Providing financial incentives for biodiversity conservation

Economic and social incentives such as subsidies, taxes and duties may have a considerable effect on biodiversity. In some cases they may be used as instruments to change or maintain patterns of production and consumption relevant to biodiversity.

Economics provides a useful perspective on issues of biodiversity, at three levels. At the international level, governments may need to consider the impact of global economic policies, such as commodities prices, on biodiversity; and because the conservation of biodiversity provides global economic benefits, economic incentives should be provided at the international level (i.e., through the Global Environmental Facility, but also through terms of trade).

At the national level, governments need to be able to assess the impact of their policies on biological resources of the country, and consider the utility of using a combination of economic incentives (i.e. differential access to resources, compensation for animal damage, subsidies, grants) and economic disincentives (i.e. fines and withholding benefits) to promote conservation objectives.

For governments, the concept of 'perverse incentives' (economic instruments which promote the destruction of biodiversity) needs to be considered; many government subsidies and foreign assistance projects have had such effects. At the level of government agencies responsible for conserving biodiversity, incentives can often be used to enhance the performance of staff, improve relations with surrounding lands, and provide long-term financial support to the agency.

In recognition of the important asset biological and landscape diversity represents for Europe as a whole, Paragraph 37 of the 1998 UN/ECE Århus Declaration resolves to strengthen and implement instruments for a better integration of biodiversity and landscape conservation objectives into sectoral policies at national and international levels across Europe by developing appropriate economic and financial incentives.