Exploring the Determinants of Biodiversity Finance Scheme Adoption in Western Oromia, Ethiopia

Abstract

The decline in biodiversity necessitates sustainable strategies to conserve ecosystems, species, and genetic diversity, which require substantial financial resources. Biodiversity financing presents a potential solution; however, its implementation encounters considerable obstacles. This study examined the determinants of biodiversity finance adoption against seven themes: financial, economic, institutional, environmental, social, conceptual, and skilled personnel, using questionnaire data from 176 key stakeholders in four zones of Wallaga Zones, Western Oromia, Ethiopia. The findings suggest that the major challenges to biodiversity finance adoption include a lack of conceptualization, economic and political instability, inadequate funding, social injustice, environmental deregulation, and excessive use of natural resources. The results indicate that financial limitations (β = 0.475, p < 0.001) represent the most significant challenge, followed by economic discouragements (β = 0.297, p < 0.001) and ecological decline (β = 0.256). Institutional capacity, skilled personnel, and community participation are critical, yet constraints such as limited technical expertise and institutional frameworks persist. The model demonstrated a strong explanatory power, accounting for 69% of the variation in biodiversity finance implementation (R = 0.824, R² = 0.69; p < 0.001). Research highlights the need for a cohesive policy structure, coordinated financial systems, and inclusive financing strategies for conservation in Ethiopia.