With the world already witnessing the impacts of global warming, the need for innovative financing in the green sector has become not a choice but a necessity.
This is from virtual national policy dialogue on financing for socio-ecological production landscape that was held on July 20.
The session was part of the dialogue on “Community-based Landscape Management for Resilient Ecosystems” organised by the Bhutan Ecological Society in partnership with Global Environment Facility-Small Grants Programme (GEF-SGP) under UNDP.
Speaking at the dialogue, UNDP’s BIOFIN project coordinator, Ngawang Gyeltshen, said that innovative finance was about identifying solutions that can mobilise new financing for development.
Innovative finance or financing refers to a range of non-traditional mechanisms to raise additional funds for development aid through innovative projects such as micro-contributions, taxes, public-private partnerships and market-based financial transactions, among others.
“To an extent innovative finance raises new funding, but innovative finance is also about optimal use or use of traditional or available funds,” Ngawang Gyeltshen said.
He added that innovative finance and innovation, in general, is not always about new or break-through ideas or ICT, but also about simple ideas that can yield results, copying from where things worked or looking at historical trends, for example.
In Bhutan, one of the innovation financing programmes is the payment of ecosystem services, said Jigme Tenzin (PhD), deputy chief forestry officer with the Watershed Management Division, Department of Forests and Park Services.
Citing an example of watershed protection from the four types of payment ecosystems, he said that protecting watersheds and water sources was benefiting the local communities.
Some challenges the speakers highlighted with innovative financing were bringing the stakeholders together, conservation organisations working in silos, the system that was failing to take risks, and the limited role of financial institutions in innovative financing.
World Wildlife Fund’s country director, Tashi Jamtsho, said that there is no choice but to invest in ecosystem restoration.
He said that the country was on the right track with the development approach of Gross National Happiness that has environment conservation one of the foundation pillars and the constitutional requirement of maintaining at least 60 percent of the country under forest coverage.
“But the question is are we doing enough?” he asked. “Doing enough not in the sense of reforestation, species conservation, watershed management, but doing enough to bring people and institutions from the other side of the fence [conservational side].”