Financing action to combat desertification

How much money is needed to combat desertification? It is difficult to estimate just how much money will be needed to achieve the objective of the Convention to Combat Desertifi- cation. The cost will depend largely on the contents of the National Action Programmes (NAPs) through which affected countries will seek to implement the Convention. The United Nations Environment Programme (UNEP) estimates that an effective 20-year global effort would cost US$ 10-22 billion per year. To put this estimate in perspective, UNEP also calculates that desertification currently causes affected countries to forego some US$ 42 billion in income per year.

What are the major sources of funding? The largest source of funds is the affected countries themselves. The largest external source for Africa is bilateral official development assistance provided on grant or concessional terms. Multilateral bank loans made on a commercial basis are the major external source of funds for Latin America and Asia. Foreign private investment is also important in these regions, although it has been largely untapped in Africa. The World Bank, the International Fund for Agricultural Development (IFAD), regional development banks, and other international financial institutions also play a prominent role, as do United Nations organizations and agencies. Non-governmental organizations (NGOs) are another significant source, particularly in Africa. Since the adoption of Land degradation as a GEF Focal area and ensuing Operational Programme on sustainable land management (OP.15), the implementation of the Convention can rely on predictable financial resources never availed before. The GEF is therefore one of major sources of funding.

What financial commitments do the Parties make? Affected developing counties are to allocate adequate resources, given their circumstances and capabilities. Developed countries are to provide “substantial financial resources and other forms of support”, including grants and concessional loans, through both bilateral and multilateral channels. They also pledge to seek new and additional funding through the Global Environment Facility (GEF) for activities to combat desertification under its new operational programme 15. In addition to funding land degradation projects, this programme also envisages to fund the elaboration of action programmes and national reports under the Convention, through capacity building components. Action programmes have proven to be costly. Furthermore, developed countries will encourage funding from private sector and non-governmental sources, including debt swaps and other innovative means of reducing external debt burdens. Over and above these commitments, any Party can voluntarily provide financial resources to affected developing countries.

How will the flow of funding from donors to affected countries be coordinated in order to ensure maximum effectiveness? At its first session in October 1997, the Conference of the Parties identified IFAD as the Host Institution of the Global Mechanism; its role is to promote actions leading to the mobilization and the channelling of substantial resources to affected developing countries, including the transfer of technology. It is expected that with the new GEF focal area, the role of the Global Mechanism will be further strengthened as a financial broker, particularly regarding the co-funding resources required for GEF intervention

How will funding be channeled to the projects and activities where it is most needed? The Convention stresses that funds must be raised and then allocated using an integrated “bottom-up” approach involving the full participation of local communities. The Regional Implementation Annex for Africa states that recipient governments will establish policies and procedures for channelling resources more effectively to groups at the local level. They will enable non-governmental organizations to assume an unprecedented role in ensuring that local communities obtain the external resources they need to carry out their own programmes. Governments will also provide a macroeconomic framework conducive to mobilizing financial resources and will ensure that the financial package is fully integrated into their overall national development programme. For its part, the COP will promote national desertification funds and other mechanisms for directing funds to the local level.

Relevant parts of the Convention: Articles 5, 6, 13, 20 and 21, plus Regional Implementation Annexes for Africa (Article 15), Latin America and the Caribbean (Article 6), Asia (Article 7), and Central and Eastern Europe (Article 7)