Green Economy in a Blue World-Full Report

Tax concessions and subsidies can be used to encourage green investment at the destinations and facilities. Subsidies can be given on purchase of equipment or technology that reduces waste, encourages energy and water efficiency, or the conservation of biodiversity and the strengthening of linkages with local businesses and community organizations. Establish clear price signals to orient investment and consumption. The price for such public goodsaswaterproductionandsupply, electricity and waste management send important signals to the private sector. Governments frequently price these goods at very low levels (frequently even free) to encourage investment, only to find that low prices encourage waste, place a drain on communities and make it very costly (financially and politically) to raise prices. Environmental and social investments are relatively new, and remain outside the mainstream of financial markets. In many cases, barriers are based on misperceptions or lack of knowledge. For example, for many green investments, payback periods and amounts are not clearlyestablished (due to limitedexperience 3.6 Financing green tourism investments

with them), creating uncertainty for banks or other investors that can jeopardize financing. Also, the return on many green investments includes easilymeasurable components (such as energy savings), combined withmore difficult to measurecomponentssuchas“guest satisfaction”. Another situation found in many developing countries is that the financial regulatory systems classify “environmental” investments as “non- productive assets”, requiring banks to hold greater reserves, resulting in higher interest rates and less investment. Enabling conditions for finance The single greatest limiting factor for SMEs in moving toward greener tourism is lack of access to capital for this type of investment. Green investments must be seen as value-adding and made on their economic and financial merits, without prejudice. This will require greater private sector awareness of the value of green investment, and also policy coordination with Ministries of Finance and Economic Development and regulatory and banking authorities. Regional funds for local tourism development could help overcome financial barriers for green investments where investments also

in a Blue World

Ecotourism funding for community marine management in the Indian Ocean

For nearly a decade, ecotourism revenue has contributed substantial funding to community-based conservation efforts in southwest Madagascar. International volunteers sign up for 6-week diving expeditions with marine conservation NGO Blue Ventures, and are trained to conduct underwater assessments of coral and fish health. Funds raised from the volunteers are used to support the development and management of one of the IndianOcean’s largest locally managed marine areas (LMMA). Called Velondriake – ‘to live with the sea’ in Malagasy – this marine conservation initiative encompasses 24 coastal and island villages, and is largely

managed by an association of local fishers and village elders (SEED, 2005). Ecotourism provides a reliable flow of funding to the Velondriake LMMA. Unlike many conservation initiatives that are solely dependent on short-term grants, Velondriake can be assured long term funding as needed. This model has achieved numerous international awards for responsible tourism, as well as being the first European-based organization to win the SEED award, founded by UNEP, UNDP and IUCN in recognition of innovative entrepreneurial solutions for sustainable development (SEED, 2005a).

Source: Kame Westerman, Blue Ventures, n.d.

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