Nature Blog Network

Sunday, October 7, 2007

Indonesia Swaps National Debt for Reef Protection

Nature News reported in the last issue that Indonesia is promising greater coral reef protection in exchange for forgiveness of portions of its national debt. Congress is expected to approve of the Tropical Forest and Coral Conservation Act, supported by President Bush, providing $75 million over 3 years to pay off debts owed to the US. Is this a good idea? Where is this money coming from? Conservation programs at home here in the USA have been systematically cut by Bush during his reign. Indonesia is not listed as a member nation of the "Coalition of the Willing", so I suspect heavy petting is not involved.

I certainly believe in coral reef conservation as a priority everywhere, but where do we find $75 million to forgive debt owed to us by other nations for a cause thus diminished here at home in the States? I have no training in economics, so correct me if I'm wrong but isn't this a double whammy? We give away $75 million of our tax dollars and forgive $75 million that is our money (plus interest??). So that is a loss of $150 million. Is my math right?

It is sad that a nation has to bribed to conserve its own natural resources. Coral reefs provide many ecosystem services. A United Nations Environmental Program (UNEP) report "In the front line: shoreline protection and other ecosystem services from mangroves and coral reefs" (2006: pdf) defined 4 categories of ecosystem services that coral reefs provide:

1) Regulating – e.g. protection of shores from storm surges and waves; prevention of erosion.
2) Provisioning – e.g. fisheries, building materials.
3) Cultural – e.g. tourism, spiritual appreciation.
4) Supporting – e.g. cycling of nutrients, fish nursery habitats.
Without any economic analysis, it should be plain to see that these 4 services are desirable and immediately affect many people from many different angles. Add on shoreline protection and the value only skyrockets:
Reefs and mangroves play an important role in shore protection under normal sea conditions and during hurricanes and tropical storms. At least 70-90 per cent of the energy of wind-generated waves is absorbed, depending on how healthy these ecosystems are and their physical and ecological characteristics.
So lets understand the estimated cost benefit of such services. This data is cited in the UNEP 2006 report mentioned above but is originally from Cesar 1996 (Cesar, H. 1996. Economic Analysis of Indonesian Coral Reefs. Work in Progress, Environment Department, World Bank: pdf)

From Cesar 1996, cited above

"Reefs adjacent to sparsely populated areas where agriculture is the main activity: US$829 per km, based on the value of agricultural production that would be lost if there were no protection. Reefs adjacent to areas of high population densities: US$50,000 per km, based on the cost of replacing housing and roads if coastal protection were lost. Reefs in areas where tourism is the main use: US$1 million per km, based on the cost of maintaining sandy beaches."-Cesar 1996 (cited in UNEP 2006)
It is not a trivial amount of money saved or provided as a result of ecosystem services. By increasing protection of coral reef ecosystems in its waters, Indonesia could very well save and earn enough money to pay off its debt while increasing the standard of living for its citizens. I am not naive enough to know think the situation there is that simple, but minimal effort can yield large gains.

The US passed a similar bill 1998 exchanging debt relief for conservation work. Nature News reported that in 2003
"... the US government cancelled $10 million in debt owed by Panama to protect the Chagres National Park. The money is being spent on projects such as park-boundary enforcement to stem illegal farming and training locals as ecotourist guides."
Will bribing Indonesia to protect is reefs work? Indonesia has the financial incentive to protect its reefs without any additional rewards. I think this reflects the lack of long-term thinking in politics. Ecosystem services as a concept requires forward thinking, waiting to reap the benefits much like the college mutual funds I started for my children. It doesn't seem like much use now and is of no immediate benefit to anyone, but after 18 years of growth it will ensure the continuing educations of Elliot and Freya so that they may continue to grow as individuals. Ecosystem services works similarly. Putting say, $75 million into protecting wetlands across the USA's coastlines might not seem to have much use in the here and now, but in 18 years when another Category 5 hurricane makes landfall in the south, certain affected individuals will be grateful 70-90% of the wind-driven wave energy ("current consensus" in UNEP 2006) was reduced due to the services these coastal habitats indirectly provide.


  1. kevin...

    sorry to just getting around to reading this, but i'm glad i found it... you take on a complex and important issue...

    i agree that at first approximations, anyone could recognize the value of investing in conservation when you stop to consider all the ecosystem services derived from healthy environments...

    but as someone who is working towards conservation in many developing countries, it's a very difficult negotiation to make these seemingly apparent connections... particularly when local people are faced with crushing poverty, political corruption, the futility of election after election churning out nothing more than business-as-usual candidates, AND hearing all about the need for developing nations to be more conservation focused when they see juggernauts like the US emitting heaps of carbon, shipping and dumping our toxic wastes and detritus to other parts of the world, and generally engaging in other such "do as i say, not as i do..."

    this is not to say that the US should be the underwriters for all of the developing world, or should "bribe" countries into action...

    all i'm empasizing is that the conservation calculus that may make sense to you and i is not necessarily the approach that can work globally... after nearly two decades of field-based conservation work, i'm becoming somewhat of a pragmatist...

    also, sometimes a conservation bribe works... in raja ampat indonesia (by all accounts the epicenter of global marine biodiversity) international mining interests are setting sights on stripping the gold, silver and nickel from the coastal highlands... these companies have the capacity to dangle very tempting bribes of their own to local people in exchange for mining rights... the strip mining doesnt just destroy the land, but contaminates the entire watershed and offshore areas with sediment and nasty byproducts of mining such as mercury...

    while conservation groups and concerned governments can never compete with the immediate fronting of cash like these companies, we can provide some smaller monetary incentives combined with education and awareness in the long-term benefits of safeguarding their natural resources (there's a lot more $$$ to be made in ecotourism in the long run than could ever be made from mining)...

    i guess i'm just saying that sometimes we need to also be willing to invest in conservation in places outside our own borders... afterall, it is one planest...

    (apologies for the long winded comment... it's late in the day!)

  2. Rick, I always appreciate your comments and in this case you extensive experience in reef conservation.

    You are absolutely right about the "do as I say, not as I do" mentality of politicians here in the US. That won't change, ever. But the real question to me is whether it is more profitable from Indonesia's perspective to protect the reefs anyways and harness the money saved from ecosystem services and money earned from eco-tourism and sustainable agriculture (tourists always pay up for local sustainably produced food, etc).

    For instance, would a villager with coastal land rights be betteroff financially with the one-time profit of selling off the land or the recurring profit of providing a service in the tourism or agricultural industries? I'm sure you've had these sorts of conversations before with such people. I've had similar conversations with native fijians about conservation priorities. The last time I was there, Sept. 2006, there were huge mangrove restoration projects and people there generally seemed to believe in eco-tourism. I stayed at eco-tourist mountain lodge in western Fiji that was run by an entire village who sustainably harvested kava, chili peppers and taro, among others, along the mountain sides. Of course this was before the 'coup' that took place almost immediately as we were leaving the country, so I don't know if things have changed.

    Indonesia certainly has lots more earning potential from many other industries (such as mining like you mentioned) so the calculus isn't quite the same. But somehow the fijians were able to see the value and earning potential.

    With regards to spending our money outside our borders. Yes, we do. But... as I said in the article we will be at a net loss of $150 million dollars from the deal. Instead of relieving foreign debt (something I personally believe is unobtainable, debt in the magnitude as seen between nations is ridiculously high and none ever seem to make any effort at paying the bills) perhaps some of that money should go to fun economists, conservationists and other folk to develop real working solutions to the Indonesian problem? Or be put into developing the tourism and sustainable ag industries and getting people into real jobs which will raise their standard of living?

    This just seems like a bad deal for the US when we got our enormous problems. Additionally, we always keep seeing enormous amounts of taxpayer money floating from out of nowhere like this. How come that money can't be used to fund the National Park Ranger system and improve our existing edens? Or be used to designate more land and oceans as protected areas (maybe not under Bush anyways, unless you brother from Florida asks nicely)? Or fund more research to find real world solutions from bright and up and coming researchers and grad students (like me!)?

  3. hey, kevin...
    all great counterpoints... again, apologies for the long comment to follow... hope there's a coherent narrative here somewhere...

    kevin said:
    "... would a villager with coastal land rights be betteroff financially with the one-time profit of selling off the land or the recurring profit of providing a service in the tourism or agricultural industries? I'm sure you've had these sorts of conversations before with such people. I've had similar conversations with native fijians about conservation priorities. The last time I was there, Sept. 2006, there were huge mangrove restoration projects and people there generally seemed to believe in eco-tourism. I stayed at eco-tourist mountain lodge in western Fiji that was run by an entire village who sustainably harvested kava, chili peppers and taro, among others, along the mountain sides."

    i certainly agree that local communities in coral reef destinations--provided with appropriate tools and training--can build sustainable alternatives to destructive practices... we are doing just this sort of work in our mpa building and community benefit sharing project in fiji... but melanesia is an interesting case and not all destinations can be compared apples-to-apples... in fiji, indonesia, png, and much of the indo-pacific, customary marine tenure exists (traditional marine resource ownership)... on paper, we would expect local people to clearly pass on strip mining or forestry buy-outs and see it's a better proposition to conserve their natural resources for something like ecotourism which can allow them to "return to the well" time and again... but it's another reality in practice...

    fiji, with all its current political problems, is still a world of difference from indonesia... fiji (for better or worse) has a councel of chiefs to assist in resource use... fiji has a tremendous amount of foreign capital and investments (everything from textiles to mega-resorts and homes of uber-rich celebrities)... this is stark contrast to where i work in raja ampat, indonesia and parts of png where there is abject poverty, malnutrition, stunning levels of local and national political corruption... yet these same communities are owners of land and seafloor rich in minerals and fossil fuels as well as forests and oceans with the highest biodiversity on the planet... by one accounting they are destitute, by another incalculably wealthy... and unlike fiji, in indonesia financial resource are concentrated in hubs (jakarta, surabaya, and bali) but resources and services start to drop off pretty quickly as you move more afield (where healthy coral remains)... even in some of the remotest places i've visited in fiji, there's basic insfrastructure of potable water, nutritional capacity, roads, sanitation, etc...

    a final rationale for outside government conservation support for developing nations is that all too many times NGOs (local and international) will come in to places like indonesia with their grants and limited funding with to local people of how they are better off sustainably managing their resources... yet, when the grant dies up or the NGO moves on, the local communities are left holding the keys on a project that didn't invest in business plans, infrastructure, and investments in local capacity-building... as a result, i've seen local communities simply throw their hands up in defeat and sell land and marine rights to mining or other extractive practices... or they become disgruntled and distrustful of future NGOs hoping to preserve biodiversity and cultural livelihoods...

    i guess i'm calling for some combination of investments by both NGOs and by governments like the US and others to be willing to recognize that critical biodiversity threats need immediate attention... do we have conservation funding gaps right here in the US? of course... do we need better funding and allocation to international conservation NGOs (and researchers and grad students)? yes again (don't get me started on the inequities of vast funding to the Big, salary-intensive NGOs (BINGOs) and the pittances for which small NGOs must compete)... i could also make an argument that dollar for dollar, i can get a whole bunch more conservation to happen in a developing country than here in the states (but that again gets skewed if you factor in the BINGOs)...

    anyway, end of transmission...

  4. Certainly not every destination can compared on equal terms. And I'm not naive enough to think that paper and reality are congruent. I think this has to do with your point about NGO' coming and going and not investing in a country's infrastructure. It the disconnect between outside government funds (i.e. US or other western nations) and where that funding goes once it reaches its destination. Are we funding reef protection and sustainable development or funding the Indonesian government? I fear that after the money goes to the government it doesn't trickle-down to where it is intended to go. Perhaps if there were more insurance and accountability of where the money goes I would be less skeptic. Or even better put the money right into the infrastrucure specifically (i.e. funding local projects on a proposal basis like how grants get funded perhaps?).

    Lol at BINGO's, is that Macphersian or a term used in the industry? This is why I stopped donating to many NGO's becuase I feel that their overheads are too high. It seems more about getting a salary than solving conservation problems at times. I don't know enough about CRA but from talking with you and reading about your work in real-time on your blog, it seems you guys are certainly in it for right reasons and working hard. So yes, NGO and Government funding might be needed, but why does the paper trail end when funds are transfered between countries?

    over and out.


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