With limited resources and seemingly limitless challenges, conservationists have to make hard choices about how and where to invest based on consideration of both the biodiversity benefits and the costs. One way to make those choices is to think about conservation return-on-investment (ROI), defined as the biodiversity benefit per dollar spent (“bang-for-the-buck”), and set priorities that maximize marginal conservation ROI.

We are collaborating with TNC’s Science Office, Science Council, California chapter, and academic scientists at the University of Queensland to explore the advantages of informing decisions with ROI thinking, and to develop methods and tools for practical application. Highlights of ongoing work include:

Incorporating the Effects of Socioeconomic Uncertainty into Priority Setting for Conservation Investment

Abstract: Uncertainty in the implementation and outcomes of conservation actions that is not accounted for leaves conservation plans vulnerable to potential changes in future conditions. We used a decision-theoretic approach to investigate the effects of two types of investment uncertainty on the optimal allocation of global conservation resources for land acquisition in the Mediterranean Basin. We considered uncertainty about (1) whether investment will continue and (2) whether the acquired biodiversity assets are secure, which we
termed transaction uncertainty and performance uncertainty, respectively. We also developed and tested the robustness of different rules of thumb for guiding the allocation of conservation resources when these sources of uncertainty exist. In the presence of uncertainty in future investment ability (transaction uncertainty), the optimal strategy was opportunistic, meaning the investment priority should be to act where uncertainty is highest while investment remains possible. When there was a probability that investments would fail (performance uncertainty), the optimal solution became a complex trade-off between the immediate biodiversity benefits of acting in a region and the perceived longevity of the investment. In general, regions were prioritized for investment when they had the greatest performance certainty, even if an alternative region was highly threatened or had higher biodiversity value. The improved performance of rules of thumb when accounting for uncertainty highlights the importance of explicitly incorporating sources of investment uncertainty and evaluating potential conservation investments in the context of their likely long-term success..

McBride, MF et al. 2007. Incorporating the Effects of Socioeconomic Uncertainty into Priority Setting for Conservation Investment. Conservation Biology. 21(6) 1463-1474.

Maximizing return on investment in conservation

Global conservation needs far exceed the available resources, so scarce resources must be used cost-effectively. Although many conservation priory-setting frameworks used by NGO's or public agencies explicitly claim to emphasize efficiency or wise investment, none actually incorporates costs in a formal return-on-investment (ROI) framework. We illustrate here how an ROI framework can be applied to real world resource allocation decisions faced by conservation organizations. We present two examples: (1) allocating resources to purchase land in 21 ecoregions that make up the Temperate Forest Habitat in the US; (2) allocating resources among a variety of conservation actions (not just land purchase) in Mediterranean habitats, with rates of habitat loss factored into the analysis. An important feature of both case studies is that costs vary by orders of magnitude, depending on where or how one is doing conservation. Second, because costs and biodiversity are not well correlated, enormous savings are possible by applying an ROI analysis. Moreover, recommended priorities after including costs in the calculations often deviate substantially from priorities based solely on biodiversity measures. Hence we argue that a major effort of conservationist biologists should be to include and record the costs of conservation actions. If serious attention is not given to returns on investment, it implies that ‘‘money is no object".

Murdoch, W. 2007. Maximizing return on investment in conservation.  Biological Conservation 139, 376-388.

Protecting Biodiversity when Money Matters: Maximizing Return on Investment

Conventional wisdom identifies biodiversity hotspots as priorities for conservation investment because they capture dense concentrations of species. However, density of species does not necessarily imply conservation ‘efficiency'. Here we explicitly consider conservation efficiency in terms of species protected per dollar invested. Methodology/Principal Findings. We apply a dynamic return on investment approach to a global biome and compare it with three alternate priority setting approaches and a random allocation of funding. After twenty years of acquiring habitat, the return on investment approach protects between 32% and 69% more species compared to the other priority setting approaches. To correct for potential inefficiencies of protecting the same species multiple times we account for the complementarity of species, protecting up to three times more distinct vertebrate species than alternate approaches. Conclusions/Significance. Incorporating costs in a return on investment framework expands priorities to include areas not traditionally highlighted as priorities based on conventional irreplaceability and vulnerability approaches.

Underwood EC, Shaw MR, Wilson KA, Kareiva P, Klausmeyer KR, et al (2008) Protecting Biodiversity when Money Matters: Maximizing Return on Investment. PLoS ONE 3(1): e1515. doi:10.1371/journal.pone.0001515

Conserving biodiversity efficiently: What to do, where and when

Conservation priority-setting schemes have not yet combined geographic priorities with a framework that can guide the allocation of funds among alternate conservation actions that address specific threats. We develop such a framework, and apply it to 17 of the world's 39 Mediterranean ecoregions. This framework offers an improvement over approaches that only focus on land purchase or species richness and do not account for threats. We discover that one could protect many more plant and vertebrate species by investing in a sequence of conservation actions targeted towards specific threats, such as invasive species control, land acquisition, and off-reserve management, than by relying solely on acquiring land for protected areas. Applying this new framework will ensure investment in actions that provide the most cost-effective outcomes for biodiversity conservation. This will help to minimise the misallocation of scarce conservation resources.

Wilson KA, Underwood EC, Morrison SA, Klausmeyer KR, Murdoch WW, et al. (2007) Conserving biodiversity efficiently: What to do, where and when. PLoS Biol 5(9): e223. doi:10.1371/journal.pbio.0050223

Global conservation priorities that maximize conservation
return-on-investment

Conventional priority-setting approaches for conservation ignore the cost of conservation, yet cost considerations are essential if conservation investments are to be efficient. We identify global conservation priorities that maximize the number of plant species protected for a given investment budget. Comparison of the realized ROI of the world’s current protected area network to a cost-efficient benchmark suggests that high-return opportunities remain and that twice as much biodiversity could have been protected for the same money if an ROI framework had been applied. For new investment budgets of $200 million to $10 billion, we identify where and how much should be invested to add the greatest biodiversity value to the current protected area network.

View draft publication (.pdf, 411 kb)

Quantifying conservation return-on-investment

Previous analyses have examined expected ROI based on estimated costs and assumed species-dollar relationships that are derived either from species-area curves or from assuming an adequately size reserve is sufficient to conserve all species located in a given region. We have submitted a proposal to quantify estimates of realized ROI of conservation projects based on actual budgeted costs (acquisition and management cost), and the “value” of biodiversity represented. If funded, this study will provide an empirical benchmark of conservation ROI that can be used by decision-makers to inform evaluation of future conservation projects, and help to establish protocols for others to track their own ROI.

View proposal summary (.pdf 12.8 kb)

For more information, please contact the team at conservationgateway@tnc.org