A Quick Analysis of MPA financing and A Financial Management Framework for MPA Networks
Mr. John D. Claussen and Mr. Stuart J. Green
Email: [email protected]
[email protected]
Overview
1. Protected Areas (PAs) present solution for biodiversity conservation, habitat preservation, and community security
2. Functioning PAs and networks require adequate planning and resources (human and financial). Significantly more than is available today.
3. Effective PAs must be well designed and considered. To respond to lack of resources PAs and networks must also be optimally designed.
4. CCIF proposes an operational and financial (management) framework – considering detailed analysis on options and providing decision-makers, practitioners and funders the information necessary to succeed.
5. Conclusions
Growth of PAs worldwide PA coverage goals - Consensus
Notes: (1) Excluding PA’s with no known date (approx. 38K PA’s covering 4 million km2)
Source: CCIF Analysis, Sustainable Financing of Protected Areas, IUCN, 2006 PA Guidelines report; Convention on Biological Diversity
In order to keep up with the rapid growth of PAs, a lot more funding and capacity will be necessary, along with better tools and methods of setting priorities in funding
Globally the number of PAs has been increasing significantly, and now cover about 12% of the Earth’s land surface
10% marine coverage in Protected Areas (current: >0.5%
globally)
20% terrestrial coverage in Protected Areas (current: 12%
globally)
The Convention on Biological Diversity calls for most signatory countries to set PA coverage targets by 2012.
Indonesia’s $5.5/Ha PA funding gap PA global costs overview
Notes: (1)
Balmford, Gravestock, Hockley, McClean & Roberts 2004.
Source: CCIF Analysis, Center for Applied Biodiversity Science 2003 PA Costs report, IFCA 2007 PA report
•Global PA expenditure est. at $6.5B /yr (2003)
•Global MPA coverage of 20–30% would cost
$5–19 billion / year, but would increase sustainability of a global marine fish catch, currently worth $70–80 billion annually, and may help sustain unseen ecosystem services worth $4.5–6.7 trillion each year1
•Domestic government budgets and donor assistance important. Private sector emerging
Despite aggressive growth demands, PAs have limited funding options, especially in developing areas (PAs are expensive..)
2007 Indonesian PAs Funding Levels
Countries such as Indonesia require 2-3 times their current PA funding to meet ‘ideal’ needs.
$38m
$56m
Initial Notes on Sustainability
“…financial sustainability…the ability to secure sufficient, stable, long-term financial resources, and to allocate them…to cover the full costs of PAs and to ensure that they are managed effectively and efficiently with respect to conservation and other objectives.”
(Sustainable Financing of Protected Areas: A global review of challenges and options.
- L. Emerton, J. Bishop and L. Thomas. 2006
)
• Effective management and financing is about more than money; it involves managing funds to achieve conservation outcomes (or objectives).
• Sustainability requires funds be managed and administered in a way
that promotes cost efficiency and management effectiveness, long-
term planning and security, and provides incentives and opportunities
for managers to generate and retain funds at the PA level.
Visited 6 “MPA Networks” at various stages of planning and implementation in the Coral triangle and conducted in depth subjective interviews with key stakeholders in 6 sites
MPA Learning Partnership - 2008
Best perceived predictors of management success as determined by regression analysis for key indicators MPA Network Learning Partnership
** Correlation is significant at the .01 level (two- tailed).
* Correlation is significant at the .05 level (two-tailed).
Indicator of Management Success Highly Significant Factors Increased fish catch Sustainable Financing for Management**
Clarity of MPA network rules**
Enforcement by community enforcers**
Improved critical habitats in no-take zones Local skills development**
Involvement in management by local elected politicians**
Improved marine diversity in no-take zones Sustainable Financing for Management**
Management capacity for MPA network / board*
Enforcement by community enforcers Local skills development**
Participatory biophysical assessments**
Increased fish catch**
Increased household income Skills Development **
Capacity Development of Management Group / Board*
Opened Tourism Business Opportunities**
Opened Nontourism Business Opportunities*
Supplemental / Alternative Livelihood Programs Provided*
Sustainable Financing for Management*
Outreach Programs Conducted*
Increased community pride Skills Development**
Opened Tourism Business Opportunities**
Supplemental / Alternative Livelihood Programs Provided*
Sustainable Financing for Management*
Extent of Support of Local Politicians**
Extent of Support of National Politicians**
Two themes emerged relevant to our discussion: Success depends on key
functions and availability of resources…
Common PA operational model Observed limitations
• Functional Management Plans actually are NOT the norm – leading to lack of
management in practical terms and misallocation of funds in many cases
• Focus is currently heavy on science and conservation objectives with little
understanding or appreciation for the operational and financial requirements essential to achieve these objectives
• Management effectiveness is on the whole poor, particularly for marine sector (behind 1- 2 decades of learning to terrestrial parks)
• Integrated planning is lacking
• Classic fundraising does not produce needed results. It alone can not.
Notes: Observations largely derived from CCIF projects Source: CCIF Analysis
Objectives Stakeholders Approach
PA
“Management”
Costs &
Financing
• Biodiversity conservation
• Support ecosystem services
• Maximize social and cultural benefits
• Conservationists
• Scientists
• Policy makers
• Create and maintain budgets
• Fulfill donor requirements
• Accountants
• Donors
• Investors
Current operational frameworks often have too narrow of a focus on scientific objectives and not enough on sustainable operations
need more integration here
Capability barriers
• Limited capacity to make management and operational decisions rooted in sound
financial analysis, let alone conduct analysis
• Financing/costs are not fully considered at inception/objective setting stage. Short-term thinking leads to programs that are
financially unsustainable in scale and scope
• Policy & regulatory constraints limit effective government budgeting and allocations as well as collaboration in management
• Lack of revenue development skills
Willingness barriers
• Low prioritization of financing activities
• Over reliance on scientists to manage
• Over reliance on expectation for donor funding
• Funders continue to under-emphasize long term sustainability
• Funder fatigue and lack of willingness to invest over much longer time frames
• Lack of focus on making a “business case” for PAs
• Continued expectation that government and/or community will necessarily prioritize
conservation for conservation sake
Limits of current model present the following barriers
Not enough funding is a problem – BUT.. not having a clear
understanding of how much you need in the first place and the costs
associated with management over the long term is just as much a
problem (no household budget)..
Source: CCIF AnalysisSetting a Framework… Integrated management and financial plans are built on a clear and rational view of the requisite framework components
Personnel
Contractual Services Travel
Supplies & Materials Fuel
Occupancy Capital Assets Asset Maintenance Miscellaneous
The CCIF Approach provides a clear and consistent framework to create, revise, and monitor
integrated management and financial plans
Objectives
Framework Foundation:
Functions
Cost Categories Scenarios
• Effective conservation
• Habitat protection
• Resource management
• Community security & livelihoods
Governance & Planning Science & Research Zoning & Enforcement
Information, Education & Comm.
Sustainable Livelihoods Tourism Management Finance & Administration
• Status Quo
• Minimal
• Optimal
Financing Approach Management Approach
Initial
Assessment
Cost & Revenue Modeling
Management
& Financing Strategy
Implementation
Fund Sources
Com muniti es
PA Profile Database
1
Ecological (General)
Endowment Business Plan Financial
Plan
Mgmt Review &
Plan
Donor Report
& proposals
Staffing allocation models and ranking Comparative management scenarios
• Identify and analyze financial objectives and priorities necessary to meet optimal PA scenarios
• Forecast financial conditions and assess funding required to meet objectives
• Recommend implementation plans
• Assess and rank staffing models
• Develop management scenarios and their respective cost of personnel and operations
Assessment of current status through internal and external data
Agreement on objectives and functions
Summarize tactics and pursue implementation plans
2 4
3 3
Builds integrated network model, comparative scenarios basedon PA assessment and reviewed data
CCIF Integrated PA Management Approach
Funding, revenue & gaps chart Financial objectives & priorities
A Framework: conduct a series of comprehensive analyses on PA management
and financial planning with varying levels of participation..
Management system intensity
Financial planning sophistication
Low
Low
High
High
I: Scientific Passive
III: Comprehensive Savvy (optimal) IV: Scientific
Savvy
II: Comprehensive Passive
PAs can benefit from a multi-dimensional approach integrating more fully their planning to hit the “sweet spot” for success…
Conceptual framework for
PA operational focus
Scenario I: Scientific Passive• Management and administration solely focus on the science of conservation
• Passive model of fundraising and little financial investment or business
development ideas
Scenario II: Comprehensive Passive
• Professional management systems are implemented
• Passive model of fundraising and little financial investment or business
development ideas
Scenario III: Comprehensive Savvy (optimal)
• Professional management systems are implemented
• Innovative business models (i.e. tourism) and strategic investments of funds
Scenario IV: Scientific Savvy
• Management and administration solely focus on the science of conservation
• Innovative business models (i.e. tourism) and strategic investments of funds
The most sustainable PA scenario is one that implements both strategic management and active financial planning in its operational model
Source: CCIF Analysis
Operational PA network concept
Notes: Data on PA network establishment trends are rarely recorded formally and savings are based on projections Source: CCIF Analysis; Establishing Resilient PA Networks, IUCN , WCPA & WWF report, 2008
PAs and networks should be viewed in terms of operational benefits: economies of scale should be explored in more detail,
PA 1
US$50,000 /yr
PA 2
US$75,000 /yr
PA Network Planning Considerations
• Institutional and governance
• Economic and social
• Spatial and temporal
• Scientific and information management
PA 1
US$30,000/yr
PA 2
US$50,000/yr Network
US$15,000/yr
Total Cost US$125,000/yr
Total Cost US$95,000/yr
ILLUSTRATION
PA benefits are escalated by networks
Ecological
Economical Social
Maximum Benefit
Ecological benefits:
•Ecosystem maintenance through area scaling
•Risk sharing that strengthens system resilience
•Slowing the loss of endangered species
Economical benefits:
• Efficient use of critical resources when inputs &
outputs are coordinated
• Sharing of best practices in financial management
Social benefits:
• Coordination of learning and administration
• Conflict prevention through common goal sharing
• Consensus exists around value and necessity of MPAs and networks as tools for achieving habitat and species conservation and community security. But
Objectives must be clear.
• MPAs and networks are relatively expensive–requiring complex set‐up and
operations, which requires meaningful human capacity and financial resources.
To‐date most effort and expenditure has been on scientific and policy actions.
• MPA financing is about more than money however; it involves mobilizing and managing funds to address a range of challenges associated with objectives.
• MPA financial sustainability can be defined as the ability to secure sufficient, stable and long‐term financial resources, and developing proper capacities and policies, and to allocate all of these in a timely manner and in an appropriate form.
• A systematic operational and financing framework is required to design efficient, effective and equitable MPAs, and to continuously improve management of these MPAs so that resources are optimized (even before discussing MPA networks).
Conclusions
• Building MPA capacity for financial and business planning is essential. The increasing difficulty of raising funds for MPAs from conventional sources, together with the
increasing complexity of PA funding needs and opportunities, accentuate the importance of financial planning and marketing skills.
• When MPAs and MPA networks are planned and objectives set, we need to be very clear on how much it will cost to manage and where this money will come from
(most ecological management plans ‐25 years, most budgets and financing 1‐2 years!)
• Financing options / strategies ((including innovative PES, etc) can be developed based on a sound understanding and appreciation the possible scenarios for a achieving MPA and related objectives, but should be initiated at the planning stage.
• We need to get the individual MPAs functioning well, before upgrading to MPA
networks, but scales of economy should kick in with networks. With proper planning, and analyses these will be found.
• We need more business trained managers involved in MPA design, management and planning (sorry scientists..). And we need to find more ways to secure and retain
resources for MPAs (and we need scientists to get MBAs!)
Conclusions (cont)
For additional information on CCIF: and the MPA Learning Network see the Appendix which follows.
Markets &
Ventures
Community Development Conservation
Finance
Downloaded at: http://blog.protectplanetocean.org/
www.cciforum.org
Appendix
Markets &
Ventures
Community Development Conservation
Finance
We conduct sound analyses to design innovative financing strategies for critical conservation challenges around the globe,
combining expertise in on- the-ground conservation work with experience in finance and natural resources economics.
Conservation and natural resource management efforts are invariably linked to communities and their livelihoods and security. We work at the intersection of these issues to find ways to enhance community development and improve conservation efforts for the long-term.
We assess and design opportunities and solutions to transform destructive practices and industries and develop strategic
investments in improved business models, markets, and enterprises.
CCIF focuses on three core areas to address urgent conservation and
sustainable community development issues globally
Overview
• CCIF applies the tools, strategies, and resources of the private sector to address urgent conservation and community
development issues worldwide.
• A project of the Trust for Conservation Innovation (TCI), a San Francisco-based fiscal sponsor1. TCI provides administrative and grant management services.
• CCIF is led by a Managing Director and is governed by TCI’s Board of Directors. In addition we are guided by an advisory group.
• CCIF utilizes 14 Practitioners globally.
• ~7 projects in last two years across Asia Pacific
• Clients are Foundations, NGOs and private sector organizations.
Overview
• CCIF applies the tools, strategies, and resources of the private sector to address urgent conservation and community
development issues worldwide.
• A project of the Trust for Conservation Innovation (TCI), a San Francisco-based fiscal sponsor1. TCI provides administrative and grant management services.
• CCIF is led by a Managing Director and is governed by TCI’s Board of Directors. In addition we are guided by an advisory group.
• CCIF utilizes 14 Practitioners globally.
• ~7 projects in last two years across Asia Pacific
• Clients are Foundations, NGOs and private sector organizations.
CCIF Setup
CCIF – How We Work
Notes: (1) TCI maintains CCIF’s 501 (c)(3) registration with the US government.
Implementers CI, TNC, WWF, WCS, MAC, Reef Check, local NGOs Investors
Packard, TOF, Duke, IFC, AusAid, Oak, World Bank,
GEF
CCIF
(TCI - US 501c3 non-profit)
Clients
Starling Resources SE Asian Consultancy
California Environmental Associates US Consultancy
Staff & Advisors
Independent Experts and Contractors
CCIF – Where We Do It
David & Lucile Packard Foundation (2009-2010) Republic of Palau
PA Management and Financial Planning Methodology
Conservation International (2008)
Raja Ampat Protected Areas, Indonesia
MPA Network Management and Cost Analysis
Duke University (2008) Marine Ecosystem-base Management Tool Innovation Fund
MPA Financial Management Tool
El Nido Foundation (2006) El Nido Taytay Managed Resource Protected Area PA Financial and Operational Management Evaluation
GCF and ADM Capital Foundation (2008) Cardamom Mountain Protected Area Network PA Network Conservation Trust Fund Business Plan
Conservation International (2007) Berau Marine Conservation Area, Kalimantan, Indonesia
PA Management and Financial Analysis
MAR Fund (2005) Central America
Mesoamerican Reef Fund Business Plan
David & Lucile Packard Foundation (2009-2010) Fiji Locally Managed Marine Areas (FLMMA) PA Trust Fund Design and Financial Planning
Wildlife Conservation Society (2005)
Karimunjawa National Park, Java, Indonesia
PA Financial Needs Assessment
TNC, PNK, and Packard Foundation (2005-06)
Komodo National Park, Indonesia PA analysis and management report, community development
ADM Capital Foundation (2009) Nantu Forest, Sulawesi, Indonesia
PA network costing and finance strategy (include CTF and REDD)
CCIF project partners led these
assignments using CCIF materials/
approach
United Nations Development Program (2008-2009) Mongolia and Thailand PA National PA system finance assessments and design
