FOOTPRINTS IN THE JUNGLE ppt

Case studies on a wide range of operationsthroughout the tropics highlight key issues in depth, including thefollowing: technologies and practices for environmental management;creation o

FOOTPRINTS IN THE JUNGLE

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FOOTPRINTS IN THE JUNGLE

Natural Resource Industries,

UNIVERSITY PRESS

Oxford New York

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Copyright © 2001 by Oxford University Press, Inc

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All rights reserved No part of this publication may be reproduced,

stored in a retrieval system, or transmitted, in any form or by any means,

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without the prior permission of Oxford University Press.

Library of Congress Cataloging-in-Publication Data

Footprints in the jungle : natural resource industries,

infrastructure, and biodiversity conservation / edited by

Ian A Bowles, Glenn T Prickett;

editorial assistance by Amy E Skoczlas.

p cm.

Includes bibliographical references and index.

ISBN 0-19-512578-9

1 Forest management—Tropics 2 Forest products industry—

Environmental aspects—Tropics 3 Economic development—

Environmental aspects—Tropics 4 Biological diversity

conservation—Tropics 5 Rain forest conservation 6 Rain forest

ecology I Bowles, Ian A II Prickett, Glenn T.

A sharp increase in investment by resource industries is changing thecourse of history for delicate tropical ecosystems and the communi-ties who inhabit them This volume is intended to help all concernedparties—activists, corporations, local communities, governments, andconservation organizations—address this growing challenge

In the pages that follow, contributors examine the environmentaland social impacts of resource extraction and infrastructure develop-ment and highlight approaches taken to date to address these issues

by both companies and nongovernmental organizations (NGOs) Thebook is intended to stimulate debate about the feasibility of, and con-straints to, developing natural resources in a manner that safeguardsbiodiversity and respects the interests of local communities It seeks

to highlight emerging "best practices" and focus attention on lenging technical, environmental, social, and legal issues

chal-The book is organized into five parts Part I provides the readerwith an overview of the book's main topics and themes In the open-ing essay, conservationists Russell Mittermeier and William Konstantexplain why we should care about biodiversity in the first place Theyexplain that scientists and the general public understand very littleabout "biodiversity"—the term used to encompass the wide range ofspecies, ecosystems, and ecological processes that are found on theplanet Earth The authors discuss challenges to conserving this biodi-versity and approaches to setting priorities for conservation invest-ments

Chapter 2 helps set the stage for future chapters by examining newtrends in development finance Everett Santos, of Emerging Market

Partners, formerly a senior official at the World Bank's private sectorarm, the International Finance Corporation, describes infrastructurefinancing as an example of the rapid growth in private sector invest-ment in developing countries and the emerging shift from public toprivate finance.

Chapter 3 provides a different perspective on the role of extractiveindustries in environmental protection and economic development.Chris Chamberlain and Lisa Jordan of the Bank Information Center,

an NGO that promotes reform and transparency at the multilateraldevelopment banks, summarize the range of approaches undertaken

by environmental organizations to bring about greater public ability in both leading corporations and public institutions

account-Parts II through V address the specific sectors of oil and gas, timber,mining, and infrastructure Each part begins with an overview of thekey environmental and social challenges in the sector and a summary

of emerging best practices Case studies on a wide range of operationsthroughout the tropics highlight key issues in depth, including thefollowing: technologies and practices for environmental management;creation of new protected areas in the context of resource develop-ment; managing impacts on local communities and supporting com-munity development; independent monitoring and evaluation of en-vironmental and social impacts; product certification and consumerawareness; and legal mechanisms to provide for benefit-sharingamong national governments and local communities

Part II concerns oil and gas development Chapter 4, an overview

by Amy Rosenfeld and her colleagues at Conservation International,describes investment trends, potential impacts, and emerging bestpractices for petroleum development in the tropics In chapter 5, Jen-nifer Parnell and Robert Kratsas, environmental experts with the At-lantic Richfield Corporation, now merged with BP, provide their in-dustry perspective on the same challenges, using case studies toillustrate their points Chapter 6, by authors from Conservation Inter-national and Mobil, presents their experience in ecological monitor-ing in the exploration stage of oil development in the Peruvian Ama-zon—the site of a recent surge in petroleum extraction activity.Part III addresses the onslaught of timber development in tropicalforests, painting a challenging picture for conservationists because,unlike oil, gas, and mineral development, logging has a much larger

"footprint" and can have far more extensive impacts on biodiversity.Chapter 7, an overview by Nigel Sizer, who leads the World Re-sources Institute's Forest Frontiers Initiative, summarizes the currentstate of the world's tropical forests and documents numerous exam-ples of how Pacific Rim nations in particular are driving the expan-sion of logging into the world's remaining tropical frontiers In chap-ter 8, Erling Lorentzen, a leading Brazilian industrialist and chairman

of Aracruz Celulose, presents the case for plantations' ability to meet

global wood demand The case study of Aracruz describes how tations can be sited on degraded lands and be operated in a profitableand environmentally sensitive manner.

plan-In chapter 9 Justin Ward of Conservation plan-International and YurijBihun of the Natural Resources Defense Council and ShelterwoodSystems International, respectively, present one response to theexpansion of logging into tropical forest frontiers: the use of "timbercertification" and community forest management techniques in thetropical forests of southern Mexico

Finally, Part III concludes with a thought-provoking chapter by ural resource economists Richard Rice and Cheri Sugal, and biologistsPeter Frumhoff, Liz Losos, and Ted Gullison on strategies for achiev-ing conservation results in the context of tropical forests being subject

nat-to logging The authors provide a powerful counterpoint nat-to those whoare advocating "sustainable management" of timber resources in thetropics by pointing out that there are often more direct ways to con-serve biodiversity in the context of logging—such as use of primaryforest "set-asides"—than through investments in silvicultural "bestpractices."

Part IV addresses mineral development in the tropics In chapter

11, professor Alyson Warhurst and her colleague Kevin Franklin atthe Warwick Business School at the University of Warwick, England,provide an overview of recent trends and emerging technological im-provements in mineral development In chapter 12, Gary Nash of theInternational Council on Metals and the Environment (ICME), a con-sortium of major nonferrous mining companies, provides an industryperspective on the same issues Nash provides an interesting sum-mary of the use of voluntary guidelines and describes ICME's efforts

to educate its members through a variety of case studies

In chapter 13, Fred Graybeal of Asarco, one of the largest base metalmining companies in the world, summarizes his company's experi-ence with best practices for mining in tropical forests; he highlightsAsarco's experience with the creation of an independent Environ-mental Advisory Committee for a gold mining project in northernFrench Guiana—a case study that frankly discusses the costs and ben-efits of this approach Chapter 14, by David Smith, Vice Dean of Har-vard Law School, and Cyril Kormos, of Conservation International,provides an historical perspective on the use of legislation and con-tracts to safeguard the environment in the context of mineral and pe-troleum projects in developing countries They conclude that, whilethe time-consuming and costly process of developing effective legisla-tion and regulatory capacity unfolds, contracts, insurance, and otherlegal protections can and should be built directly into the agreementsthat govern individual projects

Part V addresses the common thread in major natural resource traction projects: the infrastructure that ties them to markets and

ex-sources of labor, goods, and services In chapter 15, an overview oninfrastructure and challenges for conservation, leading Brazilian in-dustrialist and former Minister of Strategic Affairs Eliezer Batista andhis colleagues provide a primer on how development planners canevaluate major infrastructure projects to reduce their ultimate impact

on biodiversity In doing so, this chapter considers the conservationimplications both of major "integration" and "penetration" projects.Chapter 16, by Robert Dobias of the Asian Development Bank andKirk Talbott of Conservation International, considers the specific in-frastructure "integration" case in the highly populated greater Me-kong subregion in southeast Asia Dobias and Talbott consider therole of government and of public participation in the many processesthat underpin large-scale infrastructure projects

In chapter 17, John Reid of the Conservation Strategy Fund goes tothe other end of the spectrum and considers the conservation implica-tions of new rural roads in more remote areas In presenting casestudies from both the remote Bolivian Amazon and a less developedpart of the Brazilian Atlantic coastal forest, Reid summarizes the chal-lenges presented by individual road projects and explains how con-servationists can deploy economic cost-benefit analyses to strengthenenvironmental arguments Reid also presents the concrete case ofhow a new park, or conservation "offset," was created in southernBahia to reduce the impact of road development on biodiversity Part

V concludes with an interesting description of a joint project of theAndean Development Corporation and Conservation International, aninnovative new software tool, Condor, which is currently being used

by infrastructure planners to help avoid impacts on biodiversity

We introduce and conclude the volume with a broad analysis oftrends in natural resource industries and related infrastructure and aset of recommendations for all those concerned with their footprints

in the jungle

Ian A BowlesGlenn T Prickett

This book is the product of a great many contributors First and most, the editors are grateful to Ms Amy Skoczlas for her tirelessdevotion and leadership as our Assistant Editor The editors wouldalso like to thank the outstanding group of contributing authors whoprovided excellent chapters that are the main subject of the book—the authors gave liberally of their time and shared with us and thereaders their enthusiasm and experience with complex issues In ad-dition, the editors would like to thank Robin Bell and Debra Gordonfor their critical support in development of the book prospectus andour initial discussions with Oxford University Press We would alsolike to thank many Conservation International staff including LenaMcDowall, Sterling Zumbrunn, Tanya Tarar, Petra MacGowan, AmyRosenfeld, Cheri Sugal, Jeff Mastracchio, and Aaron Bruner for theirhelp Finally, we would like to thank our editor, Joyce Berry at Ox-ford University Press, for her enthusiasm, encouragement, and flexi-bility throughout the process that has led to publication of this vol-ume Ian thanks his family for their encouragement and dedicates thiseffort to the memory of his grandfather, Dr George H A Clowes Jr.,for his scholarly leadership and great love of nature Glenn would like

fore-to thank his wife, Lisa Prickett, for her support and encouragement ofthis effort, and his father, Gordon Prickett, for his valuable insights

as both a mining engineer and environmentalist

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About the Editors xv

Contributors xvii

Introduction The Growing Footprint: Resource Extraction

Investments Expand Further into the Humid Tropics 3

Ian A Bowles

Glenn T Prickett

Part I: Conservation and Development in the Twenty-first-Century Tropics

1 Biodiversity Conservation: Global Priorities, Trends,

and the Outlook for the Future 9

Russell A Mittermeier

William R Konstant

2 Private-Sector Participation in Infrastructure Development 29

Everett J Santos

3 Partner or Pariah: Public Perceptions and Responses

to the Extractive Industries 37

Lisa Jordan

Christopher H Chamberlain

Partll: Oil and Gas Development Meet Conservation

4 Reinventing the Well: Approaches to Minimizing theEnvironmental and Social Impact of Oil Development

in the Tropics 55

Amy B Rosenfeld

Debra Gordon

Marianne Guerin-McManus

5 An Industry Perspective on Environmental and Social Issues

in Oil and Gas Development: Case Studies from Indonesiaand Ecuador 73

Part III: Forests under Pressure

7 Trade, Transnationals, and Tropical Deforestation 115

Part IV: Mining and Conservation

11 Biodiversity Conservation, Minerals Extraction, and

Development: Toward a Realistic Partnership 183

13 Evolution of Environmental Practice during Exploration

at the Camp Caiman Gold Project in French Guiana 222

Frederick T Graybeal

14 Conservation and Concession Contracts: Environmental Issues

in Mineral Extraction Agreements 233

David N Smith

Cyril Kormos

Part V: Infrastructure for Sustainable Development

15 Rethinking Infrastructure: Approaches to Managing

Development on the National and Continental Scale to ReduceConservation Impacts 249

Eliezer Batista da Silva

Gustavo A.B da Fonseca

Part VI: Conclusion

Conclusion Leave More Than Footprints: The New CorporateResponsibility 307

Glenn T Prickett

Ian A, Bowles

Index 317

About the Editors

Until Spring 1999, Ian A Bowles was Vice President of Conservation

Policy at Conservation International (CI); he directed CI's work in theareas of policy research, natural resource economics, finance, andlaw He is the author of more than twenty published articles on con-servation issues; his research at CI focused on the role of developmentagencies and the private sector in biodiversity conservation Bowlesnow serves as Associate Director for International Affairs at the Coun-cil on Environmental Quality and as Director of Environmental Af-fairs at the National Security Council in the White House This bookwas written prior to his government service and no views expressed

in the book represent a position of the Executive Office of the dent or the United States government He is a graduate of HarvardUniversity and is a native of Woods Hole, Massachusetts, where he isalso active on local environmental issues

Presi-Glenn T Prickett is Vice President for Business and Policy at CI;

he leads strategic partnerships between CI and major internationalcorporations in a range of fields, including oil and gas development,mining, and infrastructure development, among others Prior to join-ing CI, Prickett served as Chief Environmental Advisor at the U.S.Agency for International Development He is a graduate of Yale Uni-versity and resides in Great Falls, Virginia, with his wife, Lisa.Working in twenty-three countries around the world, CI is a field-based, nonprofit organization that protects the Earth's biologicallyrichest ecosystems and helps the people who live there improve their

quality of life CI seeks to harness the power of the private sector todeliver conservation solutions in the world's most important naturalecosystems CI's mission is to conserve the Earth's living heritage andglobal biodiversity and to demonstrate that human societies are able

to live harmoniously with nature

Conserva-Christopher H Chamberlain is the Project Manager for ern Europe at the Bank Information Center in Washington, B.C.

Central/East-At the time of writing, Robert J Dobias was the Senior EnvironmentalSpecialist in the Office of Environment and Social Development atthe Asian Development Bank in Manila

Joseph Donnaway is Manager of Health and Safety for Mobil tion in Dallas, Texas

Corpora-Gustavo A.B da Fonseca is Vice President and Executive Director ofthe Center for Applied Biodiversity Science at Conservation Interna-tional

Kevin Franklin is Research Officer researching biodiversity tion indicators and minerals development at the Mining and EnergyResearch Network, Warwick Business School, University of Warwick,England

conserva-Peter C Frumhoff is Director of the Department of Global Resources

at the Union of Concerned Scientists in Cambridge, Massachusetts

Debra Gordon was formerly Coordinator for Conservation Policy atConservation International in Washington, D.C.

At the time of writing, Frederick T Graybeal was Chief Geologist ofAsarco Incorporated in New York City

Marianne Guerin-McManus is Director of Conservation Finance atConservation International in Washington, D.C

Raymond Gullison is a Research Associate at the University of BritishColumbia in Vancouver

Lisa Jordan is Executive Director of the Bank Information Center inWashington, D.C

William R Konstant is Special Projects Director for Conservation ternational in Washington, D.C

In-Cyril Kormos is Director of Conservation Policy at Conservation national in Washington, D.C

Inter-Robert Kratsas was Manager of the Environment, Health, and SafetyDepartment of ARCO International Oil and Gas Company in Piano,Texas

Erling Lorentzen is Chairman of Aracruz Celulose in Minas Gerais,Brazil

Elizabeth Losos is Director of the Center for Tropical Forest Science

at the Smithsonian Tropical Research Institute in Washington, D.C.Claudia Martinez is Head of Coordination for Sustainable Develop-ment at Corporacion Andina de Fomento in Caracas, Venezuela.Carol Mitchell is EISA Environmental Coordinator for ConservationInternational in Lima, Peru

Russell A Mittermeier is President of Conservation International inWashington, D.C

Gary Nash is Secretary General of the International Council on Metalsand the Environment in Ottawa, Canada

Silvio Olivieri is Vice President for Strategic Planning at tion International in Washington, D.C

Conserva-At the time of writing, Jennifer A Parnell was Senior EnvironmentalEngineer in the Environment, Health, and Safety Department ofARCO International Oil and Gas Company in Piano, Texas

Richard Piland was Director of Projects for Conservation International

in Lima, Peru, at the time he contributed to this book

Glenn T Prickett is Vice President for Business and Policy at vation International in Washington, D.C

Conser-John Reid is President of the Conservation Strategy Fund of the cific Forest Trust in Boonville, California.

Pa-Richard Rice is Chief Economist in the Center for Applied sity Science at Conservation International in Washington, D.C.Amy B Rosenfeld is Director of Energy and Mining Industry Initia-tives at Conservation International in Washington, D.C

Biodiver-Everett J Santos is Chief Executive Officer of the Latin AmericaGroup of Emerging Markets Corporation in Washington, D.C

Nigel Sizer is Team Leader and Senior Associate of the Latin AmericaGroup at the World Resources Institute in Washington, D.C

David N Smith is the Vice Dean of Harvard Law School in bridge, Massachusetts

Cam-Cheri Sugal is Manager of Carbon Offsets and the Tropical WildernessProtection Fund at Conservation International in Washington, D.C.Kirk Talbott is Senior Director for the Asia and Pacific Region at Con-servation International in Washington, D.C

Jorgen B Thomsen is Vice President for Monitoring and Evaluation,and Development Agency Relations at Conservation International inWashington, D.C

Justin R.Ward is Director of Agriculture and Fisheries Industry tives at Conservation International in Washington, D.C

Initia-Alyson Warhurst is Director of the Mining and Energy Research work, Warwick Business School, University of Warwick, England

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FOOTPRINTS IN THE JUNGLE

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The Growing Footprint: Resource

Extraction Investments Expand

Further into the Humid Tropics

Ian A Bowles

Glenn T Prickett

Extractive industries (logging, mining, oil and gas development) andthe infrastructure associated with them (roads, pipelines, transmis-sion lines) have had significant environmental impacts worldwide.Today the potential impact of these industries on global biologicaldiversity is growing, as they focus increasingly on new opportunities

in resource-rich developing countries, including some of the world'smost sensitive and poorly understood natural ecosystems In the nextdecade, for example, it is expected that a significant portion of allnew oil exploration and production will occur in the humid tropics.The discovery of new reserves and the liberalization of developingcountry economies are pressing development further into the last un-disturbed tropical ecosystems—home to the world's greatest biodiver-sity and the least contacted indigenous cultures

Tropical Latin America is a case in point Areas like the Amazonregions of Peru and Colombia, as well as northern Guatemala, were,until recently, unattractive for major petroleum development due topolitical and economic instability In recent years, however, muchhas changed For example, Colombia is now host to the largest oildiscovery in the Western Hemisphere in twenty years Peru is host to

a similarly large natural gas discovery at the Camisea field And inGuatemala, oil development in the Peten region—largely in areas thatoverlap the ecologically sensitive Maya Biosphere Reserve—has re-turned after years of being largely stalled The same trends hold truefor mineral development Between 1991 and 1996, investment inmineral exploration in Latin America more than doubled, from $300

to $700 million Indeed, a 1996 survey of mining company executives

indicated that seven of the top ten countries that were believed tohave the best opportunities for investment were in Latin America.The region has also seen a rapid increase in logging investments—timber exports from Latin America jumped 120 percent in the periodfrom 1990 to 1996.

As the number of resource concessions and associated ture projects in tropical countries rises, public concerns about theirenvironmental and social impacts increase as well Recent experi-ences in Nigeria, Indonesia, Colombia, Papua New Guinea, Ecuador,and other countries highlight a growing trend of controversy aroundresource extraction operations Because developing countries depend

infrastruc-on revenue from resource extractiinfrastruc-on, however, it is clear that ment of the world's tropical ecosystems will continue in spite of thecontroversies

develop-Choices made now will determine the "footprint" of these tries—the extent of disturbance to natural habitats and the impacts

indus-on local communities The questiindus-on for all those cindus-oncerned with theconservation of global biodiversity is how best to respond to this newchallenge We believe that a number of important lessons can be de-rived from the experiences summarized in this book

First, resource companies can take steps to dramatically reducetheir impacts on ecosystems and communities seen in earlier projects.The case studies in this book describe emerging "best practices" forminimizing direct disturbance of habitats, preventing illegal coloniza-tion that leads to further destruction, and responding to the interests

of local communities Due to the weakness of regulatory regimes inmany developing countries, adoption of these practices will often de-pend on a company's voluntary willingness to pursue them There-fore, the policies and motivations of individual companies—and thevigilance of local environmental and community advocates—will bekey determinants of a particular project's environmental and social

"footprint."

But the evidence in this book also suggests that biodiversity willnot be conserved by the use of better management practices alone.While information and improved global communications mean thatcompanies are more readily accountable for their actions in remotelocales, the use of better practices and technologies in each footprintcan only do so much In the end, biodiversity will be largely con-served in the natural, pristine areas that are not subject to intensiveresource development This means that conservationists, corpora-tions, local communities, and governments must include investments

in conserving natural areas as part of the matrix used to judge theenvironmental performance of given projects. Proactive investment in

biodiversity conservation should be considered part of the "cost of

doing business." For conservation to be successful, better ment practices by themselves will not be enough.

manage-Other important lessons that we derive from the chapters presentedare as follows:

• Investment in new protected areas Creation of, and funding

for, protected areas should be an integral part of any ment planning This strategy should include increased invest-ment in effective management of existing protected areas and

develop-in the establishment of new areas to provide maximum sentation of a region's biological wealth In more remote areaswith extensive and mostly intact ecosystems, the time is rightfor major new investments in conservation on a larger scale

repre-• No development in protected areas Protected areas are the

most critical core element of national strategies to conserve ological diversity, as they are the only areas where plant andanimal species that are not able to exist in human-modifiedlandscapes can survive Natural resource extraction shouldsimply not be permitted in these areas

bi-• Minimizing impacts Where petroleum and mineral

develop-ment does occur in sensitive ecosystems like tropical forests,companies and conservationists should engage in an informeddebate about approaches to minimizing the social and environ-mental impact of exploration and extraction activities Industryassociations, for example, can provide an appropriate forumfor dissemination of information on such approaches Conser-vationists must also inform themselves of the relevant techni-cal information in order to engage with potential investors in

an informed dialogue

• Limiting the geographic extent of logging Whereas technology

and better practices can be deployed to significantly reduce theimpact of mining, petroleum extraction, and infrastructure de-velopment on tropical forests and biodiversity, timber extrac-tion inherently has a much more extensive geographic impact.While much of the tropical forestry debate has centered aroundpromotion of natural forest management as a conservation tool,there are significant economic, ecological, and institutional im-pediments to its use in tropical forests Conservationists shouldperhaps instead work even harder to stay focused on directquestions of logging impacts Simple requirements like area feetaxes, conservation "set-asides" in individual timber conces-sions, and even the retirement of lightly logged areas can often

do more for biodiversity conservation than complex changes insilvicultural management techniques

• Capacity building and local participation All major

develop-ment projects should take place within the context of publicparticipation in decisionmaking Local communities, munici-palities, and other stakeholders should be involved in a publicdialogue with companies, governments, and financial institu-tions at all steps of the development process This process hasnot taken place in the past but must be an integral part of de-velopment in the future

• Regional planning International financial institutions,

na-tional governments, and business organizations alike are ing new interest in integrating biodiversity conservation con-siderations into regional planning Conservationists shouldcooperate with such efforts to ensure that the next generation

show-of large-scale zoning and regional planning efforts includes plicit efforts to steer roads and investment away from areas ofgreatest importance for biodiversity conservation

ex-• Further use of legal tools and economic analyses

Conserva-tionists and governments alike can, and should, support

broad-er use of innovative legal and financial tools to strengthen theenvironmental performance of private operators For example,concepts like the creation of "performance bonds" can help re-duce the risk of environmental noncompliance Similarly, theuse of simple economic analyses can broaden the technical ba-sis for conservaiion advocates Many road development proj-ects often rest on shaky economic underpinnings Timber de-velopment, in certain instances, is also predicated on faultyeconomic performance assumptions

• Ecological monitoring Monitoring of the ecological impacts of

major natural resource extraction projects should grow to come a fundamental part of industrial planning in sensitiveecosystems Well-developed ecological monitoring protocolscan provide an important baseline for assessing environmentalperformance

be-There is, of course, no "one-size-fits-all" answer to the challenge ofconservation We offer this book as a resource to those concernedwith finding new approaches appropriate to their own challenges

PART I

Conservation and Development in the Twenty-first-Century Tropics

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1 Biodiversity Conservation

Global Priorities, Trends, and the

Outlook for the Future

Russell A Mittermeier

William R Konstant

Biodiversity, simply stated, is the total expression of life on Earth.The first living organisms, which appeared nearly three billion yearsago, were microscopic, unicellular, and, quite literally, a drop in animmense sterile ocean that covered the planet at that time Throughcountless millennia of progressive and sometimes catastrophic evolu-tionary processes, these first fragile experiments with life haveyielded the diversity we know today—an enormous yet relativelythin mantle of microbes, fungi, plants, and animals that covers theEarth, a myriad of species of which ours is but one

We are fast coming to realize that the condition and survival ofthe human species will ultimately depend on our ability to maintainexisting levels of biodiversity and essential ecological processes Ourplanet currently faces an array of environmental problems; some wehave been dealing with for centuries, others have emerged more re-cently as global threats While some progress has been and continues

to be made with regard to air and water pollution, hazardous wastedisposal, and soil erosion, we are still desperately trying to fathomthe consequences of ozone layer depletion and climate change Fur-thermore, we have the immense problem of explosive human popula-tion growth, especially in the developing countries, and the excessiveresource consumption of the developed nations

Critical though all of these issues may be, we believe that there isone environmental issue that surpasses all others in terms of long-term global impact: that is loss of our planet's biological diversity,that wealth of species, ecosystems, and ecological processes thatmakes our living planet what it is After all is said and done—all the

recent space probes searching for life on Mars, the moons of Jupiter,and elsewhere notwithstanding—Earth is still the only place in theentire universe where we know, with certainty, that life exists.Why is the loss of biodiversity so important? The answers are verystraightforward First, such losses are irreversible, at least within any

time frame meaningful to our own species Although humanity ready has, or can certainly develop, the technologies to combat mostother environmental ills—even if it sometimes lacks the political will

al-or economic incentive to put them into effect—once a species of plant

or animal goes extinct, it is gone forever and will never be seen again.And right now, the world faces not just the loss of individual speciesbut the degradation and disappearance of entire biological communi-ties and ecosystems The second answer is that humans, as living crea-tures themselves, depend on a vast array of other forms of life for theirown survival Although those in the developed world sometimes losetrack of this because they are somewhat insulated from their direct de-pendence on other life forms by their technology and their sophisti-cated market systems, that dependence, nonetheless, is still there Forthese reasons, we strongly believe that maintenance of the planet's bio-diversity is simply the most fundamental of all environmental issuesand probably the single most important issue of our time

Surprisingly, given the incredible advances in science during thepresent century, our measure of biodiversity remains embryonic atbest Biologists have thus far described approximately 1.4—1.8 millionliving creatures (Parker 1982) However, estimates and projectionsmade in the last two decades indicate that total species diversity onEarth could be as great as ten million, thirty million, or perhaps evenone hundred million or more (Erwin 1983) While we can send mem-bers of our own species to the moon and spacecraft to the farthestreaches of the solar system, or fit millions of bits of rapidly retrievableinformation on tiny computer chips, the truth is that we do not know,probably to within two orders of magnitude, how many species sharethis planet with us (Wilson 1985; Mittermeier et al 1997) Needless

to say, our ignorance does not just relate to sheer numbers of lifeforms If we take into account the endless array of interactions amongspecies, and the ecological processes dependent on and deriving fromsuch interactions, our level of ignorance increases by several addi-tional orders of magnitude—indicating quite clearly that, in manyways, our wonderful technology notwithstanding, we are still in theDark Ages in terms of our understanding of life on Earth

Beyond the basic science of biodiversity, we also have much tolearn of the economic value of biodiversity to our own species Recog-nition over the past few decades of our dependence on biodiversityand the push for a better understanding of the economics of themuch-touted concept of "sustainable development" has led, albeit

slowly, to increased emphasis on the need for better "valuation ofbiodiversity." Although as a science such valuation is in its infancyand still lacks appropriate metrics or standardized methodologies, it

is finally receiving some attention and we hope will grow cantly in the near future

signifi-The Value of Biodiversity

In relation to the principal theme of this book, we believe that a damental understanding of biodiversity value is essential if we are toenter into a meaningful discussion of the importance of differentland-use practices, particularly the impact of the wide array of extrac-tive industries For example, if the biodiversity of a given tract oftropical forest is valued at zero, then even the most uneconomic,unsustainable, and damaging of extractive activities will be seen asgenerating a net profit for the country or community in question.However, if the true value of watershed protection, the potential oractual export value of certain key forest products, and the range ofgoods and services that the forest provides to local communities aretaken into consideration and assigned real dollar values, then theequation changes dramatically In the absence of such data on biodi-versity use—the prevalent situation in most of the tropical worldeven today—the result is too often the same: outdated extractive prac-tices carried out with little or no attention to, or concern for, impacts

fun-on biodiversity or mfun-onitoring thereof

In an effort to spur such valuation of biodiversity use and to at leastcategorize levels of use to some extent, one of the authors severalyears ago defined six distinct categories of biodiversity use (Mitter-meier and Bowles 1993) We briefly summarize these here, not be-cause we believe they are the final word but, rather, to stimulate fur-ther discussion and interest in a topic that is so fundamentallyimportant to questions of extractive industries and their impact onbiodiversity

Major ecosystem functions Biodiversity contributes enormously to

the regulation of atmospheric chemical composition, temperature,and hydrological cycles, as well as to soil formation, nutrient cycling,pollination, biological control, primary food production, and othermajor ecosystem functions A recent study by Robert Costanza andothers (1997) evaluated seventeen different ecosystem services (thebenefits human populations derive directly or indirectly from ecosys-tem functions) across the Earth's terrestrial and marine biomes andarrived at a total global value of $33 trillion per year, approximatelyhalf of which is attributed to nutrient cycling Even if this estimate is

an order of magnitude too high, the figure is truly staggering

International trade The importance of biodiversity to agriculture is

one of the more obvious uses of this resource The annual globalvalue of agricultural trade is in excess of $3 trillion, with basic humannutrition depending largely on seven domesticated species of grass(rice, wheat, barley, oats, sorghum, millet, and corn), all of which re-quire continued genetic input from wild relatives to maintain resis-tance to diseases and pests Thus, protecting the diversity of thesewild species is critical to sustaining current and future levels ofglobal grain consumption The situation is similar for coffee, theworld's second most traded commodity after petroleum (Myers 1983)

To maintain the viability of domestic coffee crops now grown out the world's tropical regions, it is critical that wild relatives beconserved in centers of origin such as Ethiopia, the highlands of eastAfrica, and the rain forests of eastern Madagascar Madagascar is par-ticularly interesting, since it harbors more than fifty wild species ofcoffee, several of which are caffeine-free What is true of these majorcrop species is also true of the hundreds of other plant and animalspecies on which we depend for our daily sustenance, and while theglobal interconnectedness of this dependence is not always obvious,

through-it remains fundamentally important

Biodiversity also has tremendous implications for industry in thetwenty-first century and must be seen as the raw material for the ex-ploding biotechnology industry Not surprisingly, it is already of con-siderable importance in industry Approximately 25 percent of allpharmaceutical prescriptions in the United States contain active ingre-dients of plant origin, and more than three thousand antibiotics are de-rived from microorganisms, all percentages and numbers that are likely

to increase dramatically in the years to come (WRI, IUCN, and UNEP1992) In addition, traditional medicine in developing countries, prac-ticed by at least three billion people, relies entirely on the diversity andavailability of wild species The growing herbal remedy market in thedeveloped countries is equally dependent on this source Industrialuses of biodiversity are not limited to pharmaceutical and medicinalplants A wide range of wood products, fibers, oils, dyes, resins, latex,tannins, and other products from natural ecosystems have growingcommercial use and potential (McNeely et al 1990)

The enormous recreational uses of biodiversity are well mented Increasingly, people are looking to the natural world for themaintenance of spiritual and psychological well-being Nature-basedforms of recreation (e.g., fishing, hunting, hiking) are growing in pop-ularity, especially in the industrialized nations Ecotourism, now esti-mated at $200 billion annually, is the fastest growing sector of what

docu-is now considered the world's largest industry, tourdocu-ism Most expertsagree that ecotourism will grow most rapidly in the tropical regions,where it is already a major foreign exchange earner in several coun-tries However, the most appealing flagship species, "charismatic

megavertebrates" like the rhinos, the elephants, the larger primates,the big cats, the bears, the savanna ungulates of Africa, the whales,the eagles and other raptors, the birds of paradise, the parrots andmacaws, the hornbills, the whales, the marine turtles, and other spec-tacular creatures, are often the first to go when ecosystem degradationtakes place They must be fully protected if their true potential assustainable foreign exchange earners is to be realized.

High levels of biodiversity serve to increase the future benefits ofscientific research, which in the past was not recognized as a signifi-cant earner of foreign exchange but increasingly should be in the fu-ture As interest in biodiversity grows, more and more people willwant to carry out research on it, especially in the more remote corners

of the tropical world Moreover, as pristine natural areas continue todisappear, they become an increasingly scarce commodity that will

be of ever greater value to those countries with enough foresight toconserve them A handful of countries, like Costa Rica, already bene-fit greatly (to the tune of millions of dollars) from scientific research

of many different kinds carried out by a wide variety of researchers,ranging from high school students carrying out their first-ever scienceprojects to some of the world's leading lights in conservation biology.Costa Rica's National Biodiversity Institute (INBIO) carries out manydifferent kinds of scientific research, much of it with visiting foreignscientists, and has become a magnet for international funding Thissort of nondestructive biodiversity use is certain to increase signifi-cantly in the future and to compete well with the kinds of unsustain-able logging activities that unfortunately are still prevalent in manytropical forest areas

Finally, biodiversity is valuable in international markets as a source

of natural products This includes timber from forest ecosystems;nontimber forest products such as rubber, Brazil nuts, and rattan; ani-mal products like fish, meat, and skins; and a variety of other prod-ucts that routinely cross international borders The range of interna-tionally exportable products is also likely to expand significantly inthe future, as improved transportation makes a wide range of locallyused tropical products (e.g., rain forest fruits) more accessible to inter-national markets

Regional markets Despite the international values of biodiversity,

the vast majority of its uses will remain within the borders of a ular nation (regional, local, and household values) Products that en-ter into the regional economy may change hands several times and

partic-be transported hundreds of kilometers partic-before they are consumed Forexample, products coming into the markets of large Amazonian townsand cities like Manaus, Belem, and Iquitos often originate from a wideradius around them

Local markets This category is similar to regional market values,

except that the products are harvested and sold in a more

circum-scribed area and there are probably fewer exchanges between sourceand market We also believe that the overall biodiversity value of lo-cal markets probably exceeds that at the regional level.

Household use The issue of household use is often overlooked in

valuation of biodiversity Products do not change hands but are used

by the individual who collects or produces them (and his/her family

or immediate circle) Examples include fish and game animals formeat, vegetable foods gathered from the surrounding ecosystem,thatch and timber used in building, fuelwood, and medicinal plants,

to name just a few The value of these products is measured not only

in market prices but also in terms of their replacement cost shouldthey become unavailable due to environmental degradation or speciesloss Since replacement products usually have to be imported fromelsewhere, the cost to the individual increases substantially, some-times to the point that replacement simply does not take place, lead-ing to reduced quality of life

Global intangibles Biodiversity is not static but rather is a

dy-namic, evolutionary complex of ecosystems that function together asenvironmental buffers to climate change and other global processes

It also has great importance in maintaining worldwide geopoliticalstability, sometimes referred to as ecosecurity Developing countriesdepend on biological resources on a more direct and immediate basisthan do developed nations; the negative impacts of biodiversity lossare confronted on a daily basis as shortages of essentials such as fuel-wood, food, and fiber If not remedied, these crises will force emigra-tion from affected areas, create political instability, and may coalesceinto national and regional conflicts In the Western Hemisphere, theseprocesses are already in evidence in the overpopulated and biologi-cally impoverished countries of Haiti and El Salvador; in the OldWorld they have been all too obvious in places like West and CentralAfrica and parts of South Asia

Understanding the scope and value of biodiversity is essential todealing with the threats that face it on a global level Harvard biolo-gist Edward O Wilson effectively summed up the situation a decadeago:

Biological diversity must be treated more seriously as a globalresource, to be indexed, used, and above all, preserved Threecircumstances conspire to give this matter an unprecedented ur-gency First, exploding human populations are degrading the en-vironment at an accelerating rate, especially in tropical countries.Second, science is discovering new uses for biological diversity

in ways that can relieve both human suffering and environmentaldestruction Third, much of the diversity is being irreversibly lostthrough extinction caused by the destruction of natural habitats,again especially in the tropics Overall, we are locked into a race

We must hurry to acquire the knowledge on which a wise policy

of conservation and development can be based for centuries tocome (1988: 3)

While we may still be a long way from documenting the full extent

of Earth's living natural heritage, we are becoming painfully aware ofthe rapid rate at which it is disappearing Largely through humanactivities, we have already lost more than 60 percent of the planet'sprimary tropical rain forest—perhaps the richest of all natural ecosys-tems—and perhaps a quarter of what remains is degraded (Johnsonand Cabarle 1993) Many of the world's coral reefs and other species-rich coastal ecosystems are similarly under threat According to the

1996 IUCN Red List of Threatened Animals, fully 25 percent of all

mammals and 11 percent of all birds are critically endangered, gered, or vulnerable, and these figures are surely underestimates(Bailie and Groombridge 1996) Furthermore, the 1997 IUCN Red List

endan-of Threatened Plants confirms that nearly thirty-four thousand plant

species, or 13.6 percent of the world's vascular flora, are threatenedwith extinction, again probably an underestimate simply because oflack of information (Walter and Gillett 1997)

Once we confront our ignorance of biodiversity, the fact that it isfast disappearing, and the fact that its loss is a threat to our own sur-vival, we can identify several key issues that need to be addressed inorder to do something about the problems that we face and to takemeaningful steps to conserve what remains We certainly believe that

a greatly increased emphasis on documenting, cataloguing, and betterunderstanding the full range of biodiversity is fundamental and that

it should proceed as rapidly as possible However, when looking atthe great urgency of many of the problems, we recognize that it is notpossible to wait for the final results of such research before takingaction Consequently, we believe that two issues are of paramountimportance over the short to medium term; we summarize them inthe pages that follow First, priorities should be set to ensure thatenergy and resources are applied where they will have the greatestimpact; second, the critical role of protected areas in achieving biodi-versity objectives should be recognized

Setting Priorities

Conservation International (CI) has been a leader in developing gies to set conservation priorities in order to maximize the efforts ofgovernments and nongovernmental organizations (NGOs) CI's prior-ity-setting approaches are based on four premises: (1) the biodiversity

strate-of every nation is critically important to that nation's survival andmust be a fundamental component of any national or regional devel-

opment strategy; (2) biodiversity is by no means evenly distributed

on the Earth's surface, and some areas, especially in the tropics, bor far greater concentrations of biodiversity than others; (3) some ofthese areas of highest concentration (e.g., tropical rain forests andcoastal ecosystems) are under the most severe threat (already reduced

har-to 25 percent or less of their original extent); and (4) har-to achieve mum impact with limited resources, global conservation strategiesshould concentrate heavily on the areas richest in diversity and mostseverely threatened, and this investment in conservation should beroughly in proportion to each region's overall contribution to globalbiodiversity

maxi-Hotspots

The first person to clearly articulate this approach was Norman ers, one of the leading thinkers of the environmental movement In agroundbreaking paper, he recognized ten tropical forest "hotspots"that he estimated contained 13.8 percent of all plant species in a mere0.2 percent of the planet's land area (Myers 1988) In a subsequentanalysis, he added several other rain forest areas and four Mediterra-nean-type ecosystems, increasing the total number of hotspots toeighteen, which then accounted for 20 percent of global plant diver-sity in just 0.5 percent of Earth's land area (Myers 1990) In 1989, CI(1990a,1990b) and the MacArthur Foundation adopted Myers's hot-spots as the guiding principle for their conservation investment, with

My-CI slightly modifying and expanding his list to include areas looked in the original analyses (see figure 1.1)

over-In March 1996, CI began a reanalysis of the hotspots This analysiswas heavily driven by endemism, and especially plant endemism, butalso uses data on diversity and endemism of four groups of verte-brates: mammals, birds, reptiles, and amphibians To qualify as a hot-

Figure 1.1 Biodiversity Hotspots: 1 Tropical Andes, 2 Mediterranean

Basin, 3 Madagascar/Indian Ocean Islands, 4 Mesoamerican Forests, 5.Caribbean Islands, 6 Indo-Burma, 7 Atlantic Forest, 8 Philippines, 9.Cape Floristic Region of South Africa, 10 Eastern Himalayas, 11 Sunda-land, 12 Brazilian Cerrado, 13 Southwest Australia, 14 Polynesia andMicronesia, 15 New Caledonia, 16 Choco/Darien/Western Ecuador, 17.Western Ghats and Sri Lanka, 18 California Floristic Province, 19 Succu-lent Karoo, 20 New Zealand, 21 Central Chile, 22 Guinean Forests ofWestern Africa, 23 Caucases, 24 Eastern Arc Mountains/Coastal Forests

of Tanzania and Kenya; 25 Wallacea; Major Tropical Wilderness Areas:

A Amazon Basin, B Congo Basin, C The Island of New Guinea, and jacent Archipelago

Ad-spot, an area or region must possess at least 0.5 percent of total globalvascular plant diversity Since current estimates of diversity of vascu-lar plants (angiosperms, gymnosperms, ferns, and relatives) is250,000, this means that an area must have, as endemics, at least

1,250 species living within its borders It must also have lost at least

75 percent of its original natural vegetation, with only 25 percent orless remaining in more or less pristine condition (in fact many ofthese areas have already lost 90-98 percent of their original naturalvegetation) The reanalysis also considered patterns of diversity andendemism for mammals, birds, reptiles, and amphibians, mainly tocomplement the plant data and to allow for priorities to be set evenwithin the hotspot list In general, tropical rain forest areas, whichare very rich in plants, also tend to have high levels of diversity andendemism in the four vertebrate groups investigated In contrast, tem-perate hotspots, such as the Mediterranean-type ecosystems, anddrier tropical hotspots, though exhibiting high levels of plant diver-sity and endemism, sometimes even exceeding those of the tropicalforests, have much lower levels of vertebrate diversity and endemism.This most recent analysis strongly emphasized endemism for severalreasons First, doing so is in line with the Doctrine of Ultimate Respon-sibility of the International Union for the Conservation of Nature andNatural Resources (IUCN), which recognizes the great responsibilitythat a country has if it is the only place where a particular speciesoccurs (McNeely et al 1990) Second, many endemic species are en-tirely dependent on a single area for their survival Third, endemics,due to their restricted ranges and sometimes high degree of specializa-tion, often represent the most vulnerable taxa of a particular commu-nity, will almost certainly be the first to fall victims to extinction, andare thus most in need of rapid conservation action (McNeely et al.1990; Balmford and Long 1994; Pimm et al 1995) In the current analy-sis, the number of hotspots increased to twenty-five Included amongthese (listed from north to south and west to east) are:

• California Floristic Province: California, Oregon, and Baja fornia, Mexico;

Cali-• Caribbean Islands, including also the southern tip of Florida;

• Mesoamerican Forests, from southern Mexico to the PanamaCanal;

• Choco/Darien/Tumbesian Region, covering the Darien of ama, Choco of Colombia, coastal Ecuador, and coastal northernPeru;

Pan-• Tropical Andes: Venezuela, Colombia, Ecuador, Peru, and livia;

Bo-• Atlantic Forest Region of Brazil, including adjacent portions ofParaguay and Argentina;

• Brazilian Cerrado;

• Central Chile;

• Mediterranean Region of Europe, North Africa, and the NearEast;

• Guinean Forests of West Africa;

• Cape Floristic Region of South Africa;

• Succulent Karoo of South Africa and Namibia;

• Eastern Arc Mountains and Coastal Forests of Tanzania andKenya;

• Madagascar and Indian Ocean Islands;

• Sundaland: Indonesia, Malaysia, Singapore, and Brunei;

• Wallacea: eastern Indonesia;

• Southwestern Australia;

• New Caledonia;

• New Zealand; and

• Polynesia/Micronesia island complex

Of these hot spots, nine are entirely tropical rain forest areas,five include tropical rain forest and tropical dry forest components,three include tropical rain forest, dry forest, and arid systems, fiveare temperate Mediterranean-type ecosystems, one is non-Medi-terranean temperate forest and shrubland, one is a mosaic of dryforests and savannas, and one is an arid region (Mittermeier et al.1998)

It is important to point out that this hotspots analysis focused tirely on terrestrial ecosystems Although some freshwater ecosys-tems are covered in the regions, we do not claim that these hotspotsadequately cover freshwater biodiversity conservation priorities.However, these twenty-five highest priority hotspots, while occupy-ing less than 2 percent of the Earth's land surface, do contain about

en-45 percent of all vascular plants as endemics and between 30 and 40

percent of all nonfish vertebrates as endemics This means that at the

very least, they are home to 50 percent of all terrestrial biodiversity(and probably much more) and at least three-quarters of the world'smost endangered terrestrial biodiversity The conservation message

should ring loud and clear: A very large percentage of global restrial biodiversity can be protected in a very small percentage ofEarth's real estate

ter-The next challenge in developing the hotspot strategy is to institute

a hierarchy of priority-setting exercises that sharpens the geographicfocus (global to regional to national to local to specific sites) or, to