UNEP Finance Initiative (UNEP FI) - Consultant for Good Growth Partnership in Paraguay fiscal incentives technical support

Result of Service The ultimate result of the service will be strengthened enabling conditions for the provision of public and private capital at scale for sustainable commodity production and the establishment of enhanced fiscal policies to support sustainable land use in Paraguay.

Work Location Working remotely

Expected duration The duration of the contract is 2 months.

Duties and Responsibilities The United Nations Environment Programme (UNEP) is the leading global environmental authority that sets the global environmental agenda, promotes the coherent implementation of the environmental dimension of sustainable development within the United Nations system and serves as an authoritative advocate for the global environment.

The overall objective of the UNEP’s Economy Division is to encourage decision makers in government, local authorities and industry to develop and adopt policies, strategies and practices and technologies that promote sustainable patterns of consumption and production, make efficient use of natural resources, ensure safe management of chemicals and contribute to making trade and environment policies mutually supportive. It promotes the development, use and transfer of policies, technologies, economic instruments, managerial practices and other tools that assist in environmentally sound decision making and the building of corresponding activities.

The United Nations Environment Programme Finance Initiative (UNEP FI) is the strategic partnership between the United Nations and over 400 banks, insurers and investors. For over 28 years UNEP FI has been shaping and driving the international sustainable finance agenda, setting global standards and growing a global network of leading financial institutions. Through its work-streams and regional activities, peer learning, methodology development, training and research, UNEP FI carries out its mission to help the financial industry align with and contribute to the Sustainable Development Goals and with that take on the crucial role it must play in achieving a sustainable future.

UNEP Finance Initiative in collaboration with the International Finance Corporation and in partnership with UNDP, WWF US and Conservation International, is executing a GEF funded project on enabling transactions for removing deforestation from commodity supply chains (“Good Growth Partnership”, hereinafter referred to as GGP) with a focus on palm oil in Indonesia and Liberia, soy in Brazil and beef in Paraguay. The project is comprised of three components:

1) Support to commercial transactions 2) Support to Financial Markets & Institutions 3) Support to Governments

In a rapidly evolving operating environment that increasingly recognize the importance of forests in supporting the functioning of agricultural commodity supply chains, risks created by unsustainable deforestation present a considerable threat for the long-term value of companies producing, transforming, transporting and selling these commodities.

The issue of finance mobilization to face the challenges related to forest and ecosystems loss has taken center-stage in the discussions. According to UNEP report State of Finance for Nature (2021) there is a USD 4.1 trillion financing gap to be closed for the world to meet the climate change, biodiversity, and land degradation targets, with current investments in Nature-based solutions amounting to only USD 133 billion, mostly from public sources. However, in a context where the share of government expenditure dedicated to ODA and agricultural investment is declining, it is key to ensure that scarce public resources are not only used most efficiently, but also help mobilize private finance.

Effective fiscal policies can play a role in redirecting private financial flows and support investments into more sustainable products, inputs, and activities, accelerating the move of production and consumption behaviours towards more resilient, environmentally sound, healthy, and socially fair food system. Through the use of financial incentives (subsidies, credit, loan guarantees, income support, payment for ecosystem schemes, tax credit, etc.), the government can help generate an environment conducive to green investments (e.g. by providing critical financial support attached to ecological services to small-scale producers), reduce the cost and risks for private investors in green technologies (e.g. through tax credits or feed-in tariffs). Fiscal instruments can also help raise public revenue (eg. through fuel or pollution tax, water tariffs) which can then be reallocated to social or environmental services, and support sustainable practices through targeted incentives (e.g. payment for ecosystem services, organic farming schemes).

There is extensive evidence that existing economic incentives (in the form of subsidies, credits, or tax relief, etc.) in the agri-food sector are often not aligned with sustainable objectives, but instead favor economic activities that cause environmental harm and biodiversity loss. The reform of those perverse incentives is one of the key opportunities for reform, as this will both free public and private resources towards ecological services, and incentivize investments in NbS that are currently underpriced and underprovided.

This consultancy will focus on GGP activities in Paraguay. As part of the ongoing technical support on issues relating to fiscal policy reform under Component 3 of the transaction child project, gaps and challenges with respect to the existing fiscal incentives regime have been identified. A legislative proposal was tabled in March 2022 which provides numerous amendments to Law 3001, the Environmental Services Law of Paraguay which will enable the Country to implement a payment for ecosystem services mechanism. In order to support the Government of Paraguay in the adoption of the amendment legislation the consultant will provide technical assistance to the Congress of the Government of Paraguay and to the Ministry of Environment (MADES).

The consultancy will review the feedback from the public and private stakeholders in Paraguay and compile a final report detailing the key feedback from Paraguayan stakeholders. The Consultant will then present a set of recommendations for the Senate of the Government of Paraguay to consider for formalizing this market through a legislative proposal. In addition to this, the outcomes of the consultancy will indirectly support ongoing efforts in Paraguay through other UNEP-led projects such as the Green Climate Fund which aims to develop a national climate fund and the GEF Food Systems, Land Use and Restoration project. For this project to address these aims we will require the services of the consultant that has established connections within the Government of Paraguay and with the GGP partnership.

Technical support In-country technical advice on sustainable finance in relation to GGP and other sustainable land use activities of UN Environment

The specific objectives of the consultancy include:

• Draft recommendations for the Ministry of Environment to adopt into the modification of Law 3001, the Environmental Services Law.
• Highlight key fiscal incentives that the Government of Paraguay can promote in support of Law 3001.

Deliverables:

• Annotated workplan and preliminary report that includes overview of key feedback that was provided by public and private stakeholders during the consultation phase of the modification of Law 3001 by October 2022.
• Final report that details key recommendation for the Ministry of Environment to adopt in for the modification of Law 3001 and proposed fiscal incentives for the Government of Paraguay to consider in support of this amended law by November 2022.

Specific tasks and responsibilities:

1st deliverable - October 2022- Detailed workplan and preliminary report detailing the findings and key feedback from the stakeholder consultation process for the modification of Law 3001.

2nd deliverable - November 2022- Final report detailing the recommendations for the Ministry of Environment to adopt in for the modification of Law 3001 and proposed fiscal incentives for the Government of Paraguay to consider in support of this amended law.

The consultant shall be under the overall supervision of the Head of UNEP FI and report directly to Signatory Programme Officer and Programme Officers. The consultant should take direction from the Programme Officer while final deliverables shall also be approved by Head of UNEP FI.

Qualifications/special skills Skills: The ideal candidate should have strong expertise in the integration of ESG criteria for the financial sector and previous experience in assisting banks in their integration efforts, either directly as a collaborator in a financial institution or as someone who has trained banks in the past. Knowledge of REDD+, zero deforestation commodity supply chains, and other landscape investments would also be an asset. Experience of coordinating or implementing projects within the UN system would be an advantage.

Academic Qualifications: Bachelor’s Degree is required in one or several of the following areas: economics, finance, business administration, international relations, development studies or environmental management, or related areas.

Experience: At least five years of work experience, working in sustainable finance either in the private sector, or an international or non-governmental organization working on environmental finance or environmental issues.

Language: English is a working language of UNEP FI. Fluency in Spanish is a requirement for this position and proficiency in English is an asset.

No Fee THE UNITED NATIONS DOES NOT CHARGE A FEE AT ANY STAGE OF THE RECRUITMENT PROCESS (APPLICATION, INTERVIEW MEETING, PROCESSING, OR TRAINING). THE UNITED NATIONS DOES NOT CONCERN ITSELF WITH INFORMATION ON APPLICANTS’ BANK ACCOUNTS.