Roundtable

Can We Afford to Conserve Biodiversity? ALEXANDER JAMES, KEVIN J. GASTON, AND ANDREW BALMFORD

R

ecent studies have highlighted the potentially enormous economic losses due to the degradation of biological diversity (Heywood 1995, Daily 1997). Environmental goods and services provided by natural biological systems have been valued at between $2.9 trillion and $33 trillion annually (Costanza et al. 1997, Pimentel et al. 1997), although some of these goods and services may depend more on biomass than on biological diversity per se (Myers 1996, Hector et al. 1999, Tilman 1999), it seems very likely that biodiversity itself is worth several trillion dollars a year. In contrast, the costs of maintaining biodiversity have received rather less comment, and few reliable figures are available (Pimentel et al. 1997). Estimates range from $680 million to $42 billion (UNEP 1992), clustering around $20 billion (IUCN/UNEP/WWF 1991, WCMC 1992, WRI/IUCN/UNEP 1992). However, the data and assumptions underlying these estimates are generally unclear. To improve the empirical basis and precision of these estimates, we set out a sequence of steps for global biodiversity conservation and computed their costs based on new data and published figures. Our estimates of the costs of global conservation, while high, are considerably less than government expenditures on environmentally harmful subsidies. Our estimates focus on area-based conservation (explicitly ignoring activities such as conservation education) and address two separate components of global biodiversity cost: conservation within an ecologically representative reserve network and conservation within the wider matrix of landscapes, including agriculture, forestry, freshwater, and marine systems. We assume that a reserve network would comprise the core of global biodiversity conservation activities, whereas conservation within the wider matrix of landscapes would integrate conservation measures with mainstream economic activities. We regard both approaches as essential to effective conservation, and we suggest that the overall level of conservation achieved in this two-tiered strategy would be largely sufficient to maintain the flow of benefits from global biodiversity into the future. We estimated the cost of conservation within a global reserve network in five steps. First, we surveyed current expenditure on protected areas globally and, second, made an estimate of the funding shortfalls in the existing reserve

system. Third, we projected the cost of purchasing land to expand this network for ecological representation; fourth, we added the cost of managing these new areas effectively in the future. Fifth, we estimated the scale of compensation required to meet the opportunity costs incurred by local people living in or near reserves. The sum of these five steps equals, very roughly, the annual cost of biodiversity conservation within a global reserve system. Funding required in the wider matrix of landscapes includes the cost of conservation activities in the agriculture, forestry, freshwater, coastal, and marine sectors. These activities include implementing conservation laws and regulations, as well as incentives, subsidies, and other measures designed to encourage sustainable use of biodiversity. Because data are insufficient for making these estimates, we relied primarily on published figures, as noted below. The estimates of biodiversity conservation costs in the wider matrix are very crude; nevertheless, they provide an indication of the magnitude of funds required for biodiversity remediation in the humandominated landscape. We close this article with a discussion of the feasibility of implementing such a global conservation program. We note that government expenditures on subsidies that encourage environmentally harmful practices are many times greater than the fiscal requirements for adequate global biodiversity conservation. These subsidies include government financial support for the agriculture sector, forestry, fishing, mining, and freshwater use. Reducing these expenditures by as little as 10% would contribute to sustainability of resource use throughout the wider matrix of landscapes, reduce environmental remediation costs, and provide funding for a global biodiversity conservation program. Alexander James (e-mail: [email protected]) is a professor with the Department of Land Economy, University of Cambridge, Cambridge CB3 9EP, United Kingdom. Kevin J. Gaston (e-mail: k.j.gaston@ sheffield. ac.uk) is a professor with the Biodiversity and Macroecology Group, Department of Animal and Plant Sciences, University of Sheffield, Sheffield S10 2TN, United Kingdom. Andrew Balmford (e-mail: [email protected]) is lecturer, Conservation Biology Group, Department of Zoology, University of Cambridge, Cambridge CB2 3EJ, United Kingdom. © American Institute of Biological Sciences.

January 2001 / Vol. 51 No. 1 • BioScience 43

Roundtable Table 1. Protected area management categories (IUCN 1994) Category

Name

Description

Example

I

Strict nature reserve wilderness area

Protected area managed mainly for science or wilderness protection

Polar Bear Pass, Canada; Sundarbans, or India

I

National park

Protected area managed mainly for ecosystem protection and recreation

Yellowstone, USA; Sagarmatha, Nepal

I

National monument

Protected area managed mainly for conservation of specific natural features

Devil’s Tower, USA; Victoria Falls, Zimbabwe

IV

Habitat or species management area

Protected area managed mainly for conservation through management intervention

San Francisco Bay, USA; Selous, Tanzania

V

Protected landscape or seascape

Protected area managed mainly for landscape or seascape conservation and recreation

Dartmoor, UK; Taishan, China

VI

Managed resource protected area

Protected area managed mainly for the sustainable use of natural ecosystems

Ocala National Forest, USA; Rub’al-Khali, Saudi Arabia

We recognize that, as a first attempt at structuring and costing out a global biodiversity program, our estimates are necessarily crude and incomplete. However, in making our calculations and assumptions explicit, our intention is that these ballpark figures will be revised as better data become available. By demonstrating that the cost of effective biodiversity conservation represents only a fraction of existing government subsidies to resource users, and an even smaller fraction of the value of biodiversity, we hope to dispel the myth that effective conservation is unaffordable.

Current expenditures for protected areas The existing global network of protected areas totals 13.2 million square kilometers, which includes an estimated 1.3 million square kilometers of marine reserves (Green and Paine 1997, IUCN 1998). This means that 7.9% of the Earth’s land area (149,811,204 sq. km) is given some level of protection by governments (IUCN 1998). In approximately half of these areas (those in IUCN categories I–III), “direct human intervention and modification of the environment has been limited”; in the rest (IUCN categories IV–VI), “significantly greater intervention and modification will be found” (IUCN 1994, p. 10). Table 1 presents the IUCN classification system with examples of parks in each category. Annual expenditure on protected areas includes national government budgets for both recurrent management expenses and capital outlays, plus foreign and nongovernmental assistance. A World Conservation Monitoring Centre (WCMC) survey provided protected area expenditures in 108 countries that manage 3.7 million square kilometers, or more than 28% of the global protected area system (James et al. 1999). Additional data from the gray literature—unpublished annual reports, consultants’ findings, working papers, and other materials—produced budgetary information for another 2.55 million square kilometers of global protected areas (WCMC 1992, Balmford and Long 1995, Balmford et al. 1995, APN 1997, Balmford and Gaston 1999). No expendi44 BioScience • January 2001 / Vol. 51 No. 1

ture data for Antarctica (14.2 million square kilometers, 0.02% protected) were available, so we omitted it from our analysis. Overall, we obtained budget information for 47.5% of the global protected area system. To obtain an estimate of expenditures for global protected areas—and of the additional funding requirements discussed below—we divided the countries of the world into 10 economically and ecologically similar regions. Within each region, the available data were extrapolated to obtain an estimate for the entire region. Global cost estimates represent a sum of the 10 regional estimates (Table 2). Based on figures from the mid-1990s, an estimated annual total of $6.0 billion is spent on management of the global protected area network. Expenditure varies widely across regions, particularly between the developed and developing regions (Table 2). The four developed regions account for 88.3% ($5.27 billion) of global protected area spending, or an average of $929 per square kilometer protected. By comparison, the six developing regions spend an estimated $695 million annually on protected areas, or $93 per square kilometer. About 15 developing countries surveyed in the mid1990s reported budgets below $10 per square kilometer per year (James et al. 1999).

Funding shortfalls Most respondents to the WCMC survey noted that current expenditures on protected areas are inadequate to meet their stated conservation objectives (James et al. 1999). The survey reported estimates of funding shortfalls from protected area managers in 52 developing countries and from 14 developed countries. These estimates formed the basis for an extrapolation of protected area budget shortfalls for the developing countries and for Europe; data were not sufficient to make similar estimates for the remaining developed countries, so we assumed that their budgetary shortfalls average 10% of actual expenditure. An extrapolation of the shortfall estimates for each region indicates that an additional

1.58

0.01

7.48

5.67

Asia (developing)

Pacific

Developing regions total

Developed regions total

174

2.07 Africa

453

1.04 North Africa/Middle East

13.16

0.66 Russia and CIS

World total

2.12 Latin America

Notes: All figures are in millions, except those in italics, which indicate per-square-kilometer costs in dollars; all costs are annual (survey and purchase annual payment calculated at 5% interest over 30 years).

4,947 3,347 1,082 10,656 7.44 3,443 3.06 270

0 1,498 196 4,768 0.64 623 0.04 164

4,947 1,850 886 5,888 6.80 2,820 3.01 106

25 172 135 549 0.05 430 0.04 7

1,283 442 204 1,407 1.07 648 0.51 32

1,896 437 227 1,392 1.57 721 0.63 26

231 263 57 839 1.15 182 0.25 11

268 292 254 930 1.79 808 1.55

242 10 772 1.17 31 0.03 17

0.04 East Asia (developed)

297 140 57 86 195 188 253 122 567 359 7 500 1,375 184 915 161 2,290

1.11 Australia/New Zealand

Developing Regions

0.60 Europe

216 102 51 78 43 41 245 118 105 67 35 2,673 695 93 5,271 929 5,967

14

1,243

0 454 187 1,445 0.03 595 0.01 26

0 68 9 218 0.23 29 0.03 9

0 943 0 3,001 0.34 0 0.00 53

0 33 0 104 0.03 0 Developed Regions 0.00 76

335 85 505 837 30 27 45 1,231 3,350 854 1,171 1,941 297 268 453 12,308 3.92 North America

Survey Scenario 1 cost Added area (1996 dollars) (1996 dollars) Estimated shortfall (sq. km) Current spending (1996 dollars) Protected area (1996 dollars)

Table 2. Annual cost of a globally representative protected area system

Scenario 1 Cost (1996 dollars)

Scenario 2 Added area (sq. km)

Scenario 2 Cost (1996 dollars)

Scenario 1 Management (sq. km)

Scenario 2 Management (1996 dollars)

Compensation payment (1996 dollars)

Roundtable $2.3 billion is required each year to protect the world’s existing nature reserves effectively (Table 2). The developing countries account for 60% of this total ($1.376 billion annually), or an average shortfall of $184 per square kilometer. Hence, on average, only about 34% of the needs of protected areas in these countries are met. The geographical variation in reserve costs indicates the possibility of some interesting conservation bargains. The annual funding shortfalls for Latin America and sub-Saharan Africa are less than $300 million each (Table 2), suggesting that adequate conservation of the nature reserves throughout much of the tropics could be accomplished for a relatively small sum, if the estimates are roughly correct. Donor agencies and conservation organizations may not realize that such a relatively small investment could make such a big difference in conservation efforts. Effective management of protected areas requires a level of funding equal to the actual budget plus the estimated shortfall. This amount averages $1090 per square kilometer in developed regions and $277 per square kilometer in developing regions. Effective conservation costs vary widely among the developing countries, from a mean of $164 per square kilometer in Russia and the Commonwealth of Independent States (CIS) to over $3000 per square kilometer in the far smaller reserves of the Pacific. Sub-Saharan Africa has effective conservation costs averaging $240 per square kilometer, close to the $200–230 per square kilometer estimated in other studies (Bell and

January 2001 / Vol. 51 No. 1 • BioScience 45

Roundtable Clarke 1984; Leader-Williams and Albon 1988). The effective conservation costs vary among regions because of differences in population densities, level of economic development, and geographic characteristics of protected area systems (James et al. 1999).

Expanding the network The existing network of reserves is not sufficiently extensive for the task of maintaining biodiversity into the future (Soulé and Sanjayan 1998). The World Conservation Union advocates that at least 10% of the land area of each nation or ecosystem be set aside for conservation (IUCN 1993). Other authors suggest that far more land should be set aside for conservation, perhaps as much as 50% of the Earth’s land area (Soulé and Sanjayan 1998). Such high levels of protection are reflected in new conservation initiatives in both developed and developing regions, such as the proposed Wildlands Project for North America (Mann and Plummer 1993) and the somewhat less ambitious Peace Parks initiative already under way in southern Africa (Hanks 1997). However, for the purpose of calculating the cost of global biodiversity conservation, we focus here on the more modest resource requirements for attaining IUCN’s 10% goal. In setting its objective of 10% protection, the IUCN provided no clear guidelines as to the ideal distribution of reserves across management categories. Because the conservation benefits of more strictly protected areas (categories I, II, and III) are likely to differ in important respects from those that allow greater human intervention (categories IV, V, and VI), we consider two scenarios for expanding the global system of reserves. First, the protected area network in each region might be increased to 10% while maintaining the current proportions of protected areas in each category (scenario 1). Second, the network of more strictly protected areas (IUCN categories I, II, and III) might be increased to 10% in each region without expanding existing category IV–VI areas, giving a stronger overall level of protection (scenario 2). Scenario 1 would require an additional 3.1 million square kilometers spread across all categories, whereas scenario 2 would require an extra 7.4 million square kilometers of reserves in categories I, II, and III. Scenario 1 expansion would result in slightly more than 10% coverage because our hypothetical reserve expansion program entails applying the 10% target to each region in turn, and some have already exceeded this goal. Scenario 2 would result in about 15% coverage because existing category IV–VI reserves (currently 4.7% of total area) would be added to the 10% coverage in more strictly protected reserves (categories I, II, and III). Under both scenarios more than 90% of the necessary expansion falls in the developing regions (Table 2). To estimate the total expenditure required under the two scenarios, one must assess the cost of surveying potential areas for new reserves, as well as buying and managing the sites actually selected for protection. Initial biodiversity surveys are required to ensure an ecologically representative reserve system; these surveys should be conducted not only for 46 BioScience • January 2001 / Vol. 51 No. 1

currently unprotected land but also for existing reserves (unless the biota of these is already well known), so that gaps in the present system can be identified. The limited data available on the cost per unit area of biodiversity surveys (Balmford and Gaston 1999) suggest that it averages approximately 30% of the annual cost of effective reserve protection per square kilometer (mean ± SE [standard error] = 0.29 ± 0.14; N = 5 countries). If 20% of world land area is surveyed (a total of 27 million square kilometers), then applying the 30% ratio to the effective conservation costs for each region suggests that the onetime cost of these surveys worldwide would be approximately $4.2 billion. This figure, although probably adequate for reserve planning, falls far short of that required for more detailed monitoring. Even this level of survey effort would require an enormous increase in taxonomic capacity, especially in the developing regions. Thus, we assume a 30-year implementation program for the necessary biodiversity surveys. Spreading the $4.2 billion investment over 30 years (at 5% interest) would reduce the annual cost to $271 million (Table 2). Land purchase accounts for the largest cost component of the program. Regional land costs can be approximated very roughly from the ratio of observed purchase costs of conservation areas at fair market value (Balmford and Gaston 1999) to the per square kilometer cost of effective protection (mean ± SE = 48.9 ± 21.2; N = 8 countries). The purchase cost of extending the reserve network in each region equals the estimated regional land price times the required area. If this calculation is made for each region and summed, the global land purchase costs are $52.9 billion under scenario 1 and $163.8 billion under scenario 2. A 30-year implementation period (at 5% interest) would reduce the annual acquisition costs to $3.4 billion for scenario 1 and $10.7 billion for scenario 2 (Table 2).

Future management costs Management costs of these additional reserves can be calculated for each region from the product of the new reserve area and the cost of effective protection in each region. Scenario 1 requires an additional 3.06 million square kilometers of reserves, at an average annual management cost of $354 per square kilometer. Scenario 2 requires an additional 7.44 million square kilometers, at an average management cost of $450 per square kilometer. Scenario 2 has a higher average management cost because a greater proportion of area is in the more expensive developed regions. These calculations yield an annual increase in global reserve management costs of $1.1 billion (scenario 1) or $3.3 billion (scenario 2). Before the completion of the expansion program, however, these additional management costs would be lower.

Opportunity costs Strictly protected areas impose significant opportunity costs on local communities, particularly in developing countries (Adams and McShane 1992, Norton-Griffiths and Southey 1995, Inamdar et al. 1999). In this context, opportunity

Roundtable costs refer to the cost of lost access to resources or development opportunities when a protected area is established. Historically, these opportunity costs were often ignored by protected area agencies, which generally excluded local people from reserves (Anderson and Grove 1987). The past two decades have seen a major shift away from this “fortress conservation” approach toward a system that acknowledges opportunity costs and attempts to compensate for them by encouraging an expansion of the use of goods and services generated by reserves (Hales 1989, Adams 1998). However, as the notion of coupling reserve protection with local development via natural resource use has gained ground, commentators have begun to argue that this approach could greatly reduce the conservation value of protected areas (Prins 1992, Barrett and Arcese 1995, van Schaik et al. 1997, Brandon 1997, Oates 1999, Robinson 1999, Terborgh 1999). Thus, we propose a third approach: direct financial compensation for the opportunity costs associated with reserves. Following this approach, communities denied use of existing category II–IV protected areas in the developing world would be compensated. Opportunity costs are most significant in category II–IV protected areas, as category I areas are mostly uninhabited and category V and VI areas allow substantial resource use. We concentrate here on existing protected areas because opportunity costs associated with new reserves are already addressed in the land purchase element of our hypothetical reserve expansion program. For the existing reserves in categories II, III, and IV, full compensation would require a payment equal to the annual value of the lost resources. This amount can be estimated from the land price at fair market value, because that figure equals the discounted future value of the land in its alternative use. Hence, the annual opportunity cost of reserves is equal to their land value multiplied by the discount rate. The developing countries have 3.62 million square kilometers under protection in categories II, III, and IV, or 48.3% of their reserve system. Drawing on the regional land costs derived above, the total land value of all these reserves is estimated to be $49.5 billion. Assuming a discount rate of 10%, annual compensation for these existing reserves should thus be approximately $4.9 billion. The compensation payment averages $1365 per square kilometer per year—a significant amount, considering that most parks in developing countries are run on only a few hundred dollars per square kilometer per year. For example, the communities surrounding Mikumi National Park in Tanzania, a reserve of 3230 square kilometers, would collectively receive $2.6 million a year in compensation. The distribution of such payments poses major challenges. Foremost, the payments would have to be administered in such a way that they create ongoing incentives to local people to conserve park resources. Monies would have to be distributed on a small scale, in ways that are sensitive to the needs of local communities. A system would have to be developed for monitoring compliance with conservation objectives. And a transparent and fair registration program would be needed for determining the eligibility of recipients. Key players in

building the necessary institutional capacity might include nongovernmental conservation organizations, national environmental trust funds, development banks, and the Global Environmental Facility (a funding mechanism to assist developing countries in the implementation of the Convention on Biological Diversity). The scale of institutional needs implies a prolonged period before full implementation— probably (in line with the protected area expansion program) about 30 years. This new plan may be more effective, in both economic and conservation terms, than either a simple fortress approach or the coupling of compensation to exploitation of resources within reserves. The program avoids the negative effects on biodiversity inherent in either the fortress approach or the resource exploitation approach, while channeling funds directly to affected communities. Part of the direct compensation, in combination with community-based conservation programs, might be used to reduce local communities’ dependence on park resources by creating alternative employment opportunities. The $4.9 billion per year in compensation for opportunity costs would support quite a lot of experimentation with these programs.

Reserve costs: Overall requirements An effective program for global protected areas would require adequate funding for management of existing reserves, survey and purchase costs for an ecologically representative expansion, management budgets for new reserves, and compensation for opportunity costs. Current budgets run to $6.0 billion, and effectively protecting the existing reserve network would cost an additional $2.3 billion a year. Reserve expansion (including survey and purchase costs) would require $3.7 billion annually under scenario 1 and $10.9 billion under scenario 2, if implemented over a 30-year period. These new protected areas would require an additional $1.1 billion in recurrent management costs under scenario 1, $3.4 billion under scenario 2. Annual compensation for lost opportunities under both scenarios would entail an additional $4.9 billion annually. In sum, global reserve conservation would cost $18.0 billion annually under scenario 1 and $27.5 billion under scenario 2, of which only $6.0 billion is spent at present. These additional expenditures would result in a much more even distribution of resources for global biodiversity conservation (Figure 1b). Under full implementation of scenario 2, annual spending on protected areas would increase from $0.7 billion to $14.9 billion in the developing countries, and from $5.3 to $12.6 billion in the developed countries. The proportion of global biodiversity spending in the developing countries would rise from 12% at present to 54% after implementation. Annual conservation spending in Latin America would rise from $216 million to $2878 million, in Africa from $245 million to $4248 million, and in developing Asia from $105 million to $3836 million. January 2001 / Vol. 51 No. 1 • BioScience 47

Roundtable a

b

Figure 1. Funding shortfalls in the global protected area network: (a) Current protected area funding, $6.0 billion annually; (b) required protected area funding, $27.5 billion annually.

The wider matrix Even an ecological network of reserves with adequate financing will be insufficient to ensure the maintenance of ecological and evolutionary processes (Gaston 1994, Balmford et al. 1998, Soulé and Sanjayan 1998). These processes typically take place over scales far larger than the size of even the biggest protected areas (Mace et al. 1998). Moreover, all reserves (and especially smaller ones) are vulnerable to edge effects and, unless connected to other blocks of habitat, they stand to lose many of their species in the face of impending climate change (Huntley 1995, 1998). Finally, many 48 BioScience • January 2001 / Vol. 51 No. 1

species are not suited to conservation in reserves, depending instead on relatively benign conditions in the wider, nonreserved matrix (Pimentel et al. 1992, Franklin 1993, Bignal and McCracken 1996, Pain and Pienkowski 1997, Krebs et al. 1999). Hence, maintaining biodiversity within the human-dominated environment—the agriculture, forestry, freshwater, and coastal sectors—is essential for the long-term conservation of biodiversity. Perhaps the largest component of the wider matrix subject to human disturbance is the world agriculture system, which covers 37% of the Earth’s land surface (FAO 1995). Two separate estimates put the cost of protecting biodiversity within the agriculture sector at approximately $2.4 billion per annum for the United Kingdom alone (Jenkins 1990, Pretty 1999). An extrapolation of this figure, based on the fact that the United Kingdom is responsible for about 1% of global cereal production (FAO 1995), yields an estimate of $240 billion per year for global agricultural remediation. Although this estimate is very crude, it is not likely to underestimate global costs significantly, because the UK agricultural system is one of the most intensive in the world and the remediation costs per unit of output are likely among the highest in the world. The costs of achieving conservation within the wider matrix outside the agriculture sector are even more difficult to evaluate. The best available estimates come from Agenda 21 (United Nations 1993), which puts annual global conservation-related needs at $34 billion for forests, $14 billion for marine and coastal areas, and $1 billion for freshwater ecosystems (in 1996 dollars). These figures do not appear to have been derived from a systematic study of the costs of well-defined conservation programs within each sector; instead, they appear to be the best estimates of the advisory groups that contributed to Agenda 21, an intergovernmental document

Roundtable originating at the 1992 United Nations Conference on Environment and Development (the Rio Earth Summit). The figures for marine areas, freshwater ecosystems, forests, and agriculture suggest that conserving biodiversity in the wider matrix of landscapes would cost perhaps $290 billion per year. This means that a comprehensive global biodiversity program with a representative and well-managed reserve system at its core ($28 billion for scenario 2) and biodiversity conservation measures taken throughout the wider landscape ($289 billion) would cost approximately $317 billion annually.

a

Is money enough? Given the pressure in developing countries to convert land to agricultural use, is it feasible to think about expanding protected areas? Projections show that developing country populations will double by 2050, creating enormous pressure to expand agricultural output (RIVM/UNEP 1997). The United Nations Environment Programme projects that agricultural land use will rise from 37% to over 50% of world land area (excluding Antarctica) by 2050, with virtually all of the expansion taking place in the developing countries (the developed countries are expected to continue to reduce agricultural land use). Figure 2 illustrates projected global land use change over the period 1993–2050, based on UNEP projections and on our calculations for protected areas. In Figure 2,“other” land use includes natural grasslands, deserts, mountains, and polar regions (excluding Antarctica). Additional land use data on forest cover and urban areas are taken from FAO (1999) and Alexandratos (1995). We have assumed that reserves will expand from the present 8% of world land area to about 15% (scenario 2). Inevitably, some of the proposed 7% of global land moved into reserves will conflict with the expansion of agricultural land use, but much of it will be located in the nearly 50% of world land area not in agricultural use, such as alpine, forest, arid, and wetland areas. There obviously would be some local conflicts with agricultural land users, but strategic implementation of the program could optimize protection within the remaining half of global land area not in agricultural or urban use. This would result in, for example, a high level of protection for the world’s remaining forests in 2050—possibly close to 42% (Figure 2b). Furthermore, given the growing scarcity of land, would an annual investment of $317 billion be adequate to conserve biodiversity? The $317 billion figure may underestimate the cost of global biodiversity conservation for two reasons. First, a core reserve system of 10% of the Earth’s land area in strict protection (plus an additional 5% in multiple use reserves) may be insufficient to ensure long-term conservation, particularly given ongoing climate change and the objective of preserving evolutionary processes. Much more land placed in reserves may eventually be needed to accomplish global conservation objectives. Likewise, biodiversity conservation in the wider matrix of landscapes also may cost more than suggested above. For example, estimates of the cost of agricultural

b

Figure 2. Future conversion of natural ecosystems: (a) Global land use, 1993; (b) global land use, 2050 (projected). remediation are complicated by the need to convert additional land to agricultural production, which could arise in the face of potentially lower yields per unit area. Second, for several reasons the cost of reserve expansion is difficult to project accurately. The lack of well-defined property rights and infrastructure in developing countries make the costs of land there appear lower than in developed countries, for example. As these institutional constraints are lifted in the course of economic development, land costs are likely to rise. Offsetting this expectation of steadily rising land costs is the fact that, in many cases, land for reserve expansion will already be owned by governments. This is particularly true in the developing countries, where governments own much of the nonagricultural and noncommercial land. Finally, the study assumes that the $317 billion global biodiversity program could be implemented effectively. Aside from securing long-term funding (discussed in detail in the next section), the effective implementation of a global January 2001 / Vol. 51 No. 1 • BioScience 49

Roundtable biodiversity program would depend upon the development, at both national and international levels, of conservation institutions that have broad-based support. Developing such support will require long-term political commitment, education and public awareness, and participation by civil society and the private sector, as well as by the national conservation and parks agencies. The Convention on Biological Diversity recognizes all of these needs and provides a legal framework for the evolution of such a global program. We have anticipated these requirements and limitations in our calculations by assuming a 30-year implementation period. Although we recognize that these institutional challenges are great and the projected expenditures may not be sufficient, the scale of land use change projected over 30 years demands concerted action to ensure the future level of diversity on the planet.

How to afford a global conservation program In total, the annual funding requirement of approximately $317 billion for global biodiversity conservation dwarfs the gross national product of many nations (WRI/UNEP/ UNDP/World Bank 1998). However, conservation in reserves could be achieved for about 1%, and conservation in the wider matrix for about 10%, of the annual value of natural ecosystems (Pimentel et al. 1997). Using less conservative estimates of ecosystem value (Costanza et al. 1997), the figures are 0.1% and 1%, respectively. The annual premium for global biodiversity conservation is thus minuscule relative to the value of the assets being insured. Equally important, the total costs of conservation are small when contrasted with the scale of “perverse” subsidies—the environmentally harmful payments already being made to support agricultural production, energy use, road transportation, water consumption, and commercial fisheries. These governmental measures keep resource prices for producers and consumers below market levels, thereby encouraging resource overexploitation and attendant environmental problems. Environmentally perverse subsidies total between $950 billion (van Beers and de Moor 1999) and $1450 billion per year globally (Myers 1998). The $950 billion estimate attributes $325 billion to the agriculture sector, $225 billion to automobile users, $205 billion to energy users, $60 billion to water users, $55 billion to manufacturing industries, $35 billion to forestry, $25 billion to mining, and $20 billion to fisheries (van Beers and de Moor 1999). A globally representative and adequately managed nature reserve system could be accomplished for about 2% of the annual expenditure on such environmentally harmful subsidies. A truly comprehensive global conservation program that addresses conservation issues in all the major natural resource sectors could be established for only one-third of the cost of these subsidies. The entire bill for conservation could be readily met by redirecting a small fraction of these subsidies; moreover, because they inflate land prices, a reduction in perverse subsidies would directly reduce the conservation 50 BioScience • January 2001 / Vol. 51 No. 1

bill. The challenge therefore lies in redirecting patterns of government expenditure to favor environmental sustainability, not in artificially lowering the cost of resource use for producers and consumers. However, these environmentally harmful subsidies are not necessarily concentrated where conservation needs are greatest. Only about one-quarter of perverse subsidies are located in the developing countries, and most of these are attributable to the transitional countries of Russia and the CIS (van Beers and de Moor 1999). In fact, the study by van Beers and de Moor (1999) identified less than 10% ($100 billion) of global perverse subsidies in the developing countries outside the former Soviet Union (although in certain sectors, such as forestry, perverse subsidies in developing countries may be considerably higher than estimated). Given their far greater scope for cutting environmentally harmful subsidies, it seems reasonable to expect the developed countries to assist the developing world with meeting the costs of a global biodiversity conservation program. The Convention on Biological Diversity provides both a mechanism for such a redistribution of funds and the legal basis for the removal of environmentally perverse subsidies. Parties to the convention are required to identify processes and categories of activities that have significant adverse impacts on the conservation and sustainable use of biodiversity and to regulate or manage these activities with a view to ensuring adequate in situ conservation. Subsidization of resource use must be considered one of the most important categories of environmentally harmful activities undertaken by governments, given the scale of public resources involved. In addition, the convention requires developed country parties to provide additional financial resources for biodiversity conservation to the developing countries; a mechanism for distributing these funds, the Global Environmental Facility (GEF), has already been established. Since its founding in 1992, much of GEF’s biodiversity investment of over $1 billion has been directed to protected areas. Implementation of the global biodiversity program outlined in this article would require a major increase in the administrative capacity of GEF. For instance, the protected areas component alone would require a multiplication of GEF’s biodiversity resources. The program would also require a significant strengthening of national conservation and park management agencies throughout the developing world, a challenge that is potentially even more difficult. Private sector institutions could also be involved in the implementation of a global conservation program. For example, privately held land conservancies already contribute to biodiversity conservation goals in many countries (Adelman 1994, WCMC 1996). These and other private sector activities could be explicitly acknowledged and incorporated into the global conservation program.

Conclusions Numerous documents have outlined strategies and priorities for global biodiversity conservation (IUCN/UNEP/WWF

Roundtable 1991, UNEP 1992, WCMC 1992, WRI/IUCN/UNEP 1992), but none has presented detailed cost estimates. Although this shortcoming is understandable in light of the paucity of hard data, the ill-defined nature of the costs has undermined efforts to galvanize support for a global conservation program. Better information on the actual costs of achieving specific conservation objectives may help international conservation efforts, particularly since these costs may not be as high as policymakers suspect. The analyses presented in this article, which couple WCMC’s database on protected area budgets with data from the gray literature, suggest that current expenditures on reserves run at about $6.0 billion per year. We project that improving protection, expanding the network in line with IUCN guidelines, and implementing an innovative plan for meeting the opportunity costs of local communities could all be achieved for an annual increase in expenditure of $12.0 billion to $21.5 billion. The cost of biodiversity conservation in the wider matrix remains an area for which data are almost nonexistent. Our preliminary review suggests that these costs may well be 10 times higher than those of protected areas, which puts into perspective the remarkable conservation bargain presented by parks and reserves. While all of the estimates presented in this article are at best approximate, they are based on a more transparent and data-driven set of calculations than any previous figures. We hope that the estimates set out here will be refined as more data on the costs of effective reserve management, and accommodation of biodiversity beyond reserves, become available. Lack of understanding of the costs of biodiversity conservation has contributed to the impression that global conservation strategies are unrealistically expensive, when in fact they are not. A small shift in government expenditures toward environmental sustainability could preserve a substantial proportion of global biodiversity for current and future generations. What is needed now is for parties to the Convention on Biological Diversity to take the first step toward reducing environmentally harmful subsidies while linking this progress to funding global biodiversity conservation. Effective conservation lies well within our means.

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