Kanta Kumari, Biodiversity Program Manager, GEF Secretariat, 1776 G Street, NW, Washington, DC, 20433, Tel: , kkumari@worldbank.

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1 SUSTAINABLE FINANCING AND THE BCTF ACTION PLAN Kanta Kumari, Biodiversity Program Manager, GEF Secretariat, 1776 G Street, NW, Washington, DC, 20433, Tel: , kkumari@worldbank.org SUMMARY POINTS One of the objectives of this workshop is to initiate a BCTF Action Plan for A financing strategy must be an essential part of this action plan Sustainable financing strategies are needed because: the problem is immense and trends are escalating; efforts need to be multiplied and scaled up; the issue needs a multi-pronged approach; for the foreseeable future, the costs are higher than the returns; and there is a need for a source of finances to support and sustain efforts that have to be undertaken to address the bushmeat crises. Key aspects for effective financing include: a reliable, continuous stream of funds; funds being used at the right place at the right time in support of the most appropriate types of activity; realizing the desired outcome(s). The bushmeat crisis needs immediate, urgent, contingency-based action, as well as a targeted approach focused more explicitly on bushmeat in addition to holistic, integrated approaches. Funds are needed urgently and for quite a while. Funding for short-term solutions may be more urgent than long-term solutions. One sustainable financing strategy should focus on short-term targeted funding, while another sustainable financing strategy should focus on medium to long-term integrated holistic funding. To address proximate, intermediate threats and underlying causes, the following types of activities should be funded: public awareness, outreach, and advocacy; community-based support; research (baseline assessments); applied research (alternatives); education and training; policy, legal, and regulatory frameworks; technology-based options; piloting innovative projects; and dissemination of best practices. Types of costs include: transaction/set-up costs; recurrent costs (staff, monitoring and enforcement); and opportunity costs (foregone options). Each of these cost types are incurred at different levels (community, national, regional, global), thus there is a need for multiple levels of financing strategies. Sources of funding include: governments; conservation NGOs (WWF, WCS, CI, JGI, DF etc.); bilateral agencies (DFID, KfW, Danida etc.); multilateral agencies (GEF, WB, UNDP etc.); industry/private sector; philanthropists; general public; as well as from specific schemes, such as game ranching, cropping, safari hunting, etc. Standard modalities of funding include: grants, loans; trust funds, and government budgets. Creative, innovative modalities of funding may include using the example of adaptation fund as in Kyoto Protocol, as well as directing tax from logging companies (function of extent of access road, profits, and some other variables). Kumari BCTF CAP Meeting Proceedings 188

2 The Sustainable Financing Working Group should consider priority actions to mobilize sustainable financing, who should take the lead for each priority action, and the role of BCTF and individual institutions and consortium. BACKGROUND The charge given to the working group on sustainable financing is to explore the options for mobilizing sustainable financing to address and solve the bushmeat problem. One of the key objectives of this workshop is to initiate a Bushmeat Crisis Task Force (BCTF) action plan for the next 3 to 4 years. A financial strategy must be an essential part of such an action plan. The question which may arise is: why do we need a financing strategy? First, the bushmeat problem is immense, and all the trends relating to this problem are escalating. Everything seems to suggest that the situation is becoming even more of a crisis, rather than less. Second, even while we have lots of good efforts to address this issue from different parts of the world, including within Africa, these efforts clearly need to be multiplied and scaled up if we are to get a handle on this crisis. Third, the issues really need a multi-pronged approach which needs to go beyond the traditional wildlife related sectors, and needs to be applied at several scales (from local, national to global). Fourth, although there are some successful schemes which indicate the potential for revenue generation through wise management for bushmeat, in the foreseeable future the cost of bushmeat management is likely to be much higher than the returns. For all of these reasons, a financing strategy is critical for effective delivery of any proposed BCTF action plan. PROBLEM STATEMENT The operative word when formulating a financial strategy for bushmeat is crisis. A crisis indicates the need for immediate, urgent, contingency-based responses which are targeted to focus explicitly on bushmeat, while recognizing the need to place these responses within the context of holistic integrated approaches. That is to say it is imperative to act on the proximate factors operating on bushmeat, while recognizing and addressing the intermediate and root causes of the problem. There is a clear need for urgent funds because of the crisis nature of the problem, as well as longer term funds because the trends seems to suggest that the problem is likely to take some time before it is arrested. What does this short-term and longer term response mean in terms of designing a financing strategy? GOAL/PROJECT DESCRIPTION The charge given to the working group on sustainable financing is to identify priority actions to mobilize sustainable financing, particularly who should take the lead for this, the kind of role that BCTF and all its constituent partners could take, and where initial action should be focused. PROPOSED ACTIONS There are two parts to a financing strategy for the BCTF action plan which need to be addressed. First is the mobilization of funds; and the second is the utilization of these funds. The bushmeat crisis situation indicates the need to mobilize significant Kumari BCTF CAP Meeting Proceedings 189

3 funding over a fairly long term, in view of the imminent challenges posed by the bushmeat crisis, and to bring the situation under control. A key feature in mobilizing funds is to ensure that there is a reliable continuous stream of funds. The worst case scenario is one where an effort gets going and just as things are beginning to work, the funds run out. In terms of utilization, it is important that the funds are at the right place, at the right time in support of the most appropriate types of activity, to realize the desired outcome. Often times, specialists tend to see the world s problems through their particular lens, and funds may not be used to address the needs of the situation, rather the wants. As mentioned above, once the funds are available, there is a need for a two pronged approach in designing the financing strategy: one which looks at short-term targeted funding, focusing on the problem of bushmeat, and the other is medium to longterm funding to address the underlying causes of the problem. Clearly, some of these responses would be linked and can (and should) run concurrently. Within each of these time-bound strategies we need to consider the types of activities that would be addressed, the sources and modalities of funding. The type of activities which need to be funded have been variously enumerated over the last two days, and they include public awareness, outreach and advocacy, community-based support, research, education and training, policy, legal and regulatory frameworks, technology-based options, dissemination of best practices and consumer demand for bushmeat. The next section will look at sources and modalities of funding. There are various kinds of costs associated with such activities. For example, transaction costs which clearly need to be undertaken upfront and have no returns, and often times these costs can be high. Some other activities have recurrent costs that have to be met, until such time that a revenue stream is available to offset these costs. In other cases, recurrent costs may be a permanent feature of a program. Then there are opportunity costs that communities and/or local governments have to forego as a consequence of the implementation of a conservation strategy. Each of these costs are incurred at different levels, and by different sectors of society. As with the type of activities, the costs have to be borne at different levels (from local, national, to global) and by different stakeholders in society. This again has implications for the mobilization and utilization aspects of the financial strategy. Sources of funding There are a variety of sources of funding including: governments, conservation NGOs (WWF, WCS, CI, etc.), bilateral agencies (DfiD, KfW, DANIDA etc.), multilateral agencies (GEF, World Bank, UNDP etc.), industry (logging), private sector, philanthropists, and the general public. Government is a really an important source of funding. At the GEF, in the last 10 years, we have provided up to a billion dollars for biodiversity support. And the interesting part is that a major co-financer, besides all the multilateral and bilaterals, is actually the governments themselves. This fact is often understated and often not even recognized. The role of governments, and their contribution, both in cash and in-kind is critical, and also because the longer term sustainability can only be assured through their support. Funding can also be raised from specific revenue generating schemes (such as game ranching, cropping, safari hunting etc.), although the funds in this case may be largely for the site where they are collected. Kumari BCTF CAP Meeting Proceedings 190

4 Modalities of funding There is also a strong need to explore the modalities in which the funding is disbursed to the various activities and projects. Grants are an important way in which activities are supported. Other funding modalities commonly applied include: loans, trust funds, and government budgets. There is, however, a need to explore creative ways in which funding is provided to projects, as this would contribute to increased involvement of, and credibility, with donors and stakeholders especially if this is met with improved impact on the ground. For example, the Kyoto Protocol as it moves forward in being operationalized, will use an adaptation fund built up from the carbon credits accrued. The rationale being that when countries or companies get carbon credits, they would pay a flat tax which would go into an adaptation fund. That adaptation fund would then be used to assist the developing countries, and especially those most vulnerable to climate change, to address that problem. One could think of some way to come up with a kind of a direct tax to logging concessions as a function of access to forests, or even a function of the proximity of the concession site to a bushmeat hotspot. The taxes (funds) collected could then be used to deter bushmeat harvests at those sites. Such, and other innovative approaches, could be tested on a pilot basis. Sustainable Financing BCTF Priority Action Plan Table PRIORITY ACTIONS LEAD ACTOR BCTF'S ROLE Engage CBD on funding conservation activities in the forestry sector Develop a strategy for leveraging new corporate and private funding BCTF BCTF Providing Information Establish a committee to implement INITIAL FOCUS OR HOTSPOT Central Africa * Large funds for work in logging concessions * Conservation success stories * Funding needs * Corporate and family foundations * Council on Foundations * African grant-makers affinity network * "Program Related Investment" * Engage "Target" CEOs DISCUSSION SUMMARY SUSTAINABLE FINANCING [TRANSCRIPT] DR. DAVID WILKIE: We had a challenge coming up with new funding sources because they would be predicated on what we were going to use the funding for. So to begin with we had a sort of brainstorming session to say what are some of the key things that we really need to do within the bushmeat arena that we need funds for. And the first one of course was crisis investment, and we felt that the crisis investments were really to reinforce the support and expand upon the ongoing events in Kumari BCTF CAP Meeting Proceedings 191

5 the region in Central Africa which were primarily constraining supply. We re doing a good job of trying to prevent wildlife going out of the forest into urban areas for consumption. That was where we needed one source of investment. But in the longer term if we really are going to intervene in changing the overall demand for wildlife then we really need to work on much trickier things which are the economic alternatives and providing people with an alternative source of protein and those really are more development initiatives and they are much more long term and need different sources of financing over a different period. We talked a lot about the kinds of tool kits, though we didn t want to present a whole series of things or just a shopping list of things that we can do. But clearly trust funds and taxation and venture capital and conservation insurance are included in the whole series of potential tools one could use but it very much depends on what you re going to use it for. And lastly there was one strategic principle that related to all sources of funding and that is that there needs to be some continuity. You can t have a funding stream that happens and then drops off and then appears and then drops off. No project can function where you don t have continuity of financing. So after we went through the brainstorm, we basically came up with two priority actions and one was very much related to the fact that the donors at present are kind of wary about supporting ongoing collaborative investments between the NGOs and the private sector. Either the private sector in logging or the private sector in the oil industry. And we felt that there was a real opportunity coming up with the next CBD Conference of Parties meeting next April in 2002 where forestry is going to be the major discussion. We felt that the Bushmeat Crisis Task Force has a massive opportunity here to engage with the scientific committee which meets in November of 2001 to bring to the fore the issue that the donors really need to reengage. They really need to reengage the forestry sector. And that we collectively have lots of experience about ways that that can work effectively. On the ground at the moment in Central Africa we do have practical functioning examples of how conservation and the private sector can engage to reduce the bushmeat crisis. So we need to convey that information to the Science Advisory Group within the CBD and push really hard by having representation both in the science meeting and in the Conference of Parties meeting in April to really push this agenda. So we really want the donors to reengage and allow us to get large amounts of financing to reinforce ongoing activities and expand it much more broadly within the forestry sector of Central Africa. And the second thing, given that government financing in the United States seems to be declining a little bit, we need to look for new sources of finance. And it turns out there s a whole bunch of potential sources of finance that we haven t been tapping into yet. Corporate and family foundations tend to finance activities around their corporate headquarters. Well here s an opportunity for getting money from corporations that usually don t fund internationally but maybe if we bent their ears with our really good story and really good opportunities for financing they might move away from their more parochial view of corporate foundation financing to a much broader international view. There s a Council on Foundations that meets each year who think that BCTF should be able to send a representative there to try and get a workshop or a small sub meeting within that council meeting to talk about the bushmeat crisis, to talk about opportunities for financing and to seek ways in which corporate, and the Council on Foundations, could leverage moneys for the bushmeat crisis. Kumari BCTF CAP Meeting Proceedings 192

6 All of the large donors (such as MacArthur, the Rockefeller, Ford) have what is called a program of related investments which is really a tool for providing business capital to businesses that usually wouldn t be able to get financing from banks and other financing systems because of the risk. And again there is a potential, there is a possibility that we could seek financing for activities that wouldn t necessarily generate large rates of return but would have a huge conservation pay off. And again it s an opportunity for BCTF to figure out ways to engage with these new potential donor sources to find longterm continuous sources of finance. And lastly there was a suggestion to have the members of BCTF use their corporate clout and use their CEOs and presidents to engage with the really big US corporations, CEO to CEO, to argue that there are opportunities for good public relations for Coca Cola, Nike, Weyerhauser, Caterpillar, any of the big organizations that are both engaged in the logging sector in a secondary way or not engaged at all in the logging sector but have an opportunity to really get a greener image by doing something really concrete and substantial in Central Africa to address the bushmeat crisis. BCTF UPDATE-SUSTAINABLE FINANCING [August 2001] BCTF Sustainable Financing Sub-Committee formed MBA Consultancy Team contracted to produce strategic plan for BCTF and Private Industry Solutions to the Commercial Bushmeat Trade Meeting and discussions with Kanta Kumari (GEF) and Melissa Moye (WWF) to discuss BCTF Action Plan and sustainable financing Sustainable Financing and Funding Sources links page created for BCTF website Please cite as: Kumari, K Sustainable Financing and the BCTF Action Plan. In BCTF Collaborative Action Planning Meeting Proceedings. Edited by: N.D. Bailey, H.E. Eves, A. Stefan, and J.T. Stein. Bushmeat Crisis Task Force. Silver Spring, MD. 319 Pages. Available from [ Kumari BCTF CAP Meeting Proceedings 193