Protected areas: Opportunities for decentralized financial mechanisms?

Abstract

Nature conservation policies suffer from financial restrictions worldwide. The level of understanding of financial needs of and funding sources for protected areas (PAs) is low everywhere. Landscape areas that are often buffer zones of other conservation areas could greatly benefit from even small investments in PAs due to the benefits for some economic sectors, ecosystems, and human well-being. Global expenditure for PAs would amount to 76.1 billion US $ annually and is expected to increase. Environmental protection expenditure for biodiversity conservation in EU did not increase over the last decade. Tight financial procedures, cost-effective management, and financial planning of PAs do not seem to be enough. Increasing public funds for conservation is unlikely to deliver satisfactory results. Alternative mechanisms to raise funds at the site level are needed to complement traditional ones. PA finance qualifies as an ideal field where mobilizing dispersed knowledge to fund conservation. This is a portfolio, or investment problem, suitable for the application of the “decentralization argument”: many decentralized sources can build a diverse, stable, and secure portfolio, by addressing direct users or beneficiaries of PAs, their goods and services. PA networks are governance models relying on the benefits they deliver to their members that should support decentralization and provide the lacking incentives to dispersed creation and testing of novel financial mechanisms. Decentralized institutions enjoying greater freedom in action are desirable in uncertain situations and when creativity and innovation are needed. PA networks as a governance model may support decentralization.