The case for MPA financing

In this chapter, we focus on three cross-cutting approaches and strategies approaches to overcome challenges to sustainable financing of MPAs. MPAs can generate multiple benefits.

• Direct market benefits such as increased commercial fish catch or increased tourism revenue.

• Indirect market benefits such as protecting coastal infrastructure and property, and research.

• Non-market benefits related to the existence value of species or ecosystems (Davis et al. 2019).

They also act as nature-based solutions to wider societal priorities.

Although these benefits are usually clearly apparent for MPA practitioners and direct beneficiaries, others may not see their value – like resource users facing restrictions because of an MPA, or decision-makers focused on other topics.

Improving the understanding of MPA-related benefits is essential to shift negative perceptions or raise awareness among these types of actors. This can be a strategic step for MPAs to:

• Inform and promote the design of favourable policies (e.g., for benefit-sharing or fund generation) (Davis et al., 2019).

• Increase social acceptability of, and compliance with, MPA rules and financing mechanisms (e.g., user fees, entry fees, licences, etc.).

• Mobilize additional finance (e.g., philanthropic donations, government budget allocations, bilateral or multilateral cooperation, private sector finance).

Some MPAs have promoted win–win conservation alliances with local actors by building on their contributions to local economies. For example, Bay Island National Marine Park, managed by Bay Islands Conservation Association (BICA) Roatan in Honduras, offers its water monitoring services to local businesses and communities to support coral reef conservation, tourism and sanitation.

BICA Roatan’s Program Director, Giselle Brady, says that they are “developing a strategy to offer our water monitoring services to local businesses and communities in support of coral reef conservation, a healthy tourism sector, and adequate sanitation for the local population.” Communicating these types of links between MPAs and the local economy can create wider support for the MPA and generate additional income through providing services.

Building a compelling case for MPA financing will depend on the target audience.

At the local level, a clear case for an MPA can also improve acceptance and compliance with regulations among local MPA users, such as fishers or tour operators (Davis et al., 2019), and eventually generate additional funds through fees, licences, permits or similar.

As an example, dive operators who benefit from a healthy reef managed by an MPA might be more likely to support fee-sharing agreements if a strong case is presented to them. A convincing case of this kind will most likely include aspects such as: 

• Cost distribution (i.e., who pays for compliance, administration, monitoring, etc.)

• Monetary and non-monetary benefits (e.g., potential increase in fish biomass, increase in visitor numbers, recovery of fish populations or coral cover, etc.)

• Cost-benefit ratios (e.g., monetary benefits exceeding the costs).

• Main beneficiaries (i.e., who receives the benefits from an effectively managed MPA).

• Timeframes (e.g., short-term versus longer-term costs or benefits).

At the international level, a case can be built for increased bilateral or multilateral development financing for countries that carry a disproportionate burden when creating and managing large MPAs or MPA networks in priority sites for the global community (Sala et al., 2021).

Budgeting, financial planning and cost-effectiveness

Reliable data on your MPA’s current and projected financial situation is the basis of developing a sustainable financing strategy. Your budget should ideally show how available resources are allocated to different cost categories (e.g., staff, equipment, infrastructure, etc.) and management objectives, activities, programmes or functional areas (e.g., enforcement, site management, research, monitoring, etc.).

In addition to short-term budgets (e.g., annual or biannual), financial planning exercises can provide useful projections of future costs over longer periods. These cost projections can be built under specific scenarios that provide a clear indication of the additional financing required to reach specific goals. A “business as usual” scenario showing projected costs under the current level of resources available is often used as the basis for estimating financing gaps.

Alternative scenarios can, for example, consider the costs required to guarantee: 

• A minimal level of conservation, meeting the most crucial objectives of the MPA management plan 

• Effective management – you can find useful guidance in the management plan itself or in external sources that set overall MPA effectiveness standards. These include the Management Effectiveness Tracking Tool or the criteria from IUCN Green List Standard (see the management effectiveness module).

  • You may want to operate a business or enterprise (e.g., camping or glamping, commercial laboratory services, tour packages, etc.) to generate funds. 
  • To analyse its viability and cost-effectiveness, a valuable exercise is to map out all required costs (e.g., capital investments, increased operational costs) over a period of several years, and to estimate the expected revenues.
  •  For the latter exercise, you’ll typically need to make assumptions using available data on numbers of visitors, willingness-to-pay studies or similar cases from other comparable locations. 
  • Conservation Finance Guide: Business Planning for Protected Areas (Conservation Finance Alliance, 2002) 

Building on budgeting and financial planning exercises, you can identify and adopt cost-effectiveness measures to reduce operational costs. These can include: 

• Co-management mandates 

• Tools or technologies (e.g., payment or monitoring systems)

• Partnerships 

• Outsourcing of activities 

• Organizational or management adjustments

• Aligning expenditure among co-managers.

Sustainable financing strategies

Designing and implementing a sustainable financing strategy, comprising a set of clear priorities and actions to achieve financial sustainability, can help you optimize the use of the financing mechanisms currently in place, or seize the most promising opportunities to generate funds, align costs or reduce expenses.

This type of strategy should respond to estimates of financing needs to achieve MPA management goals and can be integrated into an MPA business plan for communication to stakeholders or donors.

Sustainable financing strategies may contain a mix of: 

• Priority financing mechanisms (e.g., user fees, concessions, payment for ecosystem services, etc.) 

• Other solutions (e.g., cost-efficiencies, cost-sharing arrangements, partnerships, etc.). 

These should be identified on the basis of multiple criteria to assess their fund-generation or cost-reduction potential, ease of implementation, likelihood of success, conservation impact or other relevant aspects (UNDP, 2018).

Recognizing opportunities and limitations within the governance, socioeconomic, political, legal and ecological context of the MPA is essential for the design of a robust strategy. Any of these aspects can determine the viability of possible financing mechanisms, solutions and actions.

By definition, a sustainable financing strategy should aim to be future-proof and remain relevant after unforeseen events or changes. In 2019 and 2020, we worked with a group of MPA managers from the Wider Caribbean and learned a few key lessons from the results of their financing strategies in light of the COVID-19 pandemic. Despite facing substantial income losses associated with a decline in international tourism, MPAs with diversified financial strategies secured basic levels of operations thanks to: 

• Emergency disbursements by conservation trust funds or governments 

• Supplementary income from partnerships with other economic sectors, memberships, online shops, donation platforms or domestic tourism.

For some MPAs, however, their dependence on financing mechanisms that generated highly fluctuating funding (e.g. user fees) created substantial unpredictability. Restrictions in the use of grant funding or government budgets also limited the ability of some MPA managers to address urgent needs that did not match the original purpose of these funds. This illustrates the advantages of designing financing strategies with a diverse mix of funding sources, predictable funding streams and mechanisms that allow flexibility to allocate the funds they may generate.

Since these considerations might not be easily addressed in every context, flexibility and adaptation in the face of change play a crucial role in the development of future-proof financing strategies. External facilitators, advisors and mentors can help integrate these aspects into a practical strategy, especially for MPA managers who might perceive this process as complex and intimidating.

Although external advisory costs can represent a huge challenge for MPAs that are already underfinanced, conservation trust funds (e.g., MAR Fund, Micronesia Conservation Trust, Forever Costa Rica and The MedFund) and peer-to-peer learning networks (e.g., MPAConnect, MedPAN and PIMPAC) provide good examples of organizations that catalyse these types of efforts and can link MPA practitioners to sources of advice and support. Some private sector players also offer pro bono support for strategy development.