Financial support for biodiversity protection in developing countries — does the CBD mechanism lead to an appropriate level of biodiversity protection?

Summary

The contribution concerns the Convention on Biodiversity (CBD) and the provision of money for biodiversity protection in developing countries. The CBD proposes a solution to solve the problem of insufficient biodiversity protection in developing countries: the contracting developed country parties have committed themselves to provide »new and additional financial resources« to developing countries in order to enable them to protect their own biodiversity (Article 20). This contribution describes what is understood as an economic analysis and an economic perspective. Biodiversity services are considered as global public goods. The problem of providing these goods is explained. Articles 20 and 21 are presented as a solution to the market failure problem of providing global public goods. The following questions are examined: (1) Do the new and additional financial resources provided through GEF lead to an appropriate level of biodiversity protection? (2) Will the negotiations lead to an appropriate level of biodiversity protection? To answer the first question, estimated costs for biodiversity protection and actual spending of the GEF are compared. With regard to the second question, the replenishment regulations are analysed. Both of these considerations lead to the hypothesis that the actual regulations lead to an undersupply of global biodiversity protection. It is argued that the economic criterion for the amounts of money provided by the industrialised countries should equal the benefits derived from biodiversity protection. To corroborate the hypothesis a contingent valuation study and its results are presented. The results of the survey are compared to the actual spending of the GEF. They support the assumption that the request for global biodiversity protection is definitely higher than the actual spending of the GEF.