Innovative Funding Mechanisms employed by developing countries
Tradable Carbon Dioxide Permits:
For setting aside forest for the purpose of atmospheric carbon mitigation, developing countries can receive payments from industrialized countries looking to offset their carbon emissions. Carbon offset programs are popular in many circles since they can "provide a mechanism for motivating wealthy countries to pay for a benefit of forest conservation that transcends national borders." In effect, such programs promote "the transfer of funds from industrialized countries to tropical countries as a commercial transaction rather than an act of charity" (Costa, P.M. "Tropical forestry practices for carbon sequestration: a review and case study from southeast Asia," Ambio Vol. 25 No. 4, June 1996)). Malaysia, Indonesia, Belize, Costa
Rica, Guatemala, Ecuador. See the proposed plan from the Coalition for Rainforest Nations
Bio-prospecting Fees: Only Costa
Rainforest countries can earn revenue by allowing scientists to develop products from the island's native plant and animal species. The pioneer in the area was Costa Rica which entered into an agreement with the American pharmaceutical company, Merck to look for plants with potential pharmaceutical applications. Under the agreement, a portion of the proceeds from compounds that do prove commercially valuable will go to the Costa Rican government which has guaranteed that some of the royalties will be set aside for conservation projects. Similarly, in 2001 Givaudan, a Swiss fragrance and flavor company, sent a team to look for new exotic smells and flavors in Madagascar. Following their survey, Givaudan researchers 'reconstituted' 40 aromas that could be used commercial products. The company has agreed to share a portion of the profits from these products with local communities through conservation and development initiatives.
Deforestation Charges: Increasingly used as a way to both raise revenue and protect forest ecosystems. Deforestation charges are levied against firms whose activities cause deforestation. Brazil, Central African Republic.
Ecotourism Charges: Ecotourism charges through park entrance fees, hotel taxes, and service charges is becoming
a major source of funding for parks around the world. Funds collected from eco-tourists are used to improve reserve
management, to hire guides and park rangers, and expand park boundaries.
Scientific Permits: Like
ecotourism charges, scientific fees are customary in many parts of the world and are often used to finance reserves. Critics say such fees reduce the incentive for foreign scientists to do research and limits opportunities for local researchers who can otherwise benefit from the presence of outside scientists.
Watershed Charges: Charges
imposed on urban dwellers by the government for the protection and reforestation of hillside forests which ensure
the regular flow of clean fresh water into cities. Costa Rica, Brazil, Indonesia, Malaysia.
Tradable reforestation/conservation credits:
Financial credits issued by industrialized countries to forest countries in exchange for environmental protection.
Compensation for conservation: Some
governments grant monetary compensation to farmers land-holders who allow their lands to revert back to forest.
Corporate sponsorship: Corporations have been a bit slow in "adopting" parks but they have the money and a marketing-driven interest in taking a closer look at such schemes. See below for more details on a potential plan.
The Linden-Lovejoy-Phillips plan: One interesting idea proposed by Eugene Linden, Thomas Lovejoy, and J. Daniel Phillips for tropical rainforests consists of dividing natural areas into blocks and then soliciting funding commitments from international environmental groups, development institutions, corporations and other credible donors. There would be a bidding process after which an entity would take responsibility for maintaining forest cover and forest health in each block of the entire forest system. This plan could be a road for corporations to become involved in conservation as a public relations/marketing tool. A given percentage of the proceeds could be put into a trust fund with the pay out ear-marked for ongoing conservation and sustainable development programs
Continued: Saving rainforests
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