FUNDING AND ORGANIZATION
Now that we have prioritized what forest areas should be aside for reserves, we must focus on implementation and
management of these protected areas. Clearly all three steps will require a broad spectrum of participants from
local farmers to CEOs of multinational corporations to high ranking government officials. Without cooperation any
protected areas system is destined to fail.
FUNDING
Reserves are expensive to establish and maintain, as is forest management. FAO 1997 estimates that the forestry
sector alone is funded only 27% of what it requires, while the United Nations Conference of the Environment and
Development (1992) estimated the cost of protecting tropical forests through sustainable development at $30 billion
per year. The countries in which reserves and forest management are most needed have neither the money nor the
interest in funding these projects. The governments are far more concerned with supporting their people, developing
their country, and making interest payments on their debts. Thus some funding must come from the outside in the
form of loans, debt cancelation, and inhabitants. These can be organized and engineered by international organizations
with the consent of the countries' peoples. However, it important that more emphasis is placed on local resources
since outstanding debt obligations are growing to be insurmountable and effecting the ability of developing countries
to attract private international investors.
FUNDING METHODS
Debt Exchange
One method of financing conservation projects in developing countries is debt-for-nature programs where conservation
and other international organizations purchase a portion of a developing country's commercial debt at a discount,
or else persuade creditor banks to donate some of debt. Foreign debt can be purchased at 50 to 90% of its actual
value and sometimes far less. For example the organization, Conservation International purchased $650,000 worth
of Bolivian debt for only $100,000 when it initiated the first debt exchange program in 1987. In exchange for being
relieved of the obligation to repay a portion of international debt, the country agrees to set aside funds to promote
conservation by encouraging sustainable development, expanding environmental education programs, purchasing land,
and improving land management. By 1996, debt-for-nature agreements totaling nearly US$1 billion had been arranged
in sixteen countries including the tropically forested countries of Argentina, Bolivia, Costa Rica, Dominican Republic,
Ecuador, Guatemala, Honduras, Jamaica, Mexico, Madagascar, Philippines, Venezuela, and Zambia.
In March 1998, the US House approved a bill that authorizes $325 million over three years for debt-for-nature swaps.
Under the Tropical Forest Conservation Act, proposed by R. Portman (R-Ohio) and J. Kasich (R-Ohio),the US reduces
or forgives debt owed the US by developing countries in exchange for establishing forestry funds to be used for
conservation and promoting economic reform. The act mandates that projects are carried out at the local level by
NGOs, community organizations, and indigenous organizations. In his 2001 budget, Clinton proposed expanded funding
for these debt swaps.
Possible Funding Strategies for the Future
There are other means that may prove useful in financing reserves, although they have not been developed
to their fullest potential. Most of these are based on the concept that all nations should finance rainforest preservation
since the effects of deforestation will impact everyone. Since a few temperate nations have the strongest, most
stable, economies and most money to spend, they should be the primary financiers of these projects since the richest
environments are usually found in the world's poorest countries which can not afford to sponsor such projects.
To fund these projects, the government could reduce subsidies currently given to certain polluting industries.
Tradable Greenhouse Gas Budgets
Carbon Offset Programs
Bolivia's Noel Kempff Mercado National
Park
A global funding project seems like a plan with potential for sponsoring
reserves in the future. Rainforest and other reserves could be financed by a fund made up of contributions from
nations worldwide. This fund would draw its income from a tax levied on temperate zone nations scaled progressively
with its gross national product and its release of pollutants into the atmosphere. The host tropical countries
would receive regular payments from this fund to finance new environmental programs and to maintain the existing
ones. If the host nation failed to uphold its end of the bargain by oppressing native peoples, violating environmental
regulations, or failing to actually use funds for the proper causes, payments could be reduced or even halted.
This program could definitely work, but only if run efficiently and fairly so the peoples who live in and around
the reserves received their fair share of the funds. The program could not ignore the concept of sustainable development
without failing.
Another way to help ease debt pressures on tropical countries would be to reform the way companies of the industrial
world think about blocked funds. Blocked funds refer to a situation where a country cannot pay a foreign company
for services it performed and goods it provided. The foreign company often considers the debt to be uncollectible
in any reasonable amount of time. Instead of tacking on additional interest that will never be collected anyway,
the company could donate the blocked funds in exchange for guarantees of forest protection and still receive a
tax write-off from its own government for the charitable contribution. In the long run, the company would stand
to lose little (the write-off could cover the cost of the services performed) and gain a better reputation by helping
to save the planet.
One newly proposed concept to measure the economic value of unexploited forests is known as "forest capital."
Under the system, suggested at the World Commission on Forests and Sustainable Development, countries would be
rewarded for not exploiting their "forest capital." In exchange for forgoing income that could have been
earned from exploitation activities, countries would be granted credits by international financial organizations.
Like carbon dioxide and pollution credits, "forest capital" is a way to integrate forests into the global
economy as intact ecosystems.
Lower Taxes and Save the Environment
