Federico Vignati
Ejecutivo Principal de la Vicepresidencia del Sector Privado en CAF
Latin America and the Caribbean is the region with the greatest biodiversity on the planet, with approximately 40% of the world’s known species. The economic value of nature’s contribution to people is estimated at more than US$24 trillion per year, equivalent to the entire region’s GDP. Despite the valuable natural resources the region boasts, biodiversity is not yet recognized as a relevant comparative advantage and a real asset when modelling economic development.
This situation promotes the perception that biological resources are unambiguously renewable, and that preserving biodiversity reserves represents a current expenditure instead of a strategic investment. The logical upshot of this notion is detailed in the first study on the Global Assessment of Biodiversity and Ecosystems, carried out by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), a United Nations agency.
The key message the study reveals is that, despite the efforts and achievements at national, civil society, private sector and international community level to value natural capital and promote a transformative economic development agenda, the results achieved thus far are insufficient.
The net balance is negative and, as the assessment indicates, under current conditions, there are one million endangered species, which jeopardizes the delicate and complex balance that sustains life on the planet.
The situation is the result of a set of variables, including notably the following:
- The loss and fragmentation of habitats, which reduces mobility and, consequently, the gene exchange capacity of species, thus weakening them into their extinction (18 million hectares deforested in 2017);
- Habitat pollution by pesticides and toxic wastes, which poison ecosystems, reducing the ability of species to survive and regenerate (25% of the known insect species are becoming extinct, at a rate of 2.5% per year);
- Overexploitation and destructive harvesting practices hinder the regeneration of biodiversity, pushing species to the limit (one in three commercial marine species are exploited above their reproductive capacity);
- Climate change, which pushes species into an abrupt adaptation process for which most of them are not genetically prepared (a temperature rise of 0.6° C since 1960, and 1.5° C by 2050).
Instead of analyzing the underlying causes of these pressures, the core element of this trend is the logical interpretation from a economic policy and political economy standpoint on how to use and harness biodiversity. All signs show that this is the right time for new interpretations to be put into practice, in line with the present times.
In addition to pointing out the risks of maintaining the status quo, the study also argues for the need to promote a productive transformation agenda, which effectively reconciles the economic development agenda with the inherent opportunities for sustainable use of the biological resources of biodiversity. An obvious and relatively advanced example of valuation and conservation of biodiversity is tourism. However, opportunities extend directly to other industries, such as food, forestry, cosmetics and pharmaceuticals, which together account for 15% of the region’s GDP and about 50% of total exports.
It is well known that biodiversity represents the backbone of human well-being. While it may seem obvious, it is worth noting that the supply of quality water and air, genetic resources and climate regulation are some of the irreplaceable benefits of nature to human well-being. As Thomas Lovejoy, who works for the United Nations and is considered by many to be the “godfather of biodiversity,” points out: “About 70% of drugs used for cancer are natural or biologically based products. Biodiversity’s contribution to health increases every day and represents a billion-dollar economy.”
In face of the many contributions and opportunities that biodiversity offers to well-being and the economy, and with the prospect of understanding biodiversity as a possible strategic axis for Latin America and the Caribbean’s development, it is important to put some issues in perspective. Is it possible to monetize biodiversity services? How to improve public and private investment to create positive impacts on biodiversity? What is the opportunity cost of following the current trend? What tools and skills are required to drive a biodiversity-friendly productive transformation?
In this sense, CAF’s Biodiversity Program (2015-2019) recognizes that conservation and sustainable use of biodiversity is decisive in the productive transformation required by the region. Therefore, through technical assistance, credit operations and mobilization of environmental funds, the institution supports its shareholder countries to help them achieve their national goals and international commitments, including compliance with the AICHI Targets and protocols of the Convention on Biological Diversity.
