Paying cash for biodiversity


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Most conservation projects these days have some sort of community development component that promotes sustainable agriculture, agroforestry, non-timber forest products, ecotourism, or similar activities. The people that design those components hope they will reduce pressure on nearby protected areas. They claim that if farmers use their existing plots more

intensely or sustainably, they will be less likely to clear additional forest in the protected areas. Farmers that receive income from activities that depend on natural ecosystems should have an incentive to maintain those ecosystems. Development projects might also make communities better disposed towards agencies that restrict access to protected areas.

That all sounds great, but it rarely works. Too many things have to fall in place at the same time for development projects to meet conservation objectives. First, the proposed activities must provide higher profits and fewer risks than what the farmers are currently doing. Second, they must be activities that farmers have sufficient labor and capital to undertake. Third, the new activities must involve the same groups that would otherwise threaten the protected areas. Fourth, the projects must either persuade those groups not to do things that threaten the protected areas or make it impossible for them to do so. Fifth, they must achieve all this before the area undergoes excessive damage or the project runs out of funds. Unless every one of these conditions applies, the projects cannot significantly contribute to conservation. The evaluations done to-date suggest that they usually don’t. Some projects actually make the problems worse.

Fortunately, other options do exist. In particular, one could simply pay farmers to protect biodiversity. Paul Ferraro’s “Global Habitat Protection: Limitations of Development Interventions and a Role for Conservation Performance Payments” argues compellingly in favor of such an approach. Ferraro says direct payments allow projects to focus on a few well-defined tasks, provide clear incentives for conservation, achieve results quickly, and are easy to target towards high-priority ecosystems.

Direct payments are hardly a new idea. Between 1993 and 1997, fourteen European nations spent some eleven billion dollars to pay farmers to protect in area of over 20 million hectares. The United States spends about $1.5 billion each year to have farmers put land into protection. Costa Rica and various non-government organizations also pay landholders to protect biodiversity.

Ferraro admits that direct payments face many obstacles. Conflicts over property rights in tropical forests often make it difficult to know whom to pay. Communities may threaten to destroy their forests as a means of pressuring conservation groups to pay them more money. Political pressures may divert payments towards low priority groups. Agencies must monitor compliance over long periods. However, according to Ferraro, all of these obstacles can be overcome.

Given the poor performance of current conservation approaches, it is certainly worth a try.

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Further reading

To request a free electronic copy of the paper, or to send comments or queries to the author, you can write Paul Ferraro at:

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