Adopting shared resources in both roles and function
Splitting the difference between the role performed by a human and the technology which performs a function and must be validated by a human in a role who does not have access to create the transaction being validated is a key control design criteria on all financial transactions.

2.2.1 The tax lever and the reform of harmful subsidies

Taxation is now the main instrument for biodiversity financing. The allocation of additional tax resources to biodiversity, however, is a matter of political will, particu- larly at the international level.

• The potential of environmental taxation may be envisioned in two ways: either as an instrument for generating revenues (a broad base and a low rate), some or all of which are allo- cated to conserving biodiversity (often via a specific fund), or as an incentive instrument (environmental taxation with a theo- retically decreasing yield). The current energy transition context and calls for reform of subsidies harmful to biodiversity is thereby opening up prospects for green taxation based on eliminating tax expenditures linked to fossil fuels.

• Financing for a number of national subsidies programmes that fund environmental services (agri-environmental measures under the greening of subsidies, PES) and, in certain cases, for conservation in protected areas, is based both in the North and the South on the specific taxation of sectors that are linked, to a greater or lesser extent, to the use of biodiversity or the pres- sure exerted on it (water, tourism, wood, hydrocarbons, tele- communications and the sale of emission quotas) at a rate that is sufficiently low so as not to affect its yield adversely.

Taxing financial transactions ($15 to 74 billion per annum) and CO2 emissions ($250 billion per annum in developed countries at the rate of $25 per tonne) could become the two main pillars of prospective international taxation, with a relatively stable, pre- dictable base to finance development and combat climate change. Estimates about its fundraising potential and the technical conditions for its implementation already exist, but their activation and the choice of allocating part of the revenues to international financing for biodiversity are subjected to political negotiations.

• A border tax adjustment mechanism – a principle defended by numerous economists, the feasibility of which was assessed by the WTO and the UNEP (2009) – for the imple- mentation of a carbon tax and for the European quotas trading system could be accompanied by a full redistribution of the revenue from such carbon adjustment to finance the manage- ment of biodiversity in the most vulnerable countries in the South. This would respond to demands for international fair- ness in combating biodiversity loss, e.g. through financing efforts to curb deforestation and adaptation to climate change where biodiversity plays an important role.

2.2.6 Innovative initiatives with great potential for biodiversity

By combining criteria of technical, social and (international) politi- cal feasibility with those of impact on biodiversity and potential for leveraging resources, this study selected three groups of initia- tives worthy of particular interest for the international community: the development of green markets based on eco-labelling, the reform (conversion) of the subsidies that are most harmful to biodiversity and the establishment of superoffsetting mechanisms for developments that significantly affect biodiversity.

2.2.6.1 The development of green markets

The potential for direct financing of biodiversity by the private sector beyond its regulatory obligations is limited. Presently, private-sector actors voluntarily make significant investments in conservation and the sustainable use of biodiversity only as a co-benefit of sustainable production with a quality label on those markets that are sensitive to such labels. This labelling generally takes the form of certification of sites or production processes

by a third party, but it can also form part of a regional develop- ment dynamic promoting the goods and services that result from biodiversity. As it targets global value chains to reduce direct pressures on biodiversity, eco-certification may play a part in the transition towards sustainable consumption and produc- tion patterns, even in countries with low governance standards. However, the green market share it is still relatively undeveloped in both the North and the South.

2.2.6.2 The conversion of subsidies harmful to biodiversity

Because it contributes to making public policies more consistent, which is a condition for the successful deployment of economic instruments to manage biodiversity, the reform of harmful subsidies is also essential in achieving a transition toward sustainable consumption and production patterns. If conditions for its implementation are created, this reform can not only reduce pressure on biodiversity, but also free up the resources required for a redeployment of incentives in favour of biodiversity in the form of ecoconditionality of subsidies or remuneration for environmental services. Above and beyond the requisite compensation for the redistributive effects of subsidies reform, its effect in favour of more sustainable practices may allow for the re-allocation of part of the freed-up resources to biodiversity – a double dividend.

2.2.6.3 Superoffsetting for damage to biodiversity

The other field that receives significant private-sector financing is that of compensation for damage to biodiversity under the management of its environmental impacts. It also concerns public-sector developers. This financing stems mainly from a legal obligation, increasingly from a standard imposed by an investor and, more infrequently, from a voluntary approach. In the absence of systematic ecological additionality of strict compensation for impacts (which is difficult to carry out) and as a result of its limited geographical scale, only the generalised application of an super offsetting principle could turn it into an international financing instrument for biodiversity.

The potential of environmental taxation must be exploited. To cover a conservative estimate of needs amounting to $150 billion per annum at the global level, we will probably not be able to take shortcuts when it comes to directing at least 10% of the revenue from so-called international taxation towards bio- diversity – once the levers of such taxation are clearly identified – or resorting to mechanisms such as the IMF’s special “green” drawing rights. A tax on carbon emissions or financial transactions would enable direct conservation to be financed (for which alternative sources to public funds are limited) as well as changes to large-scale agricultural technical pathways in the South. 

At the national level, above and beyond environmental taxes on tourism, water, energy and transport, resistance in the North must be overcome to tap the potential of a tax on pollution by nutrients and on the transformation of natural environments into artificial ones. In the South, consideration must be devoted to allocating part of the revenues from taxes on natural resources towards biodiversity to restore critical ecosystems.

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