The BIOFIN Workbook distinguishes between policy and finance instruments (i.e. the individual financial, fiscal or regulatory instruments used) and finance solutions. A finance solution seeks to use one or more instruments to achieve a specific outcome or solve a specific problem (hence “solution”). In Chapter 1 we defined a finance solution as “an integrated approach to solve a specific problem or challenge by the context-specific use of finance and economic instruments”. A finance solution is built on a combination of elements that includes one or more finance instruments, financing sources, lead agent or intermediaries, beneficiaries or principal stakeholders, and the desired finance result. A finance solution seeks to increase the effectiveness, scale, or impact of a specific instrument to achieve a clear biodiversity outcome. A solution can involve the revision of a protected area entrance fee system in five key parks by increasing the fee rate and earmarking a percentage of park entrance fees. The finance instrument in this case is the change in regulatory provisions for modifying park entrance fees.
Biodiversity finance solutions are extremely varied – BIOFIN has made a list of over 150 available online. Solutions can rely on public or private revenues or contributions; be built around voluntary or compulsory schemes; be guided by markets or regulations; be available on a short- or longer-term basis; be associated with particular conditions set by the finance providers; be procyclical or countercyclical; and be available in different currencies. However, it cannot be overstated enough that to realize the BFP, each proposed finance solution must be adequately described and specific.
Countrywide Finance Plans, synthesizing major finance solutions at the national level, were applied across different sectors, particularly for infrastructure and energy (Boxes 6.1 and 6.6). They were rarely developed for biodiversity prior to BIOFIN (at least not in a similar comprehensive manner). Box 6.1 shows a planning cycle for the health sector, very similar to the entire BIOFIN Process, indicating how the Finance Plan builds from a systematic series of assessments.
Box 6.1: Finance Planning for Immunization: WHO-UNICEF Guidelines for Comprehensive Multi-Year Planning (CMYP) for Immunization (2013)1
STEP 1. Situation analysis: A review of the immunization system’s strengths and weaknesses.
STEP 2. Objectives, milestones and priority-setting: Prioritizes national goals, objectives and strategies for three to five years.
STEP 3. Planning strategies: Outlines the means by which national objectives will be achieved.
STEP 4. Links to national health plans and global goals and targets: For the immunization strategy.
STEP 5. Setting an activity timeline and monitoring and evaluation framework: For the main activities and milestones.
STEP 6. Costs, financing and financing gaps: Includes costing and financing assessments linked to the planning and budgeting cycle of the Ministry of Health. Identifies financing gaps, conducts cost-benefit analysis, and links the plan to potential resources mobilization strategies.