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CONSERVATION FINANCE Limitations and Opportunities By Barry Spergel Global Cost of Biodiversity Conservation 2 Main Components: Financing Protected Areas Providing Economic Incentives for conserving biodiversity outside protected areas Current global spending on the first: approx. $6 billion/year, need to increase to $45 billion Current global cost of environmentally perverse incentives and subsidies(especially for energy, agriculture, fishing, forestry and mining): over $1 trillion/year Macroeconomic Solutions Reduce perverse subsidies Earmark part of the savings for biodiversity conservation Charge fees for environmental services and earmark these fees for protected areas and biodiversity conservation All 3 Approaches will meet strong political resistance By lobbies for each of the affected sectors By ministries of finance and IMF, which oppose earmarking Because of arguments that this will hurt the poor By competition for funds from other social sectors: ---health, education,and poverty alleviation ---entitlement programs for aging populations ---expenses for defense/anti-terrorism Economic Benefits of Biodiversityare OFTEN (but not always) Hard to trace and quantify Speculative and in the future (e.g., bioprospecting) Hard to internalize costs by charging higher prices Difficult to standardize and trade biodiversity as a commodity (cf. carbon emissions trading) Provide environmental services which can also be provided by “industrial” forestry (e.g. watershed conservation and carbon sequestration) Outweighed by non-economic values of biodiversity (aesthetic, cultural, spiritual, moral, psychological) Difficult for the Private Sector to Make Money from Biodiversity Conservation Look at the Experiences of private investors in: Ecotourism Bioprospecting Organic Farming Private Protected Areas Frequent loss of money due to political risks, economic risks, unpredictable natural events, preference of investors for short-term returns: Therefor
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