Step 5.4: Refine cost models with expert input
Once the initial costing models are established, they can be refined through an iterative process. Consultations with experts can be used to refine costing assumptions, base costs and unit numbers. These discussions with experts can also assess the most cost-effective alternative actions and approaches to achieve biodiversity results. Following individual expert consultations, a workshop may be needed for specific actions. The workshop can be used to test, finalize and validate the assumptions, and the choices of costable actions, results, indicators, targets, etc. refined during the FNA process. Figure 5.3 summarizes an example of this multistage process from the Philippines, working through three levels of detail. An example of how this was applied, to progress from a draft to a more specific inland wetlands budget in the Philippines, is provided in Box 5.5. Note that in the future, more complex biodiversity costing models can be developed, with learning from other sectors (see Box 5.6).
Figure 5.3: Using Three Estimation Levels as a BIOFIN Process in the Philippines
Box 5.5: Example of Budgeting for Inland Wetlands Rehabilitation - the Philippines
An example from the Philippines concerns the initial formulation of the NBSAP Action, “Rehabilitate priority inland wetlands including peatlands”. The costing process involved several steps, as follows:
- Identification of specific sites: Lake Lanao; Lake Naujan; Lake Malasi; Seven Lakes; Mangyaw; Taal & Pansipit; Lake Maiinit; Lake Danao; Caimpugan Peat Swamp; Lalaguna Marsh; Cagayan River System (Upstream, midstream, coastal); Ilog Hinabangan; Pasig River; Rinconada Lakes; plus 22 marshes.
- Identification of sub-actions, as follows: i) design and implementation of plan to manage human settlements in wetlands; ii) reforestation; iii) soil conservation; and iv) identification of degraded marshlands.
- Determination of unit costs and quantities for personnel requirements.
- Determination of unit costs and quantities for maintenance and other operating expenses: reforestation (peso/hectare); assessment of marshes (peso/unit); soil quality monitoring (peso/unit); maintenance of wastewater management facility (peso/facility).
- Determination of unit costs and quantities for capital outlay: Peso 10 billion per facility for six wastewater management facilities.
These steps illustrate the process of clarification and quantification of specific actions and their costs, enabling a detailed budget.
Box 5.6: Future Directions for Biodiversity Costing
Note that that models for costing biodiversity results are less developed than in other areas of public policy. For example, the One Health Tool12 is software designed to inform national health planning. It links strategic objectives and targets of disease control and prevention to the required investments in health systems. The tool provides a single framework for scenario analysis, costing, impact analysis, budgeting and financing of strategies for all major diseases and health system components. Its development in the last decade was overseen by an Inter-Agency Working Group on Costing (UNAIDS, UNDP, UNFPA, UNICEF, World Bank and WHO). Other similar tools have been designed to support costing and investment decisions in economic sectors, including infrastructure, trade and industry
Biodiversity has a gap: Despite an emergent literature, and several attempts to link biophysical, economic and financial models, there is no available tool BIOFIN can recommend for immediate use. Additional research is being pursued to identify (and develop wherever possible) tools to facilitate results-based costing for biodiversity, linking alternative actions to cost structures and expected results. Moreover, attempts will be made to develop costing models within BIOFIN, on the basis of the analysis of the detailed expenditure reviews and costing exercises completed under national BIOFIN Processes. These will be used to derive cost-coefficients and/or list comparable standard costs.
Tagging Biodiversity Costs
In addition to reviewing and validating the costings, in this step all actions should be tagged to a range of additional categories that allow for further cross comparisons and analyses.
The recommended tags are:
- National biodiversity targets, themes or strategies;
- Implementing organization – based on the organizations identified in the PIR;
- Sectors – agriculture, forestry, fisheries, extractives, etc.; and
- The 9 BIOFIN categories.
And where possible:
- SDGs;
- Aichi Targets; and
- SEEA categories.
By tagging each action to these categories, it will be possible to calculate the financial needs under each of them (see Step 5.5). Once the consultation process has been completed, the team working on the spreadsheets and tables can update the assumptions and results, and produce the final costing draft for validation by the report’s clients.
