Editorial

Solving Conservation’s Money Problems

Approximately $4 billion a year is required to successfullydownlist all threatened species by at least one level onthe International Union for Conservation of Nature RedList (McCarthy et al. 2012). At first glance, $4 billionannually seems like an insurmountable goal; however,compared with the scale of the global economy, $4 billionis a pittance. Nonetheless, it is significantly more moneythan conservationists currently have access to.

However, there is a way, a potentially painful way, tocome up with billions of dollars every year. It was hintedat by Science editor Marcia McNutt (2014). Conservation-ists should rescind their opposition to the Keystone XLpipeline in exchange for a tariff on the oil that flowsthrough it. The proceeds from this tariff would then bededicated to international species conservation.

The Keystone XL pipeline is designed to transportabout 830,000 barrels of oil per day from the Athabascaoil sands in Canada to U.S. Gulf Coast refineries. A tariff ofabout $14 per barrel would generate over $4 billion peryear if the pipeline operated at capacity. Obviously, anytariff would be opposed by TransCanada, the pipelineowner, and oil and gas producers and refiners, and a $14tariff may prove too optimistic, but even a more modest$5 per barrel tariff would generate $1.5 billion dollarsper year. For comparison, The Nature Conservancy spentjust under $400 million in 2013 on conservation-relatedprograms, and Conservation International spent just over$127 million in 2012. Thus, money from a tariff on theKeystone XL pipeline could make a significant positiveimpact on conservation funding.

Clearly, this would require a painful compromise forconservationists. Environmentalists have fought againstthe Keystone XL pipeline for years and their oppositionhas been one of the major environmental successes, butultimately, the Athabasca tar sands will be developed,with or without the Keystone XL pipeline. Furthermore,it is unrealistic to think that environmentalists can suc-cessfully oppose the pipeline evermore. It is possiblethat President Obama may approve the pipeline beforehe leaves office. Even if he does not, any Republicansuccessor, and possibly a Democratic one as well, wouldprobably approve it soon after taking office. Thus, envi-ronmentalists need to act quickly to extract the maximumpossible concession from policy makers.

The fundamental question is which of three potentialfutures is the best for biodiversity? In the first potential

future, the Athabasca oil sands are not developed andthe oil remains in the ground. In the second potentialfuture, the Athabasca oil sands are developed and the oilis shipped by rail to the United States and delivered viapipeline to the Canadian West Coast, where it is shippedto refiners in China. In the third potential future, theAthabasca oil is developed and transported through theKeystone XL pipeline with a multi-billion dollar per yeartariff flowing to conservation of endangered species. Ofthese three scenarios, the first (no development) andthe third (development with a tariff) are quite obviouslypreferable to the second (development with no tariff).

Therefore, the question becomes how realistic is thefirst option? How realistic is it that environmentalistscan, in perpetuity, successfully oppose the Keystone XLpipeline and that without the Keystone XL pipeline theAthabasca oil remains in the ground? Unfortunately, wealready know the answer to this question. The Athabascaoil sands are already being developed. The best remainingoption for conservationists must be development with atariff to fund biodiversity conservation.

There are, of course, many potential pitfalls. If accom-plished legislatively, such a plan may require an excep-tion to the North American Free Trade Agreement. Fur-thermore, any tariff imposed on tar sands oil could also bevulnerable to revision by future lawmakers or the courts.Therefore, the actual implementation of such a plan maybe more feasible through some sort of legally binding“easement” that TransCanada and conservation organi-zations would agree to in order to allow development.This would set a precedent in which environmental tar-iffs are used to help settle differences between opposingstakeholders.

Acquiescence to the Keystone pipeline might also dosignificant damage to the reputation of conservation ingeneral. Rather than being seen as idealistic champions ofthe wild, conservationists may begin to be seen as Machi-avellian pragmatists, and this may have negative impactson the fundraising ability of conservation non-profits.Thus, acquiescence to the Keystone pipeline reflects areal choice for the future of conservation; conservationmay remain ideologically pure but continue to fight amostly losing battle against industrial encroachment or anew movement of conservation realism may develop inwhich environmentalists extract concessions from devel-opers to meet the financial needs of global conservation.

1Conservation Biology, Volume 00, No. 0, 1–2C© 2014 Society for Conservation BiologyDOI: 10.1111/cobi.12317

2 Editorial

The most obvious objection to this proposal, at leastfrom a conservation perspective, is that it is a slipperyslope. That is, once the precedent has been set all mannerof environmental degradation will be achievable giventhe right price. If conservationists sell out on the Key-stone XL pipeline, what is to keep them from selling outon oil drilling in a pristine ecosystem, logging in a rainfor-est, or hunting in a wildlife refuge? The answer is noth-ing. In each case the costs and benefits of each proposalhave to be weighed against the probability of successfullyopposing development. In the case of the Keystone XLpipeline, the probability of successful opposition is lowwhile the potential benefits of a tariff are high.

Another example of the same principle is oil and gas de-velopment in the area around Lake Albert in Uganda andthe Democratic Republic of Congo. There are a numberof reasons to oppose oil and gas development in Africa,but from a conservation perspective, the Lake Albert areais home to half of Africa’s bird species and contains thelast remaining habitat of the eastern lowland (Gorillaberingei graueri) and mountain (Gorilla beringeiberingei) gorillas. Obviously, oil and gas developmentwill inflict a cost on conservation efforts, but, as in theKeystone XL pipeline, it is unlikely that conservation-ists can successfully oppose development indefinitely.Indeed, oil and gas development is already beginning inUganda. Thus, rather than simply oppose development,conservationists may be wise to attempt to extract acost from the developers. Specifically, conservationistscould lobby the oil companies involved (Britain’s Tullow,France’s Total, and China’s CNOOC) or the governmentsinvolved to dedicate a portion of their profits to purchas-ing land for conservation elsewhere in Uganda or Africa.

Or, to take the argument to the extreme, considerthe case of Icelandic and Norwegian whaling. Accordingto the International Whaling Commission, in 2012 Nor-way and Iceland combined harvested 516 Minke whales(Balaenoptera acutorostrata) from the North Atlanticout of a population of about 120,000. Assume that con-servation organizations could convince the governmentsof whaling nations to pay a fee for every whale takenin return for conservationists’ acquiescence to a sustain-able whaling industry. The point is that there would be aprice per whale—$10,000, $100,000, $1,000,000—fromwhich global conservation would receive a benefit thatfar outweighed the costs to biological diversity. Further-more, because whaling is already occurring and will likelycontinue to occur whether conservationists object ornot, nearly any value paid by whalers to conservationorganizations would represent a net benefit to globalconservation.

Environmental taxes have been studied for decades(Bovenberg & De Mooij 1994; Copeland 1996) and ac-cepted by the policy community since at least the early

1970s when the polluter pays principle was embraced bythe European Community’s First Environmental ActionProgram (Ekins 1999). Thus, there is little novel in my sug-gestion that the Keystone pipeline, or any other industrialdevelopment, pay to offset the ecological damage theycause. What is more novel is the idea that the acceptabil-ity of environmental tariffs should be discounted by theprobability of successfully opposing development. Thatis, it makes sense to allow the Keystone pipeline andto extract the maximum possible concession from thedevelopers because continued successful opposition hasa low probability of success. This is not so much an eco-logical economic argument for developers to internalizethe costs of their environmental degradation as it is a callfor environmentalists to extract the maximum possiblebenefit from developers and industrialists, regardless ofthe actual external cost borne by society.

Conservation biologists have been quite good at princi-pled opposition to environmental degradation; they havebeen less good at cost-benefit analysis and realpolitik.Developments like the Keystone XL pipeline and oil de-velopment in Africa have significant environmental costs,and while conservationists do a good job defining thosecosts in terms of biodiversity, they do a poor job definingthose costs monetarily. If concessions on tariffs can besuccessfully extracted from policy makers, than the bene-fits of acquiescence surely exceed benefits of oppositionin the case of the Keystone XL pipeline, and potentially inmany other examples. While tariffs on the Keystone XLpipeline may not solve all of conservation’s money woes,the idea of placing environmental tariffs on developmentcould lead to significant new cash flows for conservationgovernmental and nongovernmental organizations.

BRIAN F. SNYDER

Center for Energy Studies, Louisiana State University, Energy Coastand Environment Building, Baton Rouge, LA 70803, U.S.A. emailsnyderb@lsu.edu

Literature Cited

Bovenberg, A. L., and R. A. De Mooij. 1994. Environmental levies anddistortionary taxation. The American Economic Review 94:1085–1089.

Copeland, B. R. 1996. Pollution content tariffs, environmental rentshifting, and the control of cross-border pollution. Journal of in-ternational Economics 40:459–476.

Ekins, P. 1999. European environmental taxes and charges: recent ex-perience, issues and trends. Ecological Economics 31:39–62.

McCarthy, D. P., P. F. Donald, J. P. Scharlemann, G. M. Buchanan, A.Balmford, J. M. Green, L. A. Bennun, N. D. Burgess, L. D. Fishpool,and S. T. Garnett. 2012. Financial costs of meeting global biodiversityconservation targets: current spending and unmet needs. Science338:946–949.

McNutt, M. 2014. Keystone XL. Science 343:815.

Conservation BiologyVolume 00, No. 0, 2014