Creating Mechanisms for Biodiversity Conservation Finance
December 15, 2010
Jerusalem
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| Patrick O'Connor, of O'Connor NRM Pty Ltd. and the University of Adelaide, discusses mechanisms currently in place in Australia that could be replicated in Israel. These include an auction system that allows landowners to access funding for conservation services. |
Global warming has had a devastating effect on the world's biodiversity. As populations increase and the availability of open land decreases, the variety of species and habitats diminishes. This destruction threatens the health of the planet's ecosystems, affecting water quality, soil erosion and agricultural productivity.
Nowhere is this situation more apparent than in Israel, where competition for land is fierce. Population density has grown steadily over the past decade. This has led to a sharp increase in commercial and residential development. Given the country's variety of species and diverse terrain, there is an urgent need for improved conservation. Previous efforts to protect the country's environmental assets have largely been policy-based, with a focus on designating protected areas through a national parks system. This has proven ineffective in stopping the loss of biodiversity in the region.
Biodiversity, as a public good, is currently undervalued. Consequently, there has been little incentive to change market behaviors toward land use. In recent years, however, financial mechanisms have been created to sustain conservation. Payments for ecosystem services, land auctions and other compensation programs have been utilized in a variety of countries. Biodiversity banking, for example, creates opportunities for developers to trade the offsets of potential destruction while earning a profit on increasing land values.
The Milken Institute, at the request of Israel's Ministry of Environmental Protection, convened a Financial Innovations Lab to evaluate potential incentive programs and other financial mechanisms that could be used to appropriately value Israel's biodiversity. The session brought together a diverse group of scientists, capital market experts, governmental officials, foundation executives, architects and land developers to design and structure potential models.
Participants discussed how to achieve the optimal level of conservation while maintaining cost efficiency. Following presentations on specific programs in countries like the United States and Australia, participants debated which models could be most applicable to Israel. There was a focus on potential bottlenecks and barriers to the adoption of these models. Participants then suggested the creation of case studies that would further examine the feasibility of financial mechanisms to support environmental and economic growth.
Results from the Lab, including recommended next steps for implementation, will be published in a full report. For more information, contact Caitlin MacLean, manager of Financial Innovations Labs, at cmaclean@milkeninstitute.org.
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