| A. Economies of scale versus transaction costs | |
A. Economies of scale versus transaction costs
One of the attractions of Transboundary Natural Resource Management is the belief that there are economic efficiencies to be captured that can increase the return on investment in biodiversity conservation. The lack of public access to information on capital investment and recurring costs related to protected areas in Africa (Wilkie et al. 2000a) unfortunately means that no data exist to confirm or confute the reputed cost savings associated with TBNRM.
Hypothetically, direct economic benefits can be expected when neighboring management authorities share the costs of purchasing and maintaining capital equipment and share research, training, and tourist facilities that would otherwise lie idle for much of the time. Where equipment and facilities are fully utilized by a management authority, no cost savings should be expected. Indirect economic benefits may also be accrued as a result of the free flow of information among neighboring management authorities. For example, the timely exchange of information about the activity of law breakers should enable neighboring authorities to reduce the number of law enforcement patrols they maintain.
As transboundary management moves from local collaboration between neighboring management authorities to the harmonizing of national resource management policies, the political and transaction costs are likely to increase, at least in the beginning. In the absence of firm data, the size of these costs in practice is hard to estimate. A couple of interesting questions emerge: if TBNRM generates such cost savings, (a) why have more TBNRM initiatives not been developed? and (b) why do the existing TBNRM efforts not document these purported cost savings?
B. Financial feasibility: Lessons from protected areas
In sub-Saharan Africa, conservation of biodiversity is increasingly predicated on finding ways to insure that the economic value of maintaining a landscape in its natural state meets or exceeds the expected returns from converting the area to an alternative land use, such as agriculture. Saying that African biodiversity constitutes a priceless national heritage will not result in these resources being conserved unless, as Richard Bell notes, we are willing to define the price and pay it (Adams and McShane 1996). Quite simply, if they are to remain wild and intact, Africa’s wildlands must generate, directly or from government and donor contributions, funds sufficient to cover both the operating costs of conservation and the opportunity costs of foregoing other forms of resource use. To understand the scale of fund raising required it is critical (1) that more information is made available on the actual capital and recurring cost expenditures on protected areas; (2) that we develop empirically based tools for estimating protected area management costs under different threat regimes; and (3) that we fully account for the opportunity costs of setting aside natural resources within protected areas.
Governments and donors spend approximately US$ 10 million per year on protected area management in Central Africa. Fully funding the staff and infrastructure needed to insure the long-term persistence of species within the present protected area network in Central Africa would cost three times this amount. The costs of biodiversity conservation are a function of the human pressure on natural resources, which in turn is related to the ratio of area to perimeter of a given conservation area, proximity to roads and population centers, and the price of forest goods. As a result, most protected areas in Central Africa are typically large and in isolated areas, where human pressure and the costs of management are relatively low. A system comprising a few big parks may not effectively represent the full range of biodiversity within a region, and some have argued for the creation of an additional network of small protected areas scattered throughout landscape that is dominated by human land uses. Such a network would cost more to manage than does a few large parks, however. Using a formula developed by the Africa Resources Trust for protected areas in Southern Africa, paying for conservation within five parks of 500,000 hectares each would require a total of approximately 350 staff, an annual investment of US$ 4 million (US$ 137 per square kilometer), and an initial capital expenditure of US$ 20 million. In contrast, a network of 500 much smaller parks covering the same total area would require 10 times as many staff, an annual investment of US$ 68 million (US$ 2,721 per square kilometer), and almost US$ 318 million in start-up costs.
The costs of biodiversity conservation outside of protected areas is much harder to estimate, as rarely if ever has it been quantified. Globally, spending on protected areas amounts to approximately 0.2 percent of national budgets. It might therefore be fair to assume that demand for biodiversity conservation is such that users of the landscape outside of protected areas would be willing to pay or forego 0.2 percent of the revenue they generate to minimize the adverse environmental impacts of land-use practices, and to conserve species and habitats on their land. In Cameroon, dense forest covers approximately 200,000 square kilometers, logging concessions occupy 80 percent of forests outside of protected areas, and agriculture occupies 14 percent of the forest landscape. Based on the relative contribution of the logging and agricultural sectors to GNP in Cameroon and on the area of forest occupied by each land use, the estimated cost to reduce environmental impacts on lived-in landscapes in Cameroon would be US$ 8 per square kilometer in logging concessions and US$ 95 per square kilometer in agroecosystems. The total costs for conservation-friendly land uses in forests outside of protected areas might be US$ 1 million per year in logging concessions and US$ 4 million per year in agroecosystems. Assuming a similar cost structure across Central Africa, the total costs for promoting more biodiversity-friendly resource use practices outside of protected areas might exceed US$ 40 million per year.
Conserving the full range of biodiversity characteristic of Central Africa will require investment in a network of protected areas and in efforts to minimize the adverse environmental impacts of economic land uses in the majority of forests that lie outside of protected areas. The estimated annual cost of this landscape approach to conservation in Central Africa would probably exceed US$ 70 million, or US$ 17 per square kilometer each year. This is a minuscule amount when compared to the US$ 1,200 per square kilometer per year that is spent on the management of national parks alone in the United States.
1. What are the likely sources of conservation monies?
Many authors have argued that, provided that most of the revenues collected from fees are specifically allocated for conservation, many protected areas in developing countries could substantially increase their revenues through a combination of tourism charges—to a large degree targeted primarily at foreign visitors to parks and reserves, but also including a sliding scale for national tourists—and fees and taxes that apply primarily to individuals or businesses resident in the nation. (Aylward et al. 1996; de la Harpe 1996; Dixon and Sherman 1991; Durban and Ratrimoarisaona 1996; Ferraro and Kramer 1997; Hannah 1992; Howard 1995; MacKinnon et al. 1986; Sherman and Dixon 1991).
Spergel (Spergel et al. 2000) notes that many nations have attempted to raise monies for conservation through: park entry fees, airport entry and departure taxes, road tolls, dive and tracking fees, hotel taxes, and hunting and fishing licenses and trophy fees (i.e., tourism fees and taxes); and property and sales taxes, logging and mining concessions fees, watershed protection charges (users of water are charged to ensure that upstream watersheds are protected, thus ensuring a regular supply of water), pollution and resource degradation fines, lottery revenues, and fuel taxes (i.e., individual and corporate taxes).
a. Tourism
The belief that tourism fees can contribute significantly to protected area management in the Congo Basin is optimistic at best. Tourism is typically economically viable only where charismatic species exist in “safe” areas that are not more than a few hours by four-wheel-drive vehicle from an international airport. On the face of it, this precludes the possibility of most of Central Africa ever engaging in economically viable tourism; unless tourists can easily visit Congo Basin sites, these sites are unlikely to attract large numbers of fee-paying visitors. (Wilkie and Carpenter 1999b).
Gorilla tourism in Rwanda, Uganda, and the Democratic Republic of Congo was, however, a major source of finance both for protected areas and for the national economies until civil unrest scared visitors away (Adams and McShane 1996; Butynski and Kalina 1998). Dzanga–Sangha in the Central African Republic also has decent tourist facilities, and tourists can be assured of seeing forest elephant, lowland gorilla, and often bongo. While tourist fees are for the first time covering the recurring costs of providing tourist services (Blom 2000), however, the high travel costs relative to those of other destinations in Africa, a bone-shaking 8–12 hour drive on a dry day from the nearest airport, and civil unrest make it highly unlikely that tourism revenues will ever recover the costs of donor investment in tourist infrastructure, let alone contribute significantly to the recurring costs of park management. Similarly, La Lopé reserve in Gabon supports large populations of elephant, gorilla, and drills, and has direct charter flights and train access from Libreville, yet the air-conditioned tourist hotel loses money (Lee White, pers. comm.). In Odzala National Park in the Congo, projections for increasing gorilla tourism suggest that if annual visitation rose to 480 tourists, more than US$ 300,000 would be generated for park management and the national treasury—but after tax, the tour operator would only be expected to make US$ 19,000 in profit (Conrad Aveling, pers. comm.). If tourism is marginal in the best established and most accessible sites, with abundant and charismatic wildlife, prospects for a viable tourist industry in the more isolated, less well-endowed protected areas in the Congo Basin are not encouraging.
b. Sport hunting
Sport hunting, particularly of elephants, has proven an effective approach to raising local revenues and financing protected areas in southern Africa (Cumming 1989; Leader-Williams et al. 1996; Wilkie and Carpenter 1999c). However, governments, donors, and international conservation NGOs are uncertain as to the potential role that safari or trophy hunting could play in financing biodiversity conservation in the Congo Basin, because almost no quantitative information exists on (1) the number of safari hunters visiting the region, (2) the number of animals harvested by safari hunters each year, and (3) the revenues generated from safari hunting (Wilkie and Carpenter 1999c). Moreover, the average biomass (30,000 kilograms per square kilometer) and productivity (150 kilograms per square kilometer per year) of large mammals (i.e., mammals of greater than 1 kilogram adult body size) within tropical forests is only 10–20 percent of that typical of tropical grasslands (Robinson and Bennett 1999a). Thus off-take rates and possibly profits from safari hunting might be one-tenth that expected from savannas in Eastern and Southern Africa.
c. Marketing NTFPs
Non-timber forest products (NTFPs) are harvested by most rural families, are consumed by both rural and urban households, and are important as supplementary income and as an insurance safety net to smooth consumption during and after shocks. The most economically valuable NTFPs are also typically the most rapidly overharvested, resulting in the depletion of wild populations and a shift toward domestication and on-farm production (Sunderland et al. 1999; Wilkie 1999). If NTFP extraction were to be reduced to ecologically sustainable levels, harvester profit margins would decline and would possibly serve as an incentive to convert the forest to alternative, more lucrative uses, such as coffee or cacao plantation. More often than not, sustainable harvesting of wild resources is not economically sustainable, and vice versa (Freese 1997 and 1998).
d. Fees and taxes
Resource-use fees and taxes (taking lotteries to be voluntary taxes) on the citizens of Central African nations may not generate significant revenues for resource conservation because: (1) per capita income is typically low, and thus capacity and willingness to pay for conservation is extremely limited; (2) the size of domestic economies is typically small, as consequently is the tax base; (3) real estate markets are either nonexistent or are limited to urban areas; and (4) much of the economy and credit systems are informal. Similarly, though corporate taxes could be increased, or at least rigorously collected, it is doubtful that governments would earmark the additional revenues for biodiversity conservation when other, much more pressing issues, such as public health and education, are severely underfinanced.
e. Trust funds
If insufficient and unreliable funding is the primary constraint to effective management of protected areas, then trust funds are the holy grail of conservation financing. The World Wildlife Fund is investigating the possibility of developing a trust fund for the protected-area system in Cameroon and for Dzanga–Sangha reserve in the Central African Republic, and WCS is exploring opportunities for endowing the Nouabale–Ndoki National Park (NNNP) in northern Republic of Congo.
Culverwell (1998) estimates the recurring costs for effective management of the present protected-area system in Cameroon to be US$ 1.9 million. This would rise to more than US$ 2.9 million if all proposed areas were to be included in an extended protected-area network. To generate sufficient interest to pay all management costs of the network, a trust fund would need to be established at a level of US$ 30–40 million (Moye 1998). In the Republic of Congo, a trust fund of US$ 6–10 million would be needed to cover the estimated US$ 600,000 of recurring costs to manage the NNNP. Although several attempts have been made to establish conservation trust funds in the region, few have been adequately capitalized because donors appear resistant to relinquishing control and losing brand recognition. As a result, the trust fund concept needs to be revised to allow single donors to fully capitalize a fund that is designed to achieve specific measurable targets. In this way donors would retain sole ownership and would be explicitly aware of what they are “buying.”
2. Demand for conservation and unwillingness to pay
Global demand for protected areas (i.e., parks, reserves, and world heritage sites) is small relative to demand for the economic uses of natural landscapes. This is reflected in the fact the nations rarely, if ever, set aside more than 6 percent of their terrestrial landscapes for parks and reserves in which biodiversity conservation is the primary, or sole, land use. In most nations, more than 90 percent of the landscape is zoned for resource extraction and land-cover conversion. This is unsurprising as protected areas seldom pay for themselves—on the contrary, they usually result in substantial management and opportunity costs for the local, national, and international economies. Some conservation biologists nonetheless argue that 10–50 percent of the terrestrial landscape must be placed under some form of biodiversity management if we are to ensure the long-term survival of most extant plant and animal species.
If human land and resource use did not adversely impact biodiversity there would be no need for conservation investments, which most often require that existing levels of use are drawn down to ensure that options for use are retained for the future. So who is to pay for the resource management needed to ensure a drawdown in resource use levels, and who is to pay the opportunity costs of forgone benefits?
User fees are unlikely to generate revenues sufficient to cover the recurring costs of managing protected areas, international NGOs appear unwilling to attribute the profits from their substantial endowments to establish trust funds to cover the management costs of key protected areas in perpetuity, and national governments have more pressing uses for scarce capital. The onus thus falls to donors and international conservation NGOs, which must decide whether the global value of biodiversity within the Congo Basin is sufficient to warrant taking responsibility for financing its conservation over the long term.
The international community may argue that the global value of biodiversity in the region is significant, but given the community’s past performance it is unlikely that it will raise its financial commitments. Consequently, donors must prioritize their investments, and must decide which protected areas in the Congo Basin warrant increases in support to ensure effective biodiversity conservation and which areas are to be fiscally degazetted. If they continue to underfinance too many protected areas and fail to make the hard choices associated with prioritizing protected area spending, most, if not all, protected areas within the Congo Basin will exhibit continued gradual degradation and progressive loss of biodiversity.