Pricing and payments are core aspects of marketing a product or service. For public and social sector marketers, pricing isn’t always straightforward. Often the buyer isn’t the user, and the goal isn’t about making more money or beating the competition. Putting a price on open space such as watersheds and parks is hard. It’s tough to determine a cost or value, let alone identify a buyer.
In the island paradise of Seychelles, marketers are collaborating to find a better way to price and pay for both existing national debts and new investments in commons with current funds.
The Nature Conservancy is working with Seychelles to swap debt for nature. Such deals have previously been made for forest lands, but Seychelles was the first to do it with oceans. Once the deal is closed, Seychelles will have placed 30 percent of their waters under protection. For the island nation, that means protecting an area larger than Germany.
How does swapping debt for nature work?
- The Nature Conservancy gave millions in loans and grants to Seychelles to establish a trust. They did this through NatureVest, their impact investment group. As a condition of the loans and grants, Seychelles agrees to set aside 30 percent of its waters as a marine sanctuary. Leonardo DiCaprio is one of the contributors to the fund.
- The trust used the money to buy back debt that the Seychelles owed other entities such as development banks and international credit agencies.
- The trust extends to Seychelles a lower interest rate and longer time period for repaying the debt. Lower debt payments thus free up money for other uses.
Seychelles will eventually repay its debts. In the meantime, this trust arrangement is expected to generate $400,000 annually to fund projects such as wildlife monitoring, invasive species removal, and mangrove and coastal restoration.
Improving Ocean Protection and Economics
All of the protected areas will be designated by 2020. In half of the protected areas, no fishing is allowed. At other marine protected areas, such a ban has been shown to help increase fish stocks in surrounding areas. In the other half of the marine sanctuary, fishing and marine activities will be managed and regulated. The debt-for-nature swap leaves 70 percent of the country’s waters open to multiple economic uses.
While many countries have adopted the national park concept and protected an appreciable percentage of land, marine protect areas still lag. This model can be scaled to other countries that have ocean areas and fisheries to protect and debt loads to reduce.
(Image courtesy of Wikimedia)