1.1 What is Biodiversity?

Biodiversity is life on Earth. Biodiversity is Nature in all its variety, from the tiniest microorganisms to the magnificent sequoias. Nature provides the essential elements for life, society and the economy – clean air, water, food, recreation, cultural texture, climatic stability, and inputs to many other processes that improve human well-being. Biodiversity is made of the living organisms and ecosystems that underpin our economy and provide the essentials for a healthy and productive human life

We are increasingly recognizing this. For the first time in history, biodiversity officially entered the global development agenda in 2015. Biodiversity is featured prominently in Sustainable Development Goal (SDG) 14, “Life Below Water” and 15, “Life on Land”, while it contributes to a wide range of other SDGs (See Box 1.1). Nearly half the human population is directly dependent on natural resources for its livelihoods, and many of the most vulnerable people rely directly on biodiversity to fulfil their daily subsistence needs. Ecosystem services and other non-marketed goods are estimated to make up between 50 and 90 percent of the total source of livelihoods among poor rural and forest-dwelling households. 1

Box 1: Biodiversity contributes to many more SDGs than SDG 14 and 15

SDG 1: No Poverty

A well-functioning national protected area system can generate entry fees, tax revenue and support local jobs and livelihoods. Subsistence and small-scale agriculture and fisheries provide livelihoods for many of the world’s rural poor

SDG 2: Zero Hunger

The protection of agricultural genetic diversity (agrobiodiversity), including wild relatives of major crops, can help ensure long-term food security, particularly by crossbreeding species that are well adapted to disease and climate extremes such as floods, drought and excessive heat. The protection and restoration of coral reefs, and the prevention of key marine threats, can ensure the long-term health of fisheries, providing critical nutrition and livelihoods to millions.

SDG 3: Good Health and Well-being

Well-managed ecosystems are storehouses of medicinal resources, potentially critical for maintaining health in rural and indigenous community areas and enabling medical discoveries.

SDG 6: Clean Water and Sanitation

Well-managed, restored and protected forests can provide long-term water security, especially during times of drought, and serve as emergency stores of energy and animal browse during times of crisis. Protected and restored wetland ecosystems can function as critical water filtration mechanisms, greatly reducing or eliminating the need for building water-treatment infrastructure.

SDG 13: Climate Action

Ecosystem protection and restoration efforts can help to buffer poor and vulnerable communities from the impacts of climate change, such as buffering coastal communities from more frequent and severe coastal storms and rising sea levels, and preventing landslides and natural disasters from catastrophic deluges.

For further elaboration of the linkages between biodiversity and the SDGs please refer to “Biodiversity and the 2030 Agenda for Sustainable Development” Technical Note.

Unsustainable economic growth and short-term profits, insecure or misguided legal and governance institutions, population growth, and the grip of poverty and hunger, contribute to decisions that destroy biodiversity, by trading long-term wealth for short-term private consumption. Open access to natural resources and the perception of nature as a free, unused and unlimited resource base results in the loss of our shared capital. Biodiversity and ecosystem services suffer because markets and politics reflect their values poorly. The “invisibility of nature” in our decisions results in economic inefficiencies, lost growth opportunities, and the misallocation of resources. We under-invest in nature and so reduce the wealth of nations. Governments, the private sector, civil society and consumers all contribute to the problem and are necessary actors in finding the solutions.

Biodiversity finance strategies can transform the prevailing planning, finance, and socio-economic systems and practices by ensuring the sustainable management of nature and preserving our communities’ well-being—towards a future where diverse and healthy ecosystems provide habitats for the existence and evolution of the Earth’s species and the wellbeing of the people. The Biodiversity Finance Initiative (BIOFIN) is a process to engine this paradigm shift, where finance solutions are designed to trigger long-lasting positive changes to the environmental, social, and economic systems dependent upon nature.

Chapter 1 sets the context for the BIOFIN Process, including the rationale for investing in biodiversity and the role finance solutions can play. Read the chapter before embarking on the BIOFIN journey.

  • Two thirds of the world’s people currently live in areas that experience water scarcity for at least one month a year.2