Conservation Finance: A Framework

Background

The authors define conservation finance as “mechanisms and strategies that generate, manage, and deploy financial resources and align incentives to achieve nature conservation outcomes.” Governments are the largest contributors to conservation finance resources, and common mechanisms include grants, subsidies, and fiscal transfers, among others.

Research Goals & Methods

In this white paper, the authors suggest processes to follow while developing conservation finance solutions, and provide a way to classify different types of conservation finance mechanisms and strategies.

Conclusions & Takeaways

The authors identify seven main types of solutions: return-based investments (e.g., microfinance), economic instruments (e.g., taxes and subsidies), grants (e.g., official development assistance), business and markets (e.g., voluntary offsets), public finance management (e.g., subsidy reform), risk management (e.g., insurance), and financial efficiency (e.g. integrated accounting). They recommend including the following process while designing and delivering conservation finance solutions. First, solutions should be tailored to specific contexts, groups, and decision-making processes. Second, key stakeholders should be involved in creating and implementing the solution, and should be empowered to do so. Third, the solution should be responsive to changing contexts and be implemented sequentially to find a balance between meeting immediate requirements and long-term concerns. Finally, the performance and impact of a solution should be measured to gauge its effectiveness.