At this point it is worth revisiting the core concept underpinning this review. The definition of “biodiversity expenditure” is any expenditure whose purpose is to have a positive impact or to reduce or eliminate pressures on biodiversity. These biodiversity expenditures include primary Unlike the UN System of Environmental-Economic Accounts (SEEA, see Box 4.3), which takes an accounting approach, BIOFIN recognizes secondary expenditures that are not counted under the SEEA. These secondary expenditures are related to activities that include biodiversity as an explicitly described secondary (or tertiary) objective. Step 2B describes how to classify biodiversity expenditures that have biodiversity as their “primary purpose” as well as “secondary” expenditures where biodiversity is clearly identified as an objective. This formulation is derived from the definition provided by the CBD (see Chapter 1).
Box 4.2: The OECD Rio Markers on Biodiversity12
OECD Rio Markers are designed to track international development assistance financing for the three main Rio Conventions: Climate Change, Desertification, and Biodiversity. To identify a biodiversity-positive expenditure, refer to the Convention on Biological Diversity’s (CBD) 3 main objectives:
The OECD Rio Markers also identify a “principal objective” (what BIOFIN terms “primary”) if it “directly and explicitly aims to achieve” one or more of the above three objectives. Thus, primary expenditures have one or more of the CBD objectives as a stated primary purpose or “causa finalis”, and secondary expenditures are identified as when one of the CBD objectives is noted but is not the expenditure’s primary purpose.
Unlike the UN System of Environmental-Economic Accounts (SEEA, see Box 4.3), which takes an accounting approach, BIOFIN recognizes secondary expenditures that are not counted under the SEEA. These secondary expenditures are related to activities that include biodiversity as an explicitly described secondary (or tertiary) objective. Step 2B describes how to classify biodiversity expenditures according to BIOFIN categories. Activities that address one of the CBD objectives but are detrimental to another should be excluded. For example, if a subsidy on sustainable use of wood products is considered, but it results in direct loss of biodiversity because of the plantations of exotic invasive species, it should not be counted.
Box 4.3: The UN System of Environmental-Economic Accounting
The SEEA contains internationally agreed standards, definitions, classifications, accounting rules and tables for producing internationally comparable statistics on the environment and its relationship with the economy. The SEEA framework is consistent with the System of National Accounts (SNA) to facilitate the integration of environmental and economic statistics.14 The SEEA expenditure categories are contained in the Classification of Environmental Activities (CEA) and include the Classification of Environmental Protection Activities (CEPA) and Classification of Resource Management Activities (CReMA). Only primary expenditures are accounted for based on the attribution principle of “primary purpose” or “causa finalis”. This rigorous attribution approach avoids double counting.
The SEEA Central Framework, 15 and SEEA Experimental Ecosystem Accounting16 provide more detailed information. The BIOFIN Process should seek alignment with SEEA where possible. In cases where a country endorses the SEEA framework, the BER should start by reviewing all reports and accounting. Mexico’s experience highlights how the SEEA and BIOFIN approaches can be harmonized. BIOFIN will continue to work with the United Nations Statistical Division, relevant expert committees and other partners to develop consensus on biodiversity expenditure categories.
Expenditures data include amounts that are budgeted, amounts that are allocated (i.e. transferred to spending units), and amounts that are spent (spending, see Figure 4.3). Care should be taken to attribute expenditure data appropriately and avoid double counting since it is common for public authorities to transfer resources multiple times, e.g. from the ministry of finance to the ministry of environment and then from the ministry of environment to a protected area.
Figure 4.3: Original Budget, Allocated Budget and Spending