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Harmful Incentives and their Elimination, Phase Out, or Reform

Technical Series No. 56

Introduction

Some measures, policies or practices induce behavior that is harmful for biodiversity, often as unanticipated side effects as policies are designed to attain other objectives. The Convention refers to harmful incentives or 'perverse' incentives. Such “policy failures” can include government subsidies or other measures which fail to take into account the existence of environmental externalities, as well as laws or customary practice governing resource use. In order to ensure the conservation of biodiversity and the sustainable use of its components, it is therefore important to identify policies and practices that generate harmful incentives and to consider their removal, phase out, or reform, for instance by mitigating their negative impacts through appropriate means.

Overview of CBD Activities

The Conference of the Parties (COP) recognized that perverse incentives harmful for biodiversity are frequently not cost-efficient and/or not effective in meeting social objectives while in some cases use scarce public funds, and urged Parties and other Governments to prioritize and significantly increase their efforts in actively identifying, eliminating, phasing out, or reforming, with a view to minimizing or avoiding negative impacts from, existing harmful incentives for sectors that can potentially affect biodiversity.

Aichi target three of the Strategic Plan for Biodiversity for the 2011-2020 period relates to incentives that are harmful for biodiversity:

Target 3: By 2020, at the latest, incentives, including subsidies, harmful to biodiversity are eliminated, phased out or reformed in order to minimize or avoid negative impacts, and positive incentives for the conservation and sustainable use of biodiversity are developed and applied, consistent and in harmony with the Convention and other relevant international obligations, taking into account national socio-economic conditions.

The Conference of the Parties acknowledged that identifying, eliminating, phasing out, or reforming existing harmful incentives requires:
  • the conduct of careful analyses of available data and
  • enhanced transparency, through ongoing and transparent communication mechanisms on
    • the amounts and the distribution of perverse incentives provided, as well as of
    • the consequences of doing so, including for the livelihoods of indigenous and local communities.

CBD Technical Series no. 56 provides succinct lessons learned and good practices cases in identifying and removing or mitigating perverse incentive measures, based on the work of an international expert workshop which took place in Paris, France, in October 2009.

The twelfth meeting of the Conference of the Parties (COP12) adopted the milestones for Aichi Biodiversity Target 3, Decision XII/3; Annex I, Milestones for the full implementation of Aichi Biodiversity Target 3 and modalities for effective implementation of Aichi Biodiversity Target 3, as contained in document Modalities and Milestones for the Full Operationalization of Aichi Biodiversity Target 3, and Obstacles Encountered in Implementing Options Identified for Eliminating, Phasing Out or Reforming Incentives That Are Harmful for Biodiversity: UNEP/CBD/WGRI/5/4/Add.1 Pyeongchang Roadmap 2020 for implementation of the targets for resource mobilization to support the achievement of the Strategic Plan for Biodiversity 2011-2020 and the Aichi Biodiversity Targets.

  • United Nations
  • United Nations Environment Programme