Financing Species Conservation

A Menu of Options

September 2004

Sarah Koteen Center for Conservation Finance BUILDING CONSERVATION CAPITAL FOR THE FUTURE World Wildlife Fund

Citation: Koteen, Sarah. 2004. Washington, D.C.: WWF Center for Conservation Finance.

Cover photo: African Savannah Elephant. Loxodonta africana. African elephant adult bulls drinking at water hole sub-Saharan Africa. © WWF Canon / Martin Harvey

Acknowledgements

The author is grateful to Bruce Bunting, Sue Lieberman, Caroline Mitten, and Amanda Nickson for their helpful contributions to the guide and would like to thank WWF colleagues: Karen Baragona, Luz Baskinas, Esteban Brenes, Tom Dillon, Jim Fuschetti, Tim Geer, Ginette Hemley, Sybille Klenzendorf, Melissa Moye, Michael Ross, Mingma Sherpa, and Jan Vertefuille.

The author would also like to acknowledge that as the third guide in a series, this publication draws from and supplements information contained in Financing Marine Conservation: a Menu of Options (Spergel and Moye) and Raising Revenues for Protected Areas (Spergel).

Center for Conservation Finance World Wildlife Fund 1250 24th Street, NW Washington, D.C. 20037-1124

Tel: +1 (202) 778-9676 Fax: +1 (202) 861-8324

http://www.worldwildlife.org/conservationfinance

Financing Species Conservation

This guide describes more than 30 mechanisms for financing species conservation. It is intended to familiarize conservation professionals – i.e., the managers and staff of government conservation agencies, international donors, intergovernmental organizations (IGOs), and nongovernmental organizations (NGOs) – with a menu of options for financing species conservation. The guide covers both revenue-raising and economic incentive mechanisms, and describes practical cases of each instrument implemented in the field. Rather than offering a detailed manual for the development of each mechanism, the guide presents a set of summaries for the reader to review. A list of sources to consult for additional information is provided at the end of each chapter.

For the purpose of the guide, the term “species” is limited to wild fauna and can be interchanged with the term “wildlife.” Because protecting species depends directly on the conservation and sustainable management of habitat, the guide highlights mechanisms that support both the conservation of individual species as well as wider habitats whose disruption would significantly impact species biodiversity.1

Please note that the cases included in the guide are not necessarily presented as paragons of their category and inclusion does not constitute World Wildlife Fund (WWF) endorsement of the particular project. They are instead presented as examples of financing mechanisms that can be effective when designed as part of a comprehensive sustainable species or habitat management strategy. A strong scientific, economic, political, and social project framework is critical to the ability of each mechanism to support species biodiversity.

WWF considers this publication an initial guide to the subject of financing species conservation. The financing mechanisms and case examples included in this guide represent a preliminary compilation to give the reader an overview of existing financing tools. The WWF Center for Conservation Finance will continue to develop new and innovative approaches to address the financial needs required by species conservation and welcomes additional ideas and information that can be included in subsequent editions.

1 Biodiversity (biological diversity): The variability among living organisms from all sources, including land based and aquatic ecosystems, and the ecosystems of which they are part. These include diversity within species, between species, and of ecosystems. Diversity is the key to ensuring the continuance of life on Earth. It is also a fundamental requirement for adaptation and survival and continued evolution of species. (World Bank)

Table of Contents

1. Introduction………………………………………………………………………………….. 1 1.1 Business Planning…………………………………………………...... 2 1.2 Feasibility Analysis………………………………………………………………... 4 2. Autonomy of Government Wildlife Agencies……………………………………………..... 7 3. Government Revenue Allocations.………………………………………………………….. 10 3.1 Taxes and Bonds Earmarked for Conservation…………………………………... 10 3.2 Real Estate and Development Taxes………………………………………………. 12 3.3 Lottery Revenues…………………………………………………………………... 12 3.4 Premium-Priced Motor Vehicle License Plates……………………………………. 14 3.5 Wildlife Stamps……………………………………………………………………. 15 3.6 Economic Instruments to Stimulate Environmental Investment…………………... 16 3.7 Debt Relief………………………………………………………………………… 17 4. Grants, Donations, and Loans……………………………………………………………….. 22 4.1 Bilateral and Multilateral Agencies………………………………………………... 22 4.2 Foundations ……………………………………………….………………………. 24 4.3 Conservation Trust Funds ………………………………………………………… 25 4.4 Nongovernmental Organizations …………………………………………………. 26 4.5 Private Sector……………………………………………………………………… 28 5. Tourism Revenues…………………………………………………………………………… 33 5.1 Protected Area Entry Fees…………………………………………………………. 33 5.2 Recreation Fees…………………………………………………………………….. 34 5.3 Species Related “User Fees”………………………………………………………. 35 5.4 Hunting Fees and Green Safaris…………………………………………………… 36 5.5 Commercial Operations in Protected Areas……………………………………….. 37 5.6 Airport Passenger Fees and Hotel Taxes………………………………………….. 37 5.7 Voluntary Contributions from Tourists and Tourism Operators…………………... 38 6. Revenue from the Sale and Trade of Wildlife…………………………………...... 43 6.1 Revenue from Illegal Hunting and Wildlife Trade………………………………… 43 6.2 Wildlife Auctions………………………………………………………………….. 44 6.3 In Situ-Ex Situ Species Conservation Partnerships………………………………… 45 6.4 Species Product Certification……………………………………………………… 46 7. Financing Habitat Acquisition and Management…………………………………………… 49 7.1 Purchase or Donation of Land or Property………………………………………… 49 7.2 Conservation Easements…………………………………………………………… 50 7.3 Wildlife Conservancies……………………………………………………………. 50 7.4 Conservation Concessions…………………………………………………………. 52 7.5 Tradable Development Rights and Wetland Banking……………………………... 53 8. Natural Resource Extraction Revenues……………………………………………………… 55 8.1 Fines……………………………………………………………………………….. 55 8.2 Royalties and Fees…………………………………………………………………. 55 8.3 Taxes…...... 56 8.4 Hydroelectric Power Revenues……………………………………………………. 56 8.5 Voluntary Contributions from Natural Resource Companies……………………... 56 9. For-Profit Investment………………………………………………………………………... 59 10. Conclusion………………………………………………………………………………….. 61 Appendix I………………………………………………………………………………………62

Acronyms and Abbreviations

ACC Asian Conservation Company ADB Asian Development Bank ARAZPA Australia Regional Association of Zoological Parks and Aquaria ARPA Amazon Region Protected Areas BEC Busch Entertainment Corp. CBD Convention on Biological Diversity CBO Community Based Organization CBNRM Community Based Natural Resource Management CEPF Critical Ecosystem Partnership Fund CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora DNR Department of Natural Resources DOC Department of Conservation EKZNW Ezemvelo KZN Wildlife EPA Environmental Protection Agancy FMCN Fondo Mexicana para la Conservación de la Naturaleza/Mexican Nature Conservation Fund GDP Gross Domestic Product GEF Global Environment Facility GOCO Great Outdoors Colorado GTZ German Technical Coorporation HCP Habitat Conservation Plan HIPC Heavily Indebted Poor Countries IGO Inter-governmental Organization IUCN World Conservation Union KWS Kenya Wildlife Service LEX Lindblad Expeditions MBCF Monarch Butterfly Conservation Fund MAC Marine Aquarium Council MSC Marine Stewardship Council NFWF National Fish and Wildlife Foundation NGO Non-governmental Organization PACT Protected Areas Conservation Trust PHKA Indonesian Directorate General of Forest Protection and Nature Conservation PRSP Poverty Reduction Strategy Paper RCP Rhino Conservancy Project SANParks South African National Parks SSP Species Survival Program TANAPA Tanzania National Parks TFCA Tropical Forest Conservation Act UK United Kingdom UNDP United Nations Development Programme UNEP United Nations Environment Programme USAID U.S. Agency for International Development USFWS U.S. Fish and Wildlife Service WWF World Wide Fund for Nature/World Wildlife Fund

1. Introduction

Forming the web of life upon which humans depend, nature provides a vast number of goods and services essential to human survival. Scientists have so far identified approximately 1.75 million species of plants, animals, and microorganisms on Earth, but estimates place the total number of species at between 3 and 100 million (Convention on Biological Diversity). These species supply valuable natural services that would be impractical – even impossible – to replace, such as large- scale pest control, pollination of plants and crops, maintenance of genetic resources, and replenishment of soil fertility. Furthermore, many of these species invoke a cultural or aesthetic pride that has become a source of social identity. Animals such as elephants, lions, and eagles adorn international flags, while charismatic wildlife mascots represent athletic teams and universities across the globe.

Not only does species conservation have important biological and human psychological benefits, but it has important social implications as well. Species conservation, at its core, aims to maintain the natural systems upon which global communities depend. Species conservation is one of the primary tools of preserving biodiversity, an important issue for most of the world following a World Summit on Sustainable Development commitment to reduce the rate of loss of the world’s biodiversity by 2010. Individual species, and specific suites of species, provide measurable indicators of the effect we are having on the world’s natural systems – the systems which sustain life. By identifying “flagship2” and “keystone3” species and actively conserving them, considerable information about and benefit to important ecosystems can be derived. For example, freshwater dolphins are an excellent flagship for important river basins. By conserving them, we see significant improvements in the management of water catchments which provide clean drinking water – a major issue for the developing world.

Despite the value and appeal of flagship species, wildlife is disappearing at an alarming rate. Nearly 1000 species of animals are critically endangered, and more than 4500 are endangered or vulnerable (IUCN Red List). Species are going extinct at 50 to 100 times the natural rate, and this rate is expected to rise in the coming years (Convention on Biological Diversity). Rapidly increasing human population is placing unsustainable pressure on natural resources, causing severe ecosystem fragmentation and habitat destruction. Furthermore, wildlife remains an attractive commodity for exploitation, both in developing nations where individuals often have no other source of income, and by consumers in other countries. Animal poaching for meat, ivory, hides, and other goods persists, despite national laws and international treaties that protect wildlife.

There are many strategies to conserve species, all of which generally aim to secure viable populations across a species range. In most cases, an effective conservation plan incorporates a variety of strategies, including, but not limited to:

2 A species whose conservation helps numerous other species that live in the same habitat (WWF) 3 A species that has a key role in the ecosystem (U.S. Fish and Wildlife Service)

Financing Species Conservation: a Menu of Options 1 • Establishing protected areas (PAs) • Creating corridors to link protected areas • Mitigating threats to migratory species that travel through unprotected areas • Mitigating threats to habitat such as unsustainable forest conversion, fishing, and mining • Habitat restoration • Improving legislation and governance at the regional, national, and local level • Education and capacity-building for communities living near wildlife

Often established as the cornerstone to a species conservation plan, protected areas such as national parks, nature reserves, or wildlife sanctuaries can help safeguard species from external threats. However, this tool is effective only to the extent that protected areas are established and managed properly. One study indicates that current global expenditures on protected areas amount to approximately $6.5 billion per year, but the amount required to fully support conservation objectives would cost an estimated $45 billion per year (Balmford 2002). This shortfall is exacerbated when considering the stark ratio of conservation investment in developed and developing nations. Of the estimated $6.5 billion per year spent on managing protected areas, less than 12 percent is spent in developing countries – where biodiversity is typically greatest (Balmford 2003).

The lack of funding for protected areas and wildlife management obscures the reality that species conservation can generate substantial income. For example, a study conducted by WWF found that marine turtle tourism brings in almost three times as much money as the sale of turtle products. Areas that use turtles for their meat, eggs, and shells, receive an average annual revenue of $582,000, whereas areas that conserve turtles as a tourist attraction produce an average annual revenue of $1.65 million (Troëng and Drewes 2004). In Tanzania, the agency responsible for managing the country’s wildlife-rich national parks generated approximately $700 million in 2000, contributing more than 8 percent of the country’s GDP (Conservation Strategy Fund 2003). Yet marine turtles and many species in Tanzania remain threatened. In many countries, wildlife-generated revenue is deposited in the national treasury and disbursed through the overall budget, thereby also supporting other priorities such as health care and education. In most cases, however, it is possible to directly capture some or all of these revenues for species conservation using a variety of financing mechanisms. Through these mechanisms, governments and communities can benefit not only from direct income, but also from improved land use planning and management, improved community governance, improved access to and benefit-sharing of local resources, enhanced local livelihoods, poverty alleviation, reduced conflict, and in some cases, maintenance of traditional practices.

1.1 Business Planning

To effectively channel revenue toward species conservation, potential financing mechanisms should be evaluated as part of a comprehensive business plan that includes a sustainable financing strategy. Natural resource and protected area management plans traditionally focus on the scientific and administrative requirements of protecting biodiversity. While these elements are important for sustainable resource management, they often fail to fully address central financial issues such as cost management and income generation. Business plans for protected areas incorporate financial analysis into the management plan to create a comprehensive strategy to improve operational efficiency. A business plan to support species conservation should assess

Financing Species Conservation: a Menu of Options 2 the costs of operating protected areas and protecting wildlife against the value gained from conserving these resources. A range of consumers willing to pay for wildlife-related goods and services can be identified as potential funding sources for conservation activities. Although their application is relatively new to conservation, business plans are being developed for a number of protected areas around the world at the site, park, or network level (Conservation Finance Alliance Guide).

The National Parks Business Plan Initiative. In 1998, the U.S. National Park Service and a U.S. NGO, the National Parks Conservation Association, established a joint initiative to develop business plans for national parks across the United States. The program evolved from the recognition that a consistent shortfall of funding had led to a $4 billion backlog of national park maintenance needs, excluding the funds necessary to conduct status assessments of park biodiversity. Recruiting top business students to help park managers analyze individual park budgets, the initiative addresses six critical questions:

• What is the park’s “business”? • What are the sources and uses of all park funds? • How well does the current funding answer the needs and expectations of the public, the U.S. Congress, and park managers? • What are the park’s priorities for allocating operating and investment funds? • What are the unmet needs, and what is their justification? • If a gap exists between currently available funds and justified need, what options are available to close the gap?

A thorough analysis of these issues produces a comprehensive business plan for each participating park. By 2000, the initiative had created business plans in 27 parks to help protect vulnerable species such as bison, wolves, grizzly bears, and whooping cranes (National Parks Conservation Association).

Masoala National Park (Madagascar). Through an international pilot initiative based on the National Parks Business Plan Initiative described above, Masoala National Park is developing a business plan with assistance from the National Parks Conservation Association and the Wildlife Conservation Society. Created in 1997, Masoala National Park is Madagascar’s largest protected area and home to numerous rare and threatened species, including the red-ruffed lemur, red owl, and Malagasy serpent eagle. The business plan analyzes the park’s historical financial baseline and current operations and identifies investment strategies to ensure financial sustainability. One program designed to generate stable revenue is an innovative partnership with the Zürich Zoo, which will help fund park management costs through a special Masoala exhibit. A trust fund is also being created to provide sustainable funding (Parc National Masoala, Conservation Finance Alliance).

Sangha Trinational Complex (Central Africa). WWF is working with partners such as governments in the region, the Wildlife Conservation Society, and GTZ to develop business plans for protected areas in the Sangha Trinational, Central Africa’s first transboundary protected areas complex. Because the region contains a number of charismatic rare and endangered species, including forest elephants and gorillas, one of the primary revenue-raising opportunities identified at the Dzanga Ndoki park in the Central Africa Republic is an innovative ecotourism

Financing Species Conservation: a Menu of Options 3 program that allows tourists to visit groups of habituated low-land gorillas. Ecotourism related activities in the park have the potential to generate high levels of revenues, and 40 to 50 percent of these revenues are disbursed to local communities and national institutions for sustainable development activities. This shared revenue is critical to establishing the link between ecotourism and conservation, creating local incentives to support conservation (Lebouder and Moye 2004).

1.2 Feasibility Analysis

The choice of which financing mechanism(s) to use should be based on an analysis of a number of feasibility issues. As identified by Spergel and Moye 2004:

Financial • How much money will actually be needed each year to support the particular wildlife conservation programs and activities that are envisaged? • How much revenue is likely to be generated each year by the new financing mechanisms? • Will the revenues generated be worth the cost of setting up the new financing mechanism? • Could the revenues vary substantially from year to year depending on global and national economic, political, and natural conditions? • How will a highly variable revenue flow affect the conservation programs that the financial mechanism is intended to pay for? • What other sources of funds might be available, either on a long-term or a one-time basis?

Legal • Can the proposed financing mechanisms be established under the country’s current legal system? Some legal systems do not recognize concepts such as easements or development rights. In other legal systems, there may be a constitutional prohibition against earmarking tax revenues or fees for specific purposes. • Will new legislation be required in order to establish the proposed financing mechanism? • How difficult and time-consuming will it be to pass such legislation? • Could the new financing mechanism be established under current legislation, by simply issuing an administrative or executive order?

Administrative • In the particular country, how difficult will it be to administer, enforce, collect, or implement a particular type of financing mechanism? • Will it be too complicated or costly to administer? • Are there enough trained people (or how difficult will it be to train enough people) to administer and enforce the system? • Will implementing the particular financing mechanism depend too much on the discretion of individual officials and therefore present too many opportunities for corruption? • Can safeguards be devised to limit potential problems? • How difficult will it be to collect, verify, and maintain the data upon which a particular financing mechanism is based?

Financing Species Conservation: a Menu of Options 4

Social • What will be the social impacts of implementing a particular system of generating revenues for conservation? • Who will pay, and what is their willingness and capacity to pay? • Will the new financing mechanism be perceived as equitable and legitimate?

Political • Is there government support for introducing the new financing mechanism? • Can the government be relied upon to spend the new revenues only for the purposes intended, or is there a strong likelihood that the money may end up being used for other purposes? • Can this be monitored and ensured by the courts or the media or NGO “watchdog” groups or particular user groups or an independent board of directors or an international agency?

Environmental • What will be the environmental impact of implementing the new financing mechanism? For example, for tourism-based mechanisms, will the desire to increase revenues from tourism compromise conservation objectives or exceed the carrying capacity of a protected area?

Financing Species Conservation: a Menu of Options 5 References and Resources

Balmford et al. 2002. Economic reasons for conserving wild nature. Science 297: 950-953

Balmford et al. 2003. Global Variation in Terrestrial Conservation Costs, Conservation Benefits, and Unmet Conservation Needs. PNAS. 100(3): 1046-1050.

Conservation Finance Alliance: http://www.conservationfinance.org/

Conservation Finance Alliance Guide: http://guide.conservationfinance.org/

Conservation Strategy Fund. 2003. Maximizing Revenues and Conservation in Tanzanian National Parks: Towards a Better Understanding of Park Choice and Nature Tourism in Tanzania. Philo, CA: Conservation Strategy Fund.

Convention on Biological Diversity: http://www.biodiv.org/default.aspx

IUCN Red List: http://www.redlist.org/

Lebouder, Madenga and Melissa Moye. 2004. Personal communication, August 26 and 29.

National Parks Conservation Association, National Parks Business Plan Initiative: http://www.npca.org/across_the_nation/funding_and_management/

Parc National Masoala: http://www.masoala.org/

Spergel and Moye. 2004. Financing Marine Conservation: a Menu of Options. Washington, D.C.: WWF Center for Conservation Finance. Available online: http://www.worldwildlife.org/conservationfinance/pubs.cfm

Troëng, Sebastian and Carlos Drewes. 2004. Money Talks: Economic Aspects of Marine Turtle Use and Conservation. Gland, Switzerland: WWF-International.

Financing Species Conservation: a Menu of Options 6 2. Autonomy of Government Wildlife Agencies

Wildlife conservation agencies that rely solely on the central government often face major systemic barriers hampering effective conservation. Unstable government budget allocations can result in the chronic underfunding of national wildlife agencies – particularly in developing nations where governments may lack the capacity to raise sufficient public funds. Compounding the problem, wildlife-generated income is typically deposited in the national treasury and dispersed across the general budget. One way to increase operational efficiency for species conservation is to grant wildlife agencies institutional autonomy and financial independence. With the ability to raise, retain, and reinvest its own funds, an autonomous wildlife agency can significantly increase its income and capacity to support species conservation. Studies conducted in Namibia indicate that tourists are willing to pay higher park entry fees if an autonomous organization, rather than the government, was responsible for managing park revenues and protecting endangered species (Krug et. al 2002).

There are a number of semi-autonomous parastatal wildlife or national park agencies currently operating, including Ezemvelo KZN Wildlife, the Kenya Wildlife Service, and Tanzania National Parks. Each of these organizations is currently undergoing or has recently completed a strategic assessment to improve its economic outlook. Parastatals can raise internal funds through a number of commercial activities, and the global public service of such agencies that manage internationally significant wildlife justifies some external and central government subsidy. It should be noted that parastatal agencies are vulnerable to fluctuations in the tourist market – their primary source of income – and should have a reserve or alternate fund-raising mechanism available from which to draw funds if regular income drops. For example, the Kenya Wildlife Service lost an estimated $1.3 million in tourism revenue when the tourism rate dropped significantly after the November 2002 bombings in Kenya’s port city of Mombasa (The Namibian Online Newspaper).

Ezemvelo KZN Wildlife. The Constitution of South Africa mandates Ezemvelo KZN Wildlife (EKZNW) as the exclusive biodiversity management authority in the KwaZulu-Natal province. As a parastatal organization, EKZNW is able to raise and manage its own revenue. Funding comes from three main sources: a subsidy from the province, donors and revenue derived from investment interest, and the provision of goods and services – which accounts for 40 percent of the total income. This income is primarily generated through the sale of wildlife products, the provision of accommodation, resale trading, the hire and lease of facilities, hunting and trails, and rides and tours. The organization manages 2500 beds and camping for 10,000 people in the 66 protected areas that have overnight accommodation. EKZNW has noted an upward trend over the past 10 years in revenues from the sale of goods and services. This trend has contributed an increasing proportion of the budget, helping to counteract the effect of a decrease in real terms of the state subsidy. To stimulate additional revenues and increase operational efficiency, EKZNW recently developed a comprehensive strategic plan in its Ecotourism and Marketing Division. The plan evaluates existing tourism facilities and guest activities and suggests improvements in accommodation, an increase in admission revenue, encouragement of private sector partnerships, and local community involvement (Ezemvelo KZN Wildlife).

Kenya Wildlife Service. The Kenya Wildlife Service (KWS), established in 1989 as a semi- autonomous institution with the power to raise and allocate its own revenues, is the national

Financing Species Conservation: a Menu of Options 7 agency responsible for wildlife conservation within the country. The KWS can hire its own staff, manage its own funds, and run its operations independently of the Ministry of Tourism and Wildlife. Rather than depending on budget allocations from the central government, the KWS attempts to run itself on commercial principles, generating funds from a number of private and public, domestic and international sources. In the 1990s, KWS raised park entry fees, introduced a tiered pricing system, established additional fees for park-related services, and restructured concession leases. These initiatives helped multiply KWS revenue by a factor of five over the first seven years of independent operation. KWS also raised $10 million from private sector and international donors to establish a biodiversity trust fund to support wildlife research, planning, and management activities. By 1996, KWS internally-generated income covered approximately 80 percent of operating costs. However, when including the substantial costs of its public service function, KWS still faced a significant funding shortfall (Emerton 1998).

KWS is currently plagued by conflict based on a proposal to sell the agency to a group of private investors. The agency faces a budget deficit expected to reach Sh 1 billion ($12.5 million) by the end of this year that is attributed to both a drop in the tourism rate and KWS financial mismanagement. To pull KWS from financial crisis, the KWS Board proposed to split KWS into a service and private commercial company. However, there is strong opposition to privatizing the agency, including from former KWS directors who argue that it is imprudent to sell Kenya’s valuable natural heritage. Opponents contend that increased revenue generation and proper money management can sufficiently reduce the KWS deficit (Ng’ang’a 2004, Mbaria 2004).

Tanzania National Parks. Tanzania National Parks (TANAPA) is a parastatal organization charged with managing the country’s 12 national parks. The organization receives no funding from the government, and reinvests all fees collected from national parks into the protection and maintenance of Tanzania’s national parks. A long-term partnership with the Frankfort Zoological Society (FZS) also helps to finance TANAPA. Over the past 10 years, the interest from an FZS fund has contributed over $10 million to pay for TANAPA operating costs, infrastructure and equipment, park employee training, and environmental outreach for Tanzanian communities (TANAPA). In conjunction with the U.S. NGO Conservation Strategy Fund (CSF), TANAPA is currently re-assessing its management strategies to improve its economic performance and capacity to protect wildlife and other park resources. Tanzania’s national parks support many of the world’s endangered and threatened species such as rhinos, elephants, and chimpanzees. In 2001, more than 100,000 tourists visited Tanzanian national parks, helping to contribute about 8 percent to the national economy. In surveys conducted by TANAPA and CSF, 95 percent of park visitors cited wildlife viewing as an important criteria in selecting their vacation. To capitalize on tourist interest, CSF and TANAPA identified seven actions to improve operational efficiency, including the establishment of variable pricing and tiered fee categories, re-structuring of concession fees, and targeted marketing campaigns to distribute tourist density across all parks (Conservation Strategy Fund 2003).

Financing Species Conservation: a Menu of Options 8 References and Resources

Emerton, Lucy. 1998. Innovations for financing wildlife conservation in Kenya. Paper prepared for Financial Innovations for Biodiversity Workshop, 10th Global Biodiversity Forum, 1-3 May, Bratislava.

Ezemvelo KZN Wildlife: http://www.kznwildlife.com/default.htm

Ezemvelo KZN Wildlife. Corporate Strategic Business Plan 2004-2007: http://www.kznwildlife.com/strategic_plan04.htm

Kenya Wildlife Service: http://www.kws.org/

Krug, Wolf, Helen Suich and Ndeutalala Haimbodi. 2002. Park pricing and economic efficiency in Namibia. DEA Research Discussion Paper Number 45, June, Windhoek, Namibia.

Mbaria, John. 2004. Ex-KWS Boss Criticizes Sale Plans. The Nation. 15 August.

The Namibian Online Newspaper. 2003. Kenya Group Loses Millions. 9 April. http://www.namibian.com.na/2003/march/world/03C3ED3F5B.html

Ng’ang’a, Nixon. 2004. KWS in SH500m Deficit. East African Standard. 14 August.

Tanzania National Parks: http://www.serengeti.org/main_fzs.html

Financing Species Conservation: a Menu of Options 9 3. Government Revenue Allocations

Government revenue allocations can be an important source of funding for species conservation, but a number of situations can reduce or even eliminate the amount of government revenue available. In many developing countries, where governments must use limited budgets to support basic human survival and poverty alleviation, funding for species conservation is typically low. Furthermore, fluctuations in world markets cause government revenues to be inherently variable, and tight economic conditions often result in across-the-board budget cuts. In cases where species conservation is considered a low-priority program, funding may be cut altogether if it exists at all. However, by earmarking revenues collected through various fiscal instruments, governments can stabilize and even increase allocations for species conservation. Examples of such mechanisms include government taxes and bonds, lotteries, premium-priced motor vehicle license plates, wildlife stamps, and tax incentives.

Debt relief is another mechanism through which governments can protect wildlife. Poverty alleviation and species conservation are complementary goals that can promote both economic growth and the conservation of wildlife if designed and implemented in an integrated program. Examples below illustrate how commercial, bilateral, and Heavily Indebted Poor Country (HIPC) debt relief can promote these dual objectives.

Unlike user-based financing mechanisms, government revenues earmarked for conservation do not necessarily establish a direct link between the source of the revenue and the programs on which revenue may be spent. In implementing such mechanisms, governments recognize that the full population – not just specific environmental users – benefits from conservation.

Additional examples of government fines, fees, and taxes can be found in section eight (Natural Resource Extraction Revenues). The environmentally destructive nature of natural resource production industries such as oil and gas, mining, and hydroelectric power, warrants a separate section to highlight how revenue from these activities can be applied towards mitigating the environmental impact.

3.1 Taxes and Bonds Earmarked for Conservation

Government taxes and bonds earmarked for conservation provide a mechanism for countries to fund conservation efforts that might otherwise be neglected in direct budget allocations. Taxes and bonds can raise money from a variety of sources without necessarily requiring a direct connection between the fund source (taxpayer or investor) and recipient (conservation projects). However, in establishing conservation taxes and bonds, governments are often responding to the appeal of voters willing to invest in the long-term conservation of local resources.

In the United States, the federal and individual state governments have instituted a variety of taxes and bonds to fund species conservation activities. Examples below illustrate conservation revenue generated from sales, property, and development taxes. Bonds are debts issued by governments, companies, and other institutions as a way to raise funds and must be repaid by the seller over a specified period of time. Government bonds may be issued in one of three forms: general obligation bonds, which are repaid out of future tax revenues; special revenue bonds, which are repaid out of revenues generated by the specific project being financed; or bonds that

Financing Species Conservation: a Menu of Options 10 are a hybrid of both. Such bonds are attractive to investors because interest earned is exempt from U.S. taxes. Voters often demonstrate overwhelming support for conservation by passing bond initiatives on state referendums.

U.S. Excise Taxes on Hunting and Fishing Equipment. The U.S. Federal Assistance in Sport Fish and Wildlife Restoration program has contributed more than $9 billion in 67 years to wildlife conservation. Established by the Pittman-Robertson Wildlife Restoration Act of 1937 and the Dingell-Johnson Sport Fishing Restoration Act of 1950, funding for the program comes from a 10 to 11 percent excise tax on hunting and angling equipment and a 3 percent tax on sport fish boating supplies. Revenues are allocated to states according to relative land size and number of registered hunters. Projects financed by the taxes include fish and wildlife monitoring, habitat improvement, land acquisition, research, and education initiatives. In 2004, these taxes raised $464 million for state wildlife conservation (U.S. Department of the Interior).

California Tobacco Tax Initiative. In 1988, California’s Tobacco Tax Initiative (Proposition 99) raised the tax on cigarettes by 25 cents per pack. The Initiative earmarked 5 percent of the tax revenue to state and local park programs and wildlife habitat conservation projects. The California Wildlife Protection Act of 1990 (Proposition 117) increased the portion of tax revenue designated for park and wildlife activities to 10 percent. A Habitat Conservation Fund was established in 1990 to receive the revenue earned from the tax programs. The fund receives $30 million annually from the cigarette tax and general budget appropriations, and disburses funds through a competitive grant program to local government agencies. Funds must be used to acquire and restore wetlands, streams and riparian habitat, wildlife and endangered species habitat, and unique habitat (California Environmental Resources Evaluation System, California State Environmental Resource Center, Habitat Conservation Fund, Trust for Public Land).

Missouri Conservation Sales Tax. The Missouri Constitution imposes a state sales tax of one- eighth of 1 percent to be allocated to wildlife conservation purposes. Adopted in 1976, the tax is levied upon all vendors who sell tangible personal property or render taxable services for retail within the state of Missouri. Funds collected from the tax are administered by the Department of Conservation for the control, management, restoration, conservation, and regulation of the state’s bird, fish, game, forestry and wildlife resources. Species conservation activities conducted by the Department of Conservation include black bear distribution studies, acquisition of land to preserve endangered bats, monitoring of snapping turtles, and osprey reintroduction (Missouri State Constitution, Missouri Department of Conservation).

Nevada Clean Water, Parks, and Wildlife Bond. The Nevada Clean Water, Parks, and Wildlife Bond passed with 59 percent of the Nevada citizen vote in November 2002. The general obligation bond authorizes up to $200 million to protect the state’s natural and cultural resources. As a state debt to be repaid, the bond allows for a property tax enhancement up to $.028 per $100 of assessed home value, to be implemented on an “as needed” basis. Revenues from the bond are disbursed among five state natural resource divisions and two counties. The Division of Wildlife receives funds to acquire, enhance, develop, and manage wildlife habitat across the state. Revenues from the bond have funded land acquisitions to protect antelope, mule deer, sage grouse, and waterfowl, as well as programs to conserve elk and migratory birds (Nevada Department of Conservation and Natural Resources, The Nature Conservancy).

Financing Species Conservation: a Menu of Options 11 Nebraska State Income Tax Check-off for Nongame Wildlife. In 1984, the Nebraska State Legislature established the State Income Tax Check-off for Nongame Wildlife to increase the funding available for the conservation of the state’s nongame wildlife. Through the program, a “check-off” line on the state income tax form allows taxpayers receiving a refund to contribute all or part of the refund to the Nongame and Endangered Species Conservation Fund. The checkoff accounts for approximately 40 percent of the state’s nongame wildlife program, and has contributed to the reintroduction of the state’s endangered river otter and peregrine falcon, as well as scientific research on the prairie dog, swift fox, and box turtle populations (Nebraska Game and Parks Commission).

3.2 Real Estate and Development Taxes

By establishing a development reparation tax or designating a portion of real estate tax to conservation, governments can compensate for developed property by applying revenues to the acquisition and preservation of remaining habitat and open lands.

Brazil Environmental Compensation Tax. Brazil’s Law of National Conservation Units aims to repair and mitigate environmental damage caused by land development projects. Passed in 2000, the law draws from earlier legislation that required developers in certain categories to obtain an environmental project license, and to offset environmental damage by creating an ecological station. The 2000 law expands coverage to all development projects, both public and private, and institutes a pre-condition that developers financially support the establishment or maintenance of a strict conservation unit (park, biological reserve, ecological station, wildlife refuge, or national monument). The equivalent of at least 0.5 percent of the total project cost must be directed toward the conservation unit, with the actual percentage determined by the licensing authority depending on the project’s overall environmental impact. To date, the tax has generated $130 million to support Brazil’s protected areas (Ferraz 2003).

Pennsylvania Realty Transfer Tax. Pennsylvania imposes a 1 percent realty transfer tax on the actual consideration or price of real property that is transferred by deed, instrument, long-term lease, or other official mechanism. Enacted as a temporary tax in 1951, the realty transfer tax became permanent in 1961. In July 1994, the state passed the Keystone Recreation, Park and Conservation Fund Act, which established a permanent funding source for these activities. The act directs 15 percent of revenue earned from the realty transfer tax to the Keystone Fund. In November 1994, Pennsylvania voters passed a referendum to supplement the fund with $50 million in bond revenue. Among other projects, the Keystone Recreation, Park and Conservation fund has granted more than $28 million for land trust projects to protect 35,000 acres of critical natural areas (Pennsylvania Department of Revenue, Pennsylvania Land Trust Association).

3.3 Lottery Revenues

Administered at the national or state level by government agencies or licensed private operators, lotteries can generate substantial income to supplement government budgets. In 2002, lottery sales worldwide totaled $132 billion (Lottery Insider). Since lottery revenues are usually kept separate from the general budget, spending them is not subject to the same legal restrictions as spending tax revenues. This special status has allowed many governments to use lotteries as a way to raise money for socially beneficial purposes such as education, health, historic preservation, and nature conservation. There is strong incentive for lottery promoters to allocate

Financing Species Conservation: a Menu of Options 12 a portion of lottery revenues to good public causes because lotteries are a government-sanctioned form of gambling and are regarded by some people as morally and socially objectionable (Spergel and Moye 2004).

Great Outdoors Colorado (GOCO). In 1992, Colorado citizens voted to create the Great Outdoors Colorado (GOCO) Trust Fund to support the preservation, protection, and enhancement of the state’s parks, wildlife, trails, rivers, and open space. Adopted as Article XXVII of the Colorado Constitution, the GOCO Amendment earmarks 50 percent of state lottery proceeds to the Trust Fund, capped at $35 million per year adjusted for inflation (revenue exceeding that amount is designated to the State Public School Fund). Through a competitive grant process, GOCO disburses its proceeds to meet six objectives: protecting wildlife and habitats; protecting important river corridors; protecting strategic agricultural lands; protecting open space corridors and greenbelts; providing land and facilities for outdoor recreation; and providing opportunities to engage youth in outdoor activities. Since initiating the grant system in 1994, GOCO has awarded almost $388 million for over 2,000 conservation projects throughout the state (Great Outdoors Colorado).

Dutch Postcode Lottery. With 2.5 million subscribers, over 40 percent of Dutch households participate in the Dutch National Postcode Lottery. Ticket numbers are based on the Dutch postal code system, and community prizes are shared by participants in the winning postcode area. Since its creation in 1989, the National Postcode Lottery has donated over €1.6 billion ($1.95 billion) to charitable organizations. The lottery donates 60 percent of its gross turnover per year to Dutch and international NGOs for projects dedicated to nature conservation, poverty alleviation, and defense of human rights. In 2003, the lottery’s charitable contributions amounted to €217 million ($263 million). International NGOs that have received funding from the lottery include Greenpeace, Terre des Hommes, Netherlands Committee for IUCN, and WWF (Novamedia). WWF-Netherlands has received more than $128 million to support national and international conservation projects (Spergel and Moye 2004). In January 2004, the lottery gave €1,485,000 ($1,795,000) to the Peace Parks Foundation, a nonprofit organization working to facilitate the development of transfrontier conservation areas in southern Africa. At least €485,000 of the award is specifically designated for the foundation’s Mega-Transfrontier Elephant Project, to monitor the patterns of elephants and other migratory species in the area (Peace Parks Foundation).

UK National Lottery. The United Kingdom’s National Lottery directs approximately 28 percent of revenue to six designated “Good Causes” through designated lottery distributors. One of the distributors, the Heritage Fund, provides funding specifically for nature conservation. In its Countryside, Parks and Gardens initiative, the Heritage Fund disburses grants to local groups or NGOs to buy, conserve, and manage land of importance for its scenery, history, wildlife, cultural, or local value. For example, in 2004, the Heritage Lottery Fund awarded £79,000 ($144,000) to a local NGO to develop a wildlife conservation and education program for Birmingham area schools. In 2003, the fund awarded the local authority of West Oxfordshire £901,500 ($1.65 million) to purchase a 500 acre wildlife-rich area of land on the river Thames. To date, the Countryside, Parks and Gardens program has funded over £510 million ($940 million) to more than 1,600 projects. About £200 million ($360 million) of these funds have been specifically directed to more than 1000 biodiversity conservation and land acquisition projects (UK National Lottery, Heritage Lottery Fund).

Financing Species Conservation: a Menu of Options 13 Uzbekistan Ecolot. A scratch ticket lottery created in 1995, Uzbekistan’s Ecolot lottery contributes to good causes such as ecological programs in catastrophe areas, family services, and local sports programs, by supporting the country’s environment and development NGOs. Ecolot contributes 50 percent of its net proceeds to the non-governmental International Fund of Ecology and Health (Ecosan), which is a shareholder in Ecolot. Since its creation, Ecolot has contributed €613,000 ($744,000) to Uzbekistan charitable causes (Novamedia).

3.4 Premium-Priced Motor Vehicle License Plates

Motor vehicle agencies can sell specialty license plates as a way to raise money and awareness for designated causes. In the United States, most states offer a special environmental license plate, and at least 29 states offer plates specifically to support species conservation. The license plates are sold at a premium compared to fees charged for standard license plates and the difference in price is allocated to the earmarked cause. Revenue generated by wildlife plates is typically directed to government wildlife agencies or conservation NGOs. Adorned with images of locally significant species, wildlife plates in the United States help support non-game wildlife programs and the protection of selected species including black and grizzly bears, butterflies, dolphins, eagles, lynx, manatees, moose, salmon, right whales, and river otters. These plates have raised millions of dollars for state wildlife conservation (U.S. State Departments of Motor Vehicles).

Florida Protect the Panther License Plate. The state of Florida offers a “Protect the Panther” license plate to support the conservation of the state’s panther population. Since the program’s inception in 1990, more than 1.3 million plates have been issued. The plate’s annual $25 fee has generated more than $38 million dollars, 85 percent of which goes into the Florida Panther Research and Management Trust Fund (Florida Department of Highway Safety & Motor Vehicles). Florida Fish and Wildlife Commission: http://panther.state.fl.us Georgia Wildlife License Plate. For a one-time special tag fee of $20, the state of Georgia offers a non-game wildlife license plate to benefit the state Wildlife Conservation Fund. The fund is operated by the Wildlife Resources Division of the Georgia Department of Natural Resources, and revenues finance conservation, education, and recreation activities related to the state’s endangered and non-game wildlife and plants. The fund provides the only means of state financing for non-game wildlife conservation in Georgia. Since the program began in 1998, more than 900,000 tags have been sold, raising more than $13.5 million. Revenue raised from the program has funded bald eagle surveys, manatee tracking, sea turtle and right whale protection, peregrine falcon nest monitoring, and songbird habitat management (Georgia Department of Natural Resources).

Financing Species Conservation: a Menu of Options 14 3.5 Wildlife Stamps

Wildlife stamps can be developed in a variety of ways to support species conservation. National postal agencies can use wildlife fundraising or “semipostal” stamps to raise revenue for species conservation. These stamps are sold at a premium compared to regular first class postage stamps, and revenue raised from the difference in price supports the cause depicted on the stamp. For example, semipostal stamps in the United States have raised about $50 million for three designated causes: breast cancer research, stopping domestic violence, and to help families of victims killed in connection with the September 11, 2001 attacks (U.S. Postal Service). Funds generated by semipostal stamps are usually administered by a government agency or NGO. Because wildlife stamps depict colorful images of charismatic species, they attract consumers willing to pay extra to support the species illustrated. At least three countries have issued species related semipostal stamps to fund conservation. In 1992, Russia issued a stamp depicting a tiger to benefit local conservation programs. In 2000, India offered a semipostal souvenir sheet illustrating animals, birds, and plants, to fund Himalayan conservation efforts (WWF et al. 2001). Since 1992, Germany has issued a series of environmental semipostal stamps to fund domestic and international conservation activities.

In addition to semipostal stamps, governments can raise revenue for species conservation through hunting and fishing stamps. In the United States, hunters and fishers are often required to obtain wildlife stamps in addition to the necessary licenses. Depicting locally significant species, the design of these stamps may be chosen through annual contests run by the relevant wildlife agency. Contests or other marketing campaigns associated with the stamps can help raise awareness of and interest in wildlife conservation programs.

German Bundespost Stamps. In collaboration with the German Ministry for Environment, Nature Conservation, and Nuclear Safety, the Deutche Post AG issues a series of premium- priced postage stamps to support ecosystem conservation. The stamps carry an “environmental surcharge” above the usual stamp purchase price. Proceeds from the surcharge go to conservation projects in Germany and abroad, with the GTZ’s Tropical Ecology Support Program (TÖB) and German Appropriate Technology Exchange (after 2001) managing funds raised for international projects. Since the first issue was released in 1992, the stamps have raised millions for conservation, with projects designated for saving the rainforest (1992), protecting tropical habitats (1996), protecting coasts and oceans (1998), the living soil (2000), and mountains (2002). The 1994 stamp focused specifically on species and biotope conservation, and directed funds to species conservation activities in Bolivia, Brazil, Burma, Costa Rica, Cuba, Georgia, Germany, Kyrgyzstan, Poland, Philippines, Thailand, Venezuela, and Vietnam (GTZ German Appropriate Technology Exchange, GTZ Tropical Ecology Support Program).

Minnesota Trout and Salmon Stamp. Individuals wishing to fish in Minnesota’s designated trout streams, lakes, and Lake Superior must purchase both a fishing license and a Minnesota Trout and Salmon Stamp. The State Department of Natural Resources issues the stamps, and runs an annual contest for the stamp’s design. The department sells approximately 90,000 stamps every year, raising approximately $900,000 from the $10 stamp. Proceeds go toward DNR trout and salmon habitat improvement and stocking programs (Minnesota Department of Natural Resources).

Financing Species Conservation: a Menu of Options 15 Hawaii Wildlife Conservation Stamp. In Hawaii, hunters are required to purchase both a hunting license and a Wildlife Conservation Stamp. Issued by the Hawaii Department of Land and Natural Resources, Division of Forestry and Wildlife, the Wildlife Conservation Stamps raise revenue for the state Wildlife Revolving Fund to support wildlife and habitat conservation, and to manage hunting. In 2003, the $10 stamp raised more than $100,000 (Hawaii Department of Land and Natural Resources).

3.6 Economic Instruments to Stimulate Environmental Investments

In addition to direct support from earmarked revenues, governments can assist species conservation efforts through economic incentive programs. Such programs stimulate investment in environmentally sustainable enterprises by providing incentives, such as tax deductions, to investors. These instruments challenge the traditional idea that nature’s services are free public goods and modify the price of investing in conservation to appropriately reflect the real benefits and costs of biodiversity. Species and habitat conservation projects could be funded through these preferential market incentive programs, as shown in the examples below.

Green Investments in Holland. The Dutch Green Investment Directive, also known as the Green Project Facility or Green Project Directive, was established in 1995 to stimulate a financial stream for environmentally responsible projects. The directive exempts from income tax all returns (interest payments and dividends) on investments made with approved Green Intermediaries. A Green Intermediary is a financial institution that initiates loans or investments, and can range in design from mutual fund to savings bank. To be eligible for green status, the financial mechanism must invest at least 70 percent of assets in approved green projects within seven defined categories: nature, woodlands and landscape features; organic agriculture; green label greenhouses; agrification; renewable energy; sustainable residential construction and refurbishment; and soil remediation. Currently eight financial institutions have approved green funds or banks. The combination of an annual return and preferential tax treatment allows a green investment to earn a slightly better net return than a similar traditional investment, making such investments attractive compared to more marketable funds (Netherlands Agency for Energy and the Environment, Eurosif, ABN AMRO).

Tax Deductions for Charitable Contributions. Many governments, particularly in developed nations, offer incentives such as tax deductions to individuals or organizations who donate assets to a range of social causes, including conservation. Such incentives are a way to stimulate private investment for public benefit. In 2003, American individuals gave nearly $7 billion in charitable contributions to non-profit environmental organizations (American Association of Fundraising Council). Donations to environmental organizations are typically monetary, but in some cases may be in the form of land or property. In 1995, Canada revised the national Income Tax Act to promote wildlife habitat conservation. Under the amendment, individuals and companies who donate land for conservation to an environmental NGO or government agency are eligible for income tax deductions through the “ecological gifts” program. Individual donors receive a tax credit (corporations receive a reduction) of up to 29 percent of the value of the land donated. In the 2000 budget, income tax rules were modified again to give landowners further incentive to participate in the program. Capital gains attributed to donated land became subject to only 25 percent tax, rather than the normal 50 percent. Through 2003, more than 325 “ecological gifts” valued at $67 million have been donated across Canada, protecting nearly 60,000 acres of wildlife habitat. For example, in Ontario, a 950-acre tract of provincially significant wetland

Financing Species Conservation: a Menu of Options 16 helps protect one of the largest regional nesting sites for the great blue heron (Environment Canada).

3.7 Debt Relief

Since the first debt-for-nature swap was conducted in Bolivia in 1987, debt relief programs have contributed more than $1 billion to environmental conservation around the world. Debt relief programs for the environment free up resources that are obligated for paying off international debt and translate those funds to local currency to support conservation activities. Two primary debt relief instruments have provided funding for the environment: commercial debt-for-nature swaps and bilateral debt reduction programs. These instruments are described in detail below. While debt relief has the potential to generate millions of local dollars for conservation, it faces inherent risk. Local currency devaluation, inflation, and other changes in the international market can reduce or even eliminate the cash value of the conservation commitment. This was the case in Zambia, explained below. To mitigate these risks, debt relief agreements should be designed to minimize market vulnerability and provide for contingency action in the event such a situation arises. In addition to commercial and bilateral debt relief, the Heavily Indebted Poor Country (HIPC) initiative can be utilized to finance nature conservation. While debt relief for the environment supports a range of conservation priorities, agreements can be structured to promote the conservation of specific species and habitats.

Commercial Debt-for-Nature Swaps. In commercial debt-for-nature swaps, a commercial creditor sells debt owed by a foreign government at a discount on the secondary market. A third party such as an environmental NGO will then purchase the discounted debt and negotiate with the debtor country to cancel the debt in exchange for local currency payments for environmental conservation. In some cases, commercial creditors will donate foreign debt to environmental NGOs to be used for conservation. International commercial banks that have donated debt for nature include the Bank of America, Bank of Tokyo, Deutschebank, Morgan Guaranty Trust Company, and NatWest. Commercial debt-for-nature swaps have generated approximately $112 million for conservation around the world (Spergel and Moye 2004).

In 1989, WWF negotiated a debt-for-nature swap with Zambia with funding provided by an anonymous Swiss donor. WWF purchased more than $2.2 million face value commercial debt discounted to $450,000. In exchange, Zambia committed more than $2 million in local currency to fund conservation programs including the protection of rhino and elephant populations. As in all debt-for-nature swaps, the local currency commitment is vulnerable to currency devaluation and inflation risks. In Zambia the inflation rate was so high during this period that in the end the value yielded for conservation was less than the hard currency put into the swap. This risk could potentially be alleviated by converting the local currency back into hard currencies subsequent to the debt swap transaction. However, any such conversions must be negotiated and agreed upon by the appropriate government agencies, usually the Central Bank and Finance ministry and there may be little incentive to do so (Bunting and Geer 2004).

Bilateral Debt Reduction. Due to changes in the secondary debt market for commercial debt, bilateral debt reduction is currently the mechanism used most often to provide debt relief for the environment. Bilateral debt reduction is similar to commercial debt-for-nature swaps but involves “sovereign” debt owed by one government to another rather than commercial debt owed to a bank. In a bilateral debt agreement, the creditor government cancels or discounts a portion of

Financing Species Conservation: a Menu of Options 17 debt in exchange for the debtor country’s commitment to finance local conservation activities. Agreements are negotiated between government ministries, but are often facilitated by conservation NGOs. In some cases, environmental organizations have contributed funds to bilateral debt agreements in order to further leverage the financial commitment to conservation. A number of creditor governments, including Canada, Finland, Germany, the Netherlands, Switzerland, and the United States have participated in bilateral debt reductions (Conservation Finance Alliance guide).

The Tropical Forest Conservation Act (TFCA) was established by the U.S. Congress in 1998 to provide funding for bilateral debt reduction in support of tropical forest conservation around the world. In 2002, the Philippines became the sixth country to benefit from the TFCA. Under an agreement negotiated between the U.S. and the Philippines and facilitated by WWF, the U.S. Agency for International Development (USAID), and Philippine NGOs, the U.S. provided $5.5 million to cancel $8.2 million in Philippine debt interest payments. In return, the Philippines committed the equivalent of $8.2 million in local currency to an independent non-governmental Tropical Forest Fund, which disburses the funds to local conservation projects. One of the objectives of the Philippines Tropical Forest Fund is to protect large tracts of habitat for the Philippine national bird, the Philippine eagle, of which an estimated 200 currently remain in the country (WWF Center for Conservation Finance, U.S. Treasury Department 2002).

HIPC Debt Relief for the Environment. The Heavily Indebted Poor Country (HIPC) Initiative was launched by the International Monetary Fund and the World Bank in 1996 to help relieve the world’s poorest countries of unsustainable debt. Over 40 countries benefit from the HIPC program, which requires participating countries to develop a Poverty Reduction Strategy Paper (PRSP) outlining its macroeconomic, structural, and social policies and programs to promote growth and reduce poverty (World Bank). A number of HIPC countries in Africa, Asia, and Latin America possess outstanding wildlife resources that offer a potential means to generate substantial, and sustainable, national income (through species-based tourism, for example). Such countries can promote species conservation by integrating sustainable wildlife management and habitat conservation into poverty reduction programs and relevant sector-specific strategies.

Madagascar’s PRSP incorporates species conservation in its strategic objective to promote large-scale economic growth, one of three focus objectives designed to achieve the overall goal of reducing the nation’s poverty by half in ten years (2013). The objective recognizes that conservation of Madagascar’s abundant flora and fauna, including thousands of endemic species, is crucial to large-scale sustainable economic growth. Environmental Conservation and Sustainable Management of Renewable Resources is one of seven programs outlined to spur economic growth, and aims to safeguard and enhance the value of Madagascar’s ecosystems and threatened species. To implement the program, Madagascar will initiate a number of projects and policies intended to maintain the volume and quality of the country’s natural resources; to satisfy local economic, ecological and social needs in terms of forestry resources, soil and water; and to integrate the environment in sectoral development policies and actions and in regional, local, and municipal planning. Plans for growth in the tourism sector specifically call for species conservation to protect and preserve the unique Malagasy environment that is attractive to potential tourists (Republic of Madagascar 2003).

Financing Species Conservation: a Menu of Options 18 References and Resources

ABN AMRO. 2002. Environmental Report. Chapter on Green Products and Services: http://www.abnamro.com/environmentreport/2002/index_en.html@folder=70&envelope=76&page=77.ht m

American Association of Fundraising Council. 2004. Giving USA 2004. Glenview, IL: American Association of Fundraising Council/Giving USA.

Bunting, Bruce and Tim Geer. 2004. Personal Communication August 23 and 25.

California Environmental Resources Evaluation System: http://ceres.ca.gov/planning/conservation_guidebook/

California State Environmental Resource Center: http://www.serconline.org/

Conservation Finance Alliance. Conservation Finance Guide: http://guide.conservationfinance.org/

Department of the Interior: http://www.doi.gov/

Environment Canada, Ecogifts Program: http://www.cws-scf.ec.gc.ca/ecogifts/rpt95-03_e.cfm

Eurosif: http://www.eurosif.org/pub2/lib/ref/ctry/nl/legi.shtml

Ferraz, Cecilia Foloni. 2003. Institutional Solutions for the Financing of Protected Areas in Brazil. Paper prepared for the Vth World Parks Congress: Sustainable Finance Stream, September, Durban, South Africa.

Florida Department of Highway Safety & Motor Vehicles, Protect the Panther License Plate: http://www.hsmv.state.fl.us/specialtytags/ProtectPanthers.html

Georgia Department of Natural Resources, Wildlife License Plate: http://georgiawildlife.dnr.state.ga.us/content/displaycontent.asp?txtDocument=324&txtPage=1

Great Outdoors Colorado: http://www.goco.org/

GTZ German Appropriate Technology Exchange: http://www5.gtz.de/gate/

GTZ Tropical Ecology Support Program: http://www.gtz.de/toeb/english/index.asp

Habitat Conservation Fund: http://www.parks.ca.gov/default.asp?page_id=21361

Hawaii Department of Land and Natural Resources, Conservation Stamp: http://www.ehawaiigov.org/DLNR/hunting/

Heritage Lottery Fund: http://www.hlf.org.uk/index2.html

Heritage Lottery Fund. 2004. Wild Life. London, England: Heritage Lottery Fund.

Lottery Insider: http://www.lotteryinsider.com/

Minnesota Department of Natural Resources: http://www.dnr.state.mn.us/index.html

Financing Species Conservation: a Menu of Options 19

Minnesota Department of Natural Resources. 2003. Lakeville artist wins Minnesota Trout and Salmon stamp’s design contest a third time. News release, August 12. http://www.dnr.state.mn.us/news/releases/index.html?id=1060707581

Missouri Constitution, Article IV, Section 43(a). Adopted November 2, 1976.

Missouri Department of Conservation: http://www.conservation.state.mo.us/about/

The Nature Conservancy, Nevada Program: http://nature.org/wherewework/northamerica/states/nevada/

Nebraska Game and Parks Commission, Income Tax Check-Off Program: http://www.ngpc.state.ne.us/wildlife/programs/nongame/checkoff.asp

Netherlands Agency for Energy and the Environment. Green Financing. Brochure: http://www.novem.org/greenfinance.pdf

Nevada Department of Conservation and Natural Resources, Ballot Question #1: http://dcnr.nv.gov/ab901.htm

Novamedia: http://www.novamedia.nl/

Peace Parks Foundation: http://www.peaceparks.org/new/index.php

Peace Parks Foundation. 2004. National Postcode Lottery hands €1,485,000 to Peace Parks Foundation. Press Release, January.

Pennsylvania Department of Revenue. See Realty Transfer Tax, explanation of tax: http://www.revenue.state.pa.us/revenue/taxonomy/site_index.asp

Pennsylvania Land Trust Association: http://conserveland.org/information/StateFunding

Republic of Madagascar. 2003. Poverty Reduction Strategy Paper. Antananarivo, Madagascar.

Spergel, Barry and Melissa Moye. 2004. Financing Marine Conservation: a Menu of Options. Washington, D.C.: WWF Center for Conservation Finance.

Trust for Public Land. See California State Funding Profile: http://www.tpl.org/index.cfm

UK National Lottery: http://www.national-lottery.co.uk/

U.S. Department of the Interior: http://www.doi.gov/

U.S. Treasury Department. 2002. Fact Sheet: Philippines Swaps Debt for Tropical Forest Programs. September 19, Washington, D.C.

U.S. State Departments of Motor Vehicles: Information available online at individual state department of motor vehicle websites.

U.S. Postal Service: http://www.usps.com/communications/community/semipostals.htm

World Bank: http://www.worldbank.org/hipc/

Financing Species Conservation: a Menu of Options 20

World Wildlife Fund, Wildlife Conservation Society, Conservation International, The Nature Conservancy, The National Audubon Society, Defenders of Wildlife, Ringling Brothers Center for Elephant Conservation/Feld Entertainment, American Zoo and Aquarium Association, African Wildlife Foundation, International Rhino Foundation, International Elephant Foundation, The Fund for Animals, The Humane Society of the United States, and International Fund for Animal Welfare. 2001. The vanishing wildlife stamp. A proposal for a semipostal postage stamp to benefit the multinational species conservation funds in the U.S. Department of Interior.

WWF Center for Conservation Finance: http://www.worldwildlife.org/conservaitonfinance

Financing Species Conservation: a Menu of Options 21 4. Grants, Donations, and Loans

Grants, donations, and loans are another principal source of funding for species conservation. Because limited government allocations are further restricted by other national priorities, targeted grants, donations, and loans often become the primary resource supporting species conservation efforts. Typical donors include multilateral and bilateral agencies, NGOs, foundations, private sector companies, and individuals. Environmental funds specifically created to support nature conservation, usually called conservation trust funds, can act as repositories for donations and serve to locally redistribute funds through independent grant-making processes.

4.1 Bilateral and Multilateral Agencies

While bilateral and multilateral donors provide support for species conservation, each type of donor differs enough that projects seeking funding should evaluate donor policies and priorities to determine which type of agency, if either, best fits the project framework. Typically, bilateral donors direct assistance toward specific countries of strategic importance, for economic, historic, or other identified reasons. Through bilateral cooperation, donor and host countries work to achieve joint priorities, and in the process establish relationships that can provide a foundation for effective, long-term collaboration. Multilateral donors generally direct assistance to projects that reflect multiple country priorities, as defined in treaties such as the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) or the Convention on Biological Diversity (CBD). Such projects tend to be broader in geographical scope, and due to the many stakeholders involved can be complex and bureaucratic. However, they can often provide significantly greater funding than bilateral donors. Multilateral agencies that provide species conservation funding include the Global Environment Facility (GEF), the United Nations Development Programme (UNDP), United Nations Environment Programme (UNEP), and the World Bank. Some multilateral agencies, such as regional development banks, provide loans to governments rather than grants or donations. Regional development banks are also beginning to collaborate with the GEF, to leverage additional resources for species conservation.

The recent trend of bilateral and multilateral environmental aid shifts the emphasis of funding from individual projects to sectoral strategies. Through this approach, conservation projects receive funding according to their ability to advance an overall sector plan (such as forest, fisheries, or agriculture). Similarly, the trend in bilateral and multilateral assistance has moved to incorporate conservation into overall poverty reduction schemes. Projects that show how species conservation activities will fit into greater poverty reduction or sector strategies will likely have a better chance of securing multilateral or bilateral funding (Lapham and Livermore 2003).

U.S. Fish and Wildlife Service, Division of International Conservation. The U.S. Fish and Wildlife Service (USFWS) Division of International Conservation seeks to strengthen the global capacity of local conservation and natural resource managers, institutions, and communities to conserve wildlife and their habitats. To achieve this goal, the USFWS works with domestic and foreign government agencies, national and international non-governmental conservation organizations, and universities in three regions: Latin America and the Caribbean; Russia and East Asia; and the Near East, South Asia, and Africa. Through its Wildlife Without Borders initiative, the USFWS supports wildlife conservation in foreign nations at all levels – from grass- roots capacity building to international environmental diplomacy. Through the Multinational

Financing Species Conservation: a Menu of Options 22 Species Conservation Funds, the USFWS supports the international conservation of selected endangered species. These funds, created separately for the conservation of African elephants, Asian elephants, great apes, rhinoceros & tigers, neotropical migratory birds, and marine turtles, have been established legislatively by the U.S. Congress over the past 15 years and are managed by USFWS. Both programs provide competitive grants and have financed millions of dollars for global species conservation (U.S. Fish and Wildlife Service).

Global Environment Facility. Created in 1991 as an independent multilateral financial institution to support the global environment, the Global Environment Facility (GEF) provides grants to developing countries and economies in transition for projects that address six designated environmental issues: biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. Since its creation, the GEF has awarded more than $4.5 billion in grants and generated more than $14.5 billion in co-financing from partners to more than 1300 projects in 140 countries. GEF projects are managed by one of three implementing agencies: the United Nations Development Program (UNDP), the United Nations Environment Program (UNEP), and the World Bank. Seven other United Nations programs and multilateral regional development banks are authorized to assist GEF project implementation.

A number of GEF grants directly support species conservation. In 2003, the GEF approved a biodiversity project that will help protect endangered species and promote community-based conservation in the Altai Sayan region of Mongolia. The area provides critical intact habitat to the largest populations of endangered snow leopards, Siberian ibex, and threatened argali (the world’s largest wild sheep) in the greater region. The area also supports globally endangered species such as musk deer, Pallas’ cat, and whooper swan, as well as a number of nationally significant species. Current threats to biodiversity in the Altai Sayan region include overgrazing, inappropriate forest use, and excessive hunting. The GEF project aims to mitigate these threats by empowering local residents with community-based management and conservation strategies that will enable herders and other stakeholders to resolve resource management problems through sustainable livelihoods and partnerships with the government and NGOs. Specifically, the project will integrate biodiversity conservation into sustainable natural resource use policy, programs, and practice, as well as link traditional protected area management to the local landscape (Global Environment Facility).

Asian Development Bank. A multilateral bank specifically serving countries in Asia, the Asian Development Bank (ADB) operates with five inter-related objectives: the reduction of poverty, promotion of economic growth, support of human development, improvement in the status of women, and protection of the environment. The bank believes that sound environmental management is essential for sustainable development, and by extension, for poverty reduction. To achieve its environmental objective, the bank incorporates environmental impact considerations in its general investment strategies and programs, and issues direct loans and grants to address specific environmental threats and natural resource management issues.

In 2000, the Asian Development Bank approved a $12 million loan to Sri Lanka for a project to improve the country’s protected area management and wildlife conservation, including Asian elephants and other endangered species. The project aims to bolster the legal and institutional framework for wildlife conservation in Sri Lanka by strengthening the management capacity of the Department of Wildlife Conservation, supporting the completion of a Biodiversity

Financing Species Conservation: a Menu of Options 23 Conservation Action Plan, and developing two pilot systems of integrated, participatory protected area management. The project also mandates a sustainable finance component whereby the Government of Sri Lanka will channel 75 percent of the revenue earned from the protected areas targeted in the project, as well as 25 percent of revenue from all other protected areas managed by the department, to an autonomous Wildlife Preservation Fund (Asian Development Bank).

4.2 Foundations

Foundations are philanthropic organizations established by wealthy individuals, corporations, or other groups for the purpose of funding charitable activities. National laws guiding the establishment of foundations in each country vary in design, but foundations are generally designated as nonprofit, non-governmental, grant-making institutions. Foundations are governed by an independent board of directors or trustees, and maintain specific charitable goals aligned with the institution’s mission. Many foundations specifically support species conservation, directing grants to the preservation of a specific species or geographic habitat. A foundation can fund NGO programs, research projects, local community activities, or other initiatives, depending on its particular set of guidelines.

The John D. and Catherine T. MacArthur Foundation. Through its Conservation and Sustainable Development priority, the MacArthur Foundation supports biodiversity conservation and environmentally sustainable economic growth in endangered tropical ecosystems around the world. In 2002, the private, independent organization awarded more than $8 million in grants to 39 Conservation and Sustainable Development projects. The program focuses resources on designated bio-geographic zones chosen for richness of species diversity, endemism, institutional capacity, and level of threat. Priority regions include the southern and northern tropical Andes and insular Caribbean; Eastern Himalaya, Lower Mekong, and Indo-Melanesia; and Madagascar, the Lower Guinean Forest, and the Albertine Rift. Through a competitive grant-making process, the Foundation funds projects that improve direct protection, law and policy, conservation training and education, and sustainable economic development of these regions. Recent grants have been awarded to strengthen the sustainable use of Andean oak forests and associated wildlife in Colombia, to conserve biodiversity in unprotected globally important bird areas in Vietnam and Cambodia, and to monitor and protect mountain gorillas in Rwanda and Uganda (MacArthur Foundation).

Save the Tiger Fund. In 1995, the National Fish and Wildlife Foundation joined forces with Exxon (now ExxonMobil) to establish the Save the Tiger Fund to support long-term tiger conservation in Asia. The fund awards grants to individuals and organizations working on-the- ground to protect Asia’s tigers, focusing on eight program areas: field study and management; conservation education; captive management; anti-poaching, conflict resolution, and trade reduction; habitat restoration and protection; conferences, publications, and mapping; community conservation; and promotions. To date, the Fund has awarded nearly $11 million to more than 200 projects. The majority of funding comes from Exxon Mobil’s $9.2 million contribution, supplemented by almost $2 million from general public donations. In 2004, the Save the Tiger Fund announced a new alliance with Conservation International’s Critical Ecosystem Partnership Fund (CEPF). Through the partnership, CEPF and Exxon Mobil have each pledged an additional $3 million to increase grant distribution in Asia’s biodiversity hotspots (ExxonMobil, National Fish and Wildlife Foundation, Conservation International 2004).

Financing Species Conservation: a Menu of Options 24

Defenders of Wildlife Bailey Wildlife Foundation Wolf Compensation Trust. In 1987, the U.S. NGO Defenders of Wildlife created a $100,000 trust to compensate ranchers for livestock losses due to wolf predation. The trust was subsequently renamed the Bailey Wildlife Foundation Wolf Compensation Trust and increased to $200,000. Since the program’s inception, the Trust has paid nearly $400,000 in compensation to U.S. ranchers. The Trust aims to shift the economic burden of wolf recovery from livestock producers to those who support wolf reintroduction. In conjunction with the Trust, the Bailey Wildlife Foundation Proactive Carnivore Conservation Fund encourages landowners who have repeated predator problems to propose projects to reduce the conflict. The Fund will share the cost of implementing projects that are practical and within means. This proactive fund has three objectives: (1) to reduce conflicts between predators and humans; (2) to keep predators from being unnecessarily killed by agencies in response to human conflicts; and (3) to increase general tolerance for carnivores across the landscape (Defenders of Wildlife).

4.3 Conservation Trust Funds

More than fifty conservation trust funds have been established around the world to finance nature conservation. Most conservation trust funds are set up as legally independent institutions (e.g., non-governmental) managed by an independent board of directors. Conservation trust funds typically provide long-term, sustainable funding for conservation activities and/or protected area agencies through a local grant-making process. In addition to providing a stable source of funding for conservation, conservation trust funds often benefit the conservation community by promoting coordination among various stakeholders such as NGOs, government agencies, community groups, and the private sector; by offering technical expertise in the design and implementation of conservation strategies; and by building local capacity for biodiversity conservation and sustainable resource management (Conservation Finance Alliance Guide).

A trust fund consists of money or other property that is legally restricted to a specified purpose, must be kept separate from other sources of money (such as a government agency’s regular budget), and is managed by an independent board of trustees or directors. Depending on the legal system of the country, trust funds can be established as foundations, nonprofit corporations, common-law trusts, or special institutions.

Trust funds can be financed by debt swaps, through grants or donations, or through other financing mechanisms such as earmarked taxes and fees. There are three primary types of trust funds: an endowment fund (where the interest, but not the capital is spent); a sinking fund (where the income and part of the capital is spent every year, eventually sinking the fund to zero over a pre-determined timeframe); and a revolving fund (which continually receives new revenues from earmarked taxes or fees and continually spends these revenues) (Spergel 2001).

Bhutan Trust Fund for Environmental Conservation. The first conservation trust fund created, the Bhutan Trust Fund for Environmental Conservation was established in 1992 to support biodiversity conservation throughout the Kingdom of Bhutan. Initial donors to the fund included the GEF, Royal Government of Bhutan, World Bank, WWF, and the governments of Denmark, Finland, the Netherlands, Norway, and Switzerland. Capitalized at more than $30 million, the fund provides Bhutan with an autonomous financial mechanism that generates approximately $1.5 million annually for conservation. Funds are disbursed through grants to

Financing Species Conservation: a Menu of Options 25 assist projects such as training programs for natural resource managers, ecological surveys, the development of protected areas and management plans, and environmental education. Many of these projects work to protect Bhutan’s endangered species including tigers, elephants, and snow leopards (Bhutan Trust Fund for Environmental Conservation).

Monarch Butterfly Conservation Fund (Mexico). The Monarch Butterfly Conservation Fund was created to support the conservation of more than 50 million monarch butterflies that spend the winter months in Mexico. Every fall, these butterflies travel approximately 2,800 miles from Canada and the United States to their winter habitat in central Mexico, a migration recognized as an endangered biological phenomenon and the first priority in world butterfly conservation. In 1986, the Mexican government created the 40,000 acre Monarch Butterfly Reserve to protect the butterfly habitat. In 2000, the Reserve was expanded to 139,000 acres with a designated core zone of 33,500 acres. The Monarch Butterfly Conservation Fund (MBCF) was established in conjunction with the expanded Reserve to promote conservation by addressing the social and economic needs of the local communities. Endowed with a $5 million grant from the Packard Foundation, $1 million from the Mexican government, and $250,000 from local states, the MBCF awards direct payments to communities for conservation. The Fund compensates logging permit-holders with $18 per cubic meter of timber not harvested; provides payments for forest conservation in the core zone ($12 per hectare for those without logging permits, $8 per hectare for those with logging permits); and establishes the framework to support sustainable economic projects in buffer zones and to provide law enforcement. To date, 31 of the 38 communities living within the Reserve boundaries have signed up with the Fund and committed to protecting the forest (WWF-Mexico, Roos 2004).

4.4 Nongovernmental Organizations

There are hundreds of nongovernmental organizations (NGOs) working around the world to advance wildlife conservation. These NGOs range in size and mission from large, international broad-spectrum conservation organizations to small, local species-specific conservation groups. Each year, NGOs generate hundreds millions of dollars for wildlife conservation, leveraging technical expertise, supplies and equipment, and other critical resources to achieve conservation goals. NGOs typically raise much of their funding from multilateral and bilateral agencies, foundations, corporations, membership fees, and donations. Many also implement special programs to reach new members and expand their contribution base. Programs such as research expeditions, symbolic wildlife adoption, and zoo partnerships are all ways that NGOs have raised both awareness of and funding for wildlife conservation.

International Nature Conservation NGOs. Independent, nonprofit international nature conservation NGOs such as Conservation International, the Nature Conservancy, the Wildlife Conservation Society, and WWF play a major role in protecting species around the world. These organizations generally operate with the mission to preserve the diversity and abundance of life on earth, and work on-the-ground in the world’s most important ecosystems to protect wildlife and other natural resources. By engaging donors, the private sector, governments, intergovernmental organizations, local NGOs, community groups, scientists, and other interested parties, these organizations generate broad-spectrum support for global species conservation. NGO activities are funded through a variety of sources, from traditional grants and donations to innovative programs and partnerships.

Financing Species Conservation: a Menu of Options 26 Established in 1961, WWF works in more than 100 countries to save endangered species, protect endangered habitats, and address global threats. As an international network supported by more than 5 million members worldwide, WWF has 50 country or regional offices and four associate partners, and is coordinated by an international secretariat. WWF’s endangered species program focuses on protecting endangered flagship species, including: cetaceans, elephants, giant pandas, great apes, marine turtles, rhinos, and tigers. In addition, WWF works to safeguard other threatened species by protecting critical habitat. In 2002, WWF invested $342 million in network conservation activities. Some of WWF’s recent achievements include:

• Assisting in the creation of the Madagascar Foundation for Protected Areas and Biodiversity, which will finance the long-term conservation of Madagascar’s unique biodiversity including lemurs and other endemic species found nowhere else on earth; • Establishing the Amazon Region Protected Areas (ARPA) Trust Fund, which will finance in perpetuity the protection of 121 million acres of rainforest in Brazil, habitat to endangered jaguars, harpy’s eagles, giant river otters, black caiman, and thousands of other species; • Helping to secure the Government of Indonesia’s declaration to create Tesso Nilo National Park, which provides some of the only remaining intact habitat for endangered Sumatran elephants and tigers.

Earthwatch Institute. An international nonprofit organization with offices in Australia, Japan, the United Kingdom, and the United States, Earthwatch Institute promotes sustainable conservation of natural and cultural resources by creating partnerships among scientists, the public, educators, and businesses. Through its volunteer program, the Institute places individuals from around the world with scientists to assist on-the ground research and conservation efforts. Volunteers pay to participate in research expeditions, infusing funds and labor to research activities that would otherwise lack the resources. The biodiversity program sponsors dozens of species-related projects, including research on Namibia’s desert elephants, Ecuador’s forest birds, Grevy’s zebras, Kenya’s black rhinos, Madagascar’s lemurs, Malaysia’s bats, Mexico’s pumas and coyotes, Alaska’s sea otters, Sri Lanka’s monkeys, and sea turtles in Trinidad. Since its founding in 1971, Earthwatch Institute has mobilized nearly 73,000 volunteers, who have contributed more than $53 million and 10 million hours to conservation field work around the world (Earthwatch Institute).

Wildlife “Adoption” Programs. Many wildlife conservation-based organizations raise revenue by offering programs in which individuals pay a fee to symbolically “adopt” a wild animal. These programs offer consumers a direct and personal connection to a particular species, creating a sustained public interest in the well-being of that species. The Whale Center of New England operates an Adopt a Whale program to support the center’s whale conservation, research, and education activities. The annual fee to adopt a humpback whale is $38-$40, and proceeds go to the center’s whale conservation efforts. Adopters receive a photo and biography of the whale, an adoption certificate and button, an audio CD of humpback whale calls, and a subscription to the Center’s newsletter (Whale Center of New England). Many WWF national organizations also offer wildlife adoption programs. Through WWF-UK’s program, adopters can choose to support a named individual animal: Etin, an orangutan in Malaysia; Kiruba, an Asian elephant in India; Kinyanjui, a black rhino in Kenya; Malu Pothi, a Bengal tiger in Nepal; the lleach dolphins, a pod living off the coast of Scotland; or Zhu Xion, a giant panda in China. Adopters can also purchase an adoption gift box, which come with a soft toy, recycled pen, endangered species

Financing Species Conservation: a Menu of Options 27 wall chart, and an information sheet about the animal. The £2 ($3.60) per month adoption fee (or £29.95 ($54) one-time cost for the gift box) supports conservation activities of the associated species in the region where each animal lives (WWF-UK).

Sumatran Tiger Trust. The Sumatran Tiger Trust is an international charity run through the South Lakes Wild Animal Park, a private zoo in northern England founded in 1993 by animal nutritionist David Gill. Created with the mission to increase public awareness of conservation by offering a physical wildlife experience, the zoo houses wildlife in open environment facilities, supports endangered species breeding programs, and offers public education activities. In 1996, David Gill established the Sumatran Tiger Trust to assist conservation efforts for the critically endangered species. In addition to international donations, the trust receives funds from a zoo admission ticket surcharge, as well a through an Adopt a Wild Tiger program. The trust provides financial support to the Sumatran Tiger Conservation Program, a collaborative effort between the Indonesian Directorate General of Forest Protection and Nature Conservation (PHKA), the Tiger Foundation (Canada), and the Sumatran Tiger Trust. Field conservation activities supported by the program include tiger monitoring, habitat preservation, community development, anti- poaching patrols, park ranger training, and the purchase of field equipment (Sumatran Tiger Trust, South Lakes Wild Animal Park).

4.5 Private Sector

The private sector can contribute to species conservation through foundations, special programs, and creative partnerships. Many large corporations maintain a foundation arm specifically dedicated to charitable contributions. Beneficiaries of corporate foundations are usually NGOs or research and academic institutions that have a specific link to the companies’ activities. (For example, grant recipients typically work in locations where corporations operate, or the charitable cause is directly related to the company’s mission). Corporate giving programs are most often found in companies based in developed nations, where many governments offer tax incentives for charitable donations.

Private companies also contribute to species conservation through special programs and creative partnerships. Licensing agreements and sponsorships support species conservation with revenue earned from selling wildlife related affinity products, such as special credit cards, stamps, coins, or toys. Some companies designate a portion of profits or sales to species conservation. Described below are examples of private company programs and partnerships that fund species conservation. Additional examples can be found throughout the guide in chapters according to industry (i.e. tourism or natural resource companies).

Wildlife Credit Cards. A number of banks around the world have partnered with conservation groups to raise funding for species conservation through affinity wildlife credit cards. Many WWF national organizations offer such credit cards. For example, WWF-UK offers an MBNA Europe Bank Limited wildlife card that donates a portion of sales to fund WWF-UK’s conservation activities. WWF-Australia is a participating charity in the Australian Spirit MasterCard program, in which the St. George bank and participating retailers donate up to 1.9 percent of every card purchase to a selected charity. Citibank in India has partnered with WWF- India to donate a portion of the annual fee and sales made on its WWF affinity card. Since 1995, WWF-US has maintained a partnership with Bank One (formerly First USA bank) to offer special credit cards in three endangered species designs. Each time the credit card is used to

Financing Species Conservation: a Menu of Options 28 make a purchase, WWF-US receives one percent of the sale. To date, WWF-US has received more than $10 million from this program to help fund species conservation projects around the world (WWF, MBNA Europe Bank Limited, Australian Spirit MasterCard, Citibank, Bank One).

WWF Conservation Stamp and Coin Collection. In 1983, WWF- International signed a licensing agreement with the Swiss company Groth AG to produce a wildlife themed stamp collection. In 1989, the collection expanded to include coins. The company’s exclusive WWF stamp and coin collections have generated close to CHF 20 million ($15.6 million) in royalties earmarked for different conservation projects around the world. Through 2003, some 1200 different stamps have been produced in www.groth.ch 336 issues from 210 different countries. Each stamp set depicts a country’s outstanding wildlife and is marked with the WWF panda logo. Sets include four postcards illustrated with photographs of the species, four first day covers with sketches by well-known wildlife artists, and an illustrated text (available in 10 languages) about the species written by scientists (Groth AG, WWF-International 2004).

IUCN The Red List Collection/Cute to Boot (C2B). In collaboration with Living Picture AG, a Swiss-based toy company, the IUCN has developed a toy product line to raise awareness and funds for species conservation. Launched at the 2003 World Parks Congress, the Red List Collection/C2B toys feature 12 endangered species from the IUCN Red List. Each toy is accompanied by an informational booklet describing the species conservation status, habitat range, threats, and the preservation action necessary to ensure its survival. Initially targeting European, Japanese, and North American retail markets, the line will donate a portion of the revenue from each toy sold to support IUCN’s endangered species conservation activities (IUCN 2002).

Bushwillow Nature Conservation Shops (South Africa). Bushwillow is a South African retail franchise specializing in items associated with wildlife and nature conservation. Products offered include wildlife reference and field books, videos, tapes, and CDs; wildlife viewing equipment; outdoor apparel; and South African handcrafts and gifts. Bushwillow maintains a close affiliation with the Endangered Wildlife Trust, an independent nonprofit organization dedicated to the preservation of species in Southern Africa. In return for providing Bushwillow shops with regalia, information, and activities, the Endangered Wildlife Trust receives 1.25 percent of all Bushwillow sales. Through this partnership, Bushwillow has contributed more than R1 400,000 ($61,700) to the Endangered Wildlife Trust (Bushwillow Nature Conservation Shops).

Krombacher Brewery (Germany). In 2002, Krombacher, Germany's largest brewer, launched a targeted marketing campaign to raise funds for the conservation of rainforests in the Central African Republic, home to endangered forest elephants, mountain gorillas, lowland gorillas, chimpanzees, bonobos and other rare and endemic species. As part of the campaign, Krombacher

Financing Species Conservation: a Menu of Options 29 produces a seasonal “rainforest beer,” that has become one of the top selling beers in the German summer market. A portion of sales is donated to the Sangha Rainforest Foundation, which is managed by WWF-Germany under the supervision of a private board. To date, the campaign has generated more than $2 million for conservation (WWF-Germany, Moye 2004).

Animal Planet Channel (Australia) “Save the Rhino” Campaign. The Australia Regional Association of Zoological Parks and Aquaria (ARAZPA) has collaborated with the private television channel Animal Planet to raise funds for the critically endangered black rhino in South Africa. Through the “Save the Rhino” campaign, Animal Planet viewers in Australia can contribute to the ARAZPA Wildlife Conservation Fund’s Project Rhino. Donations will be used to establish and protect black rhino habitat, as well as to buy radio transmitters to help South African national park scientists monitor the rhinos (Australia Regional Association of Zoological Parks and Aquaria).

Jaguar Cars. For more than two decades, the Jaguar car company has actively supported efforts to conserve its namesake. In the 1980s, Jaguar Canada contributed funds to expand a Belize jaguar sanctuary 30-fold, protecting 100,000 acres of prime jaguar habitat. Jaguar headquarters in the UK funded construction of a $3 million state-of-the-art rainforest exhibit and jaguar breeding facility at the Chester Zoo. Jaguar USA committed $1 million to the Wildlife Conservation Society for jaguar research and conservation programs. In 2003, Jaguar North America formed the Jaguar Conservation Trust to provide competitive grants for projects that promote jaguar preservation. In 2004, the Jaguar Conservation Trust awarded grants to three nonprofit groups working to conserve jaguar populations in Central America. The organization Friends of Mayflower Bocawinda National Park in Belize received $6,000 to support park infrastructure, while the Wildlife Rescue and Conservation Association (Guatemala) received $10,000 and the Center for Biodiversity Conservation of Guatemala received $6,000 for jaguar conservation, education, and rescue programs (Jaguar USA).

The Endangered Species Chocolate Company. Created with the mission to “use the universal appeal of chocolate to spread a positive environmental message,” the Endangered Species Chocolate Company offers 18 types of chocolate bars each colorfully depicting an endangered species on the packaging. Chocolate bars are labeled with educational information about the species pictured, and 10 percent of all company profits are donated to wildlife conservation NGOs. Funds have been awarded to the Jane Goodall Institute, Defenders of Wildlife, the American Cetacean Society, and the National Wildlife Federation to protect species such as chimpanzees and other primates, wolves, wild cats, and other carnivores, dolphins, whales, and other regionally, nationally, or globally significant endangered or threatened species (Endangered Species Chocolate Company).

Financing Species Conservation: a Menu of Options 30 References and Resources

Asian Development Bank: http://www.adb.org/

Australia Regional Association of Zoological Parks and Aquaria, Wildlife Conservation Fund: http://www.arazpa.org.au/Conservation_WCF.htm

Australian Spirit MasterCard: http://www.australianspirit.com.au/index.asp

Bank One, WWF credit card: http://www.firstusa.com/cgi- bin/webcgi/webserve.cgi?partner_dir_name=world_wildlife_fund&page=cont&mkid=6T9L

Bhutan Trust Fund for Environmental Conservation: http://www.bhutantrustfund.org/

Bushwillow Nature Conservation Shops: http://www.bushwillow.co.za/index.html

Citibank India, WWF credit card: http://www.online.citibank.co.in/portal/citi_home_center.jsp

Conservation Finance Alliance Guide: http://guide.conservationfinance.org/

Conservation International. 2004. Save the Tiger Fund Announces Alliance with Critical Ecosystem Partnership Fund. Washington, D.C. Press release, February 19.

Defenders of Wildlife, Bailey Wildlife Foundation Wolf Compensation Trust: http://www.defenders.org/wolfcomp.html

Earthwatch Institute: http://www.earthwatch.org/

Endangered Species Chocolate Company: http://www.chocolatebar.com/

ExxonMobil, Save the Tiger Fund: http://www.exxon.mobil.com/corporate/Citizenship/Corp_Cit_SaveTheTigerFund.asp

Global Environment Facility: http://www.gefweb.org/

Groth AG: http://www.groth.ch/

IUCN. 2002. Conservation Finance and Donor Relations Unit Progress and Assessment Report. Gland, Switzerland: IUCN.

Jaguar USA: http://www.jaguarusa.com/wildlife

Jaguar USA. 2004. Jaguar North America Announces Jaguar Conservation Trust Winner in Belize. Press release, January 27.

Jaguar USA. 2004. Jaguar North America Announces Jaguar Conservation Trust Winners in Belize. Press release, January 29.

Lapham, Nicholas and Rebecca Livermore. 2003. Striking a Balance: Ensuring Conservations Place on the International Biodiversity Assistance Agenda. Washington, D.C.: Conservation International.

Financing Species Conservation: a Menu of Options 31 MBNA Europe Bank Limited, WWF credit card: http://www.mbna.com/europe/creditcards/partner_charitygroups.html

MacArthur Foundation: http://www.macfound.org/

Moye, Melissa. 2004. Personal Communication August 26

National Fish and Wildlife Foundation, Save the Tiger Fund: http://www.nfwf.org/programs/stf.htm

Roos, Dave. 2004. Battle Royal Over monarch Habitat. Illegal Logging by Armed Gangs a Big Threat to Villages, Butterfly Reserve in Mexico. The San Francisco Chronicle, 23 August.

South Lakes Wild Animal Park: http://www.wildanimalpark.co.uk/

Spergel, Barry. 2001. Raising Revenues for Protected Areas. Washington, D.C.: WWF Center for Conservation Finance.

Sumatran Tiger Trust: http://www.tigertrust.info/

U.S. Fish and Wildlife Service, International Affairs: http://www.international.fws.gov

The Whale Center of New England: http://www.whalecenter.org/

WWF-Australia: http://www.wwf.org.au/index.php

WWF-Germany: http://www.wwf.de/

WWF-India: http://www.wwfindia.org/

WWF-International: http//www.panda.org

WWF-International. 2004. WWF Stamp Collection Helps Conservation. Gland. Press release, July.

WWF-Mexico, Monarch Butterfly Conservation Fund: http://www.wwf.org.mx/monarch_conservation.php

WWF-UK: http://www.wwf-uk.org/core/index.asp

WWF-US: http://www.worldwildlife.org

Financing Species Conservation: a Menu of Options 32 5. Tourism Revenues

In 2004, international travel and tourism will generate an estimated $4,217 billion, employing at least 200 million people and comprising 10 percent of global gross domestic product. Demand for world travel and tourism is projected to achieve annual real growth of 4.5 percent between 2005 and 2014 (World Travel and Tourism Council 2004). These numbers reveal a huge potential funding source for species conservation, particularly when considering the large portion of the world tourism industry dedicated to nature and wildlife. Estimates indicate that nature tourism may account for as much as 40-60 percent of all international tourism; of that, wildlife- related tourism represents 20-40 percent (The International Ecotourism Society 2000). To effectively capture this market for species conservation, mechanisms can be established to provide a direct financial link between tourists and the wildlife they travel to see.

Nature and wildlife tourism provides a strong incentive for governments, communities, and businesses to conserve species and their habitat, because tourists demand a high quality experience characterized by beautiful scenery and abundant wildlife. If designed to direct revenue back into the sustainable management of tourist-targeted wildlife and habitat, tourism- based financing mechanisms can provide considerable support for species conservation. Tourism-related mechanisms that can raise revenue for species conservation include protected area entry and recreation fees, species-related user fees, hunting fees, hotel and airport taxes, protected area concession fees, and tourist and tourism operator voluntary contributions.

5.1 Protected Area Entry Fees

Protected area entry fees provide a practical mechanism for raising tourism-based conservation revenue: because fees are generally collected from a single point of entry which visitors must pass through in order to access the park, entry fees require at the most basic level a collection post and collector. In reality, however, entry fees do not always benefit conservation. Many park systems lack incentives for park staff to rigorously collect, track, and account for entry fees. This occurs in countries where entry fees are deposited into the general government treasury rather than allocated back to the park system. In order to ensure an effective financial stream for species conservation, revenue from protected area entry fees should be channeled as directly as possible back into the park to cover operational needs such as staff salaries and infrastructure.

When establishing a program of protected area entry fees, planners should consider a number of feasibility issues, such as the annual number and origin of tourists, the biodiversity “value” of the species or habitat, and the accessibility of the protected area. Evidence indicates that foreign tourists are willing to pay substantially higher fees than many protected areas charge, but protected area authorities (particularly in developing nations) often choose not to increase the price due to unsubstantiated fear of losing potential tourists (Krug et al. 2002). Many protected areas have implemented tiered systems in which foreign tourists, regional tourists, and national citizens are charged separate entry fees. By setting tiered fees according to visitors’ ability to pay, rather than charging only foreign tourists, protected areas can increase the total amount of revenue collected.

Financing Species Conservation: a Menu of Options 33 Bunaken National Park, Indonesia. In 2000, the North Sulawesi Provincial Government passed a law creating a mandatory entrance fee system in Bunaken National Park. Prior to the law, entrance fees were paid only on a voluntary basis. Indonesian visitors pay between Rp 1000 and Rp 2500 ($.10-$.30) and foreign visitors pay Rp 50,000 ($6) per day or Rp 150,000 ($17) for the year, and receive a waterproof plastic entrance tag that can be affixed to snorkel gear or backpacks. The tag must remain visible at all times in the park, and enforcement is conducted by ranger spot check. Tags can be purchased through marine tourism operators or from three official ticket counters. In its first two years of operation, the entrance fee system generated over $250,000. Revenue is managed by the Bunaken National Park Management Advisory Board, a multi-stakeholder group comprised of representatives from dive companies, environmental organizations, academia, government, and local villages. Eighty percent of funds collected from the fee go toward financing conservation programs in the park, such as illegal fishing patrols and enforcement, village improvement programs, collection and disposal of garbage within park boundaries, marine conservation education, and reef and mangrove rehabilitation. These programs are designed to help conserve the endangered dugong, marine turtles, dolphins, whales, whale shark, over 1000 species of fish, and other threatened and endangered marine species that live in the region (North Sulawesi Watersports Association, WWF).

Nepal National Parks. In Nepal, national park entry fees benefit both wildlife and local communities. A 1993 amendment to the National Parks and Wildlife Conservation Act granted the government authority to designate buffer zones on lands adjacent to national park and reserve boundaries. The Act also allocates 30 to 50 percent of revenues generated by national parks and reserves to community development and sustainable resource management projects in villages within the buffer zones. Since 1996, His Majesty’s Government of Nepal has declared buffer zones around six national parks, including Royal Chitwan National Park and Royal Suklaphanta Wildlife Reserve, in order to promote biodiversity conservation through the active participation of local communities and coordination with park and wildlife authorities. Studies indicate that the community benefits received from the buffer zone program have nurtured local commitment to species conservation, resulting in a reduction of human-wildlife conflict in those areas (Chapagain 2004, Keiter 1993).

5.2 Recreation Fees

Many protected areas charge additional fees for park-related activities, such as daily use fees; vehicle, boat, and plane fees; camping fees; and special service fees. Income from such sources can supplement basic park entry revenue and help cover the true costs of supporting park visitors.

The Dudhwa Tiger Reserve in India charges a daily vehicle fee of between Rs 50 ($1) and Rs 100 ($2), depending on the size of the vehicle (Journeymart). The Kenya Wildlife Service maintains a tiered price structure for public campsites. Costs depend on the origin and age of the visitor, as well as the type and location of the campsite (Kenya Wildlife Service). Rather than charge a one-time entry fee for an unlimited park stay, South African National Parks charges a daily conservation fee for each night spent within park boundaries. The fee ranges from R15-R60 ($2.40-$9.60) for South African residents and SADC nationals, and from R35-R120 ($5.60-$19) for other visitors, depending on the park (SANParks). Nepal’s Royal Chitwan National Park offers two-hour elephant rides for Nepali Rs 550 ($8) per person and guided jungle walks for Rs 250-400 per person ($3.50-$5.75) (Visit Nepal).

Financing Species Conservation: a Menu of Options 34 5.3 Species-Related “User” Fees

In some cases, protected area agencies can raise significant funds by charging additional fees associated with the “use” of a specific species. In such instances, “use” is not considered as a good in the traditional consumptive sense (i.e. hunting), but rather as a non-consumptive service: tourists “use” the experience of viewing or photographing wildlife in their natural habitat as a personally valuable and unique experience. Species user fees are best applied to charismatic, endangered megafauna, which tourists are willing to pay large sums to see. Natural resource or protected area agencies that manage such species and habitats can develop programs to offer paying tourists a visit with these species.

Rwanda Gorilla Visit Fee. In 1980, the government of Rwanda implemented a “Gorilla Visit Fee” for guests of the Parc National des Volcans, home of the mountain gorillas made famous by Dian Fossey. The gorillas’ status as endangered and charismatic megafauna carries significant value, which allows the government to charge high fees for visitors simply to view the animals in their natural habitat. Foreign visitors pay $250 per person and Rwandan citizens pay Rf 5,400 for a 1-4 hour gorilla viewing trek. The Rwandan Office for Tourism and National Parks maintains a team of 80 trackers to guide visitors to gorillas in the park. Revenue raised from the fee supports gorilla conservation activities and park management costs (Republic of Rwanda).

Costa Rica Green Sea Turtle Viewing Fee. Tortuguero National Park protects the most important green turtle hatchery in the western Caribbean, where 30,000 turtles come ashore to nest each year. The nesting season is from June through October – outside Costa Rica’s tourism high season. However, the turtles attract enough tourist interest that Tortuguero sees a second tourism high season, generating an estimated 265 jobs that benefit local tour operators, hotel owners and employees, boat captains, and other small business owners. Because the turtles nest mainly at night, the park prohibits visitors from entering the 22-mile nesting sector without a guide after 6 pm. A regional NGO, the Caribbean Conservation Corporation, operates a training program for local villagers to become certified guides. Once certified, the guides can receive government permits to lead tourists on night walks along the beach. In 1999, local guides from Tortuguero village conducted 72 percent of all turtle tours. The price of a tour ranges between $5 and $25, and the average Tortuguero visitor spends more than $255. The area has grossed nearly $7 million from the turtle tourism industry. While guide fees are not necessarily channeled directly back into the park, the community revenue earned serves as incentive for locals to protect and support turtle conservation. Since 1971, green turtle nesting in Tortuguero has increased 417 percent (Troëng and Drewes 2004, Caribbean Conservation Corporation, CentralAmerica).

Donsol Whale Shark Ecotourism (Philippines). The municipality of Donsol, Sorsogon, the Philippines is one of the few places in the world where visitors are almost guaranteed to see the threatened whale shark in its natural habitat. The whale shark is under severe threat from fishers who can earn large sums for shark products in Asia. In 1998, Donsol declared its municipal waters as whale shark sanctuary and initiated an ecotourism project to help protect the whale shark population and increase local income. Operated by the local government unit of Donsol through its municipal tourism office, the program offers guided whale shark interaction tours highlighted by an annual festival to open the whale shark interaction season. The interaction tours allow tourists to interact, or swim with, the docile whale sharks under strict guidance. The program manages a 47-member Boat Operators Association (BOA) and a 23-member group of

Financing Species Conservation: a Menu of Options 35 “Butanging” Interaction Officers (BIO), whose members service tourists on a rotating schedule. Revenue is generated from a number of fees. Visitors pay the municipal tourism office a registration fee of Php 100 ($1.80) per guest for local tourists and Php 300 ($5.80) per guest for foreigners. The boat charges Php 2000 ($35) per trip for up to seven tourists, and the Interaction Officer – required on each boat – charges an additional Php 500 ($9). In 2003, these fees generated more than Php 1.6 million ($28,715) for the Donsol community. Income earned by the municipal tourism office has supported coastal resource management activities, environmental education, coastal-clean up, and mangrove rehabilitation, among other projects. Fees and services related to ecotourism account for nearly 10 percent of local income, providing a local incentive to protect the whale sharks (WWF-Philippines 2004).

5.4 Hunting Fees and Green Safaris

Trophy fees and hunting licenses are a standard requirement for legal hunting in most countries, and can generate significant income. In South Africa, tourists pay up to $35,000 in trophy fees and hunting licenses for a single animal. In 2003, these fees contributed to hunting industry revenues of R900 million ($145 million) (Padayachee 2004). In Tanzania, the government earned $9.3 million from tourist hunting in 2002 (Government of Tanzania). If instituted as part of a comprehensive sustainable wildlife management strategy and channeled back into wildlife agency budgets, these fees can help support species conservation.

Some organizations have created alternative hunting opportunities that give clients the hunting experience without the lethal outcome. Offered by private landowners, wildlife managers, national park systems, or private organizations, these safaris coordinate with on-going conservation efforts, permitting clients to track, tranquilize, photograph and record “a kill” without permanently harming the animal. Because clients use tranquilizing darts instead of bullets, animals are temporarily sedated, allowing wildlife managers to conduct necessary conservation activities such as translocation, medical treatment, surveys, and radio-collaring. Hunters pay for licenses, equipment, staff time, and “trophy fees” for each particular species, infusing much-needed income into species conservation efforts.

Endangered Wildlife Trust Darting Safaris. Created specifically to assist conservationists, Endangered Wildlife Trust Darting Safaris permit clients to track and tranquilize an animal that has been selected for a conservation, research, or wildlife management procedure. The safari includes a team of experienced wildlife veterinarians, game capture pilots, professional trackers, and other support staff (Darting Safaris).

Green Rhino Safaris (South Africa). Green Rhino Safaris offers a non-lethal alternative for hunters to obtain a rhino trophy. Each safari includes a team of trackers, professional hunters, and a qualified veterinary surgeon experienced in handling rhino capture. Rather than killing the rhino, clients tranquilize and sedate it. The rhino is then tracked and treated by the veterinarian. Once the veterinarian determines the rhino’s condition as stable, the client is allowed to take field photos and trophy measurements, which are entered into the Safari Club International record book (African Safari Consultants).

Financing Species Conservation: a Menu of Options 36 5.5 Commercial Operations in Protected Areas

Protected area agencies can supplement their budgets by operating concessions such as lodges, restaurants, and gift shops within protected area boundaries. Royalties and fees generated from these concessions provide a predictable revenue stream to support the agencies’ long-term activities. Concessions can be run directly by the protected area agency or leased to a private company. However, in many cases employees of protected areas lack the skills necessary to operate a commercial business. In such cases, it may be preferable to transfer business operations to private enterprise(s).

New Zealand Department of Conservation. The New Zealand Department of Conservation (DOC) leases more than 3,500 concessions on public conservation land to private companies. Concession contracts are issued for commercial activities such as tourist guides; restaurants, shops, and lodges; agriculture, horticulture, and telecommunications ventures; and filming. To determine the fees, the DOC uses a formula that represents a revenue-sharing scheme based on the proportion of investment contributed by the leasing business (investing capital) and the DOC (investing land). The formula is directly connected to the income of the concessionaire, and can be set as a percentage of gross income; an amount per hectare, head, or trip; a fixed payment; or a combination of the three. For example, guided tour concession fees are set at 7.5 percent of gross income, helicopter landing rights command five percent gross income, and hotels or ski areas collect 3-5 percent gross income.

The DOC also operates more than 1,000 back-country huts and 250 campsites. To use a hut, visitors are required to pay for a permit at a local DOC office; campsite fees are generally collected on-site. Usage fees for huts and campsites are divided into categories based on the level and quality of the facilities offered. Top-end, highly trafficked huts can cost NZ$35 ($22) per person per night (ppn), while campsites and other huts range between NZ$3-$15 ($1.90-$9.60) ppn. Fees set for huts within New Zealand’s famous “Great Walk” network recover operating costs entirely from users. Other huts and campsites require additional taxpayer subsidy (New Zealand Department of Conservation).

South African National Parks (SANParks). By the late 1990s, SANParks had grown into one of the largest nature-based tourism operators in South Africa, managing more than 5200 beds and 1000 campsites in the South African Parks network. In 1999, SANParks initiated an internal review of its commercial operations and uncovered a severe lack of capacity to run such business ventures. Consequently, SANParks devised a strategy to shift commercial business operations to the private sector through a system of concessions. The arrangement leases both existing camps and new sites in a number of national parks. To date, SANParks has awarded 11 concessions: seven in Kruger National Park, two in Addo Elephant Park, and two in the CAPE Peninsula National Park. These concessions have resulted in the addition of 380 new beds and a private capital investment of R270 million ($43.8 million). SANParks expects to earn R677 million ($110 million) from these concessionaries over the designated 20-year lease period (Fearnhead 2003, South African National Parks).

5.6 Airport Passenger Fees and Hotel Taxes

Most countries have established systems of hotel and airport passenger taxes. Governments can support species conservation by allocating a portion of the airport and hotel tax revenues

Financing Species Conservation: a Menu of Options 37 collected to natural resource agencies or wildlife management programs. Such allocations make particular sense in countries where a significant portion of tourists come to experience nature and wildlife. In some cases, governments have implemented additional airport passenger and hotel taxes specifically to raise revenue for conservation, as shown in the examples below.

Belize Conservation Fee. The Protected Areas Conservation Trust (PACT) in Belize was established to promote the sustainable management and development of the country’s protected areas. The trust receives most of its revenue from a conservation fee of BZ$7.50 ($3.75) paid by all visitors upon departure at the airport and from a 20 percent commission on cruise ship passenger fees. Conservation fees are earmarked at the time of collection and deposited directly into the trust. The trust disburses the funds through grants that support protected area conservation projects across Belize. In 2003, the Spanish Creek Wildlife Sanctuary received $35,000 from the trust to complete an ecological assessment of the area’s flora and fauna (PACT, Belizenet).

Turks and Caicos Islands Hotel Tax. The Turks and Caicos Islands in the Eastern Caribbean designates 1 percent of a 9 percent hotel tax as a conservation tax to support the maintenance and protection of the country’s protected areas. Revenue is deposited in a conservation trust fund modeled on the Belize fund described above (Turks and Caicos Islands Information Gateway).

5.7 Voluntary Contributions from Tourists and Tourism Operators

Through voluntary contributions, tourists and tourism operators can support the very species that render their vacation (or business) valuable. As described below, mechanisms such as voluntary surcharges, supplementary donations on retail or resort bills, and even charitable research assistance can establish a direct financial link between a tourist’s wildlife experience and the conservation of that wildlife. Tourists are more likely to contribute if they can be assured that the funds collected will be disbursed transparently and allocated to the conservation of the species they have viewed. Tourism operators generally contribute to species conservation when it directly benefits business operations.

The Cheetah Watch Campaign. Run by the Tanzania Carnivore Conservation Project at the Tanzania Wildlife Research Institute, the Cheetah Watch Campaign draws on tourist interest and resources to advance the conservation of the country’s cheetahs. The campaign urges individuals to send in photographs of cheetahs taken in Tanzania, along with basic information indicating where and when the cheetahs were seen. Because each cheetah is identifiable from its unique spot patterns, the photographs can help researchers track cheetahs across Tanzania at very little cost (Wildlife Conservation Society).

Whale Watch Research. A billion dollar business sustained by more than 80 countries, whale watch tourism can support conservation by allowing scientists to conduct research on whale watching boats. Whale Watch Kaikoura, a responsible tourism operation owned by the local Maori tribe on the New Zealand coast, monitors the Kaikoura coastline from its whale watching boats. Researchers on every commercial trip keep detailed records on whale identification, location, and behavior (Whale Watch Kaikoura). In New England (U.S.), research supported by whale watching boats on the Stellwagen Bank is valued at $1,000 per day, with scientists obtaining an estimated annual benefit of $875,000 (Hoyt 2001).

Financing Species Conservation: a Menu of Options 38 Cullman and Hurt Community Wildlife Project. The Cullman and Hurt Community Wildlife Project considers the support of local communities critical to the success of species conservation. Clients on safari with Robin Hurt Safaris Ltd. in Tanzania pay a voluntary 20 percent community conservation fee (separate from Tanzanian government fees), which funds village development projects near the areas allocated to Robin Hunt Safaris. As a component of each project, Cullman and Hurt trains each recipient community about the economic value of species conservation, stressing that sustainable resource management and species conservation can provide more profitable and long-term benefits than traditional resource utilization. Through this process, villagers see the direct link between species conservation and community income. To date, villagers in 34 communities have received more than $715,000 for development projects of their choosing, such as primary school renovation, construction of medical clinics, and water schemes (Cullman and Hurt Community Wildlife Project).

Lindblad Expeditions. Founded in 1979, Lindblad Expeditions (LEX) is a responsible travel operator that brings passengers on sea expeditions to remote and pristine locations around the world. Protection, preservation, and respect for the living planet are constant themes on each Lindblad voyage, which emphasizes that travel to a region should help sustain and even repair the integrity of the region’s environment. Lindblad Expeditions directly supports species conservation efforts through a number of voluntary partnerships and projects. Lindblad’s Antarctica ship serves as a platform for scientists collecting data on local penguin colonies. The Galapagos Conservation Fund, established by LEX in 1997, has received over $2 million in voluntary donations from ship passengers to preserve the region’s unique flora and fauna. In 2004, Lindblad Expeditions, the Mexican Nature Conservation Fund (FMCN), and WWF created the Baja Forever! campaign to support conservation in the Gulf of California. Guests on LEX Gulf voyages can make a contribution to WWF, which is matched by both the FMCN and WWF, to support conservation projects in the Gulf of California. Activities funded by the contributions include sea lion disentanglement and radio surveillance in the Bahia Loreto Marine Reserve, which monitors illegal fishing operations to help protect gray whales, humpback whales, dolphins, and the critically endangered vaquita porpoise. In its first four months of operation, the Baja Forever! campaign raised more than $58,000 from passengers, totaling more than $175,000 when tripled by the FMCN and WWF (Lindblad Expeditions, Zink 2004).

Disney Wildlife Conservation Fund. Established in 1995 as an awards program to fund global wildlife and habitat conservation, the Disney Wildlife Conservation Fund has contributed more than $6 million to projects in two dozen countries. Awards are typically granted to U.S. nonprofit conservation organizations working with partners around the world. The fund is supported by guests of Walt Disney World properties, who have the option to add a donation to each merchandise purchase. One hundred percent of visitor contributions are allocated to the fund, with Disney paying all administrative costs. Guests on Disney cruise lines can donate to the fund on gratuity forms at the end of their voyage, and the Living Seas at Epcot offers special behind- the-scene tours where a portion of the cost is directed to the Conservation Fund. Among hundreds of projects, the Fund has financed elephant research in Tanzania, gorilla conservation in Uganda, loggerhead sea turtle studies in the Caribbean, jaguar radio-tracking in Brazil, and Siberian tiger conservation in Russia (Disney Wildlife Conservation Fund).

SeaWorld & Busch Gardens Conservation Fund. The Busch Entertainment Corp. (BEC) created the SeaWorld & Busch Gardens Conservation Fund in 2003 to strengthen the company’s commitment to wildlife conservation. BEC has supported environmental conservation for more

Financing Species Conservation: a Menu of Options 39 than 40 years and currently spends more than $2.5 million annually on conservation, wildlife research, and animal rescue and rehabilitation projects. BEC’s species conservation efforts focus on scientific research of rhinos, tigers, elephants, cheetahs, gorillas, orangutans, lions, hyenas, and hippopotamus, as well as rescue and rehabilitation of injured sea turtles, dolphins, manatees, seals, sea lions, and aquatic birds. The new fund will provide additional support through grants to nonprofit conservation programs around the world. The fund will be financed primarily through donations from visitors to all nine Anheuser-Busch Adventure Parks. Guests can contribute at park gift shops and other outlets, as well as on the season- and annual-pass. The Busch Entertainment Corp. hopes the fund will generate $500,000 annually to supplement the established conservation program (SeaWorld & Busch Gardens Conservation Fund).

The Anheuser-Busch companies also support wildlife conservation through the Budweiser Outdoors program. Created in 1995, the Budweiser Outdoors program supports seven partner organizations, including the National Fish and Wildlife Foundation, the National Shooting Sports Foundation, the Rocky Mountain Elk Foundation, Ducks Unlimited, Buckmasters American Deer Foundation, Quail Unlimited, and the Women’s Shooting Sports Foundation. As part of the Outdoors program, Budweiser conducts an annual “Help Budweiser Help the Outdoors” campaign in which Anheuser-Busch wholesalers donate to the National Fish and Wildlife Foundation a percentage of the proceeds of every case of Budweiser sold during a designated period. The National Fish and Wildlife Foundation matches the contribution dollar-for-dollar, and funds are distributed among the seven partner organizations. Launched with an extensive advertising campaign and point-of-sale merchandise, the program has raised more than $1.5 million in four years for wildlife conservation (Anheuser-Bush 2003, National Fish and Wildlife Foundation).

Financing Species Conservation: a Menu of Options 40 References and Resources

African Safari Consultants: http://safariconsultants.com/greenrhinohunts.htm

Anheuser-Bush. 2003. ‘King of Beers’ Launches Fifth Annual ‘Help Budweiser Help the Outdoors’ Program. St Louis, MO. Press release, September 11.

Belizenet, PACT: http://www.belizenet.com/pact/how.html

Caribbean Conservation Corporation, Tortuguero Information: http://www.cccturtle.org/tortnp.htm

CentralAmerica, Tortuguero Information: http://CentralAmerica.com/cr/parks/motortuguero.htm

Chapagain, Kiran. 2004. Government Declares Buffer Zone for Shuklaphanta. The Kathmandu Post, April 21.

Cullman and Hurt Community Wildlife Project: http://www.cullmanandhurt.org/

Darting Safaris: http://www.dartsafari.com/

Disney Wildlife Conservation Fund: http://disney.go.com/disneyhand/environmentality/

Fearnhead, Peter. 2003. Commercial Tourism Concessions: a Means of Generating Income for South African National Parks. Paper prepared for the Vth World Parks Congress: Sustainable Finance Stream. September, Durban, South Africa.

Government of Tanzania. Response and Explanations Regarding the Article in the East African News Titled “Game Carnage in Tanzania Alarms Kenya.” http://www.tanzania.go.tz/wildlife2503eng.htm

Hoyt, Erich. 2001. Whale Watching 2001: Worldwide Tourism Numbers, Expenditures, and Expanding Socioeconomic Benefits. Yarmouth Port, Massachusetts: International Fund for Animal Welfare.

The International Ecotourism Society. 2000. Ecotourism Statistical Fact Sheet. Washington, D.C.: The International Ecotourism Society.

Journeymart, India National Parks: http://www.journeymart.com/Dexplorer/AsiaIS/India/india_addon/wildlife/index.asp

Keiter, Robert B. 1993. Nepal’s Buffer Zone Legislation: Legal and Policy Issues. Unpublished Manuscript. University of Utah, Salt Lake City, Utah.

Kenya Wildlife Service: http://www.kws.org/

Krug, Wolf, Helen Suich and Ndeutalala Haimbodi. 2002. Park pricing and economic efficiency in Namibia. DEA Research Discussion Paper Number 45, June, Windhoek, Namibia.

Lindblad Expeditions: http://www.expeditions.com/

National Fish and Wildlife Foundation, Budweiser Outdoors Program: http://www.nfwf.org/budpage.html

New Zealand Department of Conservation, Concessions: http://www.doc.govt.nz/About- DOC/Concessions/index.asp

Financing Species Conservation: a Menu of Options 41

North Sulawesi Watersports Association: http://www.bunaken.info/entrancefee.html

PACT: http://www.pactbelize.org

Padayachee, Nicky. 2004. Hunting in South Africa Makes a Killing. Sanwild. Press release, June 30.

Republic of Rwanda: http://www.rwanda1.com/government/rwandalaunchie.html

SeaWorld & Busch Gardens Conservation Fund: http://www.swbg-conservationfund.org/default.htm

South African National Parks (SANParks): http://www.sanparks.org/

Turks and Caicos Islands Information Gateway: http://www.tcimall.tc/

Troëng, Sebastian and Carlos Drewes. 2004. Money Talks: Economic Aspects of Marine Turtle Use and Conservation. Gland, Switzerland: WWF-International.

Visit Nepal, National Parks Information: http://www.visitnepal.com/nepal_information/pinfo.htm

Whale Watch Kaikoura: http://www.whalewatch.co.nz/

Wildlife Conservation Society, Cheetah Watch Campaign: http://www.wcs.org/home/wild/Africa/cheetahs/

World Travel and Tourism Council. 2004. World Travel and Tourism: Forging Ahead. London, England: World Travel and Tourism Council.

WWF: http://www.worldwildlife.org

WWF-Philippines. 2004. The Current Financing Mechanism in Support of Conservation-Related Activities in Donsol, Sorsogon. Quezon City, Philippines: WWF-Philippines.

Zink, Sally. 2004. Personal Communication. August 23.

Financing Species Conservation: a Menu of Options 42 6. Revenues from the Sale and Trade of Wildlife

Revenues generated from both the legal and illegal sale and trade of wildlife products can generate millions of dollars for species conservation. It is important, however, that any sale or trade of wildlife products is guided by a solid framework designed to support sustainable activity and to deter and penalize unsustainable activity. Dedicated interests including NGOs, governments, multilateral institutions, academic and research organizations, and private businesses have worked for decades to develop this framework, which is maintained by international conventions such as CITES and associated national laws. Financial mechanisms incorporated into the sustainable agenda, such as fines, wildlife auctions, in situ-ex situ partnerships, and wildlife product certification, help contribute funding for species conservation. Some of these mechanisms, particularly wildlife auctions and in situ-ex situ partnerships, should be considered with particular care; without adequate precautions, these activities could inadvertently encourage unsustainable sale or trade of species.

6.1 Revenue from Illegal Hunting and Wildlife Trade

The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) estimates that the annual international wildlife trade (both legal and illegal) is worth billions of dollars, involving hundreds of millions of plant and animal specimens. The international sale and trade of commodities from protected species is highly regulated by CITES, which provides a legal framework for wildlife trade-related laws and regulations at the national level. Party countries wishing to trade or sell goods restricted by CITES must issue permits based on management and scientific findings, and if they wish to change the status of a species on the CITES appendices they must submit proposals for approval at the Conference of Parties. Funds raised by the government-sponsored sale of products from CITES-listed species can help finance local species conservation. However, this tool is rarely implemented because it invites the perception that participating governments somehow support illegal hunting. CITES and associated national laws also enable countries to raise revenue for conservation through fines imposed on violators.

CITES Approved Ivory Sales. In 1997, CITES allowed Botswana, Namibia, and Zimbabwe a controversial one-time sale of 50 tons of stockpiled ivory to Japan. The ivory was sold in 1999, generating approximately $5 million earmarked for elephant conservation activities in the three range states (TRAFFIC 2000). The CITES decision stipulated that all revenues from the sale must be managed by a conservation trust fund overseen by an independent board of trustees, to be used for elephant conservation, capacity building, and local community-based programs. (CITES) Namibia’s Game Products Trust Fund received N$3.9 million ($640,000) from the sale of 12.6 tons of ivory and has helped fund seven local conservancies that have elephant populations (Shigwedha 2002).

In 2002, CITES accepted proposals from Botswana, Namibia, and South Africa for a second one-off ivory sale to sell stockpiles of ivory tusks that were confiscated or collected from elephants that died naturally. That sale cannot move forward until certain conditions have been met, including availability of baseline data on monitoring elephant populations and verifying that legal ivory sales do not contribute to increased poaching, confirmation that potential buyers can effectively regulate domestic ivory markets, and assurance that generated funds will be used for

Financing Species Conservation: a Menu of Options 43 elephant conservation. However, there is strong opposition from some CITES parties, who argue that since the first sale, range states have yet to submit elephant population and poaching data or audits detailing the use of the sale proceeds (Environment News Service 2004, TRAFFIC 2000, CITES 2002).

Lacey Act (United States). The Lacey Act’s focus is the prohibition of interstate and international trafficking in protected wildlife. Used frequently by federal prosecutors, the Lacey Act reinforces federal, state, tribal, and foreign wildlife protection laws by requiring accurate labeling of wildlife shipments and criminalizing most types of trafficking in fish, wildlife, and plants that have been taken, possessed, transported, or sold in violation of a state, federal, tribal, or (except in the case of plants) foreign law. The Lacey Act violator can face civil fines, forfeiture of wildlife and equipment, and criminal penalties, including fines and incarceration. In the cases below, criminal fines were directed toward species conservation activities (Lacey Act).

In May 2002, 16 men were convicted of violating the Endangered Species Act and the Lacey Act for participating in an interstate wildlife trafficking ring. Discovered during a U.S. Fish and Wildlife Service investigation dubbed “Operation Snow Plow,” the ring bought and killed endangered tigers, leopards, and other big cats with the intention of selling their hides, parts, and meat. As part of the sentence, the men paid more than $200,000 in restitution to the National Fish and Wildlife Foundation’s Save the Tiger Fund (U.S. Fish and Wildlife Service 2003).

In July 1998, the Tennessee Shell Company pleaded guilty to a felony violation of the Lacey Act for buying and exporting thousands of pounds of freshwater mussels illegally taken from rivers in Michigan, Ohio, Kentucky, and West Virginia. The company agreed to pay $1 million to the National Fish and Wildlife Foundation for use in mussel conservation (U.S. Fish and Wildlife Service 1998).

6.2 Wildlife Auctions

Wildlife auctions have been used for a number of years to finance nature conservation, primarily in Africa. Surplus game from various protected areas is sold at auction and purchased mostly by private game reserves to supplement their stock. The species are awarded a monetary value based on their rarity or desirability, and are sold to the highest bidder. Profits generated from auction sales have been used to finance the development of new parks and the management and protection of exiting protected areas.

Ezemvelo KZN Wildlife Game Auction (South Africa). Held annually since 1988, the Ezemvelo KZN Wildlife game auction sells surplus wildlife from protected areas in the KwaZulu-Natal region. Because it sells only surplus game, KZN Wildlife promotes the auction as a sustainable use of wildlife that benefits both the purchaser (typically private game ranchers) and the public. In 1999, the auction generated approximately R11 million ($1.8 million), accounting for nearly 10 percent of the KZN Wildlife operating budget (Ezemvelo KZN Wildlife 2003, WildNet Africa 2000).

SANParks Wildlife Sales. Income generated from the sale of surplus high-value game to private landowners goes toward the Park Development Fund. The fund was established specifically to finance the development of new parks in areas that need protection. The

Financing Species Conservation: a Menu of Options 44 underlying principle is that conservation assets that are in adequate supply may be sold to buy conservation assets in short supply. In 2002, SANParks generated over R24 million ($3.6 million) from the sale of wild fauna and flora for protected area acquisition (SANParks 2003).

6.3 In Situ-Ex Situ Species Conservation Partnerships

In situ-ex situ species conservation partnerships, usually between governments and zoos, can support species conservation while providing mutual benefit to both sides. The in-situ institution (i.e. a government wildlife agency) can earn steady revenue during the term of the partnership, which can help fund local conservation activities associated with the designated species. The ex- situ organization gains access to a rare species that can be integrated into scientific research programs and highlighted in educational exhibits. Such partnerships can help increase the global populations of endangered or threatened species by supporting conservation programs in the wild and captive breeding programs ex situ. In order to effectively promote species conservation, it is critical that such partnerships adhere to strict international and national guidelines that direct funds and activities to conservation, with a focus on conservation programs in countries of origin that enhance species populations in the wild and their habitats.

In the United States, the U.S. Fish and Wildlife Service Division of Management Authority oversees the import, export, re-export, take, and interstate or foreign commerce of native and non-native species to ensure that all transactions adhere to U.S. law and CITES regulations. Institutions wishing to participate in an in situ-ex situ conservation partnership must obtain permits for the import and export of endangered and threatened species. Import permits may only be issued when the purpose of the transaction is not detrimental to the survival of the species, is not for primarily commercial purposes, and when the importer is suitably equipped to house and care for the species. For species listed as endangered on the U.S. Endangered Species Act, the activity must also be shown to enhance the conservation of the species in the wild. For CITES- listed species, export permits may only be granted when the export is not detrimental to the species survival and if the exported specimen(s) are legally acquired. The shipment of live animals requires additional demonstration that the specimen(s) will be humanely shipped. Under CITES regulations, scientific institutions are eligible for a scientific exchange certificate authorizing import and export of museum species, which must be shipped as non-commercial loans, donations, or exchanges among scientific institutions registered with CITES (U.S. Fish and Wildlife Service fact sheets).

U.S.-China Long-Term Giant Panda Conservation Partnerships. In 1998, the U.S. Fish and Wildlife Service issued a revised policy on panda conservation partnerships allowing American zoos to enter into agreements with the China Wildlife Conservation Agency or the China Association of Zoological Gardens for long-term loans of pandas, most of which are around 10 years. These pandas, as well as their offspring, remain the property of China during the loan period, and the ex-situ “borrower” zoo usually pays loan fees of US$1 million to China per pair of adult pandas per year of the loan. An additional $600,000 is paid per cub per year if any are born during the span of the loan. The majority of the funds generated by the loan must be spent on conservation of wild giant pandas and their habitat in China. Other countries have also received panda loans from China but so far only the U.S. stipulates that the fees must be used for panda conservation. Each U.S. zoo seeking a panda loan must complete an extensive application including a research plan and list of conservation projects it intends to fund. The U.S. Fish and

Financing Species Conservation: a Menu of Options 45 Wildlife Service evaluates the proposal and issues an import permit if the proposal is accepted. The Chinese CITES Management Authority must also make a determination whether to issue an export permit. So far four American zoos have received long-term panda loans from China under this policy (U.S. Fish and Wildlife Service, Baragona 2004).

Forth Worth Zoo (USA)-Nepal Asian One-Horned Rhino Partnership. In the mid-1980s, the Forth Worth Zoo, the King Mahendra Royal Trust for Nature Conservation, the Royal Government of Nepal, and WWF developed a partnership to protect the critically endangered greater one-horned rhinoceros. At the time, only two known populations of the species existed, one in Nepal’s Royal Chitwan National Park and the other in the Kaziranga region of northeast India. These isolated populations were vulnerable to natural disaster and disease which could potentially devastate the species in a single incident. To protect and enhance the species, it was determined that a second viable Nepalese population be established in the wild and that an expanded captive breeding program be administered ex-situ. The Royal Government of Nepal collaborated with the Forth Worth Zoo and WWF through the American Zoo and Aquarium Association’s Species Survival Program (SSP), which seeks to ensure the survival of selected endangered or threatened species by coordinating scientifically-based, integrated species conservation programs. As part of the rhino SSP efforts to produce a viable captive breeding population of greater one-horned rhinos, the Royal Government of Nepal donated a pair of rhinos to the Forth Worth Zoo. To integrate the ex-situ conservation in Fort Worth and other zoos around the world with in-situ conservation in Nepal, the Forth Worth Zoo and WWF invested nearly $500,000 for the sustainable management of wild rhinos in Nepal. The funding supported the translocation of 41 rhinos from Royal Chitwan National Park to Royal Bardia National Park – successfully creating a second population of wild rhinos in Nepal – as well as projects to monitor, research, and protect the two populations (Bunting and Sherpa 2004).

6.4 Species Product Certification

Natural resource product certification seeks to harness global consumer power to support species conservation around the world. By establishing standards for the sustainable management of natural resource-based industries, and by conferring an eco-label on products that meet these standards, certification initiatives give consumers the choice to purchase either traditionally or sustainably harvested products. Sold at a premium, certified products give producers an incentive to follow sustainable management standards. Examples of certification bodies include the Forest Stewardship Council, the Marine Stewardship Council, and the Marine Aquarium Council.

Marine Aquarium Council. The Marine Aquarium Council (MAC) is an independent nonprofit organization dedicated to conserving the coral reefs and marine ecosystems that support thousands of marine species. Bringing together fisherman, suppliers, retailers and hobbyists www.aquariumcouncil.org worldwide, MAC has created a set of international performance standards for the marine aquarium trade. The “MAC Certified” label allows consumers to easily identify marine aquarium animals that have been collected and handled in an environmentally safe and sustainable manner.

Financing Species Conservation: a Menu of Options 46 Certification covers both practices (industry operators, facilities, and collection areas) as well as products (aquarium species) to promote a sustainable chain of custody for marine aquarium resources (Marine Aquarium Council).

Marine Stewardship Council. The Marine Stewardship Council (MSC) is an independent nonprofit organization working to ensure the sustainability of marine species by encouraging the responsible management of seafood resources. The Council has developed a rigorous set of standards for sustainable and well-managed fisheries and accredits third party certifiers who meet these standards. Certified products display the MSC label in retail outlets, allowing consumers to directly support seafood species conservation through informed purchase. www.msc.org

In May 2004, the Mexican Baja California red rock lobster fishery, a federation of fishing cooperatives (FEDECOOP) on the Pacific coast of Mexico, achieved MSC certification. The fishery is the first community fishery in a developing country to win MSC certification. Other fisheries to gain MSC certification include the Alaska salmon, New Zealand hoki, South African hake, and Western Australia rock lobster fisheries (Marine Stewardship Council).

Financing Species Conservation: a Menu of Options 47 References and Resources

Baragona, Karen. 2004. Personal Communication. August 4 and 13.

Bunting, Bruce and Mingma Sherpa. 2004. Personal Communication. August 23.

CITES 2002. CITES Sets Strict Conditions for any Possible Future Ivory Sales. Santiago, Chile. Press release, November 12.

Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES): http://www.cites.org/

Environment News Service. 2004. CITES Gets Tough with Ivory Traders. March 19.

Ezemvelo KZN Wildlife. 2003. KZN Wildlife 2003 Game Auction Results. http://www.kznwildlife.com/auction03_results.htm

Lacey Act Amendments: Summary from Federal Wildlife Laws Handbook: http://ipl.unm.edu/cwl/fedbook/laceyact.html

Marine Aquarium Council: http://www.aquariumcouncil.org

Marine Stewardship Council: http://www.msc.org

Shigwedha, Absalom. 2002. Game Products Trust Fund Aids Elephant Conservation. The Namibian. August 1.

TRAFFIC. 2000. African Elephants and the Eleventh Meeting of the Conference of the Parties to CITES. Cambridge, UK: TRAFFIC International.

U.S. Fish and Wildlife Service. 1998. Illegal mussel Take Nets Million Dollar Restitution. Fish and Wildlife News. September/October.

U.S. Fish and Wildlife Service. 2003. Chicago Area Meat Market Fined; Owner Sentenced to Six Months in Prison for Roles in Illegal Buying and Selling of Meat from Federally Protected Leopard and Tigers. Washington, D.C. Press release, December 18.

U.S. Fish and Wildlife Service, International Affairs. Fact Sheet. CITES Permits and Certificates. Permits Station: http://international.fws.gov/permits/dmapermits.html

U.S. Fish and Wildlife Service, International Affairs. Fact Sheet. U.S. Endangered Species Act. Permits Station: http://international.fws.gov/permits/dmapermits.html

WildNet Africa. 2000. All You Wanted to Know About the KZN NCS Game Auction. June 2.

SANParks: http://www.sanparks.org/

SANParks. 2003. SANparks Annual Financial Statements – Year Ending 31 March 2003. http://www.sanparks.org/news/SANParks%20AFS%202002-2003.pdf

Financing Species Conservation: a Menu of Options 48 7. Financing Habitat Acquisition and Management

The more than 30,000 protected areas around the world cover only about 10 percent of global land mass, leaving species vulnerable to threats on unprotected land (IUCN World Commission on Protected Areas). Wildlife does not adhere to traffic laws, political boundaries, or legal land delineations, so even where protected areas do exist, conservation efforts are complicated by private lands falling within a species habitat range. In the United States, approximately half of the species listed as endangered or threatened occupy habitat that is 80 percent on private lands (U.S. Fish and Wildlife Service fact sheet). To protect wildlife effectively, private lands must be integrated into species conservation strategies.

Some countries have programs to help state, provincial, or local governments fund the purchase of species-rich private lands. Many also offer incentives to property owners for the donation of private lands to land trusts or other conservation organizations. Canada’s tax incentive program for habitat conservation was described in section three. Leasing programs such as conservation concessions can support the protection of wildlife while simultaneously reducing government management costs. Other programs, such as conservation easements, wildlife conservancies, and tradable development rights allow governments, private landowners and companies, and conservation organizations to share the financial burden of protecting wildlife and habitat, increasing the mutual benefit and reducing individual cost.

7.1 Purchase or Donation of Land or Property

Land acquisition can be a cost-effective and relatively immediate technique to protect species and habitat. There are a number of avenues through which private landowners, governments, and NGOs can implement habitat purchases or donations. Conservation organizations and land trusts, such as The Nature Conservancy or the Trust for Public Land, purchase or receive and manage critical habitat sold or donated by private landowners. Governments can also support the purchase of local habitat. The U.S. federal government operates two grant programs that help state governments finance the acquisition of endangered species habitat. Before proceeding into land purchase or donation agreements, a number of issues should be considered. Real or perceived sovereignty can hinder a buyer from purchasing foreign land. Furthermore, a buyer (or donation recipient) must be prepared to manage the land once ownership has been transferred, must account for residents living on the property, and should be able to compensate, as necessary, for their displacement.

The Nature Conservancy Pantanal (Brazil) Land Purchase. The world’s largest freshwater wetland, the Pantanal area of Brazil provides habitat for more than 650 species of birds, as well as mammals such as jaguars, deer, and tapirs. Despite its ecological importance, less than 2 percent of the area is under federal protection. In the 1990s, The Nature Conservancy helped local conservation organization Ecotropica purchase 148,000 acres of critical habitat bordering the Pantanal National Park. The Government of Brazil subsequently designated the land as private natural heritage reserve, effectively increasing the protected area of the Pantanal by 40 percent (The Nature Conservancy, Earth Foundation 2003).

U.S. Fish and Wildlife Service Endangered Species Program. The U.S. Fish and Wildlife Service supports several programs to promote species conservation through cooperation with

Financing Species Conservation: a Menu of Options 49 nonfederal landowners. Section 6 of the federal Endangered Species Act establishes the Cooperative Endangered Species Conservation Fund to finance five habitat conservation programs; two of these programs supply direct grants for land acquisition.

Habitat Conservation Plans (HCP) were developed in the 1980s to assist the USFWS coordinate species conservation efforts with local and state governments. Through the HCP process, local and state governments incorporate species conservation into land use planning, and are eligible to receive federal assistance in implementing HCP agreements. In 1997, the USFWS created the HCP Land Acquisition Grants Program, which provides grants to states and territories specifically for the acquisition of land associated with an approved plan. Grants are available only for land acquisitions that exceed the conservation responsibilities of the HCP landowner, and must benefit federally listed, proposed, or candidate endangered or threatened species. Since its inception, the program has funded $72 million in HCP Land Acquisition Grants.

Inaugurated in 2001, the Recovery Land Acquisition Grants Program provides funding for states or territories to acquire land to recover federally-listed endangered or threatened species. Secured long-term protection is often critical to the recovery plan for a listed species, and grants assist land acquisition consistent with the implementation of an approved recovery plan. Funds are matched by state and nonfederal entities, and cannot be used in association with Habitat Conservation Plans. To date, the U.S. government has appropriated about $35 million to the program (U.S. Fish and Wildlife Service, Endangered Species Program).

7.2 Conservation Easements

Conservation easements allow private landowners to conserve a portion of their land in perpetuity, even if the land subsequently changes ownership. Property owners sign a legal agreement with a conservation organization (such as a land trust, NGO, or government agency) outlining permanent restrictions on the use of the property. The landholder retains ownership of the property, while the conservation organization permanently monitors easement compliance. In many countries, federal and state governments offer tax incentives for landowners who donate conservation easements to land trusts or other conservation organizations. Canada’s tax incentive program for habitat conservation was described in Section three.

CEDARENA Land Trust (Costa Rica). Established in 1999 by the Environmental and Natural Resources Law Center (CEDARENA) of Costa Rica, the CEDARENA Land Trust supports nature conservation on private lands located in the Mesoamerican biological corridor. The land trust offers technical and legal assistance to landowners interested in developing conservation easements on their property. Easements are recorded in the national register as binding legal contracts and monitored by CEDARENA. To date, approximately 50 conservation easements have been established in Costa Rica. Through easements established in five priority regions, the CEDARENA Land Trust helps protect hundreds of species, including the endangered green macaw and three wattled bell bird (CEDARENA Land Trust).

7.3 Wildlife Conservancies

A wildlife conservancy is established by a voluntary agreement between two or more landowners to manage the wildlife on their combined properties. Through cooperation between landowners,

Financing Species Conservation: a Menu of Options 50 government, and conservation authorities, wildlife conservation objectives can be achieved at a reduced cost to government budgets. Conservancies can help generate local income and provide an incentive for local communities to protect wildlife on private land.

Namibia Community-Based Natural Resource Management (CBNRM) Conservancies. As part of a successful collaboration with the U.S. Agency for International Development’s Living in a Finite Environment (LIFE) program, the Government of Namibia has developed a Community-Based Natural Resource Management Programme to promote the dual objectives of increasing benefits to rural populations and promoting natural resource management and conservation. A major component of the program was the establishment of the conservancy system. In 1996, the Government of Namibia amended the Nature Conservancies Act of 1975 to support CBNRM by allowing conservancies to use, manage and benefit from communal land; to propose recommendations for quotas for wildlife utilization and decide on the forms of utilization; and to enter into agreements with private companies and establish tourism facilities within conservancy boundaries. To benefit from the program, conservancies must select a management committee, draft a constitution, and register with the Ministry of Environment and Tourism. Registered conservancies are given ownership over huntable game, and can generate revenue through projects such as private tourism concession leases, community campsites, and craft sales. The conservancy may choose to disburse income through dividends to households or by financing community projects such as schools and health centers. Each conservancy directs a portion of income to operational costs and reinvestment in the natural resource base. Between 1998 and 2003, 29 conservancies with more than 38,000 members were established to protect more than 18 million acres of wildlife habitat (Namibia Ministry of Environment and Tourism, WWF-International).

In 2004, the Torra Conservancy in Namibia’s Kunene Region received the Equator Initiative Prize, awarded by the United Nations Environment Programme to communities from developing countries in the tropics that are successful in combining biodiversity conservation and poverty reduction. Established in 1998, the Torra Conservancy generates income from a number of sustainable wildlife use initiatives, including a partnership with a private tourism company, the sale of surplus game to private ranchers, and fees from trophy hunting. In 2003, these projects produced over $60,750. Revenues helped finance a local school, old age pensioners, and direct payment of $73 to each conservancy member – representing 50 percent of annual per capita income. The conservancy covers all operating expenses, and employs local game guards to protect local wildlife, including desert elephants, black rhinos, and endangered mountain zebras (U.S. Agency for International Development 2004).

KwaZulu-Natal Wildlife Conservancies (South Africa). The concept of wildlife conservancies in KwaZulu-Natal developed in 1975 when the National Parks Board began encouraging private landowners to cooperate in efforts to combat poaching and conserve local wildlife such as black rhinos, elephants, and dozens of other threatened species. In 1978, 22 farmers formed the first wildlife conservancy. Today, more than 220 conservancies with nearly 4000 members help protect more than 3.7 million acres of wildlife habitat. Each conservancy is a voluntary organization with an elected committee and constitution. Membership fees are collected from the participating landowners and used to hire guards to patrol the conservancy. Typically, fees are based on the relative amount of land owned by each member. Ezemvelo KZN Wildlife maintains a working relationship with each conservancy and offers assistance in

Financing Species Conservation: a Menu of Options 51 implementing conservancy plans, training guards, and providing scientific game allocation information (Ezemvelo KZN Wildlife).

Zimbabwe Black Rhino Conservancies. The Rhino Conservancy Project (RCP) was created in 1991 to protect Zimbabwe’s black rhino population from extinction. The project spreads the burden of rhino protection to private landowners by trans-locating viable founder groups of rhinos into conservancies in south-eastern Zimbabwe, and by providing seed funding for the development of these conservancies. Conservancy revenues come mostly from commercial game-viewing and photo and hunting safaris (the hunting of rhinos is prohibited). Conservancies in the Lowveld region have been particularly successful: in the first seven years, rhino numbers increased from 35 to 57 in one conservancy and from 38 to 69 in another. Members are allocated an annual quota for consumptive use of different species on their properties, based on regular wildlife surveys and scientific advice. While revenues are not shared between properties, each member commits to a minimum level of funding for joint restocking and wildlife management. Private farms and conservancies protect 70 percent of the national total of rhinos (both black and white), which remain a state-owned resource (De Alessi 2000, WWF-International).

7.4 Conservation Concessions

A concession is a parcel of land leased by the government to be used for a negotiated purpose. Traditionally, concessions have been granted for resource extraction activities such as logging and mining. Under a “conservation concession” agreement, however, the renter pays to protect the species and habitat located within the leased area. Conservation concessions can be used by NGOs or private entities as a way to directly and quickly invest in the preservation of a critical area. Governments benefit from conservation concessions through the reduced natural resource management costs now being financed by the investor. Conservation concessions can also be a way for governments to engage local communities in natural resource management, and to facilitate local income generation. By stimulating income from wildlife protection, conservation concessions give local communities an incentive to protect wildlife.

Conservation International Guyana Forest Concession. In 2000, Conservation International signed a renewable 30-year agreement to lease 200,000 acres of pristine forest from the Government of Guyana. The forest is home to an estimated 4,000 endemic plant species and threatened wildlife such as jaguar, black caiman, and yellow-headed sideneck turtle. (WWF- International) Rented at market rates, the terms stipulate payment of acreage fees and royalties comparable to a timber concession under Guyana’s standard timber sales agreement. However, unlike a traditional logging concession, the lease requires Conservation International to protect the area (Conservation International 2000, Rice 2003).

Botswana Community-Based Tourism. As part of its National Eco-Tourism Strategy, Botswana has created a system of concessions to engage local communities in the eco-tourism process. Community Based Tourism Ventures, run by Community Based Organizations (CBOs), are defined by the government as “tourism initiatives that are owned by one or more communities or run as joint venture partnerships with the private sector with equitable community participation, as a means of using natural resources in a sustainable manner to improve their standard of living in an economic and viable way.” The government asserts that the most successful projects are concessions associated with wildlife conservation. Through concession agreements, a CBO can secure exclusive rights over the wildlife quota and

Financing Species Conservation: a Menu of Options 52 commercial tourism operations in the allocated area. The CBO can then decide how to use these rights: retain all or part of the quota for subsistence needs, or sell to a private partner. Joint ventures with private safari companies can generate substantial community income during the hunting season. Typically, a CBO will sell the quota for commercially valuable and trophy species while retaining quotas for subsistence hunting of less valuable species. During the non- hunting season, similar partnerships can be arranged for photo safaris (Government of Botswana Department of Tourism).

The Wildlife Conservation Lease Program, Kenya. In 2000, a pilot program was launched in Kenya to provide direct financial incentives for wildlife conservation on private lands. Initially funded by the Wildlife Trust, Friends of Nairobi National Park, and the Wildlife Foundation, the Wildlife Conservation Lease program encourages the protection and sustainable management of vital wildlife migration corridors bordering Nairobi National Park. The voluntary leases pay participating landowners approximately $4 per acre per year for the return commitment not to fence, quarry, cultivate, or sell the land for the duration of the lease. Landowners agree to actively manage the land for wildlife conservation and sustainable livestock grazing. Wildlife Conservation Leases generate an average $400-$800 per year for participating households. The pilot project in 2000 began with 214 acres owned by two households and has grown to 8,400 acres owned by 115 households. There is a waitlist of families wanting to sign up an additional 14,000 acres. The program currently relies on external donors for funding, and plans to establish a trust fund for future support (Gichoni 2003).

7.5 Tradable Development Rights and Wetland Banking

Tradable development rights provide a market-based system to mitigate ecosystem damage incurred from development activities. These rights permit environmentally damaging development in certain areas in return for the active conservation of other areas. Tradable development rights can benefit species conservation by consolidating many small, fragmented mitigation projects into a single large mitigation tract that protects a larger area of intact wildlife habitat.

U.S. Wetland Mitigation Banks. In the United States, private mitigation banks help address the conflict between development and conservation of wetlands. Under the U.S. government’s “no net loss” wetlands policy, developers are required to preserve a portion of the wetland under development or must compensate by acquiring and conserving comparable land elsewhere. Wetland mitigation banks are large areas of private habitat that have been restored or created, preserved, and permanently protected by conservation easements. Banks receive marketable conservation credits from state or federal regulatory agencies, which they can sell to developers who need to offset damage to habitat and species caused by development activities. There are approximately 100 mitigation banks operating in the United States (EPA, National Mitigation Banking Association).

Financing Species Conservation: a Menu of Options 53 References and Resources

CEDARENA Land Trust: http://www.cedarena.org/landtrust/index.htm

Conservation International. 2000. Conservation International Creates New Market Mechanism to Conserve Global Forests. Washington, D.C. Press Release, September 25.

De Alessi, Michael. 2000. Private Conservation and Black Rhinos in Zimbabwe: the Save Valley and Bubiana Conservancies. Washington, D.C.: The Center for Private Conservation.

Earth Foundation. 2003. Update on Past Projects – Submitted by the Nature Conservancy. August: http://www.earthfound.com/participate/update.html#brazil

EPA. Wetlands Mitigation Banking. http://www.epa.gov/OWOW/wetlands/facts/fact16.html

Ezemvelo KZN Wildlife, Conservancies: http://www.kznwildlife.com/mngt_wildcon.htm

Gichoni, Dr. Helen W. 2003. Direct Payments as a Mechanism for Conserving Important Wildlife Corridor Links Between Nairobi National Park and its Wider Ecosystem: the Wildlife Conservation Lease Program. Paper prepared for the Vth World Parks Congress: Sustainable Finance Stream. September, Durban, South Africa.

Government of Botswana, Department of Tourism, Community Based-Tourism: http://www.gov.bw/tourism/community/community.html

IUCN World Commission on Protected Areas: http://www.iucn.org/themes/wcpa/

Namibia Ministry of Environment and Tourism, Community Based Natural Resource Management: http://www.dea.met.gov.na/programmes/cbnrm/cbnrm.htm

National Mitigation Banking Association: http://www.mitigationbanking.org/

The Nature Conservancy, Pantanal: http://nature.org/wherewework/southamerica/brazil/work/art5083.html

Rice, Richard. 2003. Conservation Concessions – Concept Description. Paper prepared for the Vth World Parks Congress: Sustainable Finance Stream. September, Durban, South Africa.

U.S. Fish and Wildlife Service. Fact Sheet. Private Stewardship Grants Program. http://endangered.fws.gov/grants/private_stewardship/

U.S. Fish and Wildlife Service, Endangered Species Program: http://endangered.fws.gov/

USAID. 2004. Namibian Conservancy Wins Top Award. NAWA. Edition 24. March 1.

WWF-International: http://www.panda.org

Financing Species Conservation: a Menu of Options 54 8. Natural Resource Extraction Revenues

While the extraction and use of natural resources such as minerals, natural gas, and oil can pose significant threats to wildlife and wildlife habitat, in cases where such activity is unavoidable, financial mechanisms can be designed to help mitigate the environmental impact. In many countries, and especially in developing nations, natural resource extraction is a primary source of government revenue. Governments can apply financial mechanisms such as fines, royalties, and various taxes and fees to encourage more environmentally responsible practices and receive compensation for negative impacts on species biodiversity.

8.1 Fines

Fines can serve as both a financial incentive for producers to follow best-practice guidelines and as a mechanism to collect compensation if and when excessive damage does occur. While fines by definition result from damages incurred, they can also serve as long-term conservation and immediate reparation tools. For example, fines collected from illegal pollution or resource extraction can be placed into a conservation trust fund that can finance habitat protection programs or be used to immediately restore habitat loss. In order for fines to benefit conservation, revenue generated from fines should be directed to a conservation program rather than deposited in the national treasury.

Iroquois Pipeline Operating Company. In 1996, the Iroquois Pipeline Operating Company was charged $22 million in criminal and civil fines for violating U.S. federal environmental and safety laws, marking the largest environmental penalty since the Exxon Valdez oil spill. The company pled guilty to violating permits and failing to properly mitigate damage to wildlife habitat, freshwater, and wetlands during construction of a 370-mile gas pipeline in the northeast United States. Of the total fine, $4.5 million was directed to the National Fish and Wildlife Foundation for conservation projects in the damaged area (U.S. Department of Justice 1996).

8.2 Royalties and Fees

Royalties direct a percentage of the profits derived from resource extraction to the resource owners (usually governments). Royalty agreements are specified at the time the resource owner grants extraction rights to a second party, and allow the owner to benefit from development of the resource without expending the associated production costs. Royalties and fees can generate a constant financial stream to support conservation activities, as shown in the example below.

Michigan Natural Resources Trust Fund. The Michigan Natural Resources Trust Fund provides financial assistance to local governments and the state Department of Natural Resources for the protection of natural resources and the responsible development of land for outdoor recreation. Governed by the state constitution and the Natural Resources and Environmental Protection Act, 75 percent of the funds must be used for the acquisition of environmentally important or especially scenic land, while 25 percent may be used to develop public recreation facilities. Wildlife-related value is one of eleven criteria considered in the disbursement of funds. The trust fund consists primarily of annual revenues derived from bonuses, rentals, delayed rentals, and royalties collected under provisions of leases for the extraction of nonrenewable resources from state-owned lands. To date, the fund has appropriated more than $600 million to

Financing Species Conservation: a Menu of Options 55 conservation projects across the state, including land acquisition to protect the state’s wildlife resources (Michigan Natural Resources Trust Fund, Michigan State Constitution).

8.3 Taxes

A number of tax systems can be implemented to generate revenue at various different points of resource production. Severance taxes apply directly to the extraction of the resource, and can be structured in two ways: as a tax on the value of the resource extracted (depending on market prices and production levels) or as a pre-determined tax per unit of production. Profit-related taxes link taxes directly to profits earned from resource production. As profits rise, so do tax revenues; if profits fall below a certain level, taxes are relinquished. Service tariffs tax indirect components of resource production, such as transportation and distribution.

Latvia Natural Resource Tax. Latvia’s Natural Resources Tax Law was enacted in 1991 to restrict unsustainable use of natural resources and pollution of the environment, as well as to provide a financial mechanism to support environmental protection measures. In 1996, the law was amended to reflect the creation of Latvia’s Environmental Protection Fund, an independent trust established by the Ministry of Environment to finance the protection of nature and biodiversity, and the enhancement of water and air quality and waste management. The law establishes the per-unit tax rate for various types of natural resource extraction and pollution. As stipulated by the law, 40 percent of tax revenues are paid into an environmental protection special budget, which is managed by the Environmental Protection Fund. Fines collected for violations of the law are also deposited into the special budget (Latvia Natural Resources Tax Law).

8.4 Hydroelectric Power Revenues

Directing a portion of hydroelectric power revenues to species conservation can help mitigate ecosystem disruption caused by dam construction. Revenues can be generated through various mechanisms such as a one-time payment during the initial dam licensing or re-licensing phase, or a regular percentage of hydroelectric company revenue.

Indian Pond Hydroelectric Project (Maine). In 1999, FPL Energy Maine Hydro, LLC filed an application for a new license to continue hydroelectric operations at Harris Dam on Indian Pond. During the public notice phase of the application, a consortium of government agencies, conservation organizations, and recreation groups intervened to ensure that the fish, wildlife, and recreation value of adjacent waters, lands, and wetlands was protected under the new agreement. After two years of negotiation, the two groups reached a settlement resulting in the permanent protection of more than 1,645 acres of land donated by FPL Energy, the restoration of 2,152 acres of wetlands through conservation easements, and the establishment of a Fisheries Habitat Restoration Fund. FPL Energy will contribute more than $670,000 to the Fund (Federal Energy Regulatory Commission 2004, National Park Service National Center for Recreation & Conservation 2001).

8.5 Voluntary Contributions from Natural Resource Companies

Many energy and natural resource production companies voluntarily contribute to conservation in areas where they operate. Such contributions help mitigate the devastating environmental

Financing Species Conservation: a Menu of Options 56 impact production activities often have on ecosystems, and also help to enhance the company’s image to consumers who are increasingly critical of natural resource development.

Chiquitano Forest Conservation Foundation. In the 1990s, a consortium of energy companies, including Enron, Shell, and Trensredes (a Bolivian company jointly owned by Enron and Shell), planned to construct a new gas pipeline to connect natural gas reserves in southern Bolivia to Cuibá, Brazil. The route cut across eastern Bolivia, transecting the Chiquitano Dry Forest and the Bolivian Pantanal. Concerned that development of the pipeline would irrevocably damage these important ecosystems, a group of conservation organizations, including the Friends of Nature Foundation, the Missouri Botanical Gardens, the Noel Kempff Museum of Natural History, the Wildlife Conservation Society, and WWF initiated talks with the energy companies. The group proposed alternative pipeline routes and other mitigating actions that would reduce the damage to the sensitive ecosystems. After these intense efforts were rejected by the energy companies as too costly, the two parties negotiated to create a sustainable mechanism to fund the long-term conservation of the Chiquitano Forest. The agreement established a total commitment of $30 million over 15 years. The Chiquitano Forest Conservation Foundation was created as a private, independent body to manage these resources. During the first five years, the energy companies donated $2 million annually; over the next 10 years, the environmental organizations will contribute up to $10 million, with the energy companies providing a one-to-one match. The foundation allocates $1 million each year toward funding conservation and sustainable development programs, with the other $1 million invested in endowment. Currently in its fifth year, the foundation has funded more than 100 projects with more than $2.6 million. Projects include the creation of the Tucavaca Wildlife Reserve, conservation of the hyacinth macaw, local forestry programs, and building local technical and scientific capacity (Justiniano 2003).

Kikori Integrated Conservation and Development Project (Papua New Guinea). In the 1980s, a consortium of oil companies discovered commercially viable oil reserves near Lake Kutubu in the Kikori River Basin area of Papua New Guinea. The Kikori River Basin is one of the largest remaining undisturbed tracts of tropical forest in the southern hemisphere, and is home to numerous endemic and rare species including 12 freshwater fish species found nowhere else on earth, the world’s only underground roosting bird, the world’s longest lizard, the world’s largest egg-laying mammal, the world’s largest pigeon, the world’s second largest butterfly, and the world’s largest moth. Led by Chevron subsidiary Chevron Niugini, the Kutubu Petroleum Project developed the oilfield and began transporting oil through a 165-mile pipeline to the Gulf of Papua. To mitigate its environmental impact and help conserve the globally-significant biodiversity of the area, Chevron Niugini and the Kutubu Petroleum partners coordinated with WWF and the Papua New Guinea Office of Environment and Conservation to initiate the Kikori Integrated Conservation and Development Project. The project aims to conserve biodiversity while increasing long-term social and economic benefits to rural populations by promoting the sustainable management of the region’s natural resources. The project supports a number of initiatives, including the completion of some of the most thorough biodiversity surveys ever conducted; environmental education; community training in sustainable fishery management; the establishment of local Wildlife Management Areas; the development of a certified, sustainable community forestry industry; and the creation of a locally-owned eco-tourist lodge (WWF-South Pacific, ChevronTexaco 2002).

Financing Species Conservation: a Menu of Options 57 References and Resources

ChevronTexaco, Environmental Issues. Protecting Papua New Guinea’s Rain Forest: http://www.chevrontexaco.com/cr_report/environmental_issues/case_studies/protecting_png_rainforest.asp

Federal Energy Regulatory Commission. 2004. Order on Offer of Settlement and Issuing New License. Washington, D.C.: Federal Energy Regulatory Commission. January 14.

Justiniano, Hermes. 2003. The Chiquitano Forest Conservation and Sustainable Devleopment Plan. Paper prepared for the Vth World Parks Congress: Sustainable Finance Stream. September, Durban, South Africa.

Latvia Natural Resources Tax Law: http://www.vid.gov.lv/eng/4laws/docs/204-06.pdf

National Park Service National Center for Recreation and Conservation. 2001. Settlement Agreement Reached on Maine’s Largest Hydro Project. The Forks, Maine. July 25.

Michigan Natural Resources Trust Fund: http://www.michigan.gov/dnr/1,1607,7-153-10366_11864--- ,00.html

Michigan State Constitution, Article IX, Section 35

U.S. Department of Justice. 1996. Builder of Vast Northeastern Gas Pipeline Pleads Guilty, Will Pay $22 Million in Criminal and Civil Fines. Washington, D.C.: U.S.. Department of Justice. Press release, May 23.

WWF-Pacific: http://www.wwfpacific.org

Financing Species Conservation: a Menu of Options 58 9. For-Profit Investment in Species Conservation

For-profit investments can harness the substantial resources of private markets to generate sustainable funding for species conservation. Investment companies can be structured to serve the dual purpose of providing financial returns for investors while promoting conservation in a designated region or industry. Biodiversity enterprise funds can provide long-term capital, business and environmental technical advice, real employment and educational opportunities, and sustainable conservation management to areas in which they operate, as shown in the example below.

Asian Conservation Company. The Asian Conservation Company (ACC) was created in 2001 to forge a link between private sector investment and biodiversity conservation. The company aims to assemble a portfolio of private equity investments that proactively conserves biodiversity while remaining profitable and competitive in the marketplace. ACC strategically invests only in companies that operate in high-priority biodiversity areas and work to mitigate negative environmental impact. Company profits provide a sustainable financing stream to support long- term biodiversity conservation. The Asian Conservation Foundation was established by the ACC to manage its conservation support activities. One of ACC’s investments, Stellar Fisheries, Inc., is a sustainably-managed producer of pasteurized blue crabmeat. The company’s fishers follow a fisheries management plan developed with assistance from WWF-Philippines that not only ensures conservation of this blue crab fishery but other species that share the marine habitat, including marine turtles (WWF Center for Conservation Finance, Talmage-Pérez 2003).

Financing Species Conservation: a Menu of Options 59 References and Resources

Talmage-Pérez, Leigh A. 2003. Asian Conservation Company and the Ten Knots Group: Private Business in El Nido-Taytay Managed Resource Protected Area, Philippines. Paper prepared for the Vth World Parks Congress: Sustainable Finance Stream. September, Durban, South Africa.

WWF Center for Conservation Finance: http://www.worldwildlife.org/conservationfinance

Financing Species Conservation: a Menu of Options 60 10. Conclusion

Effective species conservation requires an integrated approach to address the many threats facing species in the wild. The long-term protection of these species demands significant investment, and traditional one-time funding sources cannot alone provide adequate funding. A sustainable financing strategy is therefore essential to the success of any species conservation program. The strategy should be tailored to the specific financial, legal, administrative, social, and political conditions of a particular program, and should be based on the conservation activities and goals being implemented in each case. Because uncontrollable events such as internal strife or global recession can affect many revenue streams, financing strategies should include multiple income sources to ensure the long-term resources necessary for species conservation.

The ideas included in this guide are intended to give conservation professionals a means from which to develop sustainable financing strategies for species conservation. However, none of them are offered as a one-size-fits-all solution. Certain mechanisms may be appropriate to achieve one conservation goal, but less effective in achieving others. It is the reader’s responsibility to find creative ways to implement these mechanisms or design new ones based on the ideas contained in this guide.

This guide is about investing in conservation. But in closing, it should be noted that the real return on a conservation investment cannot be measured on a balance sheet alone. Why save a species from extinction, or a habitat from destruction? One answer is because there are important biological, social, and economic benefits to be derived from doing so. But there is also something more—something numbers cannot quantify and trend lines cannot track. Nature and wildlife connect humans to their primal roots, inspiring imagination and evoking wonder and appreciation for the world around us. Nature, it has been said, is “a means of reassuring ourselves of our sanity as creatures… a part of the geography of hope4.” There are many who will never visit the Louvre and stand in front of the Mona Lisa. But this does not diminish its value as a work of art or its importance as an icon of cultural history. No less is true of nature, without which there would be no wonder in the world; no sense of being a part of something larger than ourselves; no sense of mystery or magic. No less than art or music, species convey these things from one generation to the next, reaffirming a spiritual part of us that makes us human in the best sense of the word.

Conservation finance, then, is about investing in many things – not the least of which is the hope that our children, and their children and all future generations will continue to be inspired, as we have been, by the kaleidoscopic diversity of all life, from the delicate flap of a monarch butterfly’s wings to the thunderous splash of the flukes of a great whale.

4 Wallace Stegner. http://www.wilderdom.com/QuotesWilderness.htm

Financing Species Conservation: a Menu of Options 61 Appendix I

Table 1 categorizes the financing mechanisms described in this guide by their source of revenue. The first two sections illustrate mechanisms that primarily finance public good values of species biodiversity. Sections three through seven describe mechanisms based on specific consumptive or non-consumptive uses of wildlife or habitat, requiring species resource users to pay for the value of species conservation.

Table 1 Financing Mechanism Source of Revenue Government Revenue Allocations Taxes and bonds earmarked for conservation Taxpayers, investors Real estate and development taxes Property owners, property developers Lottery revenues Gamblers Premium-priced motor vehicle license plates Vehicle owners Wildlife stamps Postal customers, hunters, fishers Economic instruments to stimulate environmental investment Investors Debt relief Donors, governments, NGOs Grants, Donations, and Loans Bilateral and multilateral agencies Donor agencies Foundations Individuals, corporations Conservation trust funds Multi-source Nongovernmental organizations NGO members and supporters Private sector Private companies Tourism Revenues Protected area entry fees Visitors to protected areas Recreation fees Users of additional protected area resources Species related “user fees” Wildlife viewers Hunting fees and green safaris Hunters, wildlife sportsmen Commercial operations in protected areas Tourism operators, tourists Airport passenger fees and hotel taxes Tourists Voluntary contributions from tourists and tourism operators Tourists, tourism operators Revenues from the Sale and Trade of Wildlife Revenue from illegal hunting and wildlife trade Hunters, wildlife traders Wildlife auctions Game parks, private purchasers In situ-ex situ species conservation partnerships Zoo agencies Species product certification Consumers Habitat Acquisition and Management Purchase or donation of land or property Property owners, donors Conservation easements Property owners, donors Wildlife conservancies Property owners Conservation concessions Conservation investors Tradable development rights and wetland banking Property developers Natural Resource Extraction Revenues Fines Natural resource extraction companies Royalties and fees Natural resource extraction companies Taxes Natural resource extraction companies Hydroelectric power revenues Power producers Voluntary contributions from natural resources companies Natural resource extraction, power companies For-profit Investment Market investments promoting species biodiversity Private investors

Financing Species Conservation: a Menu of Options 62