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ecosystem services

Road to Kunming: Economics and Finance for Biodiversity


The development objective of this activity is to raise awareness among staff in ministries of finance and other sector ministries of WB client countries and among international financial sector stakeholders of the importance and opportunity of investing in biodiversity and ecosystem services sustainable management.


Biodiversity and ecosystems are being lost at an alarming rate. The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), recently warned that the health of ecosystems on which humans and all other species depend is deteriorating more rapidly than ever. Around 1 million animal and plant species (out of an estimated 8 million in total) are now threatened with extinction, many within decades. This is more than ever before in human history.
This will eventually translate in impacts to economies, livelihoods, food security, health and quality of life worldwide. Current negative trends in biodiversity and ecosystems will undermine progress towards 80 percent (35 out of 44) of the assessed targets of the Sustainable Development Goals, related to poverty, hunger, health, water, cities, climate, oceans and land (SDGs 1, 2, 3, 6, 11, 13, 14 and 15). Loss of biodiversity has therefore shown to be not only an environmental issue, but also a developmental, economic, security, social and moral one.
The process for a post-2020 global biodiversity framework, under the auspices of the CBD, is now underway. In 2020 the CBD will adopt a post-2020 global biodiversity framework, post-2020 framework for short, as a stepping stone towards the 2050 Vision of "Living in harmony with nature".
A successful post-2020 global biodiversity framework will require doing things differently. Transformative action slowing down the rate of biodiversity loss will require a shift in production and consumption patterns. It will also call for adopting an ecosystem lens when planning infrastructure, and adaptation to climate change. While the public sector has historically played and continue to play a major role in conservation, the bulk of the actions going forward will need to come from the private sector. Private sector behavior will shift as a result of: (i) changing market preferences, and (ii) public policies that bring materiality to biodiversity considerations in private sector decisions. The latter will include a mix of: (a) regulatory instruments; (b) pricing instruments and market-based instruments; (c) information instruments. In addition, it will require public finance and public investments to be designed in a way compatible with Nature. These in turn will require the engagement of high-level decision makers including in Ministries of Finance, Planning and Central Banks.
This activity feeds into the broader objective of the Knowledge Product “The Road to Kunming” (P170709) which aims to (i) inform the World Bank’s efforts to integrate biodiversity and ecosystem services in its analytic and operation work; (ii) support CBD parties in the preparation of a post-2020 global biodiversity framework; and (iii) harness the interest of decision makers, including Ministries of Finance, of CBD parties, G7 countries and G20 countries.


Task 1. Event on “Invet in Nature” at IMF-WBG Annual Meetings 2019.
The World Bank and IMF Annual and Spring Meetings will serve as a key moment to engage Ministers of Finance in discussing the relevance of biodiversity and ecosystem services to development. Under the KP, an event titled “Invest in Nature: Uncovering the Hidden Value of Biodiversity” will be organized as part of the October 2019 IMF-WBG Annual Meetings. The event will highlight the intrinsic value of nature to economies, people and the planet and underscore the urgency for action to preserve this natural capital via a compelling presentation from the scientist that has led the latest IPBES global assessment. It will also provide an opportunity for innovators to showcase “Green and Blue” solutions to address the biodiversity crisis and create momentum ahead of the CBD COP 15 in China. A high-level panel will round out the event.
Task 2. China-WB workshop on “Maximizing private finance for biodiversity and ecosystem services”.
With the goal of informing the post-2020 process, including the thematic consultation on resource mobilization, with particular emphasis on the role of the private sector and the role of financial sector policies, a workshop will be co-organized by the Ministry of Ecology and Environment of China and the World Bank on this topic. The workshop will be in the form of an invitation only event and it will bring together a selected number of CBD parties, top thinkers and key stakeholders from China and the international community including from the public sector, private sector, financial sector, think tanks, NGOs and academia to assess lessons learned, analyze bottlenecks and identify opportunities for increasing the effectiveness of scarce public sector finance to leverage better biodiversity outcomes.
The workshop will aim at identifying what policy reforms are most needed to maximize private conservation finance. Two key set of policies exist: (i) real sector policies (e.g. fiscal, command and control, market creation, governance, trade); (ii) financial sector policies. The workshop will hinge particularly on financial sector policies. Financial regulators, the banking sector and investors around the world are increasingly developing instruments to take into account the risks associated with poor environmental performance. Going forward the tools need to be broadened to take into consideration the positive impacts investments in nature could have, shifting the focus away from traditional “green washing” and towards “real impacts”. In this context, key enabling factors are the capacity to measure impact through private sector level accounting (e.g. Natural Capital Protocol) and national level natural capital accounting.


Event on “Invest in Nature” at IMF-WBG Annual Meetings 2019. The event was attended in person by ~200 people in the room, including ministers, international organizations and Bank leadership, and online by 575 people (of which 41.3 percent women). Most people who engaged online were 25-34 years old. Almost 18,000 people visited the event page. The event was the fourth most livestreamed event at the 2019 Annual Meetings (out of 19 livestreamed events). The event hashtag #InvestInNature reached more than 5 million Twitter users, generating 23.5 million impressions worldwide, and trending in DC area during the live event. On live engagement/comments, the event was rated 2nd out of 19 live-streamed events. Online, the event attracted strong engagement from key influencers, including Alok Sharna, UK, Zac Goldsmith, UK, Inger Andersen, UN Environment, IPBES, CBD. 

China-WB workshop on “Maximizing private finance for biodiversity and ecosystem services”. Over the course of the two days, the workshop was attended by 67 (of which 26 women) representatives of the Chinese Government, notably from the Ministry of Finance and the MEE, and several other CBD Parties and the Secretariat, the European Commission, the financial sector, multilateral and bilateral development agencies, NGOs and academic experts. The workshop was attended at high level with two Director Generals (from Ministry of Finance and Ministry of Ecology and Environment). On the World Bank side, the event was attended by the ENB Global Director and by the EAP Regional Director.  

It had been envisaged that the activities would contribute to inform the preparation of the post-2020 global biodiversity framework and in particular the policy mainstreaming and the resource mobilization dimensions of the framework. Through the dialogue in these activities the team was able to inform the preparation of the zero draft of the post-2020 global biodiversity framework. The participation of the UK at the Annual Meetings event was instrumental in engaging with that country on follow up action such as a possible collaboration with DEFRA on ecosystem policy modelling. On the finance side, the activity allowed to inform the work of the expert panel on resource mobilization for the post-2020 framework. 


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Last Updated : 06-09-2020

In the Philippines, forest investments offer significant returns

It’s well understood that forests are worth more than the sum of their trees. As an ecosystem, forests provide an astonishing array of benefits, from the more obvious ones like timber, fruits and nuts, to the intangible ones like maintaining reliable flows of clean water. But how much are these benefits actually worth? And are forests really so much better at providing these services than, say, human-engineered technology?

According to a new study in the Philippines, reforestation and forest rehabilitation may truly be the most cost-effective option for producing valuable ecosystem services that many people depend on – especially given the uncertainties brought on by climate change.

With funding from the Program on Forests (PROFOR) and technical support from the World Bank, the Government of the Philippines studied three different areas to assess the value of certain “invisible” forest-derived benefits. The research found that healthy forests help reduce risks to climate variability by providing high-quality ecosystem services that contribute to more resilient communities.

For instance, the study showed that in the Upper Marikina River Basin – a degraded watershed upstream from Manila, where most inhabitants live below the poverty line - higher forest cover results in 149 to 167 percent higher water yields during the driest months of the year, ensuring a more reliable water supply during times of scarcity. Meanwhile, during the wettest months, forests can reduce the volume of floodwater in the watershed by 27 to 47 percent. Forests also stabilize hillsides and mountainsides in the region by decreasing the risk of soil erosion by 68 to 99 percent per hectare – helping reduce the impacts of natural hazards like flooding and landslides.

“These services are worth billions of pesos,” emphasized Eugene Soyosa, Economist at the Philippines Forest Management Bureau. “Maintaining forests has a much lower cost than if you would build check dams or other erosion control measures.”

Crucially from a sustainable development perspective, forest ecosystem services are integral to the well-being of poor communities in the Philippines. According to the findings at one pilot site, people obtain about 7 percent of their annual cash income from selling forest resources like bamboo, charcoal, fish, and bush meat.

“Poor households are very dependent on forests, especially for water provisioning services” said Maurice Andres Rawlins, Natural Resource Management Specialist at the World Bank and a lead author of the study. “If these services were lost and people had to pay for them, it could certainly set back poverty reduction gains.”

“In the pilot site of Upper Marikina, forests have been degraded for charcoal-making and the water supply is decreasing; at other sites, the siltation is very pronounced,” explained Soyosa. “When we first talked to communities, they perceive the idea of ecosystem services as too technical. But as the conversation moves on, it turns out that they know a lot about these benefits, and are being heavily impacted by the loss.”

Forest ecosystem services become more important as the impacts of climate change intensify. The Philippines - being an archipelagic country that is naturally vulnerable to typhoons, earthquakes and storm surges– also ranks among the top 5 countries most affected by climate change. According to projections, all areas of the Philippines will get warmer, contributing to more frequent extreme weather events. Dry seasons will become drier, and wet seasons wetter. This study confirms that forests provide services that make communities more resilient to climate change shocks, including acting as a safety net against poverty.   

The Government of the Philippines is already trying to reverse trends of severe deforestation and forest degradation across the country, and has been working on the valuation of ecosystem services with help from the World Bank-led Wealth Accounting and the Valuation of Ecosystem Services (WAVES) Global Partnership. This work is motivated by the recognition that documenting economic values of forest resources can help make forest investments more attractive, and thus improve the livelihoods of poor upland communities.

“The Philippines is committed to regreening,” said Rawlins. “They don’t want to just plant forests where there are none, but to undertake more strategic thinking about which areas to prioritize, and what kind of trees to plant. That’s where measuring specific ecosystem services results is so important. The question now is, ‘How do we mainstream these processes into planning?’ The ability of the government to include this work in their regular processes is the true sign of success.”

Findings of the study are intended to guide the Philippines’ National Greening Program by including forest ecosystem services into land use planning processes. Results have also shaped the indicators in the country’s Forest Investment Road Map (FIRM), which is the government’s strategy for accelerating sustainable economic growth in the wood industry through private sector investment.  The FIRM, in turn, is consistent with the Philippines Master Plan for Climate Change-Resilient Forestry Development, which aims to promote the development of forest plantations and increase the participation of the private sector, local government units, and organized upland communities.

“In the Philippines we have not yet established a national database on forest ecosystem services in terms of inputs into policies and programs,” said Larlyn Faith Aggabao, Senior Forest Management Specialist at the Forest Management Bureau. “This study is a useful start to institutionalizing and formulating a coordinated effort among different agencies for data collection, data sharing, and analysis. This information would provide significant inputs to forestry plans because there are trade-offs to any policy, and these need to be managed.”

(Photo credit: Gordon Bernard Ramos Ignacio)

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Last Updated : 05-31-2018

Understanding the Role of Forests in Supporting Livelihoods and Climate Resilience (and Twin Goals) in the Philippines


Tremendous progress has been made in reducing poverty over the past three decades. Nonetheless, more than 1 billion people worldwide still live in destitution. In addition, rising prosperity in many countries is accompanied by social exclusion and increasing inequality. The post-2015 Development Agenda has thus made reducing poverty its priority. The new World Bank strategy reinforces this objective, aiming to end extreme poverty in a generation and to promote shared prosperity for the bottom 40 percent. These goals will only be achieved if development is managed in an environmentally, socially, and fiscally sustainable manner.

The challenge for development is that the poor are often highly dependent on natural resources, such as forests. Although forests provide ecosystem services and safety nets for the livelihoods of the poor, forests are facing significant pressures from the range of sectors that are critical for economic growth, such as agriculture, transport and energy. Therefore, if sustainably managed, forests could play a significant role in achieving the twin goals of reducing poverty and building climate resilience. However, our understanding of this dual forest-poverty relationship is limited, which this study seeks to address..


This study focuses on the Philippines where, similar to many tropical countries, extensive deforestation and forest degradation have taken place over the last century due to logging, fires and other human disturbances, which are further aggravated by climate change. The country’s total forest cover has declined to merely 6.9 million hectares, or 23% of the total land area.

This study builds on the three primary roles that environmental income plays in supporting rural livelihoods: (i) supporting current consumption; (ii) providing safety nets to smooth income shocks or offset seasonal shortfalls, as well as impacts of climate change; and (iii) providing the opportunity to accumulate assets and exit poverty. Each of these roles is examined further in how they depend on and impact the ecosystem services provided by forests (including the impacts of climate change), and how they can help reduce extreme poverty and promote shared prosperity for the bottom 40%. Three case study sites were examined: the Upper Marikina RIver Basin Protected Landscape (UMRBPL), the Libmanan-Pulantuna Watershed (LPW), and the Umayam, Minor and Agusan Marsh Sub-basin (UMAM).


The final report Understanding the Role of Forests in Supporting Livelihoods and Climate Resilience is available at left. The overarching message of the study is that forests are relevant to climate resilience. Key findings include:
Water provisioning and regulating services:
  • Higher forest cover generates higher water yields during the driest months of the year. 
  • If the water regulating services provided by forests were to be replaced by delivered water, the expected costs would be USD 419-1,064 per household per year, depending on the study site. These costs will be prohibitive to most households in the study sites as the majority subsist below the poverty line.
  • Compared to a “no forest” scenario, forest reduce the volume of floodwater by 27% to 47% during the three wettest months of the year.  Forests on steep slopes (>30%) help mitigate the risk of erosion by 68% to 99% per hectare, and have the potential to reduce annual sediment outflows from watersheds by 7 to 100 times compared to bare soil. 
  • Replacing erosion and sediment control services with manmade control measures will cost billions of pesos. Reforestation is a lower-cost alternative to securing erosion regulation ecosystem services over the medium term.
  • Water was cited by poor upland communities as the most important subsistence benefit from the forest, which they use for domestic purposes and, in some instances, for irrigation. 
Economic and livelihood benefits:
  • Upland communities in UMRBPL reported that about 7% of their annual cash income comes from the sale of forest resources like bamboo products, charcoal, fish, and bush meat. Approximately 40% of their annual income comes from the sale of farm produce grown on forested land.
  • Forests also provide fuelwood and wood for charcoal, which supplies most of the communities’ energy needs.
  • Poorer households in upland communities rely more on forest resources for income and subsistence

The study concludes with a list of recommendations for landscape planning and forest management:

  • Incorporate ecosystem service modeling and valuation, forest use analysis and scenarios in forest land use planning and forest management. 
  • Improve access of upland and forest dwelling communities to forest resources.
  • Enhance the value of forest assets by internalizing non-market values and adding value to the existing sources of income.

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Last Updated : 04-05-2018