Someone has to pay to conserve forests. Likely candidates include taxpayers, philanthropists, polluters, tourists, and consumers. ’Financing Biodiversity Conservation’, prepared for the Inter-American Development Bank by Ricardo Bayon, Steve Lovink, and Wouter Veening, presents the current state of affairs, emphasizing the situation in Latin America.

Through the Global Environmental Facility, bilateral donations, and technical assistance grants from the multilateral banks, northern taxpayers finance a large portion of conservation efforts. Most Latin American countries have created National Environmental Funds to channel some of these donations.

The first Debt for Nature swap was in 1987. Since then, this mechanism has provided one billion dollars for conservation projects. In the early 1990s, international environmental NGOs negotiated most of these swaps. Now there are fewer opportunities for NGOs to purchase government debts at discounted prices and leverage that to support conservation. Bilateral initiatives such as the U.S. government’s ’Enterprise for the Americas’ and ’Tropical Forest Conservation Act’ programs are currently more important. Through these programs the U.S. has forgiven developing country debts in return for investments in forest conservation.

Voluntary contributions by foundations and individual citizens remain a major source of funding. In 1993, groups in the United States contributed 3.2 billion dollars to wildlife and environmental causes. Developing countries get part of that money.

Governments in developing countries have proved reluctant to take out loans for conservation or finance it with general tax revenues. Nevertheless, Brazil requested a loan for its environmental fund and Ecuador used proceeds from the privatization of state enterprises for the same purpose.

In addition, developing countries have begun to use taxes, fines, and fees collected from polluters, loggers, water users, and tourists to fund conservation. Brazil’s new Environmental Crimes Law stipulates a portion of the fines collected will go to the national environmental fund. A special gasoline tax funds part of Costa Rica’s environmental services program and each foreign tourist who visits Belize must pay a tax earmarked for the country’s Protected Areas Conservation Trust. If the parties to the climate change convention decide to allow companies engaged in activities that emit carbon into the atmosphere to offset some of those emissions by paying to conserve natural forests that could generate large sums of money for conservation.

Governments have encouraged private investment in eco-tourism, certified timber production, harvesting and sale of non-timber forest products, and organic agriculture. Brazil’s Bank of the Amazon has established credit lines for non-timber forest products and businesses concerned with environmental sustainability and conservation. The Dutch government does not tax the income and dividends earned by ’Green Funds’ that invest in environmentally friendly activities. Government loan guarantees and projects that provide venture capital and training can stimulate investment in biodiversity – related businesses.