In its latest report, the OECD examines the economic tools available to governments for curbing environmentally harmful behaviors and promoting those that protect biodiversity. The aim of these “nature-based incentives” is to incorporate the true costs of the biodiversity damage and loss into economic pricing, sending a clear signal to markets to view the environment as both a component of production and an investment opportunity. Biodiversity-positive taxes provide incentives to conserve and sustainably use biodiversity including those on pesticides, fertilizers, forest products and timber harvests. Based on the polluter pays principle, they reflect the negative environmental externalities these activities generate.
- Biodiversity-positive fees include entrance fees to national parks, fees on hunting and fishing licenses. The amount collected can therefore be invested into research and development, education or policy development.
- Biodiversity-positive tradable permits set an aggregate limit on the total amount of a natural resource that can be exploited, and then allocate individual permits to users that they can trade. If these permits are auctioned, they can generate money invested into repairing the damage made or conservation measures.
- Biodiversity offsets compensate for significant adverse biodiversity impacts arising from project development. This policy needs proper measurements in order to lead to efficient mitigation solutions.
- Biodiversity-positive subsidies reduce directly or indirectly the use of a technology or a product that has a proven benefic impact on the environment.
The largest share of biodiversity-positive incentives is related to the agriculture, forestry, and fishing sectors, which are also among the most harmful to the environment. Currently, there are 277 environmentally friendly measures in place across 70 countries. Expanding this approach to other sectors or regions could help achieve Target 18 of the Kunming-Montreal Global Biodiversity Framework, which focuses on reducing harmful economic incentives.
Tracking Economic Instruments and Finance for Biodiversity 2024 (oecd.org)
