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Financing Adaptation: The Case of Morne Trois Pitons and Morne Diablotin National Parks, Commonwealth of Dominica A report prepared for the Commonwealth of Dominica under the Specially Project for Adaptation to Climate Change John Waugh Semaphore, Inc. Environmental Strategies and Planning October 2009 Introduction The tendency to ignore long-range interests in favor of short-term interests, is, it has been argued, innately human. Emerging from societies defined by hunting, pastoralism, agriculture, and war, human governance has typically used very narrow planning horizons, corresponding to seasons and cycles of nature, but with very limited capacity to understand and predict such cycles. Today these cycles are joined by or expressed in political and economic terms, often equally difficult to predict. However, our ability to understand and model complex systems has given rise to the capacity to engage in long-term planning. What inhibits us are incentive structures deeply embedded in our political and economic systems. When an important new signal, such as that of a changing climate, emerges, a lag in response must be expected until institutional arrangements and incentive structures are put in place to address the risk. This is the challenge for the SPACC project today. Over the long term, what does it mean to talk of adaptation to climate change? The issue is not a trivial one when one considers that the independent nations of the Eastern Caribbean rank at the top in terms of the number of natural disasters per unit of land; Grenada alone has, over the past 30 years, suffered USD 900 million in damages, twice its annual income. The impact of tropical cyclones in the Caribbean is expected to increase in coming years as a result of climate change. International discussion of climate change financing tends to emphasize the “additional costs” of problems resulting directly from climate change through direct response (Bapna and McGray, 2008). This highly reactive approach to the issue of climate impacts seeks to compensate for rather than avoid damage. A “firefighting” approach that responds to emergencies is sub-optimal for several reasons. When problems are addressed on a case-by-case basis, the worst problems attract the most attention. Problems (impacts) tend therefore to grow until they are highly visible before they are acknowledged and treated. When problems are addressed on a case-by-case basis, they tend to be addressed individually, so there is no economy of scale that would come from addressing root causes. In health care, for example, the insured or wealthy have access to preventive medicine, while the poor and uninsured will of necessity wait until a problem becomes severe before seeking treatment, often through more costly emergency services. Likewise, governments and societies can, with the right resources and policy framework, proactively manage resources based upon risk assessment, or they can defer, and respond to the threats as they emerge, rather than addressing risks at much lower cost. Our tendency is to align effort with perceived benefits. If the benefits of putting out a fire are more readily apparent than the benefits of fire prevention, we will fight fires. It is common to defer maintenance on automobiles, where the risk is one of inconvenience. Aircraft engines, on the other hand, are invariably maintained to the highest standards, because a failure is likely to be a wicked inconvenience. In the case of SPACC, the people and government of Dominica must determine if the Morne Trois Pitons and Morne Diablotin National Parks are an automobile, or an aircraft. In other words, will failure from deferred maintenance as a result of climate change be an inconvenience, or a wicked problem. The Situation Analysis for Dominica prepared under the SPACC Project (Ministry of Health and Environment, 2009) reports that Morne Diablotin and Morne Trois Pitons National Park have both global and local significance, in terms of biological diversity and in terms of ecosystem services. In particular the parks mitigate flooding and regulate water supply and climate. “It is clear”, it adds, “that climate change … will exacerbate climate stresses on the parks. Land use and agricultural practices outsides of the parks can amplify the effects of sedimentation and flooding downstream.” In other words, the parks play a critical role in mitigating the impacts of climate change. It follows therefore that protecting the ecological resiliency of the parks is essential both in the conservation and wise use of natural resources for the ecological services that they provide, services essential to livelihoods and to the quality of life for the country, but also that they mitigate some major impacts of climate change. “Climate projection models and general studies on impacts on the island suggest that there will be increased rainfall, increased intensity of storms, and extended droughts in Dominica.” The Situation Analysis goes on to warn against maladaptation through flawed models or data. Investment in research, it indicates, is a priority. “Applying the concept of adaptive capacity to Dominica, it is clear that in order to confront climate change, response/adaptive capacity must be built such that the planning mechanisms are put in place to lay the foundation for more directed adaptation actions. Risk must be managed through careful assessments and implementing the associated integrated policies that involve all levels of governance.” (Ministry of Health and Environment 2009). The PAD and stakeholder consultations (Ministry of Health and Environment 2009) indicate that the enhancement of livelihoods and the mitigation of climate impacts on natural areas are both national priorities. Given that ecosystem services binds these two goals into a unified approach, it is clear that the effective management of the national parks, including the reduction of all controllable threats that would impact the ecological integrity and the resilience of the park ecosystems, is a clear priority. And given that the greatest constraint to effective park management in Dominica is financial, it follows that a major element of financing adaptation is financing the parks, and that sustainable financing for Dominica’s parks, always a holy grail, becomes an even greater priority today. Framing the Approach Bapna and Gray (2008) describe a continuum of adaptation activities (Fig 1). Policy makers, they argue, may approach adaptation as a tactical response to specific impacts, or as a strategic response to perceived risk. One is essentially reactive, the other proactive. Vulnerability reduction efforts, they argue, provide benefits even in the absence of climate change, while tactical responses to actual impacts are specific to the impacts and may have no benefit outside of the specific climate change issue at hand. The majority of course will fall somewhere in the middle. The situation is analogous to a dangerous mountain pass; one approach may be to remove wreckage and debris from the highway, the other to build a tunnel. While tunneling may be optimal, the reality is that climate impacts are upon us, and a certain amount of triage may be necessary in addition to prevention. The question becomes, what kind of mechanism can provide the finance necessary for both? Interestingly, Dominica may have already anticipated the answer. Responding to Impacts As noted in the introduction, international discussions of climate change financing tend to emphasize the “additional costs” of problems resulting directly from climate change through direct response (Bapna and McGray, 2008). A highly reactive approach to the issue of climate impacts provides satisfaction that responsible parties are “doing something” about climate impacts, altruism being reinforced by guilt in contributing to greenhouse gas pollution (Summers and Zeckhauser 2008). Actions that avoid imposing harm are given extra weight; presumably actions that directly mitigate harm offer greater satisfaction to donors than actions less tightly coupled to direct harm. Hence it is easier to raise funds to respond to a disaster than it is to raise funds to prevent a disaster. However, “firefighting” responses are expensive for several reasons. When problems are addressed on a case-by-case basis, the worst problems attract the most attention. Problems (impacts) tend therefore to grow until they are highly visible before they are acknowledged and treated. When problems are addressed on a case-by-case basis, they tend to be addressed individually, so there is no economy of scale that would come from addressing root causes. The emphasis on impacts may therefore reflect an asymmetry between donor motivations and recipient needs. A significant effort may be required to educate donors on the appropriate balance between their emotions and rational decision theory, consistent with the OECD Declaration on Aid Effectiveness, which stressed aligning aid with national priorities, rationalizing donor activities and making them more cost effective, and by providing more predictable, multi-year commitments on aid flows. Clearly, aid effectiveness guidance would militate in favor of longer-term funding that was cost-effective; in short, funding that emphasizes vulnerability reduction. Reducing Vulnerabilities A proactive approach to climate adaptation is based upon risk assessment and the reduction of vulnerabilities. Bapna and McGray (2008) argue, “adaptation is not just additional to development but often is development” (emphasis mine). The case of Dominica’s national parks is a graphic example. As illustrated in the situation analysis, anthropogenic threats come from marginalized rural farmers pressing into the reserve when all other options have failed. In order to protect the ecosystem services upon which the entire population is dependent, ecological resiliency must be promoted. This requires the reduction and ultimate removal of all threats that are within the control of society. These threats are fundamentally developmental issues. In other words, a wealthier, more developed Dominica would better be able to withstand climate impacts; securing adaptation requires attention to the most vulnerable humans. A sustainable financing mechanism for climate adaptation in Dominica’s parks must therefore be able to address not only effective management on the inside, but also effective management on the outside. The greater the vulnerability to climate change without, the greater the threat within. Dominica’s parks must therefore become agents of social change, integral to the functioning of the entire socio-economic system - a green heart. Achieving this requires rapid innovation and collective learning. Indeed, the GEF attributes clear and measurable goals and a “learning organization” mentality and environment as a factor for successful trust fund operations (GEF 1989). Advances in technology and organizational behavioral science, combined with profound need, make it possible for a trust to transform operations into a learning network, in which all stakeholders form a peer group to achieve specific goals in conditions of uncertainty, and where clear-cut rules and procedures are not available. Pathways to success are discovered through experimentation and innovation. The use of peer to peer networking for information exchange shortens the lag time for discovery of promising strategies. Innovation can be quickly tested and broadly adopted. With this approach capacity is developed from the bottom up, with the peers taking responsibility for their own advancement. Options In the case of climate adaptation, some aspects of protecting and managing outstanding protected areas (including the outstanding universal values of the World Heritage site) may be unique to the country or region, and not necessarily available thorough conventional pedagogical approaches. A learning network can help to develop best practices in addressing combinations of cultural and environmental practice this is unique to Dominica. Ideally, an endowment could be established that would address the long-term adaptation and biodiversity conservation requirements of Dominica’s national parks. Like may Small Island Developing States, however, Dominica is at a disadvantage in terms of scale that would permit the utilization of many of the finance tools described above. And like many small island states, Dominica is not resource-rich. It is endowed with extraordinary natural beauty, which is exploited carefully, lest mass tourism despoil its attractions. It has water, sometimes in abundance. And it has its people. Beyond that, Dominica has little to work with that would fund an endowment or any other sort of sustainable finance mechanism. But, Dominica has the opportunity to appeal on the basis of its own down payment on the future because the national parks form a solid foundation for both a development and a climate adaptation strategy. With the parks as a centerpiece for an adaptation strategy, Dominica can show that it has already taken a proactive approach to sustainable development, and is therefore able to address adaptation from a relative position of strength. Dominica’s investment strategy, Organic Dominica, seeks to establish the country as an “Organic Island” and health tourism destination, shifting the agricultural base to enhance value and convert the island economy to sustainable agricultural production. Dominica should seek to create a Trust for the national parks and ecodevelopment, beginning with a sinking sustainable finance fund. Sustainability must be understood to include not only financial sustainability, but also cultural and ecological sustainability. The ability to meet longrange goals will depend upon the ability of the trust fund to work with the government and other stakeholders to ensure that the development context of the site is conducive to long-term survival. The selection of an institutional host for the trust fund should therefore take into account the comparative advantages of the institution, particularly in advancing the financial and economic sustainability of the sites that it is designed to support. The host institution should also be expected to provide help in the design of the mechanism in the form of a results-based management structure with feedback systems to incorporate experiential learning and adaptive management. The fund could be capitalized through a match between contributions from international donors (public and private), the private sector beneficiaries (e.g., the tourism industry) and government. It is noteworthy that international climate adaptation financing is more likely to displace current official development assistance than it is to complement it (Bapna and McGray, 2008), and that domestic resource flows for adaptation are likely to grow. Bangladesh has established its own Trust Fund on Climate Change with its own revenues, and Sri Lanka has initiated an environmental levy to fund adaptation. The Maldives plan to become a fully carbon neutral country, through a combination of technological innovation and economic incentives, including taxes on the use of fossil fuels. Dominica may wish to follow this model as a combination of moral persuasion and as a means to generate adaptation financing by investing funds in alternative energy and livelihoods in the park periphery. A portion of the fund should also be retained for additional fundraising with the view to capitalizing an endowment and development of regular revenue streams to convert the sinking fund into a revolving fund. Sources of Finance The World Bank estimates that climate change is costing developing countries between $75-100 billion dollars per year (World Bank, 2009). One might expect that international financial flows would emerge by way of compensation, especially to the heavily impacted small island developing states. Evidence to date indicates that such flows are slow to emerge and that where they do, it involves displacement of official development assistance rather than new and additional funds as compensation for damage. The obligation of carbon emitters is beyond the scope of SPACC and certainly beyond the control of those participating in this meeting. It should be worth noting, however, that should carbon-emitting countries step up and bear the costs of climate impacts in SIDS, those countries with robust mechanisms for managing and using such funds will have an advantage over those that do not. Our focus then is on financial resources available through conventional means, with a focus on parks and protected areas. In Dominica, the National Parks are financed through budgets appropriated by the Government, and are not supplemented by income generation, cost recovery, or external finance. 1. The general government budget - revenues collected by government from all sources, amalgamated in a Treasury or Exchequer, and distributed through an annual budget. (This is the sole means of supporting Dominica’s National Parks at the present.) 2. A government account holding funds “earmarked” (specifically designated) for the parks. This may include excise taxes, surcharges, royalties, fees, and proceeds from sales, among other things. Examples include tourism related excise taxes or fees, gasoline/petrol excise taxes, royalties on the sale of natural resources such as minerals or petrol. In most cases, any revenues generated from these sources are already designated for other purposes. Another example of government revenues that have been used to support parks is surcharges from special issue stamps and coins. Environmental Levies: In Trinidad and Tobago, the Ministry of Planning, Housing, and the Environment administers a Green Fund to support ecological restoration, environmental remediation, and conservation by community-based and charitable organizations. The Green Fund is financed by a 0.1% levy on gross receipts of all businesses within Trinidad and Tobago. The approximately 225 million US dollars that the Green Fund has raised since its inception in 2005 is spent through a government appointed board. Tourism Head Taxes: The Cayman Islands and the Turks and Caicos Islands have incorporated environmental levys into their cruise passenger head tax. The UK levies an Air Passenger Duty as an environmental tax, and France levies on to provide support for international health care. The Organisation of Eastern Caribbean States is also considering an airline ticket levy of USD 3 to finance an OECS Tourism Authority to plan, coordinate, and regulate and promote tourism in the region. The CARICOM Development Fund, intended to benefit those countries disadvantaged by the CARICOM Single Market and Economy (CSME), which came into force in 2009. Eastern Caribbean states are expected to experience a relatively greater impact from the CSME. The Development Fund is expected to be financed through international partners and the private sector, as well as from the larger economies of the CSME, such as Jamaica, Trinidad and Tobago, and Barbados. A regional tourism head tax has been mooted as a possible source of capital for the fund. 3. Financial instruments such as bonds. A bond is functionally a loan against future income, and is only practical in a sovereign state with a good credit rating, and expectations of income that could be diverted to the mandatory payments to service this debt. 4. Fees from uses of the parks. This would include bioprospecting fees, fees for use in theatrical and documentary films, fees charged to concessions for the right to operate hotels, restaurants and other services within the parks, and visitor fees. In many cases, fees go into general revenues rather than the accounts for the protected area management authority. Placing fees into properly managed park accounts gives greater incentive for the parks to recover costs and become financially self-sustaining. In many cases, however, visitation and demand for other park services is low and direct cost recovery is insufficient to meet park management. In other cases, parks have been partially privatized, wherein the management is transferred to an entity that manages the park under a lease arrangement as a for-profit enterprise. This may work in cases where there is sufficient demand and the capacity to monitor the management to ensure that the “park values” including biological, physical, and cultural values of the site are adequately protected. It is important to note also that popular parks may subsidize less popular or accessible elements of a national system in order to maintain system integrity; “high-grading” profitable parks through privatization schemes while leaving unprofitable parks in the hands of government is counterproductive. 5. Biodiversity offsets. Payments may be made to parks for land acquisition and other measures to enhance the biodiversity of the parks as a means to offset biodiversity loss elsewhere. In general, best practice is to insist, where offsets are necessary, to set aside new and additional land for protection to compensate for the conversion of land to uses unfavorable to biodiversity. On small islands, however, this may not be an option, in which case, payments to enhance existing protection may be acceptable. 6. Lotteries. Some European states earmark a portion of the national lottery for biodiversity conservation and protected area management. 7. Direct sales. Parks frequently operate gift shops and bookstores that sell merchandise with park-related themes, either directly or through an NGO or business partner. Proceeds from sales will generally produce only a limited amount of revenue and are unlikely to be a determining factor in the financial sustainability of a unit, but they may play an important role in raising awareness and extending the image and identity of the park. 8. Private donations. Parks may issue appeals for support for special projects such as construction of facilities or to address a particular threat, either directly or through an NGO. Such donations can be solicited internationally; this however works best with an international charity partner, and only works well for parks with a high visibility and established “brand identity”. 9. Licensing fees. Also for parks with an internationally established brand identity, parks or park authorities may be allowed to license the use of its name and/or marks (logo or “brand”) for the production of merchandise or use in advertising by a commercial entity. Under such arrangements the park may receive a flat fee or a percentage of every item sold. 10. International support through official development assistance. Parks may receive concessional loans or grants for development through foreign aid programs. Loan programs are available to sovereign states through the World Bank, InterAmerican Development Bank, and Caribbean Development Bank. Export credit agencies may underwrite risk for commercial development by foreign investors. And grant programs are available through the UN Development Programme, the Global Environment Facility, and through bilateral donors. Bilateral donors active in the Caribbean include the UK Department for International Development (DFID), the US Agency for International Development (USAID), the European Union ACP program under the Lomé Convention, the Canadian International Development Agency (CIDA), the French Department for International Cooperation, and the Japan International Cooperation Agency (JICA). China has also been increasing its presence in the region, including its international cooperation profile. Climate adaptation is a growing area of focus in international support for development assistance, but official development assistance is typically reluctant to make the sustained commitment for the time frames required to effectively achieve the objective of climate adaptation. 11. Carbon markets. While there may not be very much scope for avoided deforestation in Dominica, given the degree to which extant forest is already protected, the rapidly evolving rules governing carbon markets may provide scope for investments in environmental restoration in the buffer zones of Dominica’s parks. The ideal approach will be to identify approaches that will fix carbon and protect watersheds while providing alternative livelihoods through sustainable agriculture. Bamboo for example is four times as efficient as the most efficient tree species in fixing carbon and must be cropped to be efficient; the byproducts can in principle constitute alternative non-fossil fuel as well as wood products. If Dominica’s limited capacity to participate in carbon markets can be augmented by gains in productivity through such approaches, it could be possible to develop a sustainable economy that is also an adaptation measure. 1 12. Payments for ecosystem services. Caribbean states have pooled resources to self-ensure against catastrophe through the Caribbean Catastrophe Risk Insurance Facility (CCRIF, 2008). The fund will provide emergency resources to member states hit by a natural disaster, dramatically reducing the cost of disaster insurance. In a similar vein, investments in its national parks may provide Dominica with a measure of insurance against national catastrophe. Quantification of the economic benefits of risk management through nature conservation could in due course point the way to at least modest financial flows into the proposed Trust. This may be in the form of payments for ecosystem services, such as water or flood protection. Of course, it will be essential to ensure that benefits are aligned with premiums paid, in the form for example of improvements in flood control and water retention. Public works projects to obtain these benefits may in turn be a jobs program for the marginalized rural populations. Managing Financial Flows In addition to identifying sources of funds, it is also necessary to identify a mechanism for the management of funds. A sustainable financing mechanism for Dominica’s national parks should have the following characteristics: 1). It must be able to receive money from a variety of sources. 2). It must be able to engage all stakeholders. 3). It must be able to retain and spend money according to the logic of its objectives, not the logic of annual budgets and workplans. Where possible, it should be able to invest and increase the principal funds in order to meet future challenges. This would rule out a departmental line in the annual government budget, and likewise, a nongovernmental organization. A better option would be the creation of a trust fund. Trusts are assets managed by one entity for the benefit of another entity, e.g., assets held in trust for a beneficiary. They may take many forms, depending upon the requirements of the donor and beneficiary. They all have in common that they are managed through a third party (the trustee) whose responsibility it is to manage and account for the financial resources, ensure that benefits reach the intended beneficiary, and that the terms established by the donor are met. Under common law, the trustee is required to act with the beneficiaries’ interests in mind (Spergel and Taïeb, 2008). In civil law countries, the analogue to a trust fund is a foundation. 1 This approach is highly consistent with the Organic Dominica investment strategy now being promoted by the Government. Typically a trust would provide for intergenerational sharing of benefits of property, e.g., to provide assets to heirs, under conditions where the assets are effectively supervised. Trusts can be institutional, especially when beneficiaries are a class of people. Trust funds have been created to manage the proceeds from the settlement of a lawsuit, such as various tobacco trust funds in the USA resulting from litigation against the tobacco industry, or for retirement benefits. Some governments manage trust funds, such as the Social Security Trust Fund and the Land and Water Conservation Fund in the USA. The GEF evaluation of conservation trust funds (GEF, 1998) stressed “trust funds are more than financial mechanisms, and are generally appropriate when the issue to be addressed is long-term in nature.” Trust funds may not for example be optimal for addressing acute problems, such as an immediate threat to a resource, but are effective when the issue is chronic and structural in nature. It identified several essential conditions for conservation trust funds: The issue to be addressed is long -term, requiring a commitment of at least 10-15 years There is active government support for a public-private sector mechanism outside direct governmental control There is a critical mass of people from diverse sectors can work together There is a foundation of good governance in rule of law and financial accountability, and supporting institutions (e.g., banks, auditors, accountants) There are realistic prospects for attracting the level of capital adequate for a fund. The GEF recommends having donor commitments and other mechanisms in place before starting the fund. The GEF evaluation indicated that the fund should not be created without commitments for a minimum amount of capital for a meaningful program of work. Trust funds provide for long-term operations and are therefore attractive for institutions that operate in perpetuity – for example, hospitals, schools, universities and research institutions, museums, and other institutions that provide for the public good. In conservation, trust funds have been applied to the benefit of an institution, or a conservation mission. For example, an institution may hold land in trust, hence various land trusts that exist in the United States for purposes of holding and managing conservation lands. Trusts can be used for land acquisition, for the management of protected areas in perpetuity, to provide capital for innovative or “green” technologies, or for small grants, among other things. Trusts can be sinking funds that spend all assets within a specified time, revolving funds that receive and disburse income, or endowment funds, which invest capital and disburse the earnings from that investment to beneficiaries. Multilateral institutions such as the World Bank and the Asia Development Bank also have accounts for the retention and disbursement of grant monies provided by a donor (generally a government) for special projects by mutual agreement. These accounts are also termed trust funds. The GEF evaluation of conservation trust funds (GEF, 1998) stressed “trust funds are more than financial mechanisms, and are generally appropriate when the issue to be addressed is long-term in nature.” Trust funds may not for example be optimal for addressing acute problems, such as an immediate threat to a resource, but are effective when the issue is chronic and structural in nature. The Paris Declaration on Aid Effectiveness (OECD, 2005) is the product of a high-level forum convened by the Organization for Economic Cooperation and Development in March 2005. It called for aligning aid with national priorities, rationalizing donor activities and making them more cost effective, and by providing more predictable, multi-year commitments on aid flows. Trust funds align well with commitments made in Paris (Spergel and Taïeb, 2008); they can be structured and operated to maximize transparency and promote accountability through resultsbased performance standards. Trust funds structured as public/private partners are better situated to address the broad range of strategic issues associated with protected areas (bearing in mind the conclusion of the GEF evaluation of conservation trust funds that successful funds are something more than funding mechanisms). They can engage not only with businesses but with the global conservation community, e.g., through international NGOs, to build upon lessons learned and expertise gained elsewhere. Trust funds have been show to be successful in some cases in leveraging government support for conservation. Rather than releasing governments from obligations to support conservation, where the trust fund can “match” government commitments, it can amplify and enhance the government contribution (Spergel and Taïeb, 2008, GEF 1998). In other cases, government commitment has decreased (GEF 1998). Strict requirements for counterpart funding and in-kind contributions that surpass an established baseline may be required in order to ensure that endowments do not merely displace government roles. There are three basic approaches used by trusts. 1. Endowment. An endowment holds assets donated to an institution for the benefit of the institution itself (as in the case of endowed chairs at universities) or for the mission of the institution. In an endowment the principal is invested, and the proceeds of the investment are either applied to the designated beneficiaries, or, alternatively, to increase the size of the principal for the beneficiary over time. Donors or recipients may restrict an endowment to specific uses, or to specific investments. Endowments are attractive for institutions that operate in perpetuity – for example, hospitals, schools, universities and research institutions, museums, and other institutions that provide for the public good – because they provide for long-term income. Endowments can also provide a mechanism to capture funds from multiple revenue streams and combine them into a single more consistent and predictable stream, facilitating better planning. Funds held in endowments can provide additional flexibility by being put to good use while being held in reserve for deployment according to management needs. 2. Revolving Fund. Revolving funds are designed to capture resources on a recurring basis and spend them. Revolving funds could be capitalized for example by royalties from mineral extraction, an excise tax, or lottery proceeds. 3. Sinking Fund. A sinking fund is intended to disburse its resources over a fixed period of time, after which, absent further replenishment, it ceases to exist. Sinking funds are useful for addressing problems of known and limited duration or as an interim measure. By their nature, sinking funds tend to have limited numbers of beneficiaries. For example, a sinking fund could be established to repay a debt, such as a bond obligation, or to replace something that becomes obsolete (e.g., saving towards replacement of machinery). In and near the Caribbean, several countries (e.g., St. Lucia, Bahamas) have established National Trusts to hold and manage their protected areas. These land (and sea) trusts have been effective to a greater or lesser extent in mobilizing support for protected areas but have not been particularly successful at creating sustainable finance mechanisms, functioning largely in the hand-to-mouth fashion of most non-governmental organizations. They have however been able to create public/private partnerships that harness the power of the business community to achieve conservation objectives, and have important experiences to share. Within a general framework that provides for governance and operations, trust funds can be structured to provide a mechanism to capture funds from multiple revenue streams and combine them into a unified revenue stream that is more consistent and predictable, facilitating better planning. When necessary, trust funds can also create sub accounts to satisfy the restrictions placed by different donors. Governance Governing bodies (e.g., boards) can either be limited to decisions about resource allocations, or have a broader strategic planning role, in which they shape the overall structure of the relationship between grants and intended outcomes. The GEF evaluation of conservation trust funds (GEF 1998) found that larger boards worked better than smaller ones because they could establish working committees to address a broader range of protected area issues (noting that the evaluation had identified that overall success of trust funds depended upon their ability to work strategically to influence management and policy, as well as to provide funds. It also found that it is important for the governing body, or board, of a foundation to see itself as an independent organization rather than an asset-allocation body, and that the board members not be formal representatives of particular groups of stakeholders but serve in individual capacities (albeit on a board that reflects the diversity of its constituents). This reinforces the individual’s obligation to the board and increased ownership of the process, measures essential for commitment to a successful outcome. Conclusion Dominica is disadvantaged both in terms of risk and in terms of scale. Moreover, some options may be limited due to measures being put in place regionally. It is unlikely that large amounts of money will appear from external sources in the short to medium term to address Dominica’s needs. An agile hybrid approach is indicate, in which some elements of adaptation are selffinanced through advances in sustainable development and some are harnessed to the future of the national parks on the island. A modest trust fund may be possible in the short term to enhance both the participation in and the management of the protected areas by the government and stakeholders around the parks. A proven track record with a modest sinking trust fund would build capacity and position Dominica for participation in new financial opportunities as they arise. The key is not to wait for external help but to commence work immediately, building upon Dominica’s reputation as a green island. Because incontrovertible links between the status of the resources protected in Morne Trois Pitons and Morne Diablotin National Parks and the surrounding agricultural landscape, because the ecological integrity and security of these parks is dependent upon sustainable agricultural development, and because a major component of Dominica’s adaptation strategy must become sustainable rural development, it makes sense to link the Trust Fund concept described here to the Organic Dominica movement, with a view to retaining and reinvesting benefits from rural development in ways that increase the capacity of Dominica to restore and protect nature while ensuring sustainable and fulfilling livelihoods for its citizens. At the same time the Organic Dominica initiative can be made more climate aware. In linking agricultural development policy and adaptation strategies, Dominica create a holistic, systemsbased approach consistent with the principles of sustainable development but difficult to attain in practice. Dominica is well positioned to become a leader in innovation in development during a time of tremendous change. References Bapna, M. And H. McGray, 2008. Financing Adaptation: Opportunities for Innovation and Experimentation. WRI Conference Paper. World Resources Institute, Washington. On line at http://pdf.wri.org/financing_adaptation.pdf CCRIF (Caribbean Climate Risk Insurance Fund). 2008. What is CCRIF? Online at http://www.ccrif.org/main.php?main=9. GEF 1998. Evaluation of Experience With Conservation Trust Funds, Global Environment Facility, Washington Ministry of Health and Environment, 2009. Situation Analysis, Special Program for Adaptation to Climate Change Project, Commonwealth of Dominica. 43pp. OECD. 2005. Paris Declaration on Aid Effectiveness. Paris. Online at http://www.oecd.org/dataoecd/11/41/34428351.pdf. Spergel, Barry and Philippe Taïeb, 2008. Rapid Review of Conservation Trust Funds, Second Edition. Conservation Finance Alliance, Washington. Summers, Lawrence H., and Richard Zeckhauser, 2008. "Policymaking for Posterity." HKS Faculty Research Working Paper Series and NBER Working Papers (RWP08-040 and 14359), August 2008. World Bank 2009. Economics of Adaptation to Climate Change: Final Methodology Report, February 2009. Washington. 32 pp. On line at http://siteresources.worldbank.org/INTCC/ Resources/MethodologyReport.pdf