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Notes
[1] The editors debated whether to include the names of contact people at the various agencies at all, for fear that this would tend to make the book "dated" very early in its life. We decided to list titles but not incumbents of key positions where appropriate.
Acknowledgements
This book began as the "Workshop on Conservation Finance" at the IV World Congress on National Parks and Protected Areas, held in Caracas, Venezuela, in February 1992. Thanks are due first and foremost to the organizers of that workshop, The Nature Conservancy's Latin America Division and particularly Dennis McCaffrey, Randall K. Curtis, and Christina Robinson.
Peace Corps' Environment Sector, headed by George Mahaffey, provided research funding in the months following the World Parks Congress, and in fact published the first version, which was distributed to Environment Volunteers. Special thanks to John Shores of the Environment Sector for peer review, production assistance, and many helpful suggestions.
Douglas K. Eiken, Ph.D., Director of the Division of Parks and Outdoor Recreation Sites in the North Dakota Parks and Tourism Department, chaired a World Parks Congress workshop on revenue enhancement and cost recovery, whose content has also become part of this volume. Likewise, Ralph Cobham of Cobham Resource Consultants did much of the early work on IUCN's "Investment Framework" project, from which this volume draws much information.
Many others contributed papers and ideas that have enriched this volume. Their contributions are acknowledged as they appear in the text. Finally, many thanks are due to the organizations whose efforts and experience in conservation finance became the basis for this text. All of us involved in this publication wish them continued success.
Author's Preface
The task this book set out to do -- provide, in a single volume, a guide to conservation finance adequate for a user group ranging from small nongovernmental organizations that need a few thousand dollars to national agencies with needs in the multimillions, and to the donors and loaners to whom they turn for assistance -- was ambitious, perhaps bordering on impossible. It was surpassed in difficulty only by the World Parks Congress Workshop on Conservation Finance, which tried to cover the same material in a single day.
It is always a mistake to assume that there can be such a thing as a comprehensive guide to conservation finance, and the biggest mistake a user could make would be to invest days or weeks poring over the book and preparing funding plans and proposals to send to the donors herein described. In my work as a fund-raising consultant, I often encounter clients who make this mistake with reference books. If anything is constant in the world of conservation finance, it is change. The reader may rest assured that even as this book went to press, some of the agencies profiled had already made sweeping revisions in their priorities, changed addresses, replaced key people, or issued new guidelines.[1]
The way to use this book successfully is as a starting point, to stimulate discussion and contacts. None of the issues or agencies introduced here is covered exhaustively, but rather, in enough detail for the reader to determine whether it presents interesting options, and if so, to initiate further study or contacts. These should always start at the local or national level if possible.
Although the research team has made every effort to make the references accurate and helpful, we did not get responses from every agency that was given a chance to make comments and corrections, and it is not possible to guarantee that all information is up to date. Once again, the information contained herein should be approached as a starting point for research, and an organization should always maintain its own directory files to keep them current.
IUCN will welcome hearing from users as well as the institutions profiled about any organizational changes or experiences with the finance mechanisms described herein, so that future editions of this book may be kept as current and useful as possible.
Above all, I would recommend to anyone using this book as a guide for financial planning to experiment with developing a variety of sources of income, monitor the results carefully, and continue to invest in developing those that look most promising, especially at the national level. In conservation finance, as in ecology, there is strength in diversity. The trends that have shaped today's conservation finance opportunities and constraints are bound to change, and those organizations least dependent on any single source or limited range of sources will be most able to weather the inevitable.
Ruth Norris
Why invest in the conservation of natural areas and biological diversity? The question answers itself: The world's biological and cultural resources, our genetic and cultural "capital," belong to future generations as well as our own. Protected areas serve to assure the survival of rare and precious ecosystems, habitats, species, landscapes, and historic sites. They provide opportunities for research and monitoring, conservation education, recreation and tourism. They are a life support system, providing watershed protection, flood control, erosion prevention, groundwater recharge, nutrient cycling, and carbon storage.
Virtually every nation has established national parks and protected area systems. On the planet there are more than 8,000 sites meeting IUCN's criteria for national parks and equivalent reserves. Together, they cover more than 7.8 million square kilometers.[1]
But the world's natural heritage is in peril. Many "protected" areas exist as "paper parks." Management of natural areas, wildlife, and habitat is grossly inadequate -- north and south, in developing countries and developed. The potential to conserve biodiversity, and maintain the social, economic, and cultural web of life, is vanishing before an onslaught of poaching, colonization, contamination, and exploitation. Unless action is taken now, enormous costs will be borne by future generations; either they will have to do without the benefits provided by natural areas, or they will pay enormous amounts to restore them.
The reasons for this sad state of affairs are legion. Ultimately, however, the explanation can be stated simply: Protection of valuable natural areas, and promotion of ecologically sustainable uses, has not been a high priority for national governments. In some cases this is primarily a question of political will, and competing priorities for use of national funds. But in the developing countries, where most of the world's biological diversity is found, and where the greatest number of new protected areas have been established in the past decade, the costs associated with managing protected areas often appear formidable in the face of acute shortages of funds. Many of these countries rely directly on their natural resources for employment and income, and the local need for timber, minerals, and agricultural land competes with needs that seem less pressing for conservation and protection.
Although the costs of protection and conservation are clear and easy to quantify, the benefits frequently appear indistinct.[2] Although some progress has been made, many countries are reluctant to allocate the necessary funds to establish protected areas, and to manage them once they are established. The result is an acute shortage of investment of public resources, which private investments, although substantial, have not been able to bridge completely. Additional resources must be made available to enable society to earn the full benefits available from protected-area systems.
Some of the needed resources can come from changes in priorities that will cause existing resources to be reallocated. If decision makers can come to understand the value of protected areas, ecological and economic, and if ways can be found to increase the economic value, public investments may well increase. In some cases, new techniques can be applied to generate more revenue locally. Still, increased short and long-term investments from abroad will be essential.
Investment alone, of course, cannot solve the protected-area crisis or cause biodiversity to be conserved. Many books have focused on the techniques to be applied, the need for policy adjustments, and training of personnel.[3] This one picks up the common thread of the need for increased investment, and proposes strategies to be applied at the local, national, and international levels to increase the flow of funding necessary to accomplish those tasks.
Protected areas and biodiversity conservation have until recently been regarded as the domain of national governments and special-interest international organizations. Sometimes protection of natural areas is seen as a luxury that poor countries can ill afford, or an "ecological debt" owed by the richer nations of the world, who gained their wealth through the exploitation of natural resources. But one stark fact remains: Ecosystems that remain relatively undisturbed by human activities, and are close to their natural state, are becoming an increasingly scarce resource, in both developed and developing countries. Investment in their conservation will provide substantial benefits at local, national, and international levels.
At the local level, protected areas can serve as a vehicle to stimulate employment and attract compatible economic development (sustainable resource uses, of which the most often cited is tourism). They can protect watersheds and ecological processes. Maintaining natural vegetative cover helps control erosion, reduces stream sedimentation and flooding, and regulates streamflows. It also reduces air and water pollution, by maintaining natural filters, and promotes nutrient cycling. However, local residents who have been accustomed to using park resources have often failed to share proportionately in the benefits of restricted and managed use. Increasing benefits to local people may require some changes in protected-area systems management.[4]
This book, to the extent that it deals with these issues, recognizes the global scale of benefits realized from conservation of parks and biological diversity. It also encourages planners and managers to seek ways to maximize benefits at the local and regional level. An overriding theme is that the beneficiaries of protected-areas conservation -- all of us -- should share in the cost. More of the benefits must be re-invested for long-term management and maintenance of biological systems. Local people should not be "locked out" but should share in the planning and implementation of management schemes, which in turn should include generation of income at the local level, to the extent feasible and ecologically sustainable.
This book will look at conservation finance at several levels: revenues that can be generated on site; national-level policies and mechanisms; roles of various bilateral and international institutions, public and private; strategies for involving donors, and more.
Part I is a review of the need for more and different kinds of investments in protected areas. In general, these are:
In order to achieve this expanded level of investment, the absorptive capacities of the national institutions and communities concerned must be taken into account. In many nations, assistance will need to focus on development of these institutions and communities.
Part I is primarily addressed to donors. Besides outlining the needs for funding, it outlines the most promising strategies for maximizing the results of conservation investments, and proposes several new funding mechanisms that could operate at the international level to increase and stabilize the flow of resources to conservation activities worldwide.
Part II of this book focuses on existing funding mechanisms. It profiles some of the major bilateral and multilateral agencies, as well as non-governmental organizations and private sources, that provide funding for protected areas. It reviews the various strategies available for generating revenues to support conservation at the local and national level. This section will provide a context for donors, showing how various types of conservation investments relate to and build upon each other. It is aimed primarily at protected area managers and biodiversity-conservation agencies and organizations, enabling these groups to develop funding programs, and offering specific information useful in getting started.
In general, the objective of this book is to help protected-area managers, the conservation community, and investors and donors, to "speak each other's language." Investors and donors will realize greater returns by broadening their understanding of the technical, social, and political climate in which protected areas operate, and the constraints they face. Managers of conservation units will be more successful in developing long-term, secure sources of funding if they understand which types of funding are appropriate for which uses, and how to find sources appropriate to their needs. Both sides will benefit by applying creativity in developing new sources, new funding mechanisms, and above all, a growing portfolio of examples of protected areas that work to the benefit of conservation and of local communities.
The IVth World Parks Congress in 1992 examined very carefully the question of whether protected areas can "pay their own way."[5] Some protected areas are profitable in their own right, earning very considerable revenues and foreign exchange, especially from tourism. In a broader sense, protected areas make important economic contributions through helping to maintain clean air, pure water, and biological diversity. These functions enable humans to obtain food, fiber, energy, and other survival needs.
But many of the benefits of protected areas are not easily quantifiable, and relatively few protected areas can capture the "profits" from the benefits they provide to society.
If society is to benefit from the conservation of protected areas and biodiversity, and realize their considerable potential to contribute to sustainable development, then society must invest in protected-area systems. Improvements are urgently needed: better management of sites and of systems as a whole, more integration with national planning and community needs, strategically selected additions to national systems. There are many current and potential investors, from national governments to international agencies to private organizations and individual users. This "investor community" needs to be expanded, and in some cases persuaded to change investment policies and procedures, to build a stronger base of support for the world's protected areas and biological diversity.
This section makes the case for such increased investment. Why should governments, development agencies, and private organizations be encouraged to commit more resources to protected areas than has been the case to date? How and at what scale does society benefit at global, national, and local levels from protected areas? Can protected areas be presented as attractive investment prospects? And, how much is needed? What are the priority items needing investment?
The section also reviews some of the more important investment mechanisms now in place, including several promising international efforts to increase and coordinate funding for conservation and sustainable development. Some of these can serve as models, and all provide helpful insights, for the development of similar programs to increase the flow of investments in protected areas.
But even while new investment mechanisms are under discussion, protected-area systems and conservation organizations can work with the investor community to use its existing mechanisms to create and fund new efforts, and to demonstrate the value of increased investment. The overview of conservation investors presented in these chapters therefore is followed by individual profiles of the major investors, as well as summaries of promising income-generating mechanisms, in Part II. It is our hope that by helping to stimulate contact among protected-area managers and advocates, and the investor community, this volume will promote both increased flows of funding and a better understanding by both parties of how they can work together to develop even more effective means of local and international collaboration. This is essential to assure the future of protected areas and the natural resources they contain.
Traditionally, the major investors in protected-area systems have been national governments, through their normal budgeting process. But three major economic problems affect park system managers' ability to get the investments needed from national governments, above and beyond the shortage of funds for all government programs in developing countries. First, the full benefits, economic and social, of protected areas are difficult to measure. Thus the short-term gains from exploiting biological resources frequently appear more attractive than the long-term benefits of conservation.[6] Decision makers seldom have a balanced analysis of benefits and cost, and often have a difficult time seeing how increased investments will result in increased benefits, either to local populations or the general public.
Second, many of the benefits of protected areas are not within current concepts of economics. Market and policy failures keep these benefits from being valued. Third, increased investments in protection
The budgets allocated to protected areas by national governments, or for that matter, international donors and agencies, reflect the decision-makers' perception of the importance of natural-resource conservation. Since protected areas generally do not generate much direct revenue, they often are seen as a drain on resources, especially in comparison to alternative uses such as logging or agriculture. Although in some cases it will be possible to increase direct revenues (and this certainly should be done where appropriate), improved understanding of the social and economic benefits protected areas provide is an important step in generating increased investment.
Measurement of the costs of conservation is fairly direct and well understood. In recent years, economists as well as environmentalists have developed methods of analysis that will help considerably to measure benefits, although some values, such as cultural and spiritual values, and the potential for as-yet-undiscovered resources (the plant that provides a cure for cancer or AIDS) will always defy quantification.
In general, three kinds of costs are incurred to protect natural areas.
The direct costs of establishing and managing protected areas include costs of land acquisition, infrastructure, administrative and staff costs, maintenance of facilities, monitoring and research programs, law enforcement, interpretation, and visitor management. These usually depend on direct outlays from the national treasury, and when resources are scarce, may be difficult to sustain unless there are inputs from outside donors.
Indirect costs are incurred by people and industries who are not part of the park system, but suffer costs because of the establishment of a protected area. Examples include farmers whose crops are damaged by wildlife straying from the protected area, communities whose road and waste-collection systems are overloaded by an influx of tourists, or who suffer increases in cost of living because the presence of tourists drives up prices. If those who suffer indirect costs must be compensated for their losses (and often they must be), the cost of such compensation adds to the direct cost of maintaining the protected area.
Opportunity Costs are the benefits, actual and potential, that are foregone when an area is protected. If a person or industry (mining, timber, etc.) would have profited from the conversion of a natural area to another use, or if local communities depend on an area for grazing, fuel wood and timber harvest, hunting and gathering, etc., the loss of those opportunities represents a cost. (For example, the ecologist Norman Myers estimates that the value of the wildlife "crop" produced by a tropical forest may be as much as $200 per hectare, or even more than the value of timber.[7] ) If the protected-area system becomes responsible for compensating these individuals, companies, and communities for their lost opportunities, or for developing alternative sources for the benefits foregone, these, too, become part of the direct costs of management.
Of the benefits generated by protected areas, perhaps the most easily measured in economic terms are those generated by recreation and tourism. In the United States, visits to national parks generate some $3 billion in revenue annually.[8] According to papers presented at the IV World Congress on National Parks and Protected Areas, tourism to appreciate and enjoy nature accounts for 40 to 60 percent of all international tourism, with an economic impact in the hundreds of billions of dollars.[9] One often-quoted study of Amboseli National Park in Kenya shows net earnings from tourism to be worth about $40 per hectare per year, some 50 times the net profit of the most optimistic projections from agricultural activities.[10]
Similarly, Caroni Swamp in Trinidad produces $2 million per year in cash income from tourism; Bonaire Marine Park produces $5 million annually.
Watershed-protection benefits range from relatively measurable (erosion control) to values that must remain fairly speculative (stream-flow regulation and prevention of flooding). Economic values can be assigned to the protection of ecological processes and systems such as wetlands by measuring the productivity of downstream or surrounding areas that benefit.[11]
Aesthetic values can be measured by survey methods, that is, asking people to put a price on something they value, or indirectly, by looking at real estate values in similar areas with and without a protected area.
What most of these benefits have in common is that they accrue locally, and can be ascribed to a particular protected area (or in the case of national tourism, a protected area system). Protected areas also provide significant benefits at a global level. But how does one measure the value of protecting biodiversity? Of gene resources, species protection, continuation of evolutionary processes?
Costa Rica has pioneered the concept of realizing a cash income from protecting biodiversity by means of a contract with Merck & Co. Ltd. -- the world's largest pharmaceutical firm -- for prospecting for promising chemical compounds in natural forests.[12] The partnership generates employment for those Costa Ricans trained to work at this "biodiversity prospecting," as well as direct payments to the Costa Rican Biodiversity Institute and a share in the profits of any new drugs successfully developed and marketed.
While Costa Rica may indeed harbor new miracle drugs, more than half the world's plant and animal species live in one tropical forest or another -- and nowhere else on Earth. Clearly we will not protect them all. Without knowing which, if any, will yield returns, it is difficult to place a value even on protecting "as much as we can."
Spiritual, cultural, and historical values, and the value of education and research in natural areas, are difficult to quantify. Some studies have demonstrated the purely economic benefits of research. Guanacaste National Park in Costa Rica, for example, is said to add approximately $200,000 per year to the local economy from research projects through purchase of supplies, employment of local assistants, and general contributions to the economy. But whether or not economic values are ascribed, there is a long tradition of "investments" in these sectors by donors who recognize their importance.
There are values associated with preserving options for the future, and with the pure existence of a species or ecosystem. And finally, impossible to quantify because its value is infinite, is the protection of the global life-support system. These last-mentioned benefits may carry little weight with national governments, especially in the developing countries, because they do not feel able, with enormous problems of their own, to pay for benefits that will accrue to the world at large. Thus they should be given added emphasis by the industrialized countries and the multilateral institutions who have more resources to invest.
The Caracas Action Plan makes four recommendations for what needs to be done during the next decade to develop an effectively managed system of protected areas worldwide. Protected areas must be more fully integrated into larger national planning frameworks. Community involvement and advocacy are needed to expand support for protected areas. The management capacity of existing protected areas must be further developed. And international cooperation must be expanded.
Regional and National Priorities for InvestmentsAlthough there are currently more than 8,000 national parks in the world, additional protected areas will be required to reap full benefits from investments.[13] Protected areas still cover less than five percent of the Earth's surface. More important, there is a major imbalance in attention given to the various biogeographical regions, including key habitats and ecosystems.
The goal should be representative and comprehensive coverage of all ecosystem types, as well as cultural heritage features. More protected areas are needed to protect habitats for migratory species, and to sustain the stocks of prime forests, wetlands, coastal areas, and other resources, especially for local benefit. Additional sites will also be required to provide options for conserving species, varieties, and habitats. Overall, the dimensions of the protected-area network must be sufficiently robust to withstand the anticipated effects of climatic and other evolving changes: environmental, social, and economic.
Given present data, it is not possible to say with any certainty, "Here is where new protected areas must be established." The most urgent investment needs are:
New protected areas should be selected in the context of national system planning, integrated with national development planning. Investments are also urgently needed to support these planning frameworks.
Establishment of protected areas is only a first step; legal decrees do not assure protection. National park systems must design and implement management practices that will effectively protect the resources they contain. Although an increasing number of countries have established impressive protected-area systems, few have allocated sufficient resources to manage those areas properly.
Regional reviews of protected areas, prepared for the World Parks Congress, showed that the priorities for investments to bring about better management varied from region to region. The "most needed" investments include ecological research and monitoring, assistance with planning, management, and financial and legal structures, technical assistance in general, and support for operations. Species inventories and scientific information are crucial needs throughout the tropics, where fewer than five percent of protected areas have inventoried their wildlife resources.
What is the total amount of investment needed? This is a question often asked at the international level, but there is no readily available answer. In fact, a relatively definitive answer can only be attained when all countries have planned national systems of protected areas using participatory processes. In the meantime, all that can be done is to collect best estimates.
At the most basic level, we could simply add up the area of the existing and needed protected area and make calculations based on the generally accepted (or at least oft-quoted) rule of thumb that minimally adequate management costs $200 to $400 per square kilometer. Analyzing region-by-region financial needs for adequate protected-area management, the World Conservation Monitoring Centre (WCMC) has estimated that the annual additional budget allocations needed for the 117 countries for which it has data are on the order of $2 billion to $3 billion. Since these countries represent only slightly more than half (52 percent) of the countries that have designated protected areas, the total need for increased investment is likely to be in the $5 billion range, or a doubling to tripling of current investments.
This estimate does not include needs for backlogs of needed facility repairs, or for new monitoring responsibilities necessary under international conventions and treaties. Nor does it include needs for capital investments in facilities and equipment, which in the Afrotropical region alone are estimated by the African Elephant Study Group to be $5 billion.
Estimates such as these are always speculative. There are no standard criteria for defining requirements, or for distinguishing "essential" from "desirable" investments. And aggregating needs on a global basis distorts the true picture: Developed nations, which count 54 percent of the world's protected areas, account for 96 percent of the financial investments in management. The developing world, with 46 percent of the protected areas, enjoys only six percent of the management funding.
From the standpoint of
This suggests a need to carefully balance increased investments among capital expenditures, especially land purchase, which are more easily absorbed; education and training to increase the "pipeline" of qualified personnel; and operational improvements. The investment concept itself, with its focus on long-term priority setting, needs to be more widely promoted and adopted. To date, many national protected-area systems have been built and managed on an
Thus the first investment priority in both the "new areas" and "better management" portions of the protected-areas investment portfolio is additional work to develop the portfolio itself. Nations and regions need assistance to develop comprehensive system plans, both to assure appropriate protected-area coverage and to identify management needs in priority order.
IUCN and affiliated organizations have begun this in-depth anaalysis and work on investment portfolios in several areas of the world. Some representative findings:
For the Caribbean, the group identified four over-arching needs and nine policy guidelines. They recommended investment "packages" including (1) national protected-area reviews; (2) developing a network of protected-area managers; (3) regional support services in assessments, training and education, and information collection and exchange; (4) strengthening the institutional framework for technical cooperation in the region; (5) creation of a Caribbean Heritage Park System and Trust Fund; and (6) creation of other special funds for tourism, education, and rural development.
For Central America and Mexico, the key issues identified were lack of adequate planning, deficiencies in qualified protected-area personnel, a need to provide benefits to local communities, and funding shortages. The priority investment projects are (1) national conservation strategies; (2) protected-area system plans; (3) land use planning; (4) community development; (5) environmental education and training; (6) natural resource management and research; (7) ecotourism and interpretation; (8) community-based protection of protected areas; and (9) park management and operations. The group also identified one priority investment project in each country in the region.
The South America group developed a matrix and methodology for applying criteria to compare the status, importance, and value of each protected area within a national system in order to set priorities for investment. The investment "packages" they identified are (1) protected-area system planning; (2) finance and cost recovery; (3) park management and operations; (4) education and training; (5) international programs; and (6) research and natural resource management.
None of the three groups identified costs of these investment priorities.
The African Elephant Conservation Coordination Group looked at protected-area budgets and needs in the context of wildlife conservation throughout the African elephant's range.[16] The group worked with wildlife departments to define, in general, the needs for outside funding to assist African wildlife agencies. Although some countries have chosen a different focus, the priority for most is to increase their operating capacity and professional efficiency. Thus answering the needs for elephant conservation will benefit national protected-area networks and the wider issue of conserving Africa's biological diversity as well.
With data from 24 of the 35 countries, the group identified a total current annual budget of $40.8 million per year for wildlife conservation and protected-area management, and estimated that the total budget for the continent is in the range of $60-70 million annually. As much as 92 percent of this is absorbed by salaries, and this leaves a tremendous backlog of infrastructure needs -- including repairs and maintenance. The group analyzed the African wildlife agencies' own priority projects for a three to five-year time horizon, and calculated an unmet need of $11-18 million, or two to three million additional dollars per year, exclusive of what already has been pledged by donor agencies.
The United Nations Environment Programme (UNEP), analyzing country-specific case studies on needs for biological diversity conservation, concluded that worldwide, some 117 countries need international assistance to meet conservation needs.[17] Using detailed measures and criteria, UNEP concluded that
The opportunity costs of protected areas are most often paid by local residents who lose the use of the resources within the area. If the benefits of the area accrue in distant places, or to outsiders, while local people pay the cost, pressure for illegal use will mount. Guards and law enforcement are seldom a good answer; creation of buffer zones and programs for substitute benefits will be necessary in many cases.
Some of the needed investments in addressing community needs have relatively small costs. For example, local people must be involved in planning processes, and they should be given preference for jobs created within and by protected areas (including training programs to help them qualify). In some cases it will be possible to negotiate agreements to continue, on a limited basis, activities that would not be permitted if proposed by newcomers or outsiders, but form a traditional part of village life.
Designation of a buffer zone in which traditional uses are permitted and new, compatible uses developed can entail major costs. These may be simply the costs of managing permitted activities,[18] or they may involve significant investments in rural development.
The U.S. Agency for International Development has been among the most active in developing integrated approaches to protected-area conservation and rural development in buffer zones. In Central America, the agency's investment over ten years amounts to $60 million for a regional project incorporating policy analysis, biodiversity conservation, environmental education, formal education and training, natural forest management, and plant protection/pesticide management. Ecuador, Bolivia, and other countries also have multifaceted programs with parks as the core and development in surrounding rural zones.
The concept of local community participation even in the earliest stages of protected-area planning is key to thinking of conservation as an investment. Becausee the identification and full participation of key constituents is crucial to success, protected-area programs that assign importance and significant resources to the project-development phase are often the ones that are most successful in the implementation phase. Thus, rapid and low-input program development, while often seen as "efficient," may in fact be counter-productive.
Pulling together the necessary ingredients will require participation from many essential players. Thus some of the needed investments will have to focus on human resources development, and on activities to bring together the diverse interest groups, help them understand each other's roles, and develop collaborative, or at least non-conflicting, ways to contribute to protected areas locally and worldwide. These include
National governments. Although much of this book focuses on international cooperation and innovative revenue-generating techniques, the role of the national government remains paramount. Governments have the prime responsibility for management of protected areas, in view of their key role as national assets, and because of the benefits they provide to the nation as a whole. At a minimum, national appropriations should be sufficient to provide a protected-area system management structure, and to maintain some basic presence at each designated area. If even this level of funding puts too great a stress on the national treasury, there are a number of ways to collect special fees and taxes (user fees, departure taxes, other tourism taxes, etc.) that can be dedicated to protected-area management. These are discussed more fully in Part II.
International conventions. A number of international conventions and treaties provide some funding for conserving biodiversity, usually through the mechanisms of projects. The World Heritage Convention, for example, establishes a World Heritage Fund that provides more than $1 million per year for projects in natural sites of great international importance for biological diversity or cultural significance.[19] Likewise, the Convention on Wetlands of International Importance (RAMSAR) and several of the Regional Seas Conventions established by UNEP involve trust fund agreements. The Biodiversity Convention signed at UNCED may also provide significant funding.
Bilateral and multilateral banks and assistance agencies. Even countries that give priority to maintaining systems of protected areas generally are unable to meet the full sums needed for conservation and management. Thus park administrators frequently turn to external sources of finding. Investment in protected areas has, in recent years, expanded extensively beyond the handful of agencies long active in conservation finance at the international level. There has been a blossoming of concern for protected areas from multi- and bilateral development agencies, as well as the development banks.
This blossoming of concern has increased the resources available, or potentially available, for the establishment and management of protected areas. This is a positive and encouraging trend. Yet field personnel cite many examples of inappropriate and wasteful initiatives. The World Bank has acknowledged that a considerable number of its projects are failures and many of the conditions attached are not complied with -- in part because a pervasive pressure to keep money flowing through the funding "pipeline" impairs project quality.
Often protected-area system needs fail to fit within a lender's or donor's investment guidelines. Sometimes the reverse is true: Projects that fit within guidelines do not request money because the resulting conditions and policies would lessen the project's chances of success. Funding may not be available in the quantities needed or on a timetable realistic by administrators' standards. Grants and loans may be limited to capital investments, for which there is then no parallel source for ongoing costs.
It is a truism of conservation finance that successful projects respond to local and national priorities and needs. At the international level, institutional needs for standards, criteria and procedures often limit an agency's ability to be flexible and respond to the particular needs of a given situation.
One of the great paradoxes of international conservation finance is that while protected-area agencies and NGO's have tremendous difficulty securing sufficient funding for their programs, funding agencies at the same time are having great difficulty identifying appropriate programs in which to invest.
One problem is that the benefits of conservation, as discussed in the previous chapter, rarely accrue in cash. Thus the development banks, who look for projects that will generate revenue sufficient to pay back loaned resources, have a difficult time justifying investments in protected areas. On the other hand, bilateral assistance agencies and multilateral banks have development as their primary mission. Conservation of protected areas has been seen as an activity that bars development.
Marc Dourojeanni, chief of the Division of Environmental Protection at the Inter-American Development Bank, has identified three factors causing the lack of funds/lack of investment opportunities paradox.
Development agencies and banks complain that they receive too many project proposals that are not proposals at all, but vague ideas. They receive proposals for projects whose goals are over-general, over-ambitious, or simply not evidently connected with the activities proposed. Although every project is not expected in itself to address the entire complex of social and economic issues leading to the situation the project purports to address, many proposals arrive without stating their context and how the actions taken in the proposed project will relate to other projects already being implemented.
Protected-area system managers, and the nongovernmental organizations working with them, hear and appreciate this counsel, but become frustrated in the attempt to apply it. Most of them are small, and all of are them strapped for funds and overwhelmed by day-to-day responsibilities. They simply cannot spare the time and expense, or take the risk, of devoting staff time and extensive research and development to proposals that may not come to fruition -- or even if successful, may not begin for several years. They cannot develop a precise budget for activities over several years because future activities and expenses will depend, in some part, on what is learned during early phases of the project. Changes on the ground during the time a project is under consideration may make certain basic principles inoperative by the time it is approved.
In many cases, these agencies' own internal planning processes are highly contingent; priorities established for a park system or by an NGO may be completely reordered or discarded because the funding available to them reflects a funding agency's different priorities. Sometimes these differences in priorities can be worked out; in some cases, they represent basic and irreconcilable differences between an agency whose constituency is primarily local and another required to develop regional or global approaches.
Nongovernmental organizations, private foundations, and corporations. Although the total amount of funding channeled by the private sector to protected areas and biodiversity conservation worldwide is probably an order of magnitude smaller than that provided by multilateral institutions and official development assistance, these institutions have introduced and promoted some important concepts crucial to the long-term success of international investment in protected areas. Among these:
Multilateral, multisectoral collaborations. In recent years, representatives of industrialized and developing countries -- governments, assistance agencies, private donors, and non-governmental organizations -- have developed some pioneering approaches to multilateral collaboration in funding conservation and sustainable development.
The Global Environment Facility (GEF), created in 1990, is managed by the World Bank, United Nations Development Programme (UNDP), and United Nations Environment Programme (UNEP). It funds developing-country projects to protect the global environment. An associated small-grants program administered by UNDP also funds NGO activities.[20]
GEF had an astonishingly rapid development. Spurred in part by a rush to mobilize international resources in time for the 1992 UNCED conference, the facility was operational within three years of its original proposal. GEF in 1993 had some $1.2 billion committed to support projects focusing on reducing emissions of greenhouse gases, conserving biological diversity, combating pollution of international waters, and protection of the ozone layer.
As a multinational effort to generate resources, especially North-South transfers, for conservation and sustainable development, GEF has attracted both praise and criticism. It is, depending on one's point of view, either a major effort to define new working methods and institutions, or only a new "package" for institutions and policies that have already proved unable to address the challenges of a threatened environment and unsustainable development.
The World Bank chairs GEF. The director of the Bank's Environment Department is the current chair of the Facility. Governance is exercised through semiannual meetings of Participants (governments that make a minimum direct contribution to GEF's "core fund" or establish a World Bank-approved co-financing arrangement with the fund; seven of the approximately 30 Participants are developing countries). The Participants' Meetings seek to make decisions by consensus, on such matters as institutional arrangements and guidelines, and reviewing the three implementing agencies' work plans.
Under a Tripartite Agreement, the three agencies each have specific responsibilities for project identification, screening, and approval; scientific and technical guidance; technical assistance; project supervision and evaluation; and other functions. An Implementation Committee meets regularly to see that these responsibilities are coordinated. A Scientific and Technical Advisory Committee (STAP) contributes outside expertise to monitor the scientific and technical caliber of GEF operations.
Midway through its three-year pilot phase, and with fewer than 30 projects implemented as of the date of this publication, the GEF was still in a formative stage. From the beginning, the donor countries had agreed that it was more important to get the Facility in place quickly than to wait until problems could be worked out. So it is not surprising that there have been controversies and opposition.
Chief among these has been a consistent criticism that GEF uses traditional, top-down methods to select projects that are, more often than not, expensive, poorly designed, short-term, and rigid. Its large inputs of funding often have a destabilizing effect on the recipient institutions. Their management capacity may be harmed rather than enhanced.
GEF investments clearly reflect the policies and priorities of the industrialized nations, and do little to help developing nations address the problems most pressing to the majority of their populations, such as soil erosion and water contamination. These are seen as primarily "local" and therefore outside GEF's purview. Further, critics charge, GEF investments reflect development models already in place, rather than seeking to address the root causes of global environmental degradation. There is little evidence of a strategic perspective to address global environmental problems, and the project portfolio has been constructed on a largely ad-hoc basis. A lack of community participation and involvement was a consistent criticism of projects funded in the early tranches.
Information about GEF's purpose and programs has been hard to obtain. NGO's and developing countries have criticized GEF for its undemocratic procedures as well as lack of transparency, causing those procedures to go unexamined.
Most serious, according to the World Wide Fund for Nature, is the GEF's lack of evaluation systems. WWF's assessment of pilot phase operations, cited above, provides a comprehensive discussion of all these issues.
Despite these criticisms, the GEF has acquired an importance beyond the cumulative impact of its pilot projects. The implementing agencies are making efforts to address the problems and criticisms, and the Participants are overseeing significant efforts at reform. If the myriad international Conventions arising from the UNCED conference select GEF as their funding mechanism, it will acquire additional importance as the preeminent global fund for conservation and sustainable development.
The Tropical Forestry Action Plan (TFAP) is an example of an attempt by bilateral and multilateral assistance agencies, NGO's, and national governments to increase the flow of funding (in this case, to the forestry sector) by international collaboration.[21] TFAP sought to slow tropical deforestation by establishing a planning framework, a vehicle to launch a broad program to address the root causes of deforestation, and a mechanism for harmonizing development assistance in forestry. Agreed to at a conference in Bellagio, Italy, in 1987, TFAP was launched under the overall supervision of the United Nations Food and Agriculture Organization.[22] The United Nations Development Program, United Nations Environment Program, Unesco, bilateral and multilateral aid agencies including the World Bank, and a few NGO's, notably the World Resources Institute, also play major roles.
Nations that enter the TFAP process prepare a national plan, organize round-table discussions with national leaders, NGO's, and donors, and ultimately agree on a portfolio of projects for submission to donors. These may include community forestry, integrated watershed management, desertification control, land assessments and forest resource inventories, planting multi-use trees on farms, forest-based industrial development, fuel-wood projects, conservation of forest resources, and institution building.
During TFAP's first five years, some 70 countries (representing 60 percent of the world's remaining tropical forests) started TFAP's. On the average, those that completed project portfolios for submission to donors identified needs for $28 million per country. If this average were to hold true worldwide, and if donors were to come forward with funding, some $2 billion in funding would be generated worldwide, representing an approximate doubling in today's level of total forestry assistance.
In fact, from 1985 to 1990, annual forestry assistance did double, from $500 million to $1 billion. But TFAP is not a success story from a conservation point of view. The increased funding has been concentrated in traditional forest-based industry development, with less than nine percent invested in forest ecosystem conservation. Tropical deforestation has continued to accelerate. Reliance on international technical consultants, and in many cases exclusion of local people and NGO's from the planning process, has caused national action plans to languish with little ownership by local authorities. In fact, only eight of the 70-plus planning processes resulted in plans formally adopted and presented to donors in the first five years. Their success with the donors was mixed -- from Nepal, which has received 65 percent of the funding it identified and requested, to a number of others who have received less than 10 percent.
The lessons learned from the TFAP experience should provide valuable insights for the design of similar international collaborative processes to fund protected areas. In particular, TFAP should sound a warning that national planning processes must include adequate local participation, including affected communities. And the goals to be accomplished by increased investment must be clear.
The World Heritage Convention and man and Biosphere (MAB) Program are examples of many nations agreeing to cooperate to conserve natural and cultural sites of "universal significance" to humanity. Both programs establish rigorous criteria for selection of sites (almost 300 Biosphere Reserves in more than 70 countries; more than 280 World Heritage sites in 65 countries). Both have established funding mechanisms to support the sites selected. MAB funds -- about $600,000 annually -- support genetic diversity conservation, research, education and training, and environmental monitoring. The World Heritage Fund provides support for technical assistance, planning, community involvement, training, and emergency response. This Fund, which is capitalized by voluntary and required contributions from state parties to the Convention, provides some $1 million annually. Both of these programs are discussed in greater detail in Part II, Chapter 4, Multilateral Agencies (U.N. and associated agencies - Unesco).
In Madagascar, national-level and donor-level coordination has brought advantages to both donors and recipients, including increases in the overall level of funding by aid agencies and NGO's; increased information sharing on both sides; and greater efficiency in organizing reports to and visits by donors. A great deal of negotiation and work went into the adoption of a National Environmental Action Plan. However, the donors view the plan, and the national level commitment to its implementation, as sufficiently promising to warrant large and long-term investments with significant national-level responsibility and control. Secretariats basically function to assure transparency and communication, while implementation and priority setting remain in local hands.
El Salvador also has attracted significant multilateral funding for a comprehensive environmental program as a result of preparing a national plan and strategy. The plan, and efforts to coordinate participation by the various sectors, are the responsibility of the National Council for the Environment (CONAMA) and its Executive Secretariat (SEMA).
All of these efforts show promise. Their shortcomings, and lessons to be learned, have been explored in various reports and will serve at the least to inform users and designers of new collaborative mechanisms. There remains an urgent need to support alternative funding mechanisms which devolve decision making to the national and local levels and away from the capital cities of donor countries. These mechanisms ideally will provide program as well as project support; will provide funding appropriate to the capacity of the receiving institution; and will provide long-term financing sufficient for programs to achieve success.
The ability of countries to determine their needs, set their own agendas, and manage their own programs is essential to the fulfillment of the objectives of protected area conservation. Both Agenda 21 and the Caracas Action Plan place priority on developing local capacity and institutions to accomplish the tasks needed to conserve protected areas.
The existing private-sector and development assistance mechanisms for channeling funding to conservation agencies and organizations in developing countries still do not meet the needs, and they generally maintain significant decision-making authority in the hands of the donors or lenders, rather than with the national institutions whose roles must be developed and strengthened.
Perhaps most important, there is an urgent need to develop funding mechanisms that provide program as well as project support. Project support is like electricity -- that is, when there is a donor, the power is on. Between phases, projects, or donors, the power fluctuates or simply goes off. Beneficiaries must wait; staff find other employment. Institutions become orphans, especially in the non-governmental sector. Even speaking strictly of projects, a decade or more of sustained funding is often necessary to achieve a real impact -- but lender and donor agencies usually work on two- to five-year funding cycles. Results achieved in these time frames can evaporate while continuing funding remains pending.
Another problem relates to the quantity of funds that institutions are expected to process. Large projects are convenient and easier to handle for the typical donor or lender, but there are many examples of recipient organizations and agencies which have been crippled by sudden infusions of large sums of money and corresponding unrealistic expectations on the part of donors and constituents.
New funding mechanisms, actual and proposed, are evolving to correct these limitations. NGO's are acting as intermediaries, and trust funds are being established, to capture large donations and disburse them in amounts within the absorptive capacity of the beneficiary. And they seek to make funding available on a long-term basis conducive to building institutions.
Many nations are establishing trust funds to provide long-term, sustained funding for projects promoting conservation of biological diversity and sustainable use of natural resources. These funds (discussed in detail in Part II) can be set up as trusts, endowments, or revolving funds. Their income comes from various sources: debt-for-nature swaps, government appropriations, bilateral assistance agencies, the GEF, and various national-level taxes and fees. What they have in common is a move toward national-level decision making about conservation priorities and means of financing them, and built-in components of strengthening national institutions and providing long-term support.
Environmental funds, whether endowed or replenished from annual levies, provide a particularly good approach to financing recurrent costs such as administration, salaries, and maintenance. With nationally based governing bodies, they can be an effective force for broad community participation in the design of approaches to conservation and development. In many countries, these funds also serve to bring together professionals and advocates from the various sectors -- forestry, engineering, protected areas, watershed management -- that should collaborate on national conservation strategies but often lack a forum to do so.
IUCN in 1993 prepared to launch a Global Initiative for National Environmental Funds, to mobilize information, and human and financial resources, in support of national environmental funds. Having analyzed the progress of national funds to date, IUCN concluded that the leaders of the national fund movement, particularly WWF-US, The Nature Conservancy, Conservation International, and the U.S. Agency for International Development, have demonstrated the remarkable potential of this mechanism for democratizing, stabilizing, and making environmental management more efficient.
To date environmental funds have been initiated in 20 countries, or groups of countries. Together these funds have received funding commitments of almost $300 million, and have had more than $50 million actually transferred to them. Some 90 grants to field projects had been made by summer 1993.
IUCN's plan of action would establish a clearinghouse of information for national fund managers, help to develop and promote guidelines for environmental fund development and management, and ultimately establish standards of good practice and certification of individual funds. It would establish a network of environmental fund managers, who would themselves develop standards, guidelines, and criteria.
Whatever form networks and guidelines may take, the national funds remain one of themost attractive prospects for funding environmental management. This is largely because of eight distinct attributes:
Much remains to be done to promote and encourage the further development of national environmental funds. However, they remain one of the brightest prospects in the conservation finance galaxy. Many of the funding mechanisms discussed in this volume should serve to encourage and capitalize the development of national funds worldwide.
[1] Source: IUCN List of National Parks and Protected Areas, 1990.
[2] For a detailed discussion of costs and benefits of protected areas, see John A. Dixon and Paul B. Sherman, Economics of Protected Areas (Washington, DC: Island Press, 1990).
[3] See for example, Kenton R. Miller, Planning National Parks for Ecodevelopment (Ann Arbor: University of Michigan, 1978) or MacKinnon, Child, and Thorsell, Managing Protected Areas in the Tropics (Gland, Switzerland: IUCN, 1986). Also from IUCN, J.A. McNeely and K. R. Miller, National Parks, Conservation, and Development and R.V. Salm, Marine and Coastal Protected Areas.
[4] For details, see Valerie Barzetti, Parks and Progress (Washington, DC: IUCN and the Inter-American Development Bank, 1993) and J. McNeely, Parks for Life (Gland, Switzerland: IUCN, 1993).
[5] Information about the World Parks Congress, the Caracas Declaration, and Caracas Action Plan, come in part from J. McNeely, Parks for Life: Report of the IVth World Congress on National Parks and Protected Areas (Gland, Switzerland: IUCN, 1993).
[6] Much of this discussion of economics, costs, and benefits is derived from John A. Dixon and Paul B. Sherman, Economics of Protected Areas (Washington, DC: Island Press, 1990).
[7] As cited in J. McNeely, "Conservation Must Pay," Zoogoer, January-February 1990.
[8] R. Norris, "Can Ecotourism Save Natural Areas?" in National Parks, January 1992.
[9] M. Munasinghe, "The economics of protected areas," in Parks for Life, report of Workshop I.2.
[10] D. Western and W. Henry, "Economics and Conservation in Third World National Parks," BioScience 29(7), 1979.
[11] An example would be shrimp fisheries that depend on mangrove wetlands. See detailed discussion in Dixon and Sherman, op. cit. One study in India found that a partially protected mangrove forest produced 110 kilograms of prawns per hectare, while a similar, unprotected mangrove forest produced only 20 kilograms per hectare.
[12] See W.V. Reid et al, Biodiversity Prospecting (Washington, DC: World Resources Institute, 1993).
[13] Data about protected areas in this section are primarily generated by the World Conservation Monitoring Centre (WCMC). Much of the analysis is derived from R. Cobham, Improving Management in and around Protected Areas: An Investment Framework (Gland, Switzerland: IUCN, unpublished manuscript, 1992).
[14] This section drawn from Barzetti, Valerie, Parks and Progress (Washington, DC: IUCN and Inter-American Development Bank, 1993).
[15] These criteria are detailed in Barzetti, Valerie, Parks and Progress (Washington, DC: IUCN and Inter-American Development Bank, 1993).
[16] African Elephant Conservation Coordinating Group. The African Elephant Conservation Review. Paris, AECCG 1991.
[17] UNEP. Biodiversity Country Studies, Synthesis Report (Nairobi: UNEP 1992). The study was conducted by the Ad Hoc Working Group on Biological Diversity Conservation, convened by UNEP's Governing Council.
[18] Buffer-zone management is discussed in detail in J. McNeely and K.R. Miller, National Parks, Conservation, and Development (Washington, DC: Smithsonian Institution Press, 1988) and MacKinnon et al, Managing Protected Areas in the Tropics (Gland, Switzerland, 1986).
[19] For details, see Part II, Chapter 4 (Multilateral Assistance) regarding UNESCO.
[20] See David Reed, The Global Environment Facility: Sharing Responsibility for the Biosphere (Washington, DC: WWF International Institutions Policy Program, 1992).
[21] This discussion of TFAP is based largely on Robert Winterbottom, Taking Stock: The Tropical Forestry Action Plan After Five Years (Washington, DC: World Resources Institute, 1990).
[22] For a detailed discussion of FAO and the TFAP process, see Part II, Chapter 4.
End of Part I. For Part II, please use this link.
1994
Revised: 2001
Prepared for:
IUCN - The World Conservation Union
The Nature Conservancy
Peace Corps