Welcome to the Conservation Finance Guide. The overall goal is to provide practical tools to support the rapid expansion of sustainable finance mechanisms that generate long-term funding for biodiversity conservation.
Welcome to the Conservation Finance Guide. The overall goal is to provide practical tools to support the rapid expansion of sustainable finance mechanisms that generate long-term funding for biodiversity conservation.
Fiscal instruments provide a wide array of opportunities for increasing support for biodiversity conservation. Additional revenues can be generated for biodiversity-related activities, such as maintaining protected areas, and the behavior of biodiversity-impacting economic actors can be altered through tax incentives, such as tax breaks for organic farming.
From the perspective of a protected area manager, a step-by-step approach can be adopted to identify, assess and implement or promote an appropriate portfolio of fiscal instruments. This section proposes a simple, practical approach to tackling this complex subject.
It is crucial to begin by re-affirming conservation objectives, so as to ensure that the fiscal instruments will support the conservation aims of the protected area. In particular, the strictly financial aims of the fiscal instruments should never be allowed to overtake the core conservation objectives of the protected area. Financial security is not an end in itself, but a means to reaching the goal of conservation.
At this stage it is also important to identify the protected area’s financial needs. These needs might be classified as core, secondary or tertiary. Some, such as salaries of core staff or payments on loans, must be met; others are less important and could be deferred; others again may be considered optional. Such needs should include preferred time horizons, so that they can be matched against the timing of the various sources of funding.
The existing stakeholder or customer base of a protected area provides the real foundation for potential revenue. The identification of the customer base should include customers who are currently paying for the relevant goods and services and those who derive benefits free of charge. It is useful to be explicit about who is paying and who is not at this stage, to give an idea of potential additional sources of finance through the use of earmarked fiscal instruments.
This step entails identifying and listing the current sources of financing from fiscal instruments, as well as their timing (e.g. how long the funds will last, when they are actually paid, and what are the possibilities for further financing from this source), and the obligations linked to these financial re-sources (such as reporting requirements, projects or activities which must be undertaken, and deadlines).
A similar list of behavior-influencing fiscal instruments also needs to be made. This list may be more difficult. The protected area managers may not be fully aware of the impact of various fiscal instruments on the behaviors of key stakeholders such as neighbors and potential donors.
In addition to a list of fiscal instruments in use, the protected area manager also needs to know what instruments are available at the protected area system or park level as well as what instruments might be worth pursuing at the local, provincial and national levels. Here insights and information from experiences in other regions and countries may be valuable.
A careful analysis of the advantages and disadvantages of reforming existing fiscal instruments or designing new ones needs to be undertaken. Every country has a different tax structure and budget decision-making process. Every protected area system or park has a different set of priorities and challenges. Hence the feasibility of different fiscal instruments to support biodiversity conservation needs to be carefully studied.
A very indicative list of advantages and disadvantages follows:
In particular, this step requires assessing the complexity of the instruments under consideration, as well as the risks associated with their implementation, the levels of effort and investment needed to make them work, and the timelines for both the returns on these investments and meeting the needs posed by the protected area. At this stage it may be also be necessary to revisit step 2 and reassess the relevant customer base and reconsider what are appropriate instruments.
A scenario-building approach to analyzing the various options available may prove useful. In this exercise, the protected area manager would identify different sets of stakeholders/customers and instruments, and then subject them to various scenarios built up from those listed above. The protected area manager would then choose the group of fiscal instruments which best holds up under the various scenarios.
Overview
1. Understanding Fiscal Instruments for Conservation
1.1 Overview
1.2 Key Actors and Motivations
1.3 Types of Fiscal Instruments
1.5 Success Factors
2. A Selection of Case Studies
2.1 Instruments for Raising Revenue
2.2 Instruments for Changing Behavior
3. Resources