MPA Finance
If you are not already familiar with marine protected areas (MPAs), we recommend reading the Marine Protected Areas and Resilient MPA Design toolkits before proceeding through this content.
Marine protected areas (MPAs) play an important role in protecting critical habitats, fostering biodiversity, and managing fisheries while providing many related co-benefits to coastal communities, including coastal protection, sense of place, and eco-tourism income, among other impacts. Despite their ecological, social, and economic value, many MPAs are underfunded, with 65% of MPAs reporting that they have insufficient budget for management or enforcement of their area. ref
Common funding mechanisms such as government allocations, donor contributions, tourism revenue, grants, and philanthropy are frequently utilized to support MPAs, especially at the inception of a new protected area. However, these initial funding streams are often insufficient to sustain the ongoing resource needs essential for maintaining effective management activities. Challenges such as the phasing out of initial grants, budget cuts resulting from shifts in government priorities, and external threats impacting tourism revenue can significantly diminish the reliability of funding. ref
This can leave an MPA that looks ideal on paper unmanageable and unenforceable in reality. To help prevent the occurrence of these “paper parks,” it is of utmost importance to consider their economic and social benefits (such as enhancing livelihoods and economic opportunities for local communities) and the funding mechanisms necessary to support those benefits. ref
COMMON FUNDING CHALLENGES
- Benefits from MPAs can be difficult to monetize, making it difficult for some stakeholders or funders to value benefits that are not direct financial gains
- Lack of clearly identified groups who will benefit from conservation efforts leads to disinterest from potential funders
- Potential investors are disinterested due to limits on the size of returns from investments in an MPA
- MPAs may require several years of consistent and effective management before benefits are realized (and in some cases, the benefits may never be visible to funders), contributing to the perception that short-term costs outweigh long-term benefits
- Unsustainable business models (e.g., MPA management plans that do not accurately model how much funding is required for effective management across time scales)
What is MPA Finance?
MPA finance involves the collection, management, and distribution of financial resources, including budgeting, planning, and administration of MPA projects. It requires careful consideration of an MPA’s funding requirements, including the amount and timing of funding, and strategizing income sources to align with those requirements. Like any form of conservation finance, MPA financing should source, maintain, and utilize financial resources while also managing the expectations and incentives of involved parties (e.g., local communities and financial investors) to achieve conservation outcomes. ref
This toolkit primarily focuses on varieties of mechanisms that can provide revenue to MPAs for different activities and provides guidance on how one might identify the most appropriate funding mechanisms to meet those needs in the short, medium, and long terms. While the the intricacies of budgeting and revenue modeling are not discussed in this content, it is important to keep budgeting in mind, as even robust and diverse funding streams still need to be paired with considerations of efficient and effective management to make best use of that funding.
FUNDING CHARACTERISTICS TO CONSIDER
- Reliability: How consistent is the funding from the mechanism, and how likely is it to change over time?
- Feasibility: How difficult is it to raise the funding from the mechanism?
- Temporality: How long does it take to establishment a mechanism? How long will it take for financial returns to start coming in to an MPA?
- Flexibility: Are you free to use the funding as you see fit, or is it designated for specific uses?
Since the 2010s, there has been a steady and steep increase in the application of traditional and contemporary finance models to sustain MPA management. At the same time, however, there have been limited opportunities for marine managers—who often have backgrounds in natural resource management but not in business or financial management—to receive practical guidance in diversifying and cultivating income-generating MPA activities. This toolkit is designed to help managers and planners who are working either in existing MPAs or on the establishment of new MPAs:
- Gain a basic understanding of MPA finance
- Consider which finance mechanism(s) might be appropriate for their MPA
- Strategize for the implementation of MPA financing
- Explore real-world examples of what MPA finance looks like in practice
Continue through the following sections of this toolkit to learn how MPA finance can support your marine conservation objectives.
The MPA Finance Toolkit was developed in partnership with the Blue Nature Alliance, a global partnership to catalyze effective large-scale ocean conservation. In September 2023, the Western Indian Ocean Marine Science Association and Blue Nature Alliance co-hosted an MPA finance workshop with marine managers in the Western Indian Ocean region. The resources presented in this toolkit were developed for and piloted by the managers in attendance.
