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Open Journal of Social Sciences, 2016, 4, 61-69
Published Online June 2016 in SciRes. http://www.scirp.org/journal/jss
http://dx.doi.org/10.4236/jss.2016.46007
How to cite this paper: Mariki, S.B. (2016) Commercialization of Nature: Can Market-Based Mechanisms Deliver Positive
Conservation and Development Outcomes? Open Journal of Social Sciences, 4, 61-69.
http://dx.doi.org/10.4236/jss.2016.46007
Commercialization of Nature: Can
Market-Based Mechanisms Deliver Positive
Conservation and Development Outcomes?
Sayuni B. Mariki
Department of Wildlife Management, Sokoine University of Agriculture, Morogoro, Tanzania
Received 18 May 2016; accepted 12 June 2016; published 15 June 2016
Copyright © 2016 by author and Scientific Research Publishing Inc.
This work is licensed under the Creative Commons Attribution International License (CC BY).
http://creativecommons.org/licenses/by/4.0/
Abstract
Over the past two decades, market-based approaches to natural resources conservation have be-
come a focus in national and international arenas. They are regarded as a means to finance biodi-
versity conservation. The approaches have emerged, partly because of global environmental chal-
lenges as well as a response to growing criticisms levelled against the efficiency of conventional
approaches to natural resources conservation. Drawing from numerous case studies, this article
aims to demonstrate the extent to which these approaches have managed to deliver win-win out-
comes as claimed by its proponents. It synthesizes literature from the current experiences of
market-based approaches, and assesses its success with respect to economic, social and environ-
mental impacts. The article contributes to the growing debate about the role of environmental
markets for biodiversity conservation and development. The article concludes that despite some
weaknesses that market-based conservation approaches exhibit, they are the vital component in
efforts to combine conservation and development.
Keywords
Benefits, Conservation, Development, Local People, Markets
1. Introduction
Over the past two decades, conservation policy and practice have increasingly turned towards market-based in-
terventions as a means to reconcile environmental conservation and economic development [1]-[4]. The inter-
ventions have emerged in response to global environmental issues and challenges including global warming,
ozone layer depletion, and failure of environmental legislation to protect environment [5]. This situation re-
S. B. Mariki
62
quired new strategy of cooperation and negotiation between different actors. Since then, many governments are
striving to use market-based mechanisms to resolve environmental problems in diverse ways [5].
Market-based conservation emerged under the notion that if the economic value is apportioned to a resource
or a species, users will realise the accrued benefits and thereby use the resources sustainably; thus, it would be
the best way of saving it [6] [7]. Moreover, the direct payments received by local communities may provide
benefits adequate to compete with alternative land use activities such as agriculture [8]. These benefits accrued
will also provide livelihood opportunities for those most affected by conservation initiatives [9]. To date, there is
a range of financial mechanisms with the intention of meeting these dual objectives.
Market-based approaches have been implemented for over two decades, but they seem to yield mixed results
(e.g. [10]-[12]). This paper draws from different case studies around the world to explore the extent to which
these approaches have delivered conservation and development outcomes. The article contributes to growing
literature of market-based conservation approaches and whether they are good option for biodiversity conserva-
tion and economic development. Lessons learnt from different case studies will provide insights to various ac-
tors interested in market-based initiatives as a way of meeting conservation objectives.
This article starts by providing a brief history of conservation with a focus on commercialization. Secondly, it
reviews market-based conservation and its two persistent narratives—positive and negative impacts of commer-
cialization. Lastly, findings from various case studies of market-based conservation are analysed. A general
conclusion drawn from this review is that, market-based conservation approaches are important in complement-
ing the existing strategies and initiatives aiming at reconciling conservation and development goals.
2. A Brief History of Conservation with Focus on Commercialization
Modern conservation dates back to the late 19th Century when the Yellowstone National Park was established in
the United States of America. Conservation spread worldwide, largely through colonialism. The main concern
was that excessive local resource use was leading to the resource decline and extinction [13]. Europeans be-
lieved that Africans hunting for subsistence was barbaric and uncivilized. Sport hunting was perceived in ro-
mantic terms as a “civilized sport” for privileged white settlers. Thus, white people were regarded as hunters
while black people were called poachers. For instance, Teddy Roosevelt, the 26th President of the United States,
in his voyage to East Africa in early 1900s killed over 11,000 animals. However, he was regarded as “The
Hunter” and also “Conservationist President” [14].
Colonial period was marked by increased exploitation of natural resources such as wildlife, forests and wood-
lands. During the First World War, there was intensive forest encroachment as indigenous forests were cleared
to establish tea, coffee, commercial crops and timber plantations [15]. Natural resource plundering, land appro-
priation from local people (colonial primitive accumulation) and unequal exchange were done mainly through
violence and force [16]. At this time, several ordinances and policies were enacted and formulated to control
natural resource use. For example in Tanzania, the Forest Ordinance of 1957 and the Wildlife Conservation Or-
dinance of 1959 were enacted in which virtually all customary rights to local communities were withdrawn.
Shortly after World War II, much of the Western world experienced economic boom. However, after the
boom, these countries experienced economic stagnation in the 1970s where there was a high unemployment co-
incided with high inflation [17]. In developing countries, there was a decline in economic growth in the 1970s
and 1980s partly as a result of a mix of state-led economy, nationalism, corruption, politics, and populism [17].
The stagflation forced many countries to look for new economic systems. The neoliberalism and other associ-
ated economically liberal doctrines emerged as a solution to the problem and swept all over the world [16].
The economic reforms signified a move from a state-led economy and administrative control towards “eco-
nomic liberalization” and encouragement of “private sector development” [18]. The economic liberalization was
a part of the general move intended to give markets a greater role in development. It was also a response to nu-
merous factors specific to finance [17]. Three broad factors that pushed a move towards financial liberalization
in the 1980s and 1990s were “poor results, high costs, and pressures from globalization” ([17], p. 208). The neo-
liberalism agenda according to [16] was an attempt to set back the clock to an earlier time of imperialist plun-
dering of the planet, its peoples and its resources. Development partners were an important and integral part of
the process of economic reforms. Their main contribution was provision of substantial financial and technical
assistance and monitoring governments on implementation of economic reforms [18].
Most of the reforms in the natural resources sector in many countries in the south occurred in the 1990s.
S. B. Mariki
63
These reforms were supported by conservation multinationals, development multinationals, as well as many na-
tional departments for international cooperation [19]. The international policy instruments such as Convention
on Biological Diversity and the Millennium Development Goals also supported these reforms. For instance, the
Fifth IUCN World Parks Congress recommended that: “…protected area establishment and management should
contribute to poverty reduction at the local level, and at the very minimum must not contribute to or exacerbate
poverty” ([20], p. 210). The international agreements “pushed local conservation authorities to take the liveli-
hood concerns of people residing in conservation landscapes seriously, leading to the continued search for
on-the-ground mechanisms that can facilitate reconciliation between conservation and livelihood” ([9], p. 363).
3. Market-Based Approaches to Biodiversity Conservation
Since 1990s, market-based approaches to biodiversity conservation gained popularity in many countries [6]. The
market-based conservation is fitted in neoliberalism that aims to reregulate nature through forms of commodifi-
cation [21]. Neoliberalism “proposes that human well-being can best be advanced by liberating individual en-
trepreneurial freedoms and skills within an institutional framework characterized by strong private property
rights, free markets and free trade” ([22], p. 2). The neoliberalisation priorities include deregulation, decentrali-
sation, increased private sector involvement and withdrawal of the state in markets [23]. The state’s role in the
neoliberal context is to “create and preserve an institutional framework appropriate to such practices” ([22], p.
2).
Neoliberal conservation may take many forms, but it reframes conservation in terms of market mechanisms
[21]. Neoliberal conservation can be defined as the “decentralisation of environmental governance, or a shift in
responsibility for formal resource management from state to local institutions and new forms of commodifica-
tion and commercialisation of nature that emerge in these contexts in order to fund conservation efforts” ([24], p.
10). Advocates of market-based conservation argue that such market will increase conservation fund, increase
environment-friendly business practices, promote participatory conservation, protect native property rights, and
promote environmental consciousness, thus enhancing more effective and efficient conservation [21]. Market-
based conservation has been linked with efforts to empower and economically improve the condition of most
disadvantaged people, for example poor farmers, the landless, women and indigenous peoples [25]. Thus, the
approach differ from traditional command and control approach to natural resources conservation as it allows
actors to undertake actions that have the lowest cost but lead to more cost-effective results.
The main commodities for production and exchange in the market are mainly carbon, wildlife, landscape aes-
thetics, genetic resources and related knowledge, and ecosystem services. There have been major policy docu-
ments supporting this approach. These documents, among others, include: “The economics of ecosystems and
biodiversity” [26] and “Towards a green economy” [27].
The economic rationale of market-based approaches is premised on the assumption that “if biodiversity and
other environmental services are assigned market prices, market forces will drive biodiversity conservation ([28],
p. 2). The requirements in these markets are mainly commodification, privatization, free trade locally, nationally
and internationally. The approach is construed as a means to achieve development and environmental conserva-
tion in an environmentally sound way [9].
The main markets include payment for ecosystem services (PES) (also known as payment of environmental
services)—focus on maintaining a flow of a specified ecosystem service in exchange for something of economic
value. Examples under PES scheme include: carbon trade (Kyoto Protocol)—The Protocol, adopted in Japan in
1997 and entered into force in 2005, is an international treaty that binds “State Parties to reduce greenhouse
gases emissions” [29]. This Protocol was the first international attempt to fight climate change through the re-
duction of greenhouse gases emissions. The carbon trade emerged as an exchange of credits between nations.
The trade was designed to reduce emissions of carbon dioxide. The trade allows countries that have higher car-
bon emissions to purchase the right to release more CO2 into the atmosphere from countries that have lower
carbon emissions [30]. Natural forests and plantation are regarded as an important carbon sinks. Therefore, by
allowing landowners to sell the carbon stored in these forests as emission reduction credits, will act as an incen-
tive for forest conservation [6]. This argument has been embraced by the forestry sector in many countries as
well as forest plantation companies, and has promoted the afforestation and reforestation projects [28]. Another
form of PES is payments for watershed services—payments or direct compensations by the beneficiaries of a
watershed service for the maintenance or provision of the service to its providers.
S. B. Mariki
64
Biodiversity offsets is another form of market where the conservation actions are intended to compensate for
the residual, unavoidable harm to biodiversity caused by development projects, so as to ensure “no net loss” of
biodiversity. However, before developers contemplate offsets, they should have first sought to avoid and mini-
mise harm to biodiversity [31].
Forest Certification is another form of market that intends to ensure “sustainable forest management based on
environmentally, socially beneficial and economically viable management of forests for present and future gen-
erations” ([32], p. 5). The certification concept emerged in the 1990s after many campaigns by environmental
groups on the impact of timber logging on the environment. Examples of these campaigns include the “Boycott
Tropical Timber” and “Save the Rainforest” of the 1970s and 1980s. The campaigns managed to raise awareness
amongst consumers as well as putting pressure on the industry to use their purchasing power to influence prac-
tices in the trade. Based on this, timber producers, traders and environmentalists consent to establish the Forest
Stewardship Council (FSC) in the early 1990s. Since then, a mechanism has been put in place to identify timber
from genuine sources [33].
Trade in genetic resources and related knowledge is also considered as one of the markets. It is believed that
if well managed, the market can be advantageous, since it can generate income for people, and at the same time
provide incentives for the conservation of biodiversity. Another market is ecotourism. Ecotourism is defined as a
“responsible travel to natural areas that conserves the environment and improves the wellbeing of local people”
[34]. Tourism markets are believed to bring about win-win outcomes by adding value to protected areas through
ecotourism activities and ecosystem services. This added value can pay for conservation activities and generate
benefits for local communities, encouraging them to support conservation [6] [21].
Commercialisation of park management is another market where firms buy up public parks and reconstitute
them on business principles. The typical example is the “African Parks Organisation”. The Organization man-
ages ten parks in seven African countries—Central Africa Republic, Chad, Democratic Republic of Congo, Ma-
lawi, Congo, Rwanda and Zambia. The total area under management covers six million hectares [35].
The market-based conservation is supported by international treaties and conventions (e.g. Convention of
Biological Diversity, International Treaty on Plant Genetic Resources for Food and Agriculture), development
partners (e.g. USAID), corporations, financial institutions (e.g. World Bank), organizations (e.g. World Intel-
lectual Property Organization, the World Trade Organization), investors, governments, among many others [19]
[20] [28].
4. Persistent Narratives of Market-Based Conservation
4.1. Positive Impacts of Market-Based Conservation
Market-based approaches are promoted as an opportunity for sustainable livelihoods. It enhances poverty reduc-
tion by providing livelihood opportunities, generating benefits for local communities and rational economic ac-
tors, and increasing democratization [6]. Furthermore, it enhances ecological sustainability, thus it is the most
efficient and effective way of saving biodiversity [6]. Apart from that it relieves the states of the burden of con-
servation [6] [21]. Some literature supporting this claim includes [27] and [36].
Ecotourism in Africa is claimed to be “environmentally sustainable form of development” ([37], p. 131). For
instance, in Tanzania there are ecotourism activities in different categories of protected areas such as in national
parks and Wildlife Management Areas (WMAs). The WMAs are portions of village land set aside for wildlife
conservation. Safari and hunting tourism are considered as the main source of income in these areas. Local peo-
ple receive a share from tourism revenues and through this are motivated to support and participate in conserva-
tion. Thus, ecotourism is considered as a means to reconcile wildlife conservation and economic development.
One of the WMAs practising ecotourism is the Enduimet WMA. This WMA has great commercial potential for
tourism—has three tourists tented camps, and two hunting companies, several less frequent photographic tour
companies. In 2010, members of Enduimet WMA received 45,941 USD [38]. Several studies have indicated
ability of protected areas to reduce poverty (e.g. [11] [39]).
Positive impacts of carbon projects have been demonstrated through agricultural production, land tenure,
conservation and livelihoods (e.g. [10] [40]). For example, findings from smallholder carbon projects in Africa
where six projects managed by local and/or international NGOs were involved show that the projects enhanced
crop yields and soil health—water holding capacity and making soils more resistant to drought, increased fodder
and fuel wood [10]. In some cases, the development of the carbon projects led directly to solidification of tenure
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65
rights of communities. For instance in Humbo, Ethiopia, the carbon project development process, enabled peo-
ple to get user certificates which granted them control of the resources in the project area [10]. Another example
is the Makira REDD + Project in Madagascar where about 710,588 carbon credits were sold to Microsoft in
2014. Wildlife Conservation Society estimated that it could prevent the release of more than 32 million tonnes
of CO2 over the next 30 years. The use of carbon credits was claimed to mitigate the impacts of climate change
while protecting biodiversity and enhancing human livelihoods [40].
[41] reviewed eight case studies of payment for ecosystem services (PES). The findings show that the
schemes provided small income to participating households also supported community services and infrastruc-
ture, particularly where revenues were made directly to community bodies. Likewise, [42] reviewed 44 case
studies on PES. The studies show that the schemes can provide positive conservation and development out-
comes with respect to livelihoods, household and community incomes, governance and land-use change. Also,
[43] study in Cambodia on PES show that the programs had significant positive impacts on livelihoods for those
that could afford to participate. In addition, the study by [39] indicates that PES can help to reduce poverty.
4.2. Negative Impacts of Commercialization of Natural Resources
It is argued that market-based conservation leads to primitive accumulation [44]/accumulation by dispossession
[16] and green grabbing [45]. These terms have some similarities because all of them refer to appropriation of
large tracts of land for economic ends. However, green grabbing refers to appropriation of land and resources in
the name of green biofuels, carbon offsetting schemes, conservation activities and ecotourism initiatives [46].
Accumulation by dispossession is centralization of wealth and power in the hands of few by dispossessing the
public their wealth or land [16], while primitive accumulation refers to taking land, enclosing it, and expelling a
resident population to create landless proletariat and then leasing the land into the privatized mainstream of cap-
ital accumulation [45] [47]. Most of the land accumulated is last remnants of natural areas and local peoples’
land. This process has negative impact on local people access to natural resources, food security, human rights,
and the environment [48].
Market-based approaches alienate local people from their resources with hollow promises to involve them as
significant partners and beneficiaries [38]. A study by [12] on carbon sink plantation in Uganda shows that local
people were evicted from their ancestral land to make a space for plantations. Similarly, some WMAs in Tanza-
nia have led to disappointments to local people as people were persuaded to demarcate their land for conserva-
tion, take management responsibility and benefit from the resources through tourism. However, this is not the
case for instance in Enduimet WMA, as the central government retained the power of making strategic decisions
over the WMA and only minimal benefits are realized. The revenue stream is centralised, there is lack of trans-
parency of revenue flow and local communities are deprived control over revenue collection and distribution
[49].
Besides, market-based mechanisms require clear ownership of land and resources so as to know who has the
right to trade. Thus, it favours people with clear land title deed, and those with the investment capital, required
expertise, social capital, and education [32]. The policies that support market-based approaches mainly attract
and benefit large-scale landowners, who contribute towards market-based conservation [32]. Thus, marginal
groups such as poor, forest-dependent people, indigenous peoples, and women are victims and disadvantaged in
markets, as most of them do not have title deeds of land [50]-[52]. Women in particular, often own less (not own)
properties, have less time to engage in development activities due to household chores, also lack information [38]
[53]. In addition, the trade agreements do not support social safeguards in the biodiversity markets. For example,
the liberalization of trade in ecosystem services under the General Agreement on Trade in Services and similar
clauses in bilateral trade agreements indicate that giving priority and rights to local community discriminates
against large companies [28].
Moreover, the schemes benefit outsiders than the affected community [50]. Also, the mechanisms aggravate
already existing inequalities in the community due to its tendency to “redistribute upward rather than downward”
[54] [55]. A study by [2] on who benefits from bio prospecting-driven commercialization of argan oil in Mo-
rocco show that the benefits that trickled down to local households were regressively distributed both regionally
and between households. The bulk of gains accrued to non-locals and the process of commercialization induced
changes in production, processing and distribution that excluded the poor. Another study conducted in Costa
Rica on bio-prospecting shows that the scheme led to illegal appropriation of resources and limited economic
S. B. Mariki
66
benefits [32].
Studies show that the monetary powerful actors dominate the market and are able to negotiate and influence
the rules of market (e.g. [32]). Thus, large and influential private companies, stand the better chance in the nego-
tiation process from onset [56]. In addition, the significant financial returns accrued from the market, enhances
dishonest companies to buy their way out of violations of environmental conservation laws. Besides, the criteria
set by organizations such as the FSC for forests certification are often insufficient to meet the intended aims; and
can sometimes be easily neglected or manipulated (e.g. [32] [33]).
Moreover, in these markets, there is no level playing field for producers and consumers. Thus, only economi-
cally powerful consumers are free to choose and only economically powerful producers are able to compete in
the market [28]. This approach often is disadvantageous to marginal groups in the society, who lack economic
power to enter the biodiversity market. Also, they are denied access to resources when land is privatized [50]
[51] [57].
There are cases where these markets can lead to environmental destruction instead of environmental conser-
vation, especially when economic incentives are meagre or unevenly distributed, and/or when the market based
approach fail to deliver e.g. “no net loss” in biodiversity offsetting. [58] conclude that many of the expectations
set by current offset policy for ecological restoration remain unsupported by evidence. Likewise, [59] examined
natural forest management for high value timber, sale of non-timber forest products, and biodiversity prospect-
ing. The findings show that all three schemes were generally unsuccessful in facilitating the conservation of the
biological resources upon which the markets were based, except for a few cases operating under specific condi-
tions.
Moreover, most schemes are unsustainable because most of them are external dependent mechanisms. For in-
stance, almost all patrol activities in the Enduimet WMA are externally funded; the scheme will become unsus-
tainable when external support ends unless the government intervenes by funding the activities after donor
pull-out. However, experience from previous schemes such as Serengeti Regional Conservation Project [60] and
Selous Conservation Programme [61] has indicated that there was minimal support from the Government when
the donors ended their support. [62] also indicated that the market-based conservation projects in the Amazon
did not meet development expectations partly because of the high costs borne by sponsoring organizations.
Furthermore, the benefit sharing mechanism incurs high transaction costs [49] [61] [63]. For instance studies
from Costa Rica, Cambodia, Mexico, Tanzania, Mozambique and Ecuador on PES found that transaction costs
can total up to 66% of the income generated through the schemes [63].
Furthermore, in most cases there are more costs than benefits to local populations [49]. For example in En-
duimet WMA there are low revenue generation that does not come close to matching the opportunity costs borne
by the communities. Wildlife damage to local people is too high and there is not compensation in most cases [38]
[49]. Another study by [10] on six carbon projects in Africa show that for tree planting projects farmers were
responsible for buying their own tree seedlings thus they incurred implementation costs. Carbon returns to
farmers, in all six cases, were very low compared to the total costs of implementation. Other negative outcomes
in the six carbon projects were conflicts among households or within them over land and carbon rights, trade-
offs between agricultural yield and carbon credit production, and conflicts within communities over the distribu-
tion of carbon payments, vague or weak land rights. Although, market-based mechanisms provide number of
jobs to local people, the labour conditions are not favourable and many jobs are seasonal, with low wages [32].
Another shortcoming is rent seeking by different actors at different levels (see e.g. [64]). The corrupt gov-
ernments through its corrupt officials and their allies can easily divert finances derived from market mechanisms
[64]. Moreover, in countries where corruption is rampant, people with more power and influence are the ones
securing the benefits from the markets.
Some studies show that not all values of biodiversity are included in the markets (e.g. [28]). It is difficult to
quantify the cycles of nature (i.e. biodiversity balance, generation of water springs, pollination of insects, among
many others). These values are mostly “invisible”, and are not included in the markets [28].
5. Conclusions
The findings from various case studies demonstrate the strength and weaknesses of market-based approaches on
conservation and development. On the one side, case studies have demonstrated that market based conservation
can enhance biodiversity conservation, improve livelihoods, social services, and infrastructure, enhance good
S. B. Mariki
67
governance, enhance agricultural production and land tenure. On the other side, the case studies have shown that
the schemes can favour owners of large tracts of land and powerful actors. Besides, the schemes benefit outsid-
ers in most cases, can also lead to green grabbing and alienate people from their resources. Moreover, the
schemes are affected by corruption; they lack transparency in revenue flow, and can lead to environmental de-
struction. Furthermore, flow of revenue incurs high transaction costs and the schemes are unsustainable because
most of them are external dependent. In most cases, the victims are local communities particularly the poor,
women, and indigenous people. Although, these schemes promise many powerful benefits for community, they
remain unfulfilled. The benefits received in these schemes seldom outweigh associated costs.
As we have seen, the market-based approaches have much weakness but it is a vital component of efforts to
combine conservation and development. The market-based conservation can be more effective and equitable if
all biodiversity values are considered and equitably distributed to the proper owners. Also, if the market is prop-
erly regulated and there is an equitable participation of all biodiversity producers and consumers. All of these
criteria have gender dimensions that should be emphasized and considered in the markets.
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