|Saving What Remains|
FUNDING AND ORGANIZATION
Now that we have prioritized what forest areas should be set 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.
Reserves are expensive to establish and maintain, as is forest management. FAO 1997 estimates that the forestry sector alone is funded only 27 percent of what it requires, while the United Nations Conference on 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 cancellation, and investments. These can be organized and engineered by international organizations with the consent of the countries' peoples. However, it important that more emphasis be placed on local resources, since outstanding debt obligations are growing to be insurmountable and are affecting the ability of developing countries to attract private international investors.
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 percent of its actual value and sometimes far less. For example the non-profit 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 U.S. House approved a bill that authorized $325 million over three years in debt-for-nature swaps. Under the Tropical Forest Conservation Act, proposed by R. Portman (R-Ohio) and J. Kasich (R-Ohio), the U.S. reduces or forgives debt owed the U.S. by developing countries in exchange for establishing forestry funds to be used for conservation and promoting economic reform. The act mandates that projects be carried out at the local level by NGOs, community organizations, and indigenous organizations. In his 2001 budget, President Clinton proposed expanded funding for these debt swaps, while President Bush has continued the policy with deals in Peru and Jamaica.
According to an analysis by the World Bank, while debt-for-nature agreements will never substantially reduce external debts of poor countries—which are far too large for such schemes— they can dramatically increase the amount of funds spent by the debtor country on environmental protection.
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. Because a few temperate nations are the wealthiest, 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 and environmentally damaging industries.
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.
A similar concept won support at the 2005 United Nations summit in Montreal on climate change. A group of ten countries, led by Papua New Guinea, proposed that wealthy countries pay them to preserve their rainforests. The Coalition for Rainforest Nations argued that all countries should pay for the benefits—from carbon sequestration to watershed protection—that tropical rainforests provide.
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Continued: Organization of Rainforest Conservation Efforts
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Copyright Rhett Butler 1994-2005