Funding Sri Lanka’s Marine Conservation Ambitions: Time for a Reset?

Photo courtesy of Nishan Perera

This year marks a major milestone for Sri Lanka’s biodiversity conservation ambitions – three decades of commitment to the Convention on Biological Diversity (CBD) since its ratification following the Rio Earth Summit. In accordance with the CBD, Sri Lanka is currently updating its National Strategic Action Plan for Biodiversity (NBSAP) for 2024 to 2030. This document will guide the country’s conservation efforts and demonstrate that it is in line with the Kunming-Montreal Global Global Action Plan. Biodiversity Framework (GBF), which consists of global goals and targets that collectively embody a vision of living in harmony with nature.

The 23 GBF Goals, adopted at the 15th Conference of the Parties (COP15) in 2022, set ambitious goals for global conservation efforts. Goal 2 focuses on the restoration of 30 percent of degraded ecosystems, while Goal 3, colloquially known as “30 by 30”, calls for the effective protection and management of 30 percent of terrestrial, inland waters, the world’s coastal and marine areas by 2030. Together, these goals represent the most substantial conservation commitment in history, with more than 190 countries pledging their support. As global momentum builds towards the ambitious “30 by 30” conservation target, Sri Lanka, as it slowly recovers from the country’s worst economic crisis, finds itself at a critical juncture. The need to recover economically must be balanced with the need to protect and regenerate our natural environment in line with global goals.

Prioritize marine conservation

When we think of protected areas in Sri Lanka, our thoughts wander to the lush forests of Sinharaja or the hills of Knuckles. However, as an island surrounded by the Indian Ocean, our marine ecosystems and species deserve just as much – if not more – attention. Sri Lanka’s oceans have a rich and diverse range of ecosystems and habitats, including coral reefs, seagrass beds, lagoons, mangroves and deep-water channels. Marine Protected Areas (MPAs) play a crucial role in protecting the rich biodiversity of our waters and support more than 3,000 species of marine flora and fauna, such as vertebrate coral reefs, invertebrates, dugongs, sea turtles, sharks, dolphins and whales. As climate change, coral bleaching and human-induced pressures such as overfishing pose significant threats to these vital habitats, they are deteriorating at a rapid and dangerous rate.

Sri Lanka’s Marine Economic Zone, a vast expanse covering over 532,000 square kilometers (nearly four times our land area), is also vital to our economic growth. Coastal communities in 14 of the country’s 25 districts rely heavily on marine and coastal ecosystems for their livelihoods. This sector directly and indirectly employs more than 583,000 people, while providing critical support to a further 2.7 million coastal workers.

Despite this, our current MPA system protects less than 1 percent of our territorial waters and exclusive economic zone (EEZ). Given the inherent economic value of our marine resources, in addition to their broader ecological significance, we must confront a crucial question: has Sri Lanka done enough to protect these vital natural resources? Can we afford to continue with business as usual or is a transformative approach urgently needed?

Of the major candidates contesting the 2024 presidential elections, only one had mentioned in his manifesto the need to protect and preserve MPAs. Amid this seemingly lower attention from our political leaders, global interest and investment in environmental conservation is at an all-time high. If we tactfully tap into this interest, we have the opportunity to transform our development into a success story and build on it in a different way.

Financing conservation – key insights

Many of the difficulties in marine protection are ultimately due to inadequate funding. There simply isn’t enough money to meet all of our conservation needs.

During 2023-2024, the Center for a Smart Future (CSF) collaborated with Blue Resources Trust (BRT) on a research and advocacy project to advance financing for sustainable marine conservation in Sri Lanka. Funded by the Oceans 5 consortium, the project aims to advance existing stakeholder knowledge, address the gap between the marine conservation community and the financial sector, and demonstrate practical application at sites across the country. Over the course of ten months, CSF convened six Knowledge Roundtables and one Multi Stakeholder Roundtable with a diverse group of participants, learning about the financing concepts and approaches for marine conservation and exploring the relevant instruments and financial mechanisms that could be used to fund conservation efforts. The results of these discussions have led to important insights regarding both the challenges stakeholders face in combating the financing of MPAs and what we should consider moving forward.

The project’s findings revealed that there are a plethora of interconnected issues and pressing threats requiring attention regarding our MPAs, some unique to each MPA and others broadly relevant to the nation’s marine ecosystems as a whole. While it is critical to recognize these diverse challenges, this article will focus specifically on those associated with conservation financing.

A key insight developed in response to this challenge is the need to demonstrate that conservation is not only the right thing to do, but also the economically smart thing to do. It is critical to develop project pipelines that make economic sense while protecting our natural resources. Market volatility and economic fluctuations also pose a significant risk to funding stability. To mitigate this, diversification of financing sources is critical to reduce dependence on a single source and increase financial resilience.

It is also essential that the underlying problems of structural financing are robustly addressed. Simply increasing funding for MPAs will not be enough if the systemic financial barriers to effective management are not addressed. Bureaucratic hurdles leading to lengthy processes and red tape were also identified as a major obstacle, leading to delays in project implementation. Sri Lanka’s environmental decision-making landscape is notoriously bureaucratic, with decisions often having to pass through multiple layers of authority before being approved. The roundtable discussions highlighted the need for greater autonomy in decision-making by government agencies involved in conservation. Financial incentives should ideally be structured to promote effective systems and empower stakeholders at all levels, from on-site staff to central offices. Exploring alternative financing instruments could enable local conservation managers to gain greater control over expenditures and contribute more effectively to conservation efforts. The ultimate goal would be to promote a sense of ownership and encourage a more agile and responsive approach to conservation decision-making.

Another key challenge lies in aligning the diverse interests and priorities of different stakeholders for effective conservation. The governance of protected areas involves a complex web of actors, including government agencies, NGOs, local communities and others. Coordinating these entities can be difficult given their different priorities and regulatory frameworks. Successful conservation financing therefore depends on stakeholder consensus on key issues, limitations, mechanisms, instrument design and desired outcomes. This therefore requires a collaborative approach that bridges the perspectives of these stakeholders.

Conducting a thorough stakeholder mapping and analysis is seen as a crucial preparatory step towards a financing plan, as it provides detailed stakeholder categorizations, identifies users and their uses and needs, assesses costs and benefits, and helps improve comprehensiveness of the budgeting of conservation financing.

To meet the complex challenges, Sri Lanka must now choose to embrace innovative strategies. Conservation Trust Funds (CTFs) are one of many innovative financial mechanisms that can be used to mobilize sustainable finance for longer-term conservation. As CSF noted in this Knowledge Primer, CTFs face operational risks associated with management, including governance issues, regulatory compliance and administrative challenges. Implementing robust management practices and diversifying spending strategies can help mitigate these risks.

Establishing a national Conservation Trust Fund is one possible approach. However, creating two separate funds – one for marine conservation and one for land conservation – may also be justified if donors have specific interests. To move forward with such an approach, building trust with donors is critical and will require transparency, good governance and a competent management team, as noted by a global expert during a CSF webinar. While two CTFs are feasible, it is critical to ensure they have sufficient scale and aligned missions.

As the 2030 deadline for meeting our global biodiversity commitments approaches, pressures around conservation and financing become more acute. The health of our marine ecosystems, which is inextricably linked to our economic prosperity and resilience, continues to face increasing threats. A ‘business as usual’ approach is no longer sustainable. In light of the challenges of financing conservation, we face a difficult choice: innovate or stagnate.

It is time to re-examine the financing approach that is highly dependent on annual budget allocations and cannot keep up with urgent needs and come up with new and innovative approaches. By carefully considering these different options and tailoring them to our unique context, Sri Lanka can work to chart a more nature-positive economic recovery path – one that protects our natural environment while promoting a sustainable and vibrant future.