Abstract:

The funding scale invested in protected areas is far lower than funding needed. Innovative financing mechanisms in the future will involve seeking external funds, self generating and retaining revenues, and charging fee systems based on products or service markets. Generating revenue refers to fiscal approaches like ecological taxes, benefits and cost sharing mechanisms, and financial trades like carbon trading, etc. The political institutions and regulations as well as market or price policies both affect the financing mechanisms of protected areas. In the future, the financing mechanisms for protected area will depend on diversified financing channels covering fiscal, finance, market and trade tools. The concept of sustainable financing for protected areas mainly refers to the capacities of obtaining abundant, stable and long-term financial resources as well as allocating these financial resources in a timely and appropriate manner, so as to cover the full cost and achieve conservation objectives for protected areas. The major problems of the current funding mechanism and expenditure status of Chinese nature reserves include the unreasonable structure of funding sources and funds expenditure, low levels of funding amounts, as well as the lack of compensation and benefit sharing with the local community. This paper suggests ensuring federal fiscal sources as the dominant funding source for national nature reserves and establishing or improving the new market and trading channels such as PES (Payment for Ecosystem Service), carbon trade and green product certification (based on the traditional charging system including payment for eco-tourism services and resources using fees). In addition, we suggest using overseas funds as much as possible to promote capacity building of Chinese nature reserves and trying to raise funds from different domestic societies. Moreover, multi-stakeholders shared governance could be piloted in some nature reserves to achieve cost sharing among key stakeholders and benefit sharing mechanisms between local communities and the nature reserves. The authors also suggest that the majority of funds should be spent on conservation investments after the necessary staff salary deduction.

Key words: financing mechanism, financing sources, funds using and allocation