Governments and multilateral development banks around the world now recognize the social and economic importance of biodiversity. Despite this, a major gap between current funding levels for biodiversity projects (US$53 billion annually) and total estimated need (US$300-400 billion annually) remains.
With no major increase in biodiversity financing on the horizon, new ways to protect and enhance biodiversity must be identified. One solution being championed by the IDB is to ensure that new development in general, and infrastructure development in particular, is done in a way that prevents biodiversity loss. In some cases, these projects can even help secure the conservation of ecosystems.
The importance of biodiversity cannot be overstated. This is especially true in Latin America and the Caribbean, home to 40% of the world’s biodiversity and 50% of remaining tropical rain forests, plus a significant dependence on ecosystem services for food, energy, and employment.
Unfortunately, biodiversity is being lost an alarming rate, often due to land-use changes and fragmentation caused by roads, transmission lines, hydropower facilities, and other infrastructure. Meanwhile, loans to support biodiversity remain as rare as some endangered species.
Although loans for infrastructure development lag behind the region’s needs, financing of these projects is far more common than for biodiversity conservation. In 2014 alone, IDB approved US$4.7 billion in infrastructure projects for roads, energy, water, and more. With all financing sources combined, more than US$150 billion was invested in infrastructure development in Latin America and the Caribbean. By contrast the IDB provides US$3-4 million annually for biodiversity protection and ecosystem services.
Unfortunately, infrastructure development and biodiversity don’t always go hand-in-hand. Various assessments on the state of biodiversity over the past ten years have pointed to infrastructure development as one of the key enablers of biodiversity loss. With funding of biodiversity lagging, it’s unrealistic to think that biodiversity conservation can keep up with the fast-paced rate of infrastructure development.
To address this challenge head-on, IDB has taken an approach that injects biodiversity considerations into the design and operation of infrastructure projects. While the primary goal is to avoid negative impacts on biodiversity, we find that in getting the mitigation measures right these projects actually contribute to the improved management and conservation of biodiversity.
We now have excellent examples of how effective management of environmental and social impact can safeguard biodiversity. These projects include:
- Reventazon Hydroelectric Project (Costa Rica): An integrated program of reforestation, payments for ecosystem services, and engagement with local landowners ensuring that the major biological corridor Barbilla-Destierro, frequented by jaguars, was preserved and supported. The project also pioneered Latin America’s first aquatic offset.
- Chaglla (Peru): This project followed the Hydropower Sustainability Assessment Protocol and scored extremely well by selecting its location with a high level of scrutiny, focusing on a minimal social and environmental footprint. It also contributed to the discovery of a several new species and understanding their distribution patterns, as well conservation measures and an offset.
- Caracol Industrial Park (Haiti): Mitigation efforts for the industrial park resulted in the establishment of Three Bays National Park. Additionally, officials are implementing a long-term management plan that will provide for alternative livelihoods for local communities
It is through effective safeguard policies and sound practices that international financing can mainstream biodiversity into infrastructure, ensuring that both biodiversity and infrastructure objectives can be met, particularly by:
- Minimizing negative impacts through a mitigation hierarchy and by respecting “no go” zones
- Providing for surveys and monitoring, which serve to further conservation science and knowledge
- Developing and refining new methodologies such as baseline data collection, predictive modeling of indirect impacts, among others.
- Contributing to the capacity and institutional development of borrowers and local agencies
- Insisting on robust alternatives analysis, which can lead to reduction in the project’s foot prints.
IDB has learned its share of lessons as well, and our practices and those of other multilateral development banks will continue to evolve as more efforts are made to merge the two important goals of biodiversity conservation and infrastructure provision. These lessons are being captured in the development of joint guidance documents on Good Practices for the Collection of Biodiversity Baseline Data; and Good Practices for Biodiversity Inclusive Impact Assessment and Management Planning which have been endorsed by a number of multilateral financial institutions.
We cannot do this alone. The role of national planning agencies in particular is critical to creating a major shift in thinking that development and biodiversity are not mutually exclusive. Indeed, they can support and benefit each other.