Mind the gap

06 July 2010 | Article

How much money is currently being spent globally on biodiversity conservation, how much more is needed, and for what?

With biodiversity declining at an alarming rate, despite political commitments to halt or slow its loss, it is clear that the effort and funds currently devoted to conservation are insufficient. But how much is actually being invested and how effectively in terms of conservation results? With renewed calls for massive increases in conservation funding, a question rarely asked is what is the most cost-effective way to conserve biodiversity?

Recent studies indicate that globally, about US$ 7–10 billion is invested every year in biodiversity conservation. A significant portion of this amount is directed towards protected areas. But recent growth in the number and size of protected areas has not been matched by increased resources and many are not effectively managed. Estimates of how much more is needed to secure the existing protected area estate vary greatly, let alone how much is required to conserve ‘enough’ biodiversity to safeguard its (and our own) future. Effectively managing the existing protected area network has been estimated to cost around US$ 14 billion per year and the cost of investing in an ‘ideal’ global protected area network—if expanded to cover 15% of land and 30% of marine areas—has been estimated at up to US$ 45 billion per year.

Estimates of the funding gap to achieve the three global objectives of the Convention on Biological Diversity (CBD) range from US$ 10 to 50 billion per year. The CBD itself is calling for a ten-fold increase in capacity (human resources and financing) by 2020 to implement the Convention and there are proposals from the environmental community to raise the bar even further. IUCN has called on OECD countries to contribute at least 0.3% of their GDP to international biodiversity assistance, in addition to the 0.7% target for international development assistance. At today’s prices that’s about US$ 120 billion per year. For comparison, annual spending on subsidies to agriculture in the US, European Union and Japan is about US$ 220 billion per year. Reducing subsidies for activities that harm biodiversity is therefore one of the most cost-effective ways to slow environmental decline. More generally, it is usually much cheaper to avoid degradation than to pay for ecological restoration, although restoration is often a good investment too.

Looking beyond protected areas as a way to conserve biodiversity, there are many established and emerging areas of financing for biodiversity conservation. Evidence is growing that incentive-based policies can achieve environmental objectives at a lower economic cost than conventional regulatory approaches. These include biodiversity offsets and BioBanking, conservation tax incentives, bio-carbon finance including REDD-plus (Reducing Emissions from Deforestation and forest Degradation), and certification and eco-labeling schemes. Funding from these and other market-based schemes may well exceed total public spending on protected areas, although assessing their environmental benefit remains a challenge.

A recent report by Forest Trends, an IUCN Member, focused on a range of schemes designed to reduce development impacts on biodiversity, a practice known as compensatory mitigation. These markets were found to have a global size of at least US$ 1.8–2.9 billion per year. The impact of this market includes at least 86,000 hectares of land placed under some sort of conservation management or permanent legal protection each year.

Evidence is growing that incentive-based policies can achieve environmental objectives at a lower economic cost than conventional regulatory approaches.

Nature-based tourism, which includes eco-tourism, adventure tourism and tourism in natural areas, is a more established approach that is growing significantly with potential benefits for biodiversity, if carried out sustainably. “Colombia has seen a 45% increase in nature tourism in the last three years and demand for sustainable tourism is reported to be growing rapidly,” explains sustainable tourism specialist, Andrew Drumm.

Data from Latin America and the Caribbean show a strong correlation between tourism demand and biodiversity with between two-thirds and three-quarters of all international tourists (Peru 73%; Argentina 60% and Costa Rica 65–75%) visiting at least one protected natural area. In Ecuador, protected area tourism generates 95% of all self-generated revenues for the park system. Studies in Peru and Ecuador show significant potential to increase the economic benefits from protected area tourism for biodiversity conservation and local communities. However, the sustainability of tourism’s economic benefits is threatened by a lack of investment in protected area management.

“Nature tourism, especially eco-tourism, is the major contributor to park system revenues across Latin America and the Caribbean and African countries such as South Africa and Tanzania. Despite this, there is significant potential for tourism to contribute much more to closing the funding gap for biodiversity conservation. In countries like the UK and US, there are growing numbers of tourists motivated to contribute financially to the conservation of the natural destinations they visit,” adds Mr Drumm.

The world as a whole is not short of funds, despite the current economic recession in many countries. What is lacking is the motivation for increased private investment in biodiversity. If even a small proportion of private capital flows, international trade and national economic output could be harnessed for biodiversity business, the resulting contribution to conservation would be enormous.


View of logging road in the Cameroon Forests