People, Planet, Prosperity Colombia Pilot Project: Compensation Mechanisms to Protect Nature and Support Stewardship

This pilot within the People, Planet, Prosperity project will support the economic valuation of the contributions of nature to the energy, agriculture, forestry, and tourism sectors, and to high income/population municipalities; it will implement a pilot to assess the benefits of protected areas in the Northeastern Andes region, toward development of compensation mechanisms; and it will generate lessons and methodological contributions to advance the implementation of the Environmental Economic Accounting System - Ecosystem Accounting in Colombia. Key collaborators: Inter-American Development Bank (IDB); Colombia National Planning Department (DNP); Colombia Ministry of Environment and Sustainable Development; Colombia National Department of Statistics (DANE). It is funded by the Global Environment Facility (GEF). 

Background

Colombia is home to almost 10% of the world’s biodiversity. It is also culturally, linguistically, and geographically diverse, encompassing a range of unique ecosystems. In 2021, the country developed a roadmap to conserve 30% of its land and sea by 2030: the National Policy for the Consolidation of the National System of Protected Areas-SINAP (known as CONPES 4050). Yet a substantial increase in funding is needed. An innovative aspect of CONPES 4050 is its focus on shared responsibility: recognizing that economic sectors such as energy, tourism, forestry, and agriculture, and municipalities with higher incomes and population benefit from the ecosystem services provided by protected areas, it proposes compensation mechanisms to generate new financing streams for nature protection. This financing would include compensating communities for their stewardship of protected areas and the constraints on their economic activities.  

The pilot project

This project directly supports CONPES 4050 by applying natural capital assessments and accounting (NCAA) to estimate the economic value of the flows of ecosystem services originating in protected areas. This information is a key component in the adoption of equitable compensation schemes and financing mechanisms. The project is also aligned with the objectives of Colombia’s Climate Action Law, which promote the adoption of the principles and standards of the System of Environmental-Economic Accounting - Ecosystem Accounting (UN-SEEA-EA). This would provide a standardized and scalable approach to accounting and monitoring for the benefits of ecosystems to Colombian people and economy. This project grew out of previous collaborations.