YK Poudel
To address a USD 75 million funding gap for biodiversity conservation and sustainable development, Bhutan is implementing four innovative biodiversity finance solutions.
At a capacity-building workshop held on November 20, UNDP’s Biodiversity Finance Initiative (BIOFIN) emphasised the need for improved co-ordination among agencies and enhanced training for officials to bridge this financing gap.
Bhutan launched four BIOFIN solutions in May last year, which include enhancing results-based budgeting, mainstreaming biodiversity finance and finance solutions into the local government plans, increasing revenues from eco-tourism fees and park conservation areas, and redesigning human-wildlife conflict (HWC) insurance schemes.
This was part of the second phase of the BIOFIN project. The first phase mapped the country’s biodiversity finance challenge implemented from 2012 to 2020.
The World Bank’s report “Bhutan: Overview Assessment of Country’s Framework for Assessing and Managing Environmental and Social Risks and Impacts of Development Projects” identifies that Bhutan’s environmental conservation framework lacks clarity in addressing development projects’ impacts on habitats.
The report also finds a weak link between biodiversity laws and development, and gaps in the biodiversity management plan.
Globally, USD 150 million is invested in biodiversity annually, but this falls short of the USD 824 million required to meet conservation needs. UNDP BIOFIN, through its innovative methodology, aims to close this gap by enhancing biodiversity finance solutions worldwide.
For Bhutan, BIOFIN identifies a financing gap of USD 75 million for implementing the 4th National Biodiversity Strategy and Action Plan (NBSAP) 2014 and for achieving the biodiversity targets of the 12th Plan.
UNDP BIOFIN’s senior technical advisor, Andrew Seidl said, “Rather than simply spending money with the hope of improving biodiversity outcomes, we are setting clear targets and localising solutions to be more efficient, effective, and to avoid future costs of our actions today.”
Led by international BIOFIN environmental finance experts, the workshop discussed practical insights into effective financial mechanisms, such as payment for ecosystem services, ecotourism, and performance based budgeting.
Participants also discussed BIOFIN methodology, including policy and institutional reviews, financial needs assessment, and expenditure tracking.
The officials from the implementing agencies—Ministry of Finance, Department of Tourism, and Department of Forest and Park Services—also presented their achievements and future plans.
While presenting on redesigning Human Wildlife Conflict (HWC) schemes, the planning officer of the Ministry of Agriculture and Livestock, Leki Choda, said, “Financial protection for farmers, risk management and investment, climate change adaptation, and enhancing access to credit are some of the benefits,” he said.
However, Leki Choda said that the yield and price volatility, moral hazards, adverse selection of crops and catastrophic events are the associated risks. Under this scheme, the government will be investing Nu 927.83 million for four years, starting next year.
A finance ministry official, Tek Bahadur Ghaga, said that result-based budgeting’s Biodiversity and Climate Expenditure Review assessment will be completed in November this year.
At the national level, the government in the 13th Plan has allocated Nu 101 million for the National Biodiversity Centre to focus on enhancing ecosystem services through sustainable and resilient biodiversity initiatives.
BIOFIN is working with 41 countries, including Bhutan, implementing more than 200 biodiversity finance solutions with a total budgetary impact in the tens of millions of dollars.