Economic valuation, however, can help protected areas thrive. An area with proven economic value clearly becomes a stronger candidate for conservation funds. Many donors, in fact, now insist upon economic analysis before considering support.

Non-market values
The past 20 years have seen expanding recognition of the variety of costs and benefits of protected areas. Assessors once tallied up only direct-use benefits like timber, wild game and recreation, but now the balance sheet has grown to include non-market values (for example biodiversity), environmental services (such as erosion control) and even ‘non-use’ benefits (their intrinsic value to people who will never visit or physically benefit from them). Similarly, costs beyond direct management costs – such as the impacts of natural damage and lost opportunities for development and extractive use – are now brought into the equation.

New techniques for measuring these costs and benefits have emerged. Studies that evaluate simple market-based values for goods and services from protected areas – such as the direct values of tourism revenues or harvested foodstuffs – are still used. Broader ones, however, use proxies to estimate values of goods and services not actually bought or sold: these include, for example, the cost of replacing a service no longer available, such as building an oil-fired power station to replace a silted up hydroelectric reservoir.

Economists believe that the recreational value of protected areas is not adequately reflected by entrance fees, and take into account the time spent on each visit and on such costs as transport, food and accommodation. One recent study concludes that the fees typically amount to just 0.01 to 1 per cent of what visitors pay to make the trip. Surveys also assess the hypothetical willingness to pay to protect a park resource.

Rising awareness of the value of protected areas is driving park managers to see their resources in the broader context of market forces, to rethink recreational user fees, and to implement ways of generating revenue based on the ‘user pays’ concept. The International Institute for Environment and Development recently identified 280 actual and proposed payment plans for environmental services. Some parks now charge recreational users in keeping with guests’ ambitions to visit, and endeavour to keep most funds on site. The Galapagos Islands has a sliding-scale entrance fee for the park that ranges from $6 for Ecuadorians to $100 for most foreign adults. Half the tourism revenue goes to manage the park and the surrounding marine reserve.

Not every park, however, can justify steep price hikes. Researchers predicted that Indonesia’s Komodo National Park would generate most revenue by multiplying gate fees some 15 times over the existing rate of around $0.90. But further assessment indicated that this would be entirely offset by the damage to the local economy caused by a sharp fall in visitor numbers. Higher fees will now be introduced gradually.

Localization means making people less dependent by helping them put their skills and resources to use

The Kyoto Protocol’s Clean Development Mechanism turns developing nations’ forests into ‘carbon credits’, which can be leased to developed countries to offset excess emissions. This offers great potential benefits to forest parks, although the scale and complexity of the negotiations have slowed progress.

In Costa Rica land title holders – most commonly private farmers – are paid $210 per hectare over five years for forest conservation, or $538 for reforestation. By 2002, 200,000 hectares were under such contracts with another 800,000 pending.

Meanwhile Costa Rica’s La Esperanza Hydroelectric Project pays the Monteverde Conservation League to safeguard the watershed that protects its dam and turbines from over-sedimentation and flash floods. The 99-year contract provides roughly $30,000 each year to manage 3,000 hectares of forest: the amount is linked to power output to boost the incentive for managing the watershed effectively. Costa Rica saw another pioneering scheme in 1991 when its National Biodiversity Institute provided biological samples to the chemical company, Merck, for testing in exchange for $1 million, and a share of royalties from any drugs developed. Though no promising drug material was found, the agreement established an interesting model.

Prime challenge
Many of these strategies have blossomed over the last decade, yet apart from recreational fee revisions, they are hardly ever implemented. A prime challenge for the next decade is to marry the lessons of economic valuation with compensation for environmental services to get green areas into the black.