Issue Briefs for the CaribbeanIssue Briefs for the Caribbean

SUSTAINABLE FINANCINGAnalyze your arrangement, expand yourreach and build a diversified revenuestream to support management andconservation objectives

Lessons learned for building and sustaining effective marine protected areasLessons learned for building and sustaining effective marine protected areas

WHAT IS THE ISSUE?

PAMPAMPA

1 | Sustainable Financing

Building and sustaining effectively managedMPAs requires dedicated, long-term financialsupport. Yet many if not most sites, particularlyin the tropics, remain woefully underfundedand as a result struggle to meet managementand conservation goals. Faced with persistentbudget shortfalls, declining resource health,and heightened expectations from the publicand government, a growing number of MPAsaround the world are pioneering new revenuegenerating methods. In turn, an emergingconsensus recognizes that for any MPA toachieve financial sustainability, itsmanagement structure must include financialand business planning, analysis andprogressive fundraising approaches. Across theWider Caribbean, the need for innovativefundraising holds particular relevance asdeveloping states work to build robust MPAnetworks and provide the necessary budgetresources that strengthen institutional capacityand enable active management.

Funding for most MPAs comes from acombination of government budgets,

international donors, private foundations,NGOs or local communities. At many sites thecollection of tourism user fees further bolstersmanagement capacity and may even representthe primary source of funds. Unfortunately,these traditional sources are often insufficientand unstable, which limits managementcapacity and creates uncertainty about futurerevenue. Achieving long-term financialsustainability therefore requires MPAmanagers to move beyond conventionalfundraising. A range of different approachesshow tremendous potential to enhancemanagement effectiveness through diversifiedrevenue streams, improved administrativeefficiency, establishment of market andconservation incentives, and increased benefitsharing with local communities. A growingbody of sustainable financing literature, casestudies and financial modeling tools areavailable to interested parties, though not allare equally and directly applicable. Carefulanalysis of local social, institutional and legalrealities must be made when consideringapplication of any financing tools.

2 | Sustainable Financing

Trad

ition

alfu

ndin

g so

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Government sources● Direct allocation● Bonds and taxes● Lotteries, stamps and license plates● Concessions● Real estate tax surcharges● Debt relief

Grant revenue● Bilateral and multilateral donors● Private foundations● Non-governmental organizations● Conservation trust funds

Tourism revenue● Protected area entry fees● Diving or yachting fees● Airport passenger or cruise ship fees● Hotel taxes● Voluntary donations● Merchandise sales● Concessions

Fishing revenue● License and permit sales● Quotas● Catch levies● Fines

Energy and mining● Oil spill funds● Right of way pipelines● Royalties

Private sector contributions● Corporate donations● Local business donations

Inno

vativ

eap

proa

ches

Private sector investments promotingbiodiversity conservation

National conservation trusts linked to theCaribbean Biodiversity Fund

Payment for ecosystem services

Debt for nature swaps Carbon offsets Biodiversity prospecting

Fish levies through eco-labeling orcertification

Fishing access payments Alternative livelihoods that enhance localtax revenue

Regi

onal

exam

ples Merchandise stores at the Roatan

Marine Park, HondurasDiver tags at the Bonaire Marine Park Cruise ship passenger head tax in the

Cozumel Reefs National Marine Park,Mexico

Adapted from Spergel and Moye, 2004; Gallegos et al., 2005; and CBD, 2012.

Learn about sustainable financing conceptsand practices. The relatively new yet evolvingfield of sustainable financing is ripe forexploration by enterprising policymakers,managers, NGOs and stakeholder groups. TheConvention on Biological Diversity (CBD) -- seeProtected Areas and CBD -- highlights six keysteps to develop and maintain a sustainablefinance plan:

■ Determine your funding needs and shortfalls

■ Review the efficiency and effectiveness ofyour current administrative system in achievingmanagement goals

■ Assess the socioeconomic costs and benefitsof management

■ Identify real and potential funding sources.

■ Develop a business and finance plan thatdelivers a combination of reduced costs

through improved management efficiencyand/or increased revenue from new orpotential funding sources

■ Map out implementation steps and methodsfor monitoring progress.

WHAT LESSONS MAY APPLYTO MY MARINE PROTECTED AREA?

Innovative financing at the Roatan Marine Park, Honduras.

3 | Sustainable Financing

Design and refine supportive policyframeworks. Enabling legislation builds afoundation for MPA governance andmanagement by establishing institutionalauthority, management capacity and the abilityto devise agreements with stakeholder groupsand communities. A close review of the legalframework that guides MPA development mayreveal gaps or, worse yet, policies and programsthat conflict with stated resource conservationgoals. For example, inclusion of a mechanismor provision for MPA authorities to set fees,retain revenues or determine new market andconservation based revenue sources is a provensuccess factor. Conversely, certain types offisheries subsidies or development schemesmay cause environmental degradation, therebyincreasing MPA management costs andnegatively impacting local stakeholders.Regularly reviewing and refining the legalframework helps to reconcileintergovernmental conflicts, ensure the mostappropriate governance structure and open thedoor to innovative fundraising. (See the BelizeMarine Protected Areas Network.)

Align conservation goals with internationalagreements and regional initiatives.Subsequent to formal MPA declarations,governments generally assume responsibilityto provide some level of revenue that buildsinstitutional capacity and enables management.Such commitments, if met, are furtherstrengthened when countries sign on tosupporting international agreements,conventions and regional initiatives. Forexample, the CBD Program of Work, CartagenaConvention and associated SPAW Protocol,Ramsar and CITES all support biodiversityconservation and the establishment of MPAnetworks. As proof of concept, countries thatjoined the Caribbean Challenge initiative nowstand to reap long-term benefits from thenewly established Caribbean Biodiversity Fund

Adopt business and financial planningpractices. Successful management requires aclear understanding of the financial needs andexpenses of a MPA, combined with knowledgeof how to optimize resources and draw upon adiverse portfolio of funding opportunities.Business and financial planning helps managersset strategic fundraising objectives and thendesign a long-term road map to effectivemanagement through improved financialsustainability. Business plans also enable clearcommunication about funding gaps, needs andpriorities to both existing and potential donors.Perhaps most importantly, business plans serveas a benchmark to monitor and evaluatemanagement activities, demonstrateaccountability and transparent use of funds andattract support from a range of sources. Agrowing number of MPAs are filling this neededcompetency by hiring individuals that possessa business background. (See the Roatan MarinePark in Honduras.)

Create a diverse and durable revenueportfolio. Like any sound investment portfolio,MPA revenue should come from a diverse suiteof revenue streams. Reliance on one or a smallnumber of sources increases the risk associatedwith changes in economic cycles or fundercapacity. For example, MPAs dependentprimarily or exclusively on visitor fees maysuffer during global economic downturns thataffect the tourism sector. Likewise, shifts ingovernment priorities often affect theavailability of funds that support biodiversityconservation. As such, managers need todiversify MPA financial portfolios in order tobolster revenue, reduce variability and risk, orweather the instability of one or more fundingsources. Also keep in mind that manyinnovative methods take time to set up. Startexploring options early and adopt newapproaches as they present themselves, orcreate them as needed. (See the CaribbeanBiodiversity Fund.)

4 | Sustainable Financing

and associated national conservation trusts andsustainable financing workshops. (See theCaribbean Challenge Initiative.)

Ensure widespread benefit sharing fromresource protection. Governments,international donors and private foundationsincreasingly recognize the link betweenbiodiversity conservation and the creation ofsocioeconomic development opportunities thatpromote sustainable enterprise, reduce povertyand build alternative livelihoods. This isespecially true in the developing world where

incipient MPA networks are gaining a strong yetstill limited foothold. As such, managers mustensure, particularly where resource access hasbeen limited, that revenues from activities inand around MPAs contribute to the well beingof local communities. Funding requests canthen be based on the benefits that wellmanaged coastal and marine resources provideto local and national economies. (See the BelizeManaged Access Fisheries Program.).

WHERE CAN I FIND MORE INFORMATION?

5 | Sustainable Financing

■ Emerton, L., Bishop, J. and Thomas, L. 2006.“Sustainable Financing of Protected Areas: AGlobal Review of Challenges and Options.”IUCN, Gland, Switzerland and Cambridge, UK. x+ 97pp.

■ Erdmann, M. and Peter R Merrill, IdhamArsyad and Meity Mongdong. 2003.“Developing a Diversified Portfolio ofSustainable Financing Options for BunakenNational Marine Park.” Vth World ParksCongress: Sustainable Finance Stream, Durban,South Africa.

■ Gallegos, Viviana Lujan, Anu Vaahtera andEsther Wolfs. 2005. “Sustainable Financing forMarine Protected Areas: Lessons fromIndonesian MPAs - Case Studies: Komodo andUjung Kulon National Parks.” Environmental &Resource Management (ERM), VM, VrijeUniversiteit Amsterdam.

■ Spergel, B. and Moye, M. 2004. “FinancingMarine Conservation: A Menu of Options.”Building Conservation Capital for the Future.Center for Conservation Finance. World WideFund for Nature. Washington, D.C.

■ Tlaiye, Laura. 2012. “Expanding Financing forBiodiversity Conservation: Experiences fromLatin America and the Caribbean.” InternationalBank for Reconstruction and Development/TheWorld Bank.

■ World Wide Fund for Nature. 2009. “Guideto Conservation Finance: Sustainable Financingfor the Planet. World Wide Fund for Nature.”The MPA cost model provides a framework thatcaptures both the costs of providing ongoingconservation programs as well as the currentand potential revenue and funding sources tocover these costs :

► Conservation and Community InvestmentForum (CCIF). 2008. “CCIF MPA financial andmanagement tool manual and MPA costmodel”.

► Conservation and Community InvestmentForum (CCIF). 2008. “MPA cost model.”

PRACTICAL TOOLS