Supporting Sustainable Finance of Protected Areas Through Environmental Funds

by Marcela Aguirre, Ecuador, ELP 2013



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When we talk about cultural values, food security, carbon dioxide absorption, quality and quantity of water, or other socio-economic benefits of ecosystem goods and services, there is talk of protected natural areas. For Dudley (2008), protected areas are defined geographical space, recognized, dedicated and managed through legal or other effective means to achieve long-term conservation of nature, ecosystem services and cultural values associated.

The creation, financing and management of natural areas, is a critical strategy for protecting biodiversity. However, to date, priorities and resource allocations globally are much smaller than those required to prevent further soil degradation and finally their loss (Bovarnik, 2008).


Ecuador constitutionally recognized biodiversity and water as strategic assets. To materialize it, the environmental public policies currently focus on institutionalizing: (1) basic principles such as prevention, precaution, among others, and (2) mandates such as the State's resources allocation for financial sustainability of the National System of Protected Areas (National Constituent Assembly, 2008).

Accordingly, the National Environmental Policy (2010) considers in its first policy: to conserve and to secure the sustainably use of biodiversity and natural resources of the country for the benefit of its development, multiculturalism, and respecting ancestral knowledge; and adds, as first strategy: to incorporate the environmental variable in the economic and public finance (Ministry of Environment, 2010).

Taking that as a frame of reference, a complementary concept is the Protected Areas Fund (FAP) of Ecuador. FAP has been a key financial resource for national protected areas. It is based on a contractual agreement between strategic partners to establish and regulate an independent mechanism, with clear accounting procedures, project cycle and scrutiny of results. Also, its directory is the highest representative body of the citizens for public and private sectors, with the integration multi-stakeholder leadership and their best skills.

Thus, the Ecuadorian government (Ministry of Finance and Ministry of Environment), the German Cooperation (KfW), the Global Environment Facility (GEF) through the World Bank, and private donors, as AGIP Oil & CONECEL, Gordon and Betty Moore Foundation and others, have stimulated seed capital growth from initial US$ 1 million, provided by the State of Ecuador. Currently, this amount reaching around the $ 30 million which co-finances every year the operating expenses (recurrent costs) of 30 protected areas of the State's protected areas.


- Raise funds for protected areas is a challenge, managing financial resources once they have secured is another (Emerton et al., 2006).

- It is necessary to ensure that protected areas are not weakened once project execution ends. Strategies are essential to ensure long-term conservation goals.

- A fund is most effective when its resources can be used as a catalyst to cover basic costs, but stimulating the adoption of complementary facilities such as co-financing, government incentives, user services fees, and other special charges (The Nature Conservancy and Programme United Nations Development Programme, 2001).

- Institutions with financial autonomy and decision-making, that focus mainly the management in an objective (in this case of protected areas), which are autonomous, with specialist staff, are supervised by an independent board, and fosters the participation of various actors, have been proven be very effective and efficient (National Environmental Fund, 2006).