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Biodiversity in Latin America and the Caribbean

Even though our existence depends on nature, humanity activities are driving an existential biodiversity crisis.  

  • Nature provides goods and services that are essential for human well-being and our economies, from goods that humanity can harvest and extract (i.e., water, food, water, timber, biofuel, medicines) to ecosystem services that underpin life on Earth as we know it (i.e. nutrient cycling, production of atmospheric oxygen, flood control, hydrological cycle, and climate regulation) ​(IPBES, 2017)​.  Research suggests that 55% of the world's total GDP, amounting to approximately US$ 58 trillion, depends moderately or highly on nature and its ecosystem services.1
  • Biodiversity and ecosystems are declining globally and pressures leading such decline are intensifying, requiring urgent action to reverse nature loss and avoid a 6th mass extinction (IPBES, 2019). There has been a global average decline of 69% in species populations since 1970 - LAC is at the very top of the list with an alarming 94% drop (WWF, 2022).

The biodiversity crisis is caused by our methods of production and standards of consumption, which exceed nature’s capacity to supply us with the same services and goods we depend on.

  • Food production is responsible for about 60-70% of the loss of different species on land and around 50% in freshwater.
  • Wood extraction is the primary contributor to forest biodiversity degradation, accounting for 5-10% of global species loss.
  • Grey solutions in water management have led to a 20% decrease in species in rivers and 15% in floodplains.

This unsustainable pattern occurs because nature and its ecosystems services and goods are blind spots in economics and GDP accounting.2 The fact that the natural capital value has not been taken into account in our economic strategies has led to severe depletion of natural assets’ reserves on which our well-being and economies depend on. Between 1992 and 2014, the GDP /person doubled, while the natural capital stock/person was reduced by almost 40%.3


What can be done

  • The transformational change needed passes through how we asses, value, use, conserve and share the benefits from nature. The IDB’s strategy is focused around mainstreaming Natural Capital and Biodiversity across the IDB Group activities and main institutional-related strategies. Mainstream of natural capital and biodiversity requires knowledge development on ecosystems services and natural capital’s value contribution for countries and sectors, integration of knowledge into public policy, budgeting, and investment planning, and creation of innovative financing solutions for conservation and restoration.


1.     Bank Initiatives or operations. Examples of our work:

  • Debt-for-nature conversions guarantees: IDB will continue to lead among MDBs on debt for nature conversions, collaborating with co-guarantors and partners to deliver up to $2 billion for conservation outcomes in the next 5 years. In 2023, the IDB and the U.S. International Development Finance Corporation (DFC) supported the largest ever DFNC to protect the Hermandad Marine Reserve in the Galapagos. The combination of DFC’s political risk insurance of $656 million and the IDB guarantee of $85 million allowed Ecuador to buy back $1.6 billion with the use of Blue Bonds generating more than $450 million for conservation over a period 18 years. In Barbados, the operation comprised of a US$100 million guarantee from the IDB and another US$50 million guarantee from TNC that enhanced a loan provided to Barbados (Blue Loan) to buyback existing debt. The savings generated by the operation will be used by Barbados to fund a conservation fund to achieve a conservation commitment.


2.     Mainstreaming Biodiversity into policy, public budgeting, and investment planning

  • The IDB supports LAC countries integrate biodiversity into their public policy, budgeting, and investment design and planning processes. Through such processes, natural capital value is included into national accounting systems and the process allows for creation of policy cohesion amongst different ministries. Biodiversity and natural capital issues are more prevalent in the recently approved and updated Country Strategies and Country (CS) Development Challenges documents (CDC). By 2023, 83% of all country-strategies already presented the opportunities natural capital and biodiversity.
  • The IDB is implementing a GEF funded project, with the Natural Capital Project team, from Stanford University, through pilot projects in five countries Belize, Chile, Colombia, Ecuador, and Uruguay. The $2 million project is focused on transforming policy and investment through mainstreaming rapid approaches for natural capital assessment and accounting.
  • The IDB recently announced a new $10M fund with the United States to advance use of innovative finance solutions to finance nature solutions to tackle climate challenges in the countries of the Americas Partnership for Prosperity.
  • In Chile, IDB is supporting the development and implementation of a Natural Capital Committee - a forum formed by the ministries of finance, economy, environment and the central bank which will enable policy cohesion and lead to the integration of Natural value Capital into national accounts. This work includes a pilot on policy and finance for water management.
  • The IDB supports Colombia in exploring national capital accounts, gross ecosystem product accounting, and various economic valuations for policy planning purposes. The Bank continues to work with Colombia including supporting its government on the COP-16 Agenda.
  • The IDB supported Costa Rica in drafting its Blue Economy Recovery strategy, now a part of the national development plan. This strategy includes outcomes for nature and people, and concrete financing targets and mechanisms.
  • The IDB is working with the Coalition of Finance Ministers of the Amazon on green/biodiversity taxonomies as part of overall sustainability taxonomies.
  • The IDB is supporting G20 in the sustainable finance nature-based solutions track and bioeconomy track.
  • The IDB makes the Integrated Economic Environmental Modeling tool which creates scenarios that value nature for a variety of decisions.  It has been applied in a number of policy contexts, and is open source. The IDB has supported a number of countries in creating national nature accounts.
  • The IDB undertook an economic valuation of the Mesoamerican reef to inform the development of an insurance product that insures the reef as natural infrastructure.  A follow-up study of the value of the mangroves and corals of the Dominican Republic is underway.
  • Green Coalition of National development Banks for Amazon: The first ever Green Coalition of 20 development banks that operate in the Amazon region, launched by the IDB and BNDES, with 20 additional Amazon region public development banks (PDBs), and the World Bank and CAF. The goal is to integrate collaboration between Amazon basin countries, PDBs and MDBs to deliver solutions where they are needed most and mobilize additional resources and technical assistance in the range of US$10 to 20 billion by 2030.


3.     Policy Integration of Nature-Based Solutions:

  • The IDB is creating toolkits and policy guides to support the incorporation of nature-based solutions into policy frameworks to encourage private investment. The NBS Accelerator with $3.7M from the Global Affaire Canada, will enable conditions for NBS investment in 4 pilot countries (Colombia, Guatemala, Bazil, and Mexico).
  • Rehabilitation and Housing Program in Asunción: The collaboration with Asunción focuses on incorporating Nature-Based Solutions into a rehabilitation project, reducing flood risk for vulnerable communities near the Paraguay River. The initiative includes funding for the restoration of ponds, wetlands, and green infrastructure, with 72.11% of resources invested in climate change mitigation and adaptation activities.
  • The IDB is supporting Chile to develop their first Water Security National Plan, which includes a specific key axis of work for the mainstreaming of NBS within the watersheds’ investment planning and resources management.
  • Panama Project: The IDB is supporting Panamá to promoting the conservation and protection of coastal natural capital (mangroves and wetlands) with US$ 2.3 M from the UK's Blue Carbon Fund. This project supports scientific activities to quantify blue carbon stored in the mangroves of Parita Bay and Panama Bay, as well as complementary research on mangrove dynamics, such as the mapping of mangrove and bird species as an indicator of the ecosystem's health.
  • In Dominican Republic the IDB is supporting the formulation of a Nature-based solutions portfolio for the watershed management of the Yuna basin to reduce climate vulnerability.


4.     Innovative financing solution:

  • The GCF Project Amazon Bioeconomy Fund Program has a specific component dedicated to supporting public entities (including national or sub-national governments and National Development Banks) to leverage capital market financing through the issuance of thematic bonds with a focus on bioeconomy investments. The Bolivia BioEconomy Fund is a project focused on conservation and sustainable bio-trade in the Bolivian Amazon. This project aims to support IDB Lab’s EcoMicro Program in Bolivia by including natural capital valuation and development in the country’s bioeconomy. This investment will create the first privately-led bioeconomy blended finance fund to support regenerative agro forestry by Indigenous peoples. The first Bioeconomy Fund was stablished in Peru with a 20M loan to government and 5M on concessional finance to help the design and tracking of biodiversity targets.
  • IDB-CLIMA, a new results-based mechanism (with 3rd party verification) to provide discounts to IDB clients on IDB products based on achievement of KPIs on climate and biodiversity.
  • Development species bonds with results based KPIs on nature, climate, and social impact in Central America and the Amazon. Such as the Jaguar Bonds, or market instruments, such as the Habitat Bank Terrasos3 in Colombia, epitomize innovative biodiversity investment solutions that the IDBG is prepared to scale and replicate throughout the region. Project CO-T1638, looks to scale the Habitat Bank Program in Colombia. The project sets up Habitat Banks, a private sector outcomes payment solution to nature compensation and restoration. This strategy has already had proof of concept in a regulated market in Colombia and looks to be replicated in Peru.
  • Development of SLBs related to climate and nature in multiple countries.
  • Creation and governance of conservation trust funds in Chile, Ecuador, and Barbados.


5.     Other highlights are:

  • Natural Capital Lab Policy Forest innovation: The IDB continues to support countries in developing innovative solutions to avoid deforestation or to reforest degraded areas through 24M euro in funding from the French government.  Projects are under way to support traceability of sustainably produced products, provide finance to forest entrepreneurs, support restorative bioeconomy projects, and generate new agroforestry practices, among others.  
  • Natural Capital Lab Policy Mangrove restoration: The IDB continues to deploy 12M pounds from the United Kingdom into projects in Colombia, Panama, Suriname, and Jamaica that restore and conserve mangrove ecosystems for the benefit of climate and livelihoods.  The program is also developing a new MRV system for blue carbon, tailored to the needs of the region.
  • Amazonia Forever framework we have set for ourselves an increased ambition for the Amazon and providing at least US$5 billion in resources to the Amazon by 2030.  The program pioneered large-scale work in Amazon biome, focusing on national as well as cross-border challenges and actions. Amazonia Forever has already achieved significant results in creating integrated narrative and increasing collaboration among key stakeholders and has mobilized significant funds for forest protection and conservation from IDB's own capital, multi-donor trust funds and the GCF, among others.  During COP 28, IDB announced a new partnership with the Government of Sweden, to more than double Amazonia Forever resources to US$800 million through a credit substitution guarantee by Sweden. A core element of the Amazonia Forever Program is the Network of Ministers of Finance and Planning of the Amazon countries established to scale up regional collaboration and strengthen the finance/ environment/nature nexus, with a particular focus on scaling up of financial ambition in the Amazon region and monitoring the progress of Amazonia Forever.
  • Other regional initiatives such as One Caribbean, and America at the Center.

Borges De Padua Goulart Janaina

Borges De Padua Goulart Janaina
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