIN encourages the use of the catalogue and the sharing of it on other websites. We request that any other organisation sharing or using elements from the catalogue appropriately acknowledge UNDP-BIOFIN and alert us to its use by sending an email to BIOFIN@undp.org. We also request that you include a link to this page as the original source of the biodiversity finance solutions catalogue.

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Finance Solutions

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68 Results

Mobilization of private donations

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.

Result

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Public/Private
Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Non-state Protected Areas

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.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Type

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Fishing

Fishing

Forests

Forests

Protected Areas

Protected Areas

Tourism

Tourism

Water

Water

Nudging

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.

Public/Private
Public

Public

Private

Private

Outsourcing strategies

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.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Type

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Pasture (and grazing) fees

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.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Other

Other

Protected Areas

Protected Areas

Payment for Ecosystem Services

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".

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Payment for Ecosystem Services-state intermediation and/or fee

Beneficiaries/users of an ecosystem service make a indirect payment to the provider of that service through an intermediary such as the state where the public authority disburses the compensation to the service provider for conservation for maintenance.  To fund the compensations, countries either rely on the general budget or introduce PES-like taxation systems with special-purpose taxes and fees, targeting the tourism, water, electricity, transport and extractives sectors (i.e. the beneficiaries of the ecosystem services). Mexico has a national level scheme that also encourages the establishment of private to private PES systems.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Payment for Ecosystem Services-private to private

Beneficiaries/users of an ecosystem service make a direct payment to the provider of that service. The system can be voluntary using a private contract. Payments are mostly found in the water, forest, agriculture and energy sectors. For example, Nestle (formerly Vittel) pays farmers to refrain from using chemicals in north-eastern France and the City of New York pays farmers and other land owners to protect watersheds in the Catskill mountains, thus saving billions of dollars by aoviding the construction of major water treatment systems.

Result

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Penalties and other compensation for unplanned environmental damage

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.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Project Finance for Permanence

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. 

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Finance

Finance

Fishing

Fishing

Forests

Forests

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Countries:

Promoting natural capital accounting

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.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Fishing

Fishing

Forests

Forests

Protected Areas

Protected Areas

Water

Water

Natural capital accounting-natural capital protocol - corporate natural capital accounting

Every business impacts and depends on natural capital to some degree and will better manage risks and opportunities associated with natural capital if they seek to integrate natural capital accounting into decision making. All impacts and dependencies create costs and benefits for the business and society. Understanding these connections can better inform corporate decision makers, investors, and clients. The natural capital protocol provides detailed guidance to enterprises.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Tourism

Tourism

Trade

Trade

Water

Water

Natural capital accounting-national accounts

National-public-natural capital accounts measure the stocks of natural capital and flows of services supplied by them. Methodologies and international standards exist for calculating forests, land and water accounts, while more experimental exercise are being piloted for biodiversity and ecosystems. The incorporation of natural capital into national accounts can support better financial and economic decisions as well as influence spending allocations in the long term.

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Sector

Agriculture

Agriculture

Energy

Energy

Fishing

Fishing

Forests

Forests

Mining

Mining

Protected Areas

Protected Areas

Trade

Trade

Water

Water

Promotion of sustainable tourism

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.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Public/Private
Private

Private

Sector

Protected Areas

Protected Areas

Tourism

Tourism

Reform subsidies harmful to biodiversity

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. 

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Sector

Agriculture

Agriculture

Energy

Energy

Fishing

Fishing

Forests

Forests

Protected Areas

Protected Areas

Remittances

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.

Result

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Debt/Equity

Any solution that invovles an obligation or liability to make a payment and/or the acquisition of ownership rights (equity, property or financial asset).

Debt/Equity

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Result based budgeting

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. 

Result

Avoid

Any measure that can prevent or reduce future investment needs by eliminating/amending existing counter-productive policies and expenditures (e.g. taxes on sugar content or tobacco).

Avoid

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Realign

Any measure that can re-orient and realign existing financial flows towards biodiversity conservation. 

Realign

Type

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Regulatory

Any solution that involves a regulatory reform, i.e. the imposition of a certain behaviour through the law or a regulation.

Regulatory

Public/Private
Public

Public

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Social and development impact bonds

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.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Debt/Equity

Any solution that invovles an obligation or liability to make a payment and/or the acquisition of ownership rights (equity, property or financial asset).

Debt/Equity

Fiscal

Any solution that involves a fiscal reform, i.e. changes in taxation or the modification of a subsidy's regime.

Fiscal

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Risk

Any solution that invovles the transfer of risks between two or more parties, e.g. a guarantee.

Risk

Public/Private
Public

Public

Private

Private

Sector

Agriculture

Agriculture

Energy

Energy

Finance

Finance

Fishing

Fishing

Forests

Forests

Infrastructure

Infrastructure

Manufacturing

Manufacturing

Mining

Mining

Other

Other

Protected Areas

Protected Areas

Tourism

Tourism

Trade

Trade

Transport

Transport

Water

Water

Countries:

Wildlife impact bond

A social and development impact bond where resources are linked outcomes featuring the protection or conservation of wildlife.

Result

Deliver

Any measure or strategy that can enhance cost-effectiveness/efficiency, synergies and/or favour a more equitable distribution of resources.

Deliver

Generate

Any existing or innovative mechanism that can generate and/or leverage financial resources for biodiversity.

Generate

Type

Debt/Equity

Any solution that invovles an obligation or liability to make a payment and/or the acquisition of ownership rights (equity, property or financial asset).

Debt/Equity

Grant

Any solution that invovles the allocation of a grant. This includes private donations and Official Development Assistance.

Grant

Market

Any solution that involves a market transaction, e.g. ecosystem services and carbon markets.

Market

Public/Private
Public

Public

Private

Private

Sector

Protected Areas

Protected Areas

Tourism

Tourism

Development impact bond (payment for results)

A social and development impact bond where resource