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Protected Areas and the Importance of Biodiversity and Ecosystems in Economic Growth and Equity in Latin America and the Caribbean: An Economic Valuation of Ecosystems

Protected Areas and the Importance of Biodiversity and Ecosystems in Economic Growth and Equity in Latin America and the Caribbean: An Economic Valuation of Ecosystems

"Latin America and the Caribbean; A Biodiversity Superpower" is an initiative of the United Nations Development Programme (UNDP).  Marlon Flores, Senior Policy Advisor at Ecologic Institute, contributed the chapter on "Protected Areas" to the initiative's report "Importance of Biodiversity and Ecosystems in Economic Growth and Equity in Latin America and the Caribbean: An Economic Valuation of Ecosystems".

The Latin American and Caribbean region has one of the greatest endowments of natural capital in the world, which is a source of economic growth and has the potential to become the world leader in offering the services its ecosystems and biodiversity provide , and in return receive new benefits from this  conservation and sustainable management. The new policies recommended in the publication promise to transform the traditional model of development — one that often disregards environmental costs — into a new paradigm that recognises the value of services provided by healthy, fully functioning ecosystems.

The Report aims to inform policy makers and businesses in the Latin American and Caribbean region about the economic risks and opportunities of undertaking productive activities that impact on and are influenced by biodiversity and ecosystem services. The Report is a tool to assist governments and stakeholders in analyzing the role of ecosystem services in order to incorporate these services into economic planning, policy and investment at the sectoral level.

In his chapter on "Protected Areas", Marlon Flores, Senior Policy Advisor of Ecologic Institute, assesses the evidence on the contribution of Protected Areas to the wider economy and contrasts this against the current status of financing for Protected Areas in Latin America and Caribbean.

Protected Areas have cross-cutting effects. They contribute to the economies of Latin American and Caribbean countries through each of the other sectors reviewed in the book: agriculture, fisheries, forestry, tourism, and hydrological services. Marlon Flores' chapter relates the varied functions of Protected Areas and of the ecosystem services they support to productive processes in each of those sectors. The chapter also compares the effects of contrasting management regimes — from not managed to minimally-managed and well-managed — on the cross-cutting contributions of Protected Areas.

The chapter illustrates how Protected Areas contribute to sustain ecosystem services and examines the potential decline in productivity due to the degradation of ecosystems as a consequence of under-investment in Protected Areas. To this end, three scenarios are considered: a “not protected” scenario, in which habitats are not safeguarded and, thus, likely to be degraded; a “business as usual” scenario, where basic Protected Area protection is available but can mitigate only low level threats; and a “sustainable ecosystems management” scenario, with sufficient funding to support comprehensive, cost-effective Protected Area system management plans. In the case of sustainable ecosystems management, threats are fully managed (mitigated), and new business opportunities may be created in areas like eco-certification, sustainable sourcing, and novel ecosystem services.

Growing evidence indicates that the economic benefits of well-managed Protected Areas are multiple: increased production (GDP) in selected sectors, more jobs in rural areas, higher tax revenues, and higher foreign exchange earnings, especially though international tourism. Additional sectors can be affected as a result of economic ripple or multiplier effects.

This initiative has been sponsored by UNDP in partnership with the UN Environment Programme (UNEP), The Economic Commission for Latin America and the Caribbean (ECLAC), the Secretariat of the Convention on Biological Diversity (CBD Secretariat) and the UN Conference on Trade and Development (UNCTAD), and with the generous support from the government of Spain.


Flores, Marlon 2010: "Protected Areas", in: A. Bovarnick; F. Alpizar and C. Schnell (eds.): The Importance of Biodiversity and Ecosystems in Economic Growth and Equity in Latin America and the Caribbean: An economic valuation of ecosystem. New York: United Nations Development Programme (UNDP).

14 pp.
Table of Contents

    10.1 Introduction
        Key findings
    10.2 Context of Protected Areas
        Protected Areas
        Threats to Protected Areas
        Insufficient Funding to Cover the Costs of PA Management
    10.3 BAU and SEM in Protected Areas
        Defining BAU and SEM
        Differences in the BAU and SEM management approaches
    10.4 Importance of Protected Areas to Growth: Benefits and Costs under BAU and SEM
        Wild Genetic Resources
        Trade-offs between BAU and SEM in Forrest Resource Management
        Reduction of Deforestation
        Forest Concessions and Taxes
        Carbon Storage
        Nature-based Tourism
        Job Creation and Income
        Tax Revenues
        Foreign Exchange Earnings
        The Multiplier Effect of NBT
        Financing to PAS
        Private PAS
        Negative Impacts of Tourism (BAU Practices)
        Human Settlements (Potable Water, Disaster Mitigation, Hydropower)
        Drinkable Water
        Disaster Mitigation and Prevention
    10.5 Importance of Protected Areas to Equity and Poverty Reduction
        Economic Benefits
    Political and Social Benefits
        Are PA Objective Compatible with Poverty Reduction
    10.6 Conclusions and Recommendations
        The Transition from BAU to SEM is feasible
        Barriers to the Transition from BAU to SEM for PAs Are Significant
        Growing Biodiversity and Ecosystems Markets Can Provide Significant Benefits to Business
        PAs Drive Foreign Excgange Earnings and Local Employment. Especially via Tourism
        The Benefits of PAs Are not Equally Distributed
        PAs under SEM Can Contribute to Equity and Poverty Alleviation
        Economic Benefits from PAs and Cost Reductions from SEM Justify Including Externalities
        SEM Secures High Quality and Quantity of Water Resources from PAs. Indispensable to Maintining Production Levels and Savings in Irrigated Agriculture, Hydropower and Potable Water
        Hydropower: SEM Can Secure Sufficient Water Flow and Savings (Avoided Replacement Costs) in Hydropower Dam Operations
        Marine and Freshwater Protected Areas Contribute to Growth Through Biodiversity Conservation
        Research and Information Management
        PA Policy and Finance
        Institutional (Public and Private)
        Annex 10.1. Threats to Freshwater Ecosystems and the Possibility of Prevention by Protected Areas
        Annex 10.2. PAs and Crop Genetic Diversity in Selected LAC Countries
        Annex 10.3. IUCN Protected Area Management Categories

Protected Areas, PA Management, BAU, SEM, Agriculture, Irrigation, Wild Genetic Resources, Fisheries, Forests, Deforestation, Taxes, Carbon Storage, nature-based Tourism, Job Creation, Income, Tax Revenues, Multiplier Effect, NBT, PAS, Tourism, Human Settlements, Potable Water, Disaster Mitigation, Hydropower, Drinkable Water, Mitigation, Poverty, Benefits,