With the Convention on Biological Diversity (CBD) Conference of the Parties (COP15) ongoing in Montreal, with the preparations for the Post-2020 Biodiversity Framework, and following the recent United Nations Framework Convention on Climate Change (UNFCCC) COP27 and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) COP19 considering the imminent biodiversity, climate and health crisis that is threatening us all, it is time for bold, coordinated and integrated global action.

The impacts on local communities as well as their central role in enabling ecosystem integrity and resilience and the essential climate nature-based solutions are being highlighted, and finance solutions are being sought, especially for key biodiverse areas and for the most climate-affected countries and communities.

The local costs and global benefits of biodiversity conservation

The main costs of biodiversity conservation are local and national in nature, consisting of direct costs of conservation and management efforts, human-wildlife conflict impacts, which can be devastating at local level, and the costs of not opting for other land and resource uses.

The benefits of local conservation efforts, however, go well beyond local and national direct revenues. They contribute globally to improved climate change mitigation through nature-based solutions, and to improved biodiversity integrity and ecosystem health, and thereby also to adaptation and resilience through securing ecosystem services, food security and sustainable economic opportunities. No less important, they protect intrinsic values of the natural world, including social, cultural, ethical, aesthetic and spiritual values.

Translated into monetary terms, a pioneering valuation attempt estimated the carbon capture value alone of one African forest elephant at $1.75-million (Chami, R., C. Fullenkamp, T. Cosimano, and F. Berzaghi. The secret work of elephants. Finance and Development, December 2020, pp. 58-62).

More comprehensive valuation would be likely to demonstrate a much higher scale of funding required to enable conservation and to pay for the great global service of the local custodians.

In such a financial analysis, we need to also take into account the global costs of biodiversity loss, land, water, and habitat degradation, compromised food security and resilience, and increased global climate change risks, as well as health hazards that can result from not opting for conservation, but rather for immediate high gain at local and national levels from destructive land and resource uses.

Externalities

Recognising the high local costs of conservation, with significant global benefits, means that some of the poorest communities in the world carry a large part of the conservation and climate burden for the rest of the world. They produce significant positive global economic and other externalities without being paid for this service, or even adequately compensated for the negative impacts they are subjected to as a result (an economic externality, negative or positive, is a cost or benefit of an activity with economic implications, experienced by an unrelated third party. The term was first introduced by Pigou in The Economics of Welfare, 1932).

Read in Daily Maverick: “Can a global conservation fund bridge the gap between global finance and the realities for indigenous communities?”

On the other hand, some of the richest countries, enterprises and individuals in the world enjoy the use of common resources and produce global negative externalities through negative impact on biodiversity loss and climate change without having to pay for it. While biodiversity-relevant and emission- and pollution-related taxes, fees, obligatory offsets and penalties do exist in many countries at the national level, there is no system that enables global taxing of major producers of global negative externalities.

Wildlife must pay its way?

Many conservation practitioners, governments and interest groups advocate the concept that “wildlife must pay its way” through direct revenues, from fees, payment for ecosystem services, tourism-related revenues, concessions and consumptive use of wildlife and other natural resources.

However, the potential access of local communities to such direct revenues varies dramatically between countries and between communities and is invariably limited and far from the scale of substantive funding needed to globally secure local conservation efforts, as well as sustainable welfare of the local custodians. Consumptive use of wildlife, such as trophy hunting, is also highly controversial, as I have written here and here in Daily Maverick.

Existing global funding solutions to supplement governments’ budgets for conservation and to compensate local communities residing in or around conservation areas, are voluntary in nature. They are either based on charity, donations, aid and compensation, or on voluntary exchange mechanisms such as voluntary offsets, carbon credits, wildlife conservation bonds, debt-for-nature swaps, or on partnerships.

Voluntary funding, whether through aid, compensation, partnerships or exchange mechanisms, can rarely meet the real scale of current finance needs, and more rarely provide sustainable long-term finance security.

Furthermore, the major weakness of voluntary funding is that it entails decision-making powers of donors or partners regarding how much they pay, to whom and for what, often failing to cover critical finance gaps of local priorities. Worse, they often have significant impact, and not always positive, on the lives of another country’s citizens. Adequate safeguards are not always in place.

Without a substantive, globally agreed and adequately enforced mechanism of checks and balances, carbon credits and other exchange mechanisms are also often exposed to corruption and can be the source of significant risks of a political, economic, social and environmental nature, and even of blunt exploitation.

A joint global responsibility fund

In previous articles including those cited above, I have framed the concept of a joint global responsibility fund in the limited context of wildlife crime mitigation as well as a sustainable alternative to trophy hunting.

Here I propose the concept in a wider context of an alternative ambitious funding model, or rather cost-sharing system, for a global collaborative effort to mitigate climate change and biodiversity loss and improve global resilience and sustainability through a joint global responsibility tax-based fund for biodiversity, climate and local communities.

Read in Daily Maverick: “Value of trophy hunting to conservation massively overstated: report”

The concept proposed here is based on the understanding that wildlife does pay its way, big time, by its actual existence, and that it is time to pay back globally for conservation and for the local custodians of biodiversity and nature-based solutions.

It is not about bilateral or multilateral aid, donation or compensation. It is about payment derived through taxing major producers of global negative externalities for the service of positive externalities, produced locally and provided to the world. Such payment must realistically reflect the value of the externalities produced at an adequate scale and meet the needs of local custodians to enable them to continue providing this service sustainably.

Taxing mechanism

Considering that the negative and positive externalities impacting biodiversity and climate globally are produced differentially and in different parts of the world, a global taxing mechanism would need to be established.

Effective implementation of such a global funding system that is based on administering tax funds collected in one part of the world to another would obviously have to overcome numerous challenges. It would have to be managed through an agreed, existing or new global finance management agency, and with an agreed and well-enforced set of adequate safeguards, checks and balances.

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Global taxing of governments, enterprises, organisations and even individuals for producing major climate- and biodiversity-related negative externalities with global impact, would require a well-defined, regulated and monitored set of criteria, guidelines and rules based on a sound science-based system of evaluating such negative externalities.

At the receiving end, an adequate mechanism would need to be established to enable the transfer of funds to local custodians of conservation such as conservation authorities, local communities and local organisations. The recipients would also have to be designated on the basis of agreed criteria, and a science-based system of evaluating the positive externalities that they produce.

Criteria, guidelines and regulations for the use of the funds by local custodians would also have to be agreed globally and through consultations with the relevant stakeholders at all levels. It is essential that these funds would be used for biodiversity conservation through support to national and local environmental protection and conservation agencies and other related entities, and for collective sustainability-inducing activities of local communities.

A major part of these funds should be directed to local communities, conservancies, and local organisations and associations to facilitate the engagement of the local custodians in sustainable management of their natural resources and conservation.

Specific programmes financed would have to be tailored on a case-by-case basis through consultations with the local stakeholders, and managed through locally indicated institutional structures under the overall guidance of the globally agreed criteria, safeguards, checks and balances.

Such sustainability-inducing activities can include creating sustainable job opportunities including conservation-related employment at all levels; best-practice capacity support for sustainable natural resources management, livelihoods and economic opportunities; support to developing holistic human-wildlife conflict-mitigation programmes; or extending access to best education at all levels.

Some part of the funding would inevitably be allocated to enable the function of the agreed global fund management agency and to local management and implementing support by governments, organisations or private-sector entities. However, the system to be created would have to ensure that the major portion of the funds gets to the target end beneficiaries, and will not “leak” to government coffers, international organisations or other mediating entities.

Implementing the proposed joint global responsibility fund will require a managing agency, a board of decision-makers comprising all key stakeholders at all levels, including adequate representation of local custodian groups, and a task force of experts in all relevant disciplines.

Can it work?

The proposed system may seem very ambitious, maybe even utopian, but I believe that through an open-minded joint effort of all relevant stakeholders, at all levels, it can work. If not, we must still find a solution, because the problem presented here has to be addressed if we want to secure ours and our planet’s survival.

Current finance mechanisms are insufficient by far. Critical times call for bold solutions. DM