Peace, Green Development and Climate Change: A tripled pronged approach to finance for nature in Colombia

Colombia's biodiversity
Country:

By Julia Queiroz and James Maiden

BIOFIN in Colombia is contributing to the growing prominence of biodiversity in government strategies and decision-making through finance solutions that influence policies and interventions for climate change, national development strategies and the ongoing peace building process in the country.

"Biodiversity is not seen any more as something just for biologists, but it is inside economic, social, political and financial discourses of development," said John Bejarano, Project Coordinator of BIOFIN in Colombia.

While Colombia is responsible for under half a percent of global greenhouse gas emissions, it is highly vulnerable to the effects of climate change. Its rich, but fragile ecosystems house the second highest number of species anywhere on earth, which face severe decline and extinctions of a changing climate and human pressures such as population growth and unsustainable development.                  

But competition for resources to protect biodiversity and fight climate change is unnecessary, according to BIOFIN. BIOFIN Colombia is trying to see this issue as an opportunity and they are developing a holistic approach that integrates climate and biodiversity into financial management. The Colombian development agenda is focusing on strategies leading to the Green Growth Policy, which is the best mechanism to link both initiatives. BIOFIN's research found that around 44% of biodiversity expenditure in the country is strictly related to climate change, making the efforts to raise finance for both synonymous.

BIOFIN in Colombia is supporting the strengthening of key biodiversity financial solutions. These include biodiversity offsets where the private sector pays for practices or activities where it impacts on the nature or the benefits of a protected area, for example. BIOFIN found that compensation from the private sector could be as high as USD 214 million. This solution alone could pave the way to covering a significant proportion of the financial gap for biodiversity in the country which is estimated at USD $1.44 billion.

An example is seen through a pilot project with Promigas S.A., a Colombian company working in natural gas, transport and distribution, which aims to channel money it pays in compensation of extracting resources from rich areas of biodiversity directly towards projects that help protect the country’s biodiversity and ecosystems. In this case it is financing the Civil Society Nature Reserve Declaration (or private natural reserves) through ecosystem restoration and more productive management.

We must also highlight the importance of the regional context to understand Colombia’s success in strengthening finance for biodiversity conservation. The ongoing Colombian peace building process brings new challenges for development and the environment. Conflict and post conflict regions need strategies that incorporate green growth as they develop to ensure inclusive growth that protects biodiversity and natural resources.

The government is restructuring the forest incentive certificate (Certificado de Incentivo Forestal or CIF in Spanish) through the Payments for Ecosystem Services mechanism. This finance solution reformed an outdated and dysfunctional policy from the mid-1990s that had operational and financial weakness that meant much needed Government budget was not being allocated. However, given the increase of the deforestation in the post conflict era, this instrument became an important mechanism help reduce deforestation as well as create an important opportunity to change the way of living for people, particularly who suffered during the conflict, in favor of conservation focused livelihoods.

"BIOFIN is contributing key data and technical assistance to this policy reform. This instrument attempts to increase the biodiversity expenditure USD 21 million per year on average and contribute to close the 20% of the NBSAP´s financial gap," said John Bejarano.

BIOFIN is also contributing to the financial strategy for National Natural Parks in The Pacific Area – an area seriously affected by the conflict as well as informal mining. The main objective of this strategy is to promote Regional Systems of Protected Areas with the local governments. This generates better coordination as well as increasing both public and private expenditure on biodiversity conservation and management. This finance solution aims to generate an estimated 18% of the finance gap for the NBSAP implementation in Colombia.

Given the strong relation between biodiversity and climate change, BIOFIN Colombia is proposing ideas for the allocation of the new Colombian Carbon Tax. BIOFIN is promoting that the resources obtained from this instrument, contributes to finance the main targets of the NBSAP such as ecosystem restoration and conservation. It's been estimated that finance from this source could contribute to closing the financial gap by around 40%.

BIOFIN Colombia is playing an important role in the country's efforts to properly finance biodiversity conservation. It is a primary source of biodiversity finance information in Colombia and it has built strong linkages with the biodiversity policy making authorities as well as the private sector.

John Bejarano believes BIOFIN is helping facilitate the mainstreaming of biodiversity finance in others spheres and sectors – particularly around the spending, costs, financial needs and  finance solutions and strategies.

"But there are still many challenges such as fiscal adjustments, diminishing forecasts about official development assistance or social disruptions that still need to be addressed," he said.

Additional reporting and contributions from James Maiden, Marlon Flores, Johana Pinzón