BIOFIN – The Biodiversity Finance Initiative How BIOFIN supports Biodiversity Conservation in Perú

1. BIOFIN – The Biodiversity Finance Initiative • How BIOFIN supports Biodiversity Conservation in Perú • October 2014, Pyeonchang, Korea

2. Why MINAM take BIOFIN as its own project? conSerVation without financing is just conVerSation

3. The Ministry of Economy and Finance – MEF in Our Lives Draft and Adoption of Policies and Practices Budget (warnings) The Autonomy of Local and Regional Governments Total Quantity: Main part of Budget is “Continuity” MEF promotes private investments but (obviously) doesn´t control private budgets

4. BIOFIN – MINAM and MEF and Biodiversity DGIP (public investment): Its recent statement says “Peruvian mega biodiversity must become one of the axes of economic development and growth”. It considers that there is an opportunity, as the “sector” is quite new, to avoid or reduce the inefficiencies reported in traditional sectors. In this scenario, DGIP says “It´s an urgent need to introduce the relevance of biodiversity and environmental and climate change issues into national development planning, so it´s a challenge to have adequate academic and technical language in our public sector processes (economics, planning, targets, and indicators).

5. BIOFIN – MINAM and MEF and Biodiversity DGPP (public budget): Applies an Output Budgeting Approach through Budget Programs (BP). BPs aim to solve specific problems under a logical process, supported by evidence. DGPP oversees the allocation of public resources to any public activities, as biodiversity conservation must be executed with equity, efficacy and efficiency under national guidelines and policies. There are 2 BPs scoping natural resources: “Sustainable Management of Natural Resources and Biodiversity” and “Biodiversity Conservation and Sustainable Economic Natural Resources Use in Protected Areas”. Both BPs needs around US$ 64 million per year to implement its regular activities.

11. Other Allies – MINAGRI and PRODUCE MINAGRI – Agro-biodiversity and Forest – (4.5 times MINAM´s budget) PRODUCE – Fishing and Manufacturing

12. Other Allies – MINAGRI and PRODUCE MINAGRI – Agro-biodiversity and Forest – (4.5 times MINAM´s budget) PRODUCE – Fishing and Manufacturing

13. Finance Mechanisms for Biodiversity Conservation in a Megadiverse Country Marine Biodiversity – Sustainable Fishing – Hypothesis: Operations are more expensive and fished quantity is less so costs rise… Who should pay for it? Consumers? Producers? Do other countries demand sustainable operations of their producers, ergo are our producers in the same competitive position as others countries? Rainforest – Offers “megadiverse” ecosystem services, and who gets benefits? Locals? Foreigners? What´s the price for each service? What´s the actual cost of conservation? Agro-biodiversity – there are already almost 4000 varieties of potatoes (papa for us) – Hypothesis: 50 varieties can be commercialized and this practice will preserve and develop those varieties… Who is going to conserve the other 3950 varieties? Who receives the benefits of these varieties, ergo who pays for it?

14. Guidelines and Ideas to Resource Mobilization – 1 Guidelines – Our assumptions for Perú No existe la Solución Universal (there is no ONE COMPREHENSIVE project finance answer, so let´s think of what financial mechanism and instruments can be applied in each case and think of “everything”) 3 Sources: Increasing and Fresh Resources; Mobilizing what is stuck; and Use Resources more effectively – PRIVATE and PUBLIC – LOCAL and INTERNATIONAL

15. Guidelines and Ideas to Resource Mobilization – 2 Guidelines – Our assumptions for Perú Recourse Mobilization Strategy is to support long term conservation, so let´s think how agents will behave in the future, not only how things are at this moment Recourse Mobilization Proposals MUST: - …aim to achieve NBSAP implementation and Aichi Targets - …respect indigenous people and local communities’ rights and their way of living - …at least, cover the cost of conservation - …be as inclusive as possible - …support poverty reduction, especially in the short term.

16. Guidelines and Ideas to Resource Mobilization – 3 Guidelines – Our assumptions for Perú Those who receive benefits from ecosystem services must pay and Those who pay the costs for conservation must receive benefit

17. Guidelines and Ideas to Resource Mobilization – 4 Ideas – 03 Sources Increasing and Fresh Resources: Hardest Work – Payments for Ecosystem Services, like source of water for Hydro Power Plants or Water Utilities. Mobilizing what is stuck: Sub National Governments receive 50% of the taxes paid by Mining Firms. In 2013 – US$ 1.4 billion (2009 – 2013: US$ 7 billion). At least, US$ 500 million has not been used… BIOFIN activities aim to facilitate the execution of the stuck budget, and to direct it to biodiversity. Use Resources more efficacy: In Perú, 2.2 million farmers and Ministry of Agriculture spends about US$ 12 million in assistance. Less than 2 ha: 1.3 million farmers…

18. BIOFIN Perú – • What else are we doing – 1 Assisting: - MEF to develop Guidelines for Environmental Public Investment - MINAM to identify tax incentives for conservation activities - MINAM to estimate the operation cost of the Protected Areas System - MEF to develop Guidelines to formulate and asses Public Investment Projects in Biodiversity Conservation (“Green Projects”)

19. BIOFIN Perú – • What else are we doing – 2 Develop: - Ecosystems Conservation Impact indicators financed by domestic public sources - Modeling Public Investment Projects on Biodiversity Conservation - How Local Communities, who have an integral view of the values of biodiversity and ecosystem services, can receive actual income from these kind of businesses

20. NBSAP… Waiting for… • APPROVAL BY DECREE

21. No WAVES, TEEB, SEEA or…

22. BIOFIN Perú – Short Term Next Steps Evaluate Biodiversity Conservation expenses in Perú NBSAP Budget

23. MUCHAS GRACIAS