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Conservation Science

Conservation Strategy - Conservation by Design

Conservation Methods

Partners of The Nature Conservancy

Conservation Initiatives

Conservation Methods, Conservation Easements, Conservation Policy, Public Land Management

Funding for Conservation

The Nature Conservancy works with conservation supporters and partner organizations to create funding for conservation worldwide using a variety of creative methods.  We seek to create market incentives for conservation, such as debt for nature swaps. We also strive to increase funding for public land acquisition and management through appropriations and public finance campaigns.

Debt-for-Nature Swaps

Debt-for-nature swaps create a link between a country's external debt and financing for biodiversity conservation. These are voluntary transactions through which an amount of hard-currency debt owed by a developing country government (debtor) is exchanged by the creditor for financial commitments to conservation by the debtor, usually in local currency. The proceeds generated by a debt-for-nature swaps are often administered by local conservation or environmental trust funds, which disburse grants to specific projects and ensure accountable, transparent and decentralized management.

The Nature Conservancy has been involved in debt swaps for more than a dozen years. In 1998, the Conservancy played an instrumental role in the passage of the U.S. Tropical Forest Conservation Act (TFCA)-a vehicle to scale up support for multiple debt-for-nature conservation transactions each year. The Conservancy works closely with the U.S. Treasury Department, debtor governments and other NGOs on applying this tool in new countries and in new ways. Most recently, debt swaps under the TFCA have been arranged in Peru (cooperation with the World Wildlife Fund and Conservation International) for approximately $11 million, Belize for approximately $10.7 million, and a debt swap of approximately $10 million in Panama is currently under development.

Previous debt-for-nature swaps:

For more information about debt-for-nature swaps, e-mail cfp@tnc.org.

Conservation Trust Funds

Conservation trust funds (CTFs) have been set up in many developing countries over the past decade as a way of providing stable, long-term funding for conservation. Most CTFs take the form of a legally independent institution managed by an independent board of directors. Many CTFs have a permanent endowment that has been capitalized by grants from the national government and international donor agencies. The main purpose of creating a CTF is to provide funding for national parks and other protected areas, or small grants to non-governmental organizations and community groups for projects aimed at conserving biodiversity and using natural resources more sustainably.

The Nature Conservancy has been a pioneer in helping structure and capitalize conservation trust funds. Recent examples of national level funds we've helped establish include:

  • FUNDESNAP (the Bolivia Protected Areas Fund). Design assistance and donor negotiations were provided by TNC for FUNDESNAP, which oversees $46 million in commitments during an initial 5 year phase from 2001 - 2005.
  • Mama Graun Conservation Trust Fund, Papua New Guinea. TNC helped establish and capitalize this $15 million trust fund with a GEF grant, and a $2 million grant from AusAID. It has an overall funding target of $30 million.
  • Ecuador National Environmental Fund (FAN). TNC assisted in the design and launch of FAN which was funded by several bilateral debt swaps and a GEF grant totaling $12 million.
  • The Conservancy has also supported the development of trust fund networks such as RedLAC (the Latin American and Caribbean Environmental Funds Network) with assets of over $150 million for conservation in 27 funds throughout Latin America and the Caribbean.
    For more information about conservation trust funds, e-mail cfp@tnc.org.

Payments for Ecosystem Services

Nature provides a range of critical ecosystem services that yield tangible economic benefits yet the economic value of these services has traditionally gone unrecognized. One of the most important developments in conservation finance in recent years is the idea that key beneficiaries should be paying for these critical ecosystem services, such as the clean water, flood control and carbon storage services provided by intact natural landscapes.

  • Watershed Conservation Payments: There is perhaps no other resource so valuable to humanity and yet so threatened as water. In response to this problem, innovative and cost effective means of providing clean and safe water that rely on the conservation of threatened watersheds are beginning to be tested and developed around the world. At the heart of this approach lies the idea that healthy ecosystems such as intact forests also provide valuable hydrological services (such as slowing rainfall runoff, enabling ground water recharge, and reducing erosion). Convincing key water users that the protection and maintenance of healthy watersheds provides real economic value to them is the essence of a watershed conservation payments. By understanding the benefits of watershed conservation and the potential impacts of watershed degradation water users develop policies, sustainable financing options and conservation practices that will maintain and perhaps even improve water quality. Examples of recent projects can be found in Chiapas, Mexico; Lago de Yojoa, Honduras; Quito, Ecuador, and Sierra de la Minas, Guatemala.
  • Carbon Offset Projects: In terms of the development of markets and payment systems, forest sequestration is by far the most advanced of the ecosystem services. Forests store (sequester) carbon, whereas deforestation releases carbon dioxide into the atmosphere, making reforestation and forest conservation important elements of a strategy to combat global climate change. As a result of the regulatory framework developed under the Kyoto Protocol, and with the likelihood of national legislation in the U.S. and elsewhere, the energy industry and other green house gas emitting companies will be able to meet their target emission levels in part by investing in reforestation and forest conservation projects as a cost effective means of offsetting their carbon emissions. The Conservancy continues to lead the way in developing prototype forestry projects funded by industries concerned about climate change. Consequently, the Conservancy is playing an increasingly important role in translating the lessons learned from these projects into best practices for adoption by the developing carbon credit market. The Conservancy's Climate Change Initiative has led the way in developing model carbon offset projects in Noel Kempff Mercado National Park in Bolivia, Guaraqueçaba in Brazil, the Midwestern U.S. (Ohio/Indiana) and Rio Bravo in Belize.

For more information about payment for ecosystem services, e-mail cfp@tnc.org.

Resource Extraction Fees

Extraction of non-renewable natural resources is an important economic activity in many countries. These activities include the mining of ores and fossil fuels like oil, natural gas, and coal. Extracting these resources inevitably causes environmental damage. Resource extraction fees are mandatory levies on extractive industries (or often, voluntary contributions by extractive industries) used to mitigate environmental damages and can be a potential source of complementary funding dedicated to conservation. An example of a resource extraction fee can be found in Ecuador where a $16 million conservation trust fund has been created through resource extraction fees in Ecuador.

For more information about resources extraction fees, e-mail cfp@tnc.org.

Public Finance Campaigns

For more than ten years, the Conservancy has worked in the U.S. at the state and local level with conservation supporters and partner organizations to create public funding for conservation. These public finance campaigns have generated more than $24 billion dollars for conservation throughout the country. Even in tough economic times, voters have continued to support conservation at the ballot box. Focusing on these collaborative efforts, we can leverage private donations by magnitudes of over 300 to 1.

Examples:

For more information about the Conservancy's success in creating public financing for conservation, contact Carol Baudler at cbaudler@tnc.org, or Angie Grover at agrover@tnc.org.