Conservation news

We need a green life support plan (commentary)

  • Tourism — much of it nature-based – comprises 2% of sub-Saharan African nations’ GDP, which can rise to up to 38% for some countries. It is also critical to sovereign credit analysis, giving countries access to capital markets, external financing and funds to support government programs, including nature-based tourism. But with the collapse of international tourism in response to COVID-19, sub-Saharan African countries are facing credit rating downgrade risks, putting conservation funding at risk.
  • Without income from nature-based tourism, many small- and medium-size enterprises in the nature-based tourism sector risk closure, and wildlife conservation will be seriously compromised as landowners and locals could be incentivized to convert conserved land into agriculture production and partake in illegal activities such as overfishing, with significant negative results for countries’ nature-based assets.
  • With the long-term sustainability of these nature-dependent economies threatened, the authors argue for standardized, methodical and systemic funding for the conservation, protection and restoration of the natural capital.
  • This post is a commentary. The views expressed are those of the authors, not necessarily Mongabay.

If COVID-19 has taught us one thing, it is that we need a green life support plan that enables the private and public sectors to finance conservation of the natural capital resources that underpin our economy. Worldwide, our current approach to conservation depends heavily upon some combination of informal tourism revenues, periodic government support, and, in the developing world, occasional donor support. Instead of relying upon these ad-hoc funding approaches, we need to standardize funding for the conservation, protection and restoration of the natural capital our planet and our societies depend upon for our livelihoods. We need to make such financing methodical and systemic throughout key sectors of our global economies.

We live together on one planet, with the same oceans and the same dirt under our toes. We all depend on Earth’s magnificent biodiversity, as well as the services that nature provides, like clean water and air. This natural capital provides life’s necessities, shelters us, and, more often than we realize, secures the foundations of our economy. Because of the foundation of natural capital that we depend upon — that is currently eroding rapidly as we are living in a house whose foundation is being washed out sea — investors, businesses, civil society, and governments must find a way to fund this natural capital infrastructure systematically. In short, we need a green life support plan to conserve the nature we depend upon. The response to COVID-19 should be the beginning of a transition to a green economy, to transform our understanding of nature to see it as foundational to our global economy, equal to other sectors of the economy, and to see natural capital as an economic pillar of each nation’s health to be nurtured and grown.

In parts of sub-Saharan Africa, as in many other places around the world, economies rely upon nature-based tourism, which provides the funds to conserve natural capital. In sub-Saharan Africa alone, tourism accounts for 2% of all nations’ gross domestic product (GDP) and up to 38% of the GDP of some countries, contributing more than $30 billion to the region’s GDP. Yet for many of these economies, as is the case around the world, the economic shocks from COVID-19 may be harsher than the pandemic itself: As these revenues have stopped flowing, funding has decreased dramatically for activities that conserve the natural capital we depend on.

Elephants in Serengeti National Park, Tanzania. Image by John C. Cannon/Mongabay.

Before COVID-19 brought international travel to a standstill, Tanzania’s Serengeti National Park hosted wildlife enthusiasts who traveled from as far away as China and Argentina to get a glimpse of Africa’s charismatic game species and world-famous wildebeest migration. But now, the collapse of tourism is a lethal wound to the businesses built around Africa’s iconic wildlife. Tanzania’s northern tourist circuit, of which Serengeti is the crown jewel, receives more than a million visitors annually. It’s seen as a paragon of high-value, low-impact visitation. These visitors spend handsomely for the privilege, generating both employment and conservation dollars. But when they don’t come, what happens to wildlife?

Former Tanzanian president Benjamin Mkapa has now called on governments and businesses to provide greater support for natural capital in the face of COVID-19. In an opinion article on the news site African Arguments, Mkapa wrote, “As humanity, we must start to see nature as our insurance policy against diseases like COVID-19. The disease lays bare the consequences of neglecting nature and thinking that human health and economic development are separate from it.”

Indeed, nature is the only safety net in much of Africa.

Wildlife economies support conservation that conserves natural capital

A wildlife economy, according to the African Wildlife Economy Institute at South Africa’s Stellenbosch University, relies on natural capital as an economic asset, utilizing undomesticated animals and plants and the ecosystems in which they live to produce goods and services for human benefit. Investors need to reorient our understanding of natural capital as an asset class as the first step toward incentivizing the management of natural resources for resilience.

The hardest-hit sectors in wildlife economies are fragile small- and medium-sized operations, including community-based enterprises. These vulnerabilities will quickly accumulate in nations that depend on nature for sovereign wealth.

Sub-Saharan African countries are facing credit rating downgrade risks from COVID-19, yet many economies need international tourism dollars (see Table 2). On April 30, 2020, the rating agency Standard & Poor’s downgraded South Africa’s long-term foreign-currency rating to BB- because of the country’s growing current account deficit and decline in capital flows, including steep declines in international tourism receipts. Sovereign credit ratings provide global public and private sector leaders an overarching view on the short- and mid-term riskiness of a country on a timeline of up to five years.

Plains zebras in South Africa’s Kruger National Park. Image by Rhett A. Butler/Mongabay.

Basing an economy on nature-based tourism presents risks

In Africa, tourism generated $142 million in fees for protected areas in 2015, and 80% of tourism trips to Africa are nature-based.

Thus, the lack of income from nature-based tourism compromises wildlife conservation if no funding is available to pay lease fees. As a result, the landowners will be incentivized to convert their land into agriculture production with significant adverse consequences. But what happens if the incentive structure is broader?

Mountain gorillas, pictured here in the Democratic Republic of Congo, are a major draw for tourists to Rwanda, Uganda and DRC. Image by John C. Cannon/Mongabay.

Protecting natural capital

Madagascar has lost upward of $500 million in nature-based tourism revenue since COVID-19 began, according to the Malagasy news site La Verité. This revenue is often the only financial support for Madagascar’s 144 protected areas across 70,000 km2 (27,000 mi2).

The dire story is crystal clear, just looking at a single protected area in Madagascar, Ranomafana National Park, a biodiversity-rich protected area covering 416 km2 (161 mi2). It is home to 12 lemur species (see Table 1), many of which are endemic to the region and threatened with extinction, such as the critically endangered golden bamboo lemur.

Madagascar had about 350,000 nature-based tourists in 2019. Without the revenue they bring in, to survive, the local population may begin to engage in “illegal and irrational land occupation and exploitation of natural resources in protected areas; hunting of wild animals; trafficking rare, endemic and protected species of flora and fauna; clearing and transforming natural habitats into crop plots; overfishing in coastal zones; illicit charcoal manufacturing; illegal mining, among others,” Baomiavotse Vahinala Raharinirina, Madagascar’s minister of environment, ecology and forests, told Mongabay in April 2020.

“People, without the four million dollars that flowed into the Ranomafana National Park region from tourism and research, will be forced to return to cutting the forest and farming,” Patricia Wright, a professor at Stony Brook University, who helped establish the park in 1991, told Mongabay. “I fear for the future of the people and wildlife in Madagascar.”

How can this be turned around so that tourism is not the only revenue source to support nature? Why is destructive farming the only alternative to Madagascar’s tourism economy?

Table 1: Twelve Lemurs Threatened with Extinction in Ranomafana National Park, Madagascar. Image by Planet Tracker/Gabriel Thoumi with data from the IUCN Red List.

If we can produce a more diversified approach, including functioning natural capital and healthy ecosystems, we can invest in high-quality tourism destinations and wildlife and have a robust tourism economy without being entirely dependent upon it. The healthy ecosystems on which this green economy depends can then serve as a meaningful “safety net” for rural communities.

Enact a green life support program now

In light of COVID-19, investors, lenders, companies, governments, multilateral finance institutions and civil society must now enact a green life support program to conserve the natural capital that our lives depend on. Several strategies are available:

  1. Asset owners, such as sovereign wealth funds and pension funds, and asset managers invested in sub-Saharan African sovereign debt must discuss pathways to support small- and medium-size enterprises that contribute both materially to GDP and creditworthiness at the national level and that, at the local level, are the proverbial eyes in the forest, maintaining natural capital and mitigating biodiversity loss.
  2. Governments can enable lenders and investors, or act on their own, to support “nature-based solutions” as the avenue of first resort in managing land for social benefit — for example, restoring and enhancing ecological functionality and employing “green engineering,” rather than building infrastructure to manage watersheds.
  3. Investors alongside development finance institutions can provide economic support for locally owned small- and medium-sized enterprises — in particular, through working capital loans and grants — with a focus on those businesses that support the conservation of natural capital alongside economic diversification, capacity development and access to credit and technical resources at the community level, especially to advance social equity through opportunities for women and youth.
  4. Companies and governments can work to change the license to operate to ensure a transparent and traceable approach to natural capital impacts. Governments should improve standards to require both climate and biodiversity disclosures of all investors; these disclosures should be timely and publicly accessible. Companies can expand traceable and transparent “green” value chains that open access to markets for sustainably produced products that also increase economic benefits to local producers.
  5. States should guarantee land tenure and property rights of rural people, unlocking their ability to participate in the economy and incentivizing their investments in sustainable natural resource management.
  6. Actors can advance economic and environmental justice to ensure that the rural poor benefit from conservation. Rural communities should be invited as partners in protected areas, rather than held at bay at the point of a gun.
  7. Tools similar to green corporate bonds and green loans issued since 2017 can be used. They could be pegged to decreasing natural capital impacts and metrics, such as performance deforestation rates, land-use conservation, support for Indigenous peoples’ rights, greenhouse gas reduction targets, biodiversity enhancement, and funding of green small- to medium-size enterprises.
  8. Governments can use taxation to incentivize generational equity and investment that supports the most vulnerable in society — those most likely to require natural resource use as a safety net.
  9. Markets should price carbon to incentivize resource users to restore forests and soils.
  10. Wealthy global north countries can expand export bank and small business administration loans to support natural capital conservation businesses on the front line in sub-Saharan Africa.
A baboon sits in a tree in Tanzania’s Lake Manyara National Park. Image by John C. Cannon/Mongabay.

In the near term, we must invest in relief in ways that will accelerate recovery and help all countries to come back stronger. In countries dependent on nature-based tourism to fund conservation of natural capital, COVID-19-related natural capital losses may be prolonged, or even permanent, unless decisive action to conserve and protect the natural capital base is taken. With foresight and investment, we can help developing countries that depend on wildlife economies to build back better.

We must ensure that we build these economies back better with our green life support stimulus focused on conserving the natural capital that our livelihoods depend upon.

Table 2: Sub-Saharan African countries’ international tourism receipts, GDP and credit ratings, 2018. Image by Planet Tracker/Gabriel Thoumi with data from the World Bank (2020). Note: Data not available on certain countries. Data excludes Chad, Equatorial Guinea, Eritrea and Liberia. Some countries have partial data. Fitch Ratings, Moody’s and S&P do not provide ratings for all nations.
Table 3: Tourism industry statistics for key sub-Saharan African countries, 2019. Image by Planet Tracker/Gabriel Thoumi with data from National Sources, Fitch Solutions.

Banner image of African buffalo in Tarangire National Park, Tanzania, by John C. Cannon/Mongabay.

Gabriel Thoumi, CFA, FRM, is director of capital markets at Planet Tracker.

John Waugh is a senior consultant in international development, focusing on natural resources and the environment.

Citation:

Pigram, J. J. (1980). Environmental implications of tourism development. Annals of Tourism Research, 7(4), 554-583. doi:10.1016/0160-7383(80)90049-3