Peru: One Step Ahead on Biodiversity Finance

The South American country has passed two new policy instruments to mainstream biodiversity directly into the public finance system.

As part of efforts to ensure adequate financing for biological diversity, Peru officially adopted two key policy instruments to increase the quality and number of public-funded projects focusing on biodiversity and ecosystem services. This is a significant step forward to ensure biodiversity is taken into account in local and national planning and development. BIOFIN and ProAmbiente-GIZ supported drafting the policy documents, which should guide government entities to prioritise investments benefitting both sustainable development and biodiversity conservation. The initiative started back in 2010, after the creation of the Ministry of Environment (2008) and was finally concreted in August 2015.   

Hosting over 1,700 bird species, Peru is considered one of world’s megadiverse countries. According to the Convention on Biological Diversity, “Peru’s biodiversity is one of the pillars of its national economy, plays a direct role in sustaining a large part of the population, has an important role for culture, science and technology and provides essential environmental services in terms of soil fertility, air quality and water supply”. It is estimated the country’s natural capital, such as forests, biodiversity and water, made a direct contribution of 13.6 % of the GDP in 2012.

The Ministry of Environment (MINAM), in cooperation with the Ministry of Economy and Finance (MEF), launched the first instrument, the Policy Guidelines for Public Investment in Biodiversity and Ecosystem Services. They outline the main biodiversity-related criteria public agencies have to consider when applying for Public Investment Projects (PIP). The criteria focus on conservation, sustainable use, knowledge management, capacity building and threats. The Ministry of Economy and Finance (MEF) developed the second instrument, the Standards for Public Investment Projects in Biodiversity and Ecosystem Services, to complement the Guidelines.

“The technical support that BIOFIN and ProAmbiente-GIZ bring to the table as well as the demonstrated commitment from the Ministry of Environment and Ministry of Economy and Finance were essential contributions to develop these policy instruments” said José Alvarez Alonso, Biodiversity Director of the Ministry of Environment, in a letter sent to UNDP. He highlighted the instruments represent a solid basis for mobilizing public resources for biodiversity.

BIOFIN, in collaboration with the Ecosystem based Adaptation in Mountain Ecosystems (EBA Mountain) project and other partners, supports the implementation of a Public Investment Project for the community of Tomas in the Nor Yauyos Cochas Landscape Reserve (East of the capital city Lima), to pilot both instruments.

“This will be one of three pilots supported by BIOFIN, in coordination with MINAM and MEF, with the aim to develop lessons learned in the early application of the new policy guidelines and standards” explains James Leslie, UNDP Technical Advisor in Ecosystems and Climate Change, based in Lima.

In addition to the pilot projects, UNDP, MINAM and MEF will roll out a capacity development programme for local and regional governments in an effort to expand the use of the guidelines to the national level.

Foto: © Daniel Silva/MST Apurímac/MINAM/PNUD/GEF