Improving biodiversity resilience requires both public and private finance: A life-cycle analysis of biodiversity finance

Abstract

There is a substantial ‘biodiversity financing gap’: each year, only about one sixth of the funding required for biodiversity conservation is actually provided. Most biodiversity financing is from public sources; less than one fifth is from private ones. However, the potential of private financing is huge and could help fill the biodiversity financing gap. We study how this might be achieved by using a life cycle analysis for biodiversity, identifying the various phases a stylized biodiversity restoration- or conservation project passes through. Public funding offers most potential in the early stages of a biodiversity project, when financing requirements are relatively low, but uncertainty is high. Private and blended finance demonstrate potential in later stages, when financing requirements are higher, but uncertainty is lower and return mechanisms have been established. We contribute theoretically by proposing a novel framework through which the financing options of biodiversity interventions can be considered. Practically, the framework assists in advancing the understanding of the field of funding possibilities for entities wishing to develop projects with the aim of conserving and/or restoring biodiversity.