Incentives and financial transitions towards rewarding effective culture-based solutions
Incentives, including financial support for IPLC collective actions and innovative culture-based solutions, are prioritised; environmental, social and human-rights safeguards on biodiversity financing are applied; and perverse incentives and harmful investments are ended or redirected.
Mobilisation and allocation of resources, both monetary and non-monetary, are key elements for an effective implementation of the post-2020 global biodiversity framework. This is another area needing transformation. Much more resources are invested (through subsidies and investments in fossil fuel and extractive industries, for example) to support activities and industries that reduce biological and cultural diversity, than in activities that maintain, strengthen and revitalise them. Focusing on market-based solutions and technological fixes is very likely to cause further damage instead of addressing the underlying causes and making systemic changes. Examples of such controversial ‘solutions’ include carbon trading, geo-engineering, synthetic biology and gene drives. In 2019 the OECD estimated subsidies harmful to biodiversity at US$500 billion a year, which is about 10 times the estimated global funding for biodiversity conservation and sustainable use.1 Return-oriented, for-profit financial mechanisms have yet to generate significant investment in implementing the objectives of the CBD2 and they are massively outweighed by subsidies such as those for domestic agricultural production.3
When considering funding for conservation, only a tiny fraction goes to support the collective action of IPLCs; paradoxically, some biodiversity funding harms and violates the rights of IPLCs, instead of supporting them. Another US$1,753 billion is spent every year on military expenditure, which could be put to much better social and environmental use.
Collectively, the actions of IPLCs to protect and conserve their lands and territories, and the biodiversity that these areas contain, comprise a very substantial non-financial contribution towards the goals of the CBD. However, their efforts to maintain and steward biodiversity are currently insufficiently recognised as a form of resource mobilisation and are badly under-funded.
A major shift in investments, incentives and funding, including on technology assessments, is needed to support activities, especially the collective actions of IPLCs, and appropriate technologies4 that benefit both nature and people.
Caring for stranded pilot whales in Farewell Spit, New Zealand. Credit: Gary Webber.
Benefits of the transition
- By ending perverse incentives, many of the direct drivers of biological and cultural diversity loss would be eliminated or greatly reduced, thereby preventing damage in the first place.
- By ending biodiversity financing that harms the rights and livelihoods of IPLCs, stronger collaboration between conservation agencies and IPLCs would focus on positive outcomes for both nature and people.
- By providing adequate financial, political and technical support, IPLC collective contributions to the objectives of the CBD would be greatly amplified and upscaled, and would have greater positive impact both for IPLCs and the whole of humanity. For example, it would enable IPLCs to:
- Strengthen, expand and replicate their action leading to conservation, restoration, sustainable use and access, and benefit-sharing;
- Revitalise and/or strengthen cultural and social values of living in harmony with nature;
- Effectively defend their territories and lands from external threats and destructive industries;
- Strengthen local sustainable economies.
Progress towards the transition and guiding examples
There is not enough evidence to assess in any detail the overall level of funding available to support IPLC collective actions. However, given that IPLCs customarily own or manage more than 50 per cent of the world’s lands, and vast marine areas, and that these areas hold a large proportion of the planet’s biodiversity, the available information suggests strongly that the proportion of biodiversity funding available for IPLCs lags far behind their current contributions to the Aichi Biodiversity Targets.
Progress has been made to ensure that biodiversity finance does not harm IPLCs at the global level through, for example, Global Environment Facility and CBD safeguards, but these have yet to be fully implemented at national and local levels.
Negligible progress is being made to phase out perverse incentives. Few governments have even identified perverse incentives, let alone begun to effectively reform them.
However, innovative approaches, programmes and projects have started to emerge, providing good practices and ‘seeds’ on which this transition can be built on. Guiding examples include:
- Initiatives directly supporting IPLCs and small-scale producers in sustainable production, marketing, livelihoods and conservation, such as the Forest and Farm Facility5, the Non-Timber Forest Products Exchange Programme6, the ‘Mountain Partnership Products Initiative’7, the International Partnership for the Satoyama Initiative8 and the ‘Global ICCA Support Initiative’9;
- National or sub-national governments supporting IPLC collective action; for example, the municipal government supporting community-led natural resource management in Thailand;
- Investments by global funds to support conservation by IPLCs; for example, the Global Environment Facility’s Small Grants Programme and the ‘Inclusive Conservation Initiative’;
- Cooperatives formed by IPLCs receiving payments for carbon storage, biodiversity conservation and customary sustainable use in community forests through a REDD+ project in Vietnam;
- New tax initiatives (for example, in the USA), whereby citizens and businesses can channel their taxes to pay to help return indigenous land to indigenous ownership, as an act to right the wrongs and pains associated with colonisation, and recognise and support indigenous stewardship.10
Key components of the transition
- Investing in nature- and culture-based solutions, and the collective actions of IPLCs.
- Recognising the role and contributions of IPLCs as a form of resource mobilisation and reflecting this in national and sub-national policies, laws and resource allocation.
- Increasing direct funding for IPLCs, including for conservation and sustainable use, with enhanced accessibility through greater information-sharing, training, revision of technical requirements, planning grants, networking and partnerships. Monitoring this by having disaggregated figures on domestic support for IPLC collective actions in national reports to the CBD, and in the work of the United Nations Development Programme’s ‘Biodiversity Finance Initiative’.
- Applying safeguards for biodiversity financing in practical and concrete ways.
- Having social inclusion and adherence to human rights standards as core criteria for all biodiversity financing and other resource mobilisation processes at the national and sub-national level, to bring an end to its potential for negative impacts on the rights and livelihoods of IPLCs.
- Including IPLCs on national committees, with roles and responsibilities for national budgets related to domestic biodiversity financing.
- Urgently identifying and eliminating perverse incentives, and developing and applying positive incentives,including directing the stimulus in response to COVID-19 into an opportunity to reshape the economy towards sustainability for people and planet.
- Making REDD+ more effective through early planning, up-front investment, collection of baseline data,and rigorous and widespread monitoring of impacts.
- Embedding technology assessments at all levels of biodiversity policy, planning and implementation.
- Reforming the financial sector, including actions by financial institutions at all levels to align financial flows towards sustainable practices. This could be done, for example, by applying biodiversity and social risk assessment policies and processes, and demonstrating decreasing negative impacts and increasing positive impacts on biodiversity and IPLCs over time.
- OECD (2019) Biodiversity: Finance and the Economic Business Case for Action. Report prepared for the G7 Environment Ministers’ Meeting, 5-6 May 2019. Paris: OECD. Available at: https://www.oecd.org/environment/resources/biodiversity/G7-report-Biodiversity-Finance-and-the-Economic-and-Business-Case-for-Action.pdf
Dempsey, J., Martin, T. G. and Sumaila, U. R. (2020) ‘Subsidizing extinction?’, Conservation Letters 13(1), pp. 11-13.
- Dempsey, J., and Suarez, D.C. (2016). ‘Arrested Development? The Promises and Paradoxes of “Selling Nature to Save It.”’ Annals of the American Association of Geographers 106(3), pp. 653–671.
Conservation Finance Alliance (2014). Supporting biodiversity conservation ventures: Assessing the impact investing sector for an investment strategy to support environmental entrepreneurism. Conservation Finance Alliance. Available at: https://static.squarespace.com/static/537c92d5e4b071e47398cfcb/537cc7ace4b07ba17deab3d3/537cc 7ade4b07ba17deab585/1399828542777/ACS__CFA_2014.pdf
Clark, R., Reed, J, and Sunderland, T. (2018) ‘Bridging funding gaps for climate and sustainable development: Pitfalls, progress and potential of private finance’, Land Use Policy 71, pp. 335-346.
- Dempsey, J., Martin, T. G. and Sumaila, U. R. (2020) ‘Subsidizing extinction?’, Conservation Letters 13(1), pp. 11-13.
- See, for example, Patterson, S.A. (2020) First-ever compendium of indigenous technologies provides a powerful toolkit for climate-resilient design. Boston: Harvard University Graduate School of Design. Available at: https://www.gsd.harvard.edu/2020/02/first-ever-compendium-of-indigenous-technologies-provides-a-powerful-toolkit-for-climate-resilient-design/
- Forest and Farm Facility. Available at: http://www.fao.org/forest-farm-facility/en/
- Non-Timber Forest Products Exchange Programme. Available at: https://ntfp.org/where-we-are/asia/
- Mountain Partnerships Products Initiative. Available at: http://www.fao.org/mountain-partnership/initiatives
- The International Partnership for the Satoyama Initiative. Available at: https://satoyama-initiative.org/
- Global ICCA Support Initiative. Available at: https://sgp.undp.org/about-us-157/partnerships/icca-gsi.html
- Singh, M. (2019) ‘Native American “land taxes”: a step on the roadmap for reparations’. The Guardian. London: Guardian Media Group. Available at: https://www.theguardian.com/us-news/2019/dec/31/native-american-land-taxes-reparations