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Global nature funding

Nils Zimmermann
May 6, 2016

Experts say that conserving global biodiversity will require spending tens of billions of additional dollars on nature reserves every year. But where could the money come from? DW asked some specialists for their ideas.

Iguazu-Wasserfälle in Argentinien
Image: Fotolia/miragik

When conservation scientists look around the world at the state of wild ecosystems, what they see is tragedy. In much of the world, remaining natural ecosystems are being degraded and destroyed. Species extinctions are occurring about a thousand times faster than the natural extinction rate.

"The International Union for the Conservation of Nature (IUCN) has long had a Red List of threatened species. We're now working on a Red List of threatened ecosystems, to help prioritize where conservation action is most urgently needed," said Gerard Bos, head of IUCN's Geneva-based Global Business and Biodiversity Programme.

Governments recognize the problem. The UN Convention on Biological Diversity in 2010 adopted an ambitious "Strategic Plan for Biodiversity 2011-2020" and the "Aichi Biodiversity Targets" at a conference in Japan's Aichi Prefecture.

Sri Lanka Oranutang mit Baby im Zoo von Dehiwala
Orangutans are rapidly losing their homes as their forest habitats are felled.Image: picture-alliance/dpa

But it's one thing to recognize a problem, and quite another to solve it. A big reason why stated conservation intentions and actual outcomes don't match is gross underfunding of conservation efforts.

What will it cost to turn things around?

About 15 years ago, Cambridge University conservation scientist Andrew Balmford set out to estimate how much money it would take to adequately protect a global network of terrestrial and marine nature reserves.

"Current global expenditure on nature reserves runs at very roughly $6.5 billion a year (in year 2000 US $)," Balmford wrote in 2003. But this spending was "only a fraction of that needed" to properly protect existing nature reserves as well as create new reserves for underrepresented ecosystems.

Worse, very little conservation money was being spent in high-biodiversity tropical countries, even though "the countries richest in biodiversity are poorest in economic terms."

Balmford and his research team estimated that the additional cost of establishing and running a global reserve system covering roughly 15 percent of land and around 30 percent of the sea would be "very roughly $30 billion a year."

Brasilien Entwaldung des Urwaldes
Experts say loss of the Amazon forest harms biodiversity and affects climate change.Image: picture-alliance/Demotix/K. Hoffmann

Balmford told DW that since 2003, progress on conservation funding has been modest: "It's pretty clear there's still a very large funding gap. The UN's Global Environment Facility and the various programs of the UN Convention on Biological Diversity are attempts to plug some of the gap, but they're simply not on the same scale as the need."

In fact, Balmford's 2003 estimate of $30 billion a year in unmet conservation funding needs may have been too small. One reason is that protecting 15 percent of land and 30 percent of the sea might not be nearly enough to prevent continuing extinctions - after all, it means an 85 percent loss of habitat for most big animals on land.

In "Half Earth," a new book by Edward O. Wilson, the famed Harvard evolutionary biologist argues that on the basis of bio-geographic evidence, “to save biodiversity, we need to set aside about half the earth's surface as a natural reserve.”

Using different and broader definitions of conservation funding than Balmford's study, Credit Suisse and IUCN estimated in a 2016 report entitled "Conservation finance - from niche to mainstream," that "US$ 200-300 billion in additional capital is needed to preserve healthy ecosystems on land and in the oceans, including clean air, fresh water and species diversity. Currently, conservation spending is estimated at about $52 billion per year."

One promising approach, IUCN's Gerard Bos said, would be to set up net-profit-generating "mosaic landscapes" comprising core nature reserves and buffer zones of commodity-producing forest or agricultural land.

The landscapes would generate cash flow from commodity sales supplemented by tourism revenues. Aggregated into portfolios, such projects could become "investable assets" for institutional investors like pension funds - but Bos admitted "we're not there yet."

Kenia Amboseli National Park Elefantenherde
Elephant numbers are dwindling fast, as they get poached at unprecedented rates.Image: picture-alliance/dpa/D. Kurokawa

Public funding - but how?

For now, core nature reserve network funding must continue to come from the governments of wealthy countries, channelled into vehicles like the UN's Global Environment Facility (GEF). But are sums of 50 billion dollar a year, which is more money than is currently allocated to GEF, realistic?

"Can we afford it? Easily, if the political will is there," said Erik Solheim, a former environment minister of Norway nominated by UN Secretary General Ban Ki Moon to become the next chief of the UN Environment Programme (UNEP).

Günter Mitlacher, head of biodiversity at WWF Germany, agrees. An amount on the order of 50 billion dollar a year, he said, should ideally be raised not from taxes, but rather from fees - i.e. from a simple surcharge on some regular financial flows, with revenues flowing directly into a global biodiversity conservation fund.

"We tried proposing this a couple of years ago in connection to the financial transaction tax (FTT) that was to be levied in Europe," he said, but the FTT has, so far, gone nowhere.

A more politically tractable approach might be to levy a surcharge on some quantity directly related to natural commodities, like land, wood, or fossil fuels, as a kind of "nature user fee."

Converting land to industrial agriculture or urban areas excludes wildlife from that land. People intuitively understand the justice and reasonableness of offsetting environmental damages they cause as consumers by paying for nature reserves on some other land, via consumer surcharges.

Great Barrier Reef Korallenriff
Coral reefs face threats from fishing, unsustainable tourism, pollution and climate change.Image: Dorothea Bender-Champ for ARC Centre of Excellence for Coral Reef Studies

For example, if a group of wealthy countries got together and agreed to levy of a very modest 0.2 percent annual land use fee on the value of real estate, the conservation funding gap would vanish. A back-of-the-envelope calculation shows the fee would raise about 5 billion euros a year in Germany alone.

The advantage of such a "nature user fee" approach, Mitlacher noted, is that once the system is in place, the funding is stable and relatively secure. It isn't necessary to go back every year or two to persuade politicians to decide to spend a little more on conservation - and hence less on other things - from their discretionary fiscal budgets.

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