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SBSTTA 11 Recommendation XI/6

Incentive measures

The Subsidiary Body on Scientific, Technical and Technological Advice,

A. Review of work on incentive measures under the Convention

Recalling that Article 11 of the Convention calls upon Parties, as far as possible and as appropriate, to adopt economically and socially sound measures that act as incentives for the conservation and sustainable use of components of biodiversity,

Noting the progress made in implementing Article 11 under the Convention process, including inter alia:

(a) The adoption of the programme of work on incentive measures by decision V/15 of the conference of the Parties;

(b) The endorsement of the proposals for the design and implementation of incentive measures and the recommendations for further cooperation on incentive measures, contained respectively in annexes I and II of decision VI/15, as far as they are consistent with Parties' national policies and legislation as well as their international obligations;

(c) The compilation and dissemination of case-studies, lessons learned and other relevant information on incentive measures through the electronic database on incentive measures of the clearing house mechanism and the toolkit on incentive measures;

(d) The preparation of analytical documents on incentive measures for consideration by the Conference of the Parties and its subsidiary bodies, available through the clearing house mechanism of the Convention, as well as technical series documents,

Noting also the contributions made by international organizations, non-governmental organizations, and research institutions to support the implementation of the programme of work through, inter alia: the preparation of analytical reports and conceptual guidance through manuals and handbooks, and pilot projects,

Acknowledging the support provided by bilateral and multilateral funding institutions in implementing Article 11 at the national level,

Cognizant of the progress made in implementation of Article 11 at the national level,

Acknowledging that more work needs to be undertaken at all levels and scales to effectively provide guidance for the further implementation of Article 11 of the Convention, including work on methodological and conceptual issues, on the practical implementation of measures, and on capacity building and training,

Recognizing that the rapidly evolving international policy and legal environment, as well as emerging policy, legal and scientific issues at the national level related to development and implementation of incentive measures for the conservation and sustainable use of biodiversity, create important challenges that emphasize the need for further collaborative efforts in achieving further progress in implementing the programme of work under the Convention,

Noting that the work on incentive measures under the Convention is scheduled for in-depth review by the ninth meeting of the Conference of the Parties, in accordance with the multi-year programme of work of the Convention adopted by the Conference of the Parties in decision VII/31,

Recommends that the Conference of the Parties at its eighth meeting:

1. Identifies and considers the challenges and options in implementing the programme of work on incentive mechanisms;

2. Initiates a structured, transparent and inclusive preparatory process for the in-depth review of work on incentive measures with a view to identify, for consideration by the Conference of the Parties at its ninth meeting, the further outcomes that would be required from a revised programme of work on incentive mechanisms to meet obligations under the Convention and the requirements of Parties, and possible options for a future programme of work, and, in doing so, take into consideration elements such as:

(a) Key challenges in implementing the existing programme of work;

(b) Key gaps in the work to date;

(c) Linkages to other international initiatives in this area; and

(d) Options for mechanisms to advance the future programme of work;

3. Elaborates terms of reference for the preparatory process;

4. Identifies the most effective mechanism to deliver the preparatory work for the in-depth review.

B. Application of positive incentive measures and their integration into relevant programmes, policies or strategies

Recognizing that biodiversity and its resources and functions, as well as successful policies and programmes that protect or enhance them, provide important ecosystem services, including ecosystem services of regional and global importance, that need to be adequately recognized and taken into account in private and public decisionmaking,

Also recognizing that positive incentive measures can influence decision-making by recognizing and rewarding activities that are carried out for the conservation and sustainable use of biological diversity, when such positive incentive measures are targeted, flexible, transparent, appropriately monitored and adapted to local conditions,

Recalling paragraph 4 of decision VI/15, on incentive measures and other relevant decisions of the Conference of the Parties,

Noting that the proposals below are voluntary and should be applied in accordance with countries' national and international obligations,

Also recalling paragraphs 4 and 6 of decision V/15, on incentive measures,

Recognizing that there are limits to knowledge and potential risks in the use of positive incentive measures to both biodiversity and ecosystem services,

Recommends that the Conference of the Parties at its eighth meeting:

1. Recalls the importance of positive incentive measures in achieving the objectives of the Convention and the 2010 biodiversity target;

2. Takes note of the Chair's text of the optional proposals on the national application of positive incentive measures and their integration into relevant national and regional programmes, policies or strategies as appropriate, contained in the annex to the present recommendation;

3. Invites Parties to take, in accordance with their national and international obligations, these proposals into consideration when considering the voluntary application of positive incentive in achieving the objectives of the Convention, and exchange information, including success stories and best practices, as well as experiences on achieving consistency between incentive measures and the objectives of the Convention through the clearing house mechanism of the Convention;

4. Encourages relevant national, regional and international organizations and initiatives to strengthen mechanisms that build capacity and extend training on the design, implementation and review of positive incentive measures for the conservation and sustainable use of biodiversity, in accordance with domestic needs and priorities, taking into account the need to understand the risks of perverse effects on livelihoods, sustainable development or the biodiversity of third parties;

5. Invites national, regional and international funding institutions to support the building or enhancement of national capacity, extend research as well as training, including through pilot projects, in accordance with the needs and priorities identified by Parties, for the design, implementation and review of positive incentive measures for the conservation and sustainable use of biodiversity;

6. Encourages relevant national, regional and international research institutions to strengthen research activities including research cooperation and exchange at national, regional and international levels, on, as appropriate:

(a) Further assessment of positive incentive measures and their application at the national, regional and global level, taking into account the context in which they were implemented, the conditions necessary for their success, as well as the ecosystem approach;

(b) Comparative analyses of the effectiveness and cost-efficiency of individual positive incentive measures, including their impact on the livelihood and biodiversity of third parties;

(c) The development of innovative positive incentive measures;

(d) The development of mechanisms, including policy, legal and institutional measures in full consultation with representatives of indigenous and local communities that ensure the fair and equitable sharing of benefits arising from positive incentive measures so that indigenous and local communities that maintain customary sustainable use systems are appropriately recognized and rewarded for biodiversity conservation and sustainable use;

(e) The analysis and evaluation of the relevant economic, social and cultural impacts of individual positive incentive measures at different levels and scales;

and to communicate the results of this research to Parties and the Executive Secretary;

7. Invites UNEP to continue supporting the programme of work on incentive measures of the Convention, in particular through its work on the creation of pro-poor markets for ecosystem services;

8. Invites Parties and other Governments as well as national, regional and international funding institutions, to support the capacity building and research activities identified in the previous paragraph;

9. Requests the Executive Secretary:

(a) To initiate a coordinated effort with relevant organizations such as IUCN and OECD as well as with other research institutions and representatives of indigenous and local communities, to study options and associated costs for the design of innovative [regional and] international incentive measures and mechanisms, and pilot projects thereon, that reward the provision of ecosystem services of regional or global importance;

(b) To continue, in cooperation with, and with input from, Parties, Governments and relevant international organizations, the compilation of information on positive incentive measures for the conservation and sustainable use of biodiversity, including on the context in which they were implemented and the conditions necessary for their success, and to disseminate this information through the clearing house mechanism of the Convention and other means;

(c) To continue to follow the negotiations at the World Trade Organization (WTO) on paragraph 31 (iii) of the Doha Ministerial Declaration, on the reduction of or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.

Annex

CHAIR'S TEXT OF THE OPTIONAL PROPOSALS ON THE APPLICATION OF POSITIVE INCENTIVE MEASURES AND THEIR INTEGRATION INTO RELEVANT PROGRAMMES, POLICIES OR STRATEGIES[2]/

1. Scope of proposals. The present non-binding proposals further specify the Proposals for the Design and Implementation of Incentive Measures endorsed by the Conference of the Parties to the Convention on Biological Diversity at its sixth meeting as far as they are consistent with Parties' national policies and legislation as well as their international obligations, by giving focus to the application of positive incentive measures and their integration into relevant programmes, policies or strategies, while bearing in mind that the Proposals for the Design and Implementation of Incentive Measures also apply to positive incentive measures for the exclusive objectives of conservation and sustainable use of biological diversity of the concerned parties, under the assumption that such measures should not negatively affect the livelihoods, the sustainable development or the biodiversity of third parties.

2. Purpose of positive incentive measures. Positive incentive measures can influence decision-making by recognizing and rewarding - through monetary and non-monetary means - activities that are carried out for the exclusive purpose of conservation and sustainable use of biodiversity.

3. [Moved down]

3. Application of monetary positive incentive measures. Monetary positive incentives could be applied in situations where desirable activities would not be undertaken without financial support, or to create a differential in favour of such activities where it is not feasible to discourage the undesirable alternatives through other measures.

3bis. Use of positive incentive measures. Careful consideration should be taken when developing and/or using positive incentive measures to avoid the generation of secondary adverse effects on biodiversity, the generation of perverse incentives or inconsistency with international obligations.

3 tris. Use of negative incentive measures. The use of negative incentive measures (disincentives that discourage activities that are harmful to biodiversity) should be encouraged . The 'polluter-pays-principle' encourages decision-makers to take responsibility for their own behaviour and is often the most cost-effective and equitable mechanism for encouraging the conservation or sustainable use of biodiversity.

4. Consistency with international obligations. The implementation of positive incentive measures mustshould take place in a manner that is consistent with international obligations.

A. Design of positive incentive measures

5. A package of measures. A package consisting of a wide range of instruments will often be necessary to effectively address underlying causes of biodiversity loss. The application of positive incentive measures often requires the complementary application of regulations or other instruments to operate in a cost-effective manner.

6. Targeting and flexibility. Positive incentive measures should be clear, transparent, targeted and well-monitored targeted to achieve outcomes that are cost-effective, non or minimally trade distorting, delinked from production and targeted at the conservation and sustainable use of biodiversity. most valuable from a biodiversity perspective. Therefore, instruments should be flexible enough to be adapted to address different priorities and specific circumstances as well as the distinct features of the ecosystem or biological resource under consideration; one size does not fit all. In all cases, the geographical scope of the measure should be matched with the spatial dimension of the biodiversity management problem.

7. Specify clear objectives, targets, and associated indicators. Objectives and targets that are clear, outcome-oriented, time-driven, and based on an analysis of their effects will contribute to the cost-effectiveness of the measure and to minimize the risk of unexpected reactions by the target actors. This , and will also facilitate its monitoring, and the evaluation and review of the of its performance of an incentive measure. Indicators can also facilitate the evaluation of incentive measures and provide useful information in determining the need for corrective action.

8. Specify baseline standards or benchmarks. Outcome-oriented baseline standards or benchmarks can act as reference levels for the eligibility of target actors to participate in the measure and will thus also contribute to its cost-effectiveness.

8bis. Review of incentive measures. Adequate and ongoing review of positive incentive measures is essential in maintaining the effectiveness of such measures and preventing the advent of perverse incentives. In some cases, the strategic behaviour of rational recipients will impede the long-term effectiveness of positive incentive measures. In such cases, ongoing review of or restriction of use to a transitional period of time through appropriate legal means, such as sunset legislation, will ensure effective use of positive incentive measures.

8tris. Application of monetary positive incentive measures. Monetary positive incentives could be applied in situations where there is sufficient and transparent evidence that desirable activities would not be undertaken without financial support, or to create a differential in favour of such activities where it is not feasible to discourage the undesirable alternatives through other measures. In these situations, the financial support should be granted only to the extent necessary to pursue well-targeted, transparent and monitored goals for the purpose of conservation and sustainable use of biodiversity. They should be applied in a manner that have no or at most minimal trade distorting effects, be delinked from production and be consistent with international obligations.

9. Consider traditional law and practices. The traditional law and practices of indigenous and local communities often generate important non-monetary incentives for the conservation and sustainable use of biodiversity. In these cases and, where relevant, any new incentive measure should synergize with and build upon these traditional laws and practices by encouraging their wider application.

B. Institutional requirements

10. Development or improvement of institutions. The effective implementation of positive incentive measures often presumes the existence of a specific institutional context in which they can be successfully implemented. In particular, their successful implementation requires institutions that can, inter alia, effectively monitor performance and ecosystem health, resolve conflict, coordinate individual behaviour, and allocate and enforce rights and responsibilities. Attention should be placed on developing appropriate institutional structures to design, implement, monitor, and enforce and review positive incentive measures.

11. Involvement of stakeholders as well as indigenous and local communities. Institutions should have mechanisms in place that ensure the full and effective involvement of relevant stakeholders, including the private sector and relevant nongovernmental organizations, as well as indigenous and local communities in the design, implementation and monitoring of incentive measures. These mechanisms should also include consultative processes among relevant governmental institutions to ensure effective cooperation and policy integration between different branches and levels of Government.

12. Identification of relevant experts and stakeholders. In addition to relevant governmental entities and policy makers, experts and scientists, stakeholders should include representatives of the private sector and relevant non-governmental organizations.

13. Role of non-governmental organizations and the private sector. The non-governmental and private sectors can play an importance role in identifying opportunities for conservation and sustainable use, and in encouraging or initiating the design and implementation of positive incentive measures, independently from and/or in cooperation with government institutions.

14. Transparency. The institutions that design, and implement and review positive incentive measures should operate in a transparent manner, consistent with Parties' national policies and legislation, as well as their international obligations. The dissemination of pertinent information plays a key role for the effective implementation of positive incentive measures for conservation and sustainable use of biodiversity.

C. Policy integration

15. Policy integration. Policy integration should be undertaken with a view to ensure synergy and consistency between positive incentive measures for conservation and sustainable use of biodiversity and other policies, programmes, and strategies and international obligations, for instance, by avoiding the duplication of activities or by ensuring that the measures do not contradict existing polices, programmes, and strategies and international obligations do not contradict the measures.

16. Mechanisms for consultation and cooperation. The establishment of formal channels and mechanisms for consultation and cooperation among relevant governmental institutions is an important means to ensure effective policy integration between different branches and levels of Government.

17. Well-defined land and property rights. Policies, programmes and strategies pertaining to land and property rights are an important area for policy integration. Well-defined land and property rights are an important factor in the successful implementation of positive incentive measures and also indicate whether land/property-owners and relevant biodiversity-holders should be held liable at their own costs for environmental damage or be rewarded for providing ecosystem services that go beyond usual good practices.

18. Distributional effects and poverty alleviation. The use of positive incentive measures may have both negative and positives distributional consequences. Potential consequences need to be assessed comprehensively before implementation and programmes need to be reviewed regularly to avoid perverse outcomes. Any effect on income distribution should be taken into consideration when designing and implementing positive incentive measures. The implementation of positive incentive measures should be consistent with poverty policies and contribute to progressively reducing alleviate poverty.

19. Removal of policies and programmes that generate perverse incentives. The removal of policies and programmes that generate perverse incentives increases the cost-effectiveness of monetary positive incentive measures and will contribute to policy coherence.

20. International incentive measures and mechanisms. Biodiversity resources and functions, as well as successful policies and programmes that protect or enhance these resources and functions, often provide ecosystem services of regional or global importance. The design and implementation of innovative international positive incentive mechanisms could be envisaged, with a view to reward the provision of these services. Before approving such measures and mechanisms, careful sFor instance, tudies should be undertaken on the design, and potential cost implications of practical international incentive measures or mechanisms to reward the provision of ecosystem services of global importancecould be studied on how to reward the provision of ecosystem services of global importance., possibly building on experiences with the Kyoto mechanisms of the UNFCCC.

D. Awareness-raising and the generation and sharing of information

21. The importance of information and awareness. Raising awareness by providing information on biodiversity values and management problems can act as a positive incentive measure in its own right and will also be a key precondition for the effective and targeted implementation of other measures for the conservation and sustainable use of biodiversity.

22. Raising awareness of biodiversity values and systems. Instruments such as environmental impact assessment, strategic environmental assessments and valuation techniques should be further developed and applied with a view to assess and understand the value of biodiversity resources and functions and associated ecosystem services under differing local circumstances and capacity preconditions, and to therefore contribute to raise awareness.

23. Information systems for market creation. The marketing of goods and services that support the conservation and sustainable use of biodiversity should be further encouraged, such as through the development, enhancement and wider application of voluntary instruments that promote information on biodiversity in consumer decisions, including, as appropriate, voluntary standards, voluntary certification and labelling schemes, or awareness campaigns. These instruments should not erect new hurdles for market access for, or put onerous costs on, producers of biodiversity-related goods and services, in particular in developing countries. Such instruments should be consistent with Parties' national policies and legislation, as well as their international obligations.

24. Community recognition. In many cases, the existing value and belief system of national societies as well as of local and indigenous communities offers important entry points for the generation of incentives for conservation and sustainable use of biodiversity. This lever could be used by disseminating information on environmental best practices through environmental awards and prizes, thereby supporting community recognition of environmental excellence..

24bis. Working with non-governmental organizations. Consideration could be given to developing effective working relationships with relevant non-governmental organizations. Working cooperatively with non-governmental organizations can assist Governments in the design, implementation and review of positive incentive measures. Strong and effective non-governmental organizations are important participants in decision-making.

E. Financing

25. Adequate funding. Taking into account the different financial constraints of Parties, aAdequate funding, including start-up funding, as appropriate, and trust funds for biodiversity conservation in favour of local populations, should be ensured for the design and implementation of positive incentive measures, and in particular of monetary positive incentive measures, that meet the conditions enumerated above, as well as for their effective management, monitoring and enforcement, and for capacity-building.

26. International funding. The further integration and mainstreaming of biodiversity considerations in bi- and multilateral funding processes and development programmes and strategies will strengthen international incentives for the conservation and sustainable use of biodiversityy

27. Cost-effectiveness. Due consideration should be given to ensure the cost-effectiveness of positive incentive measures, and in particular of monetary positive incentive measures. To ensure cost-effectiveness of the measure, a number of mutually not exclusive activities could be envisaged:

a)        Comparative research could be undertaken into the relative cost-effectiveness of the different policy options at hand for addressing a specific biodiversity management problem, prior to decision-making, in order to choose the best option;

b)        If the conditions for their successful application are met, using complementary economic mechanisms such as competitive bidding procedures can increase cost-effectiveness and reduce the prospect of overcompensation;

c)        A low participation rate of relevant actors under voluntary incentive programmes may result if maintaining their current biodiversity-harmful activities is artificially made attractive for them by other governmental policies and programmes. The removal of policies and programmes that generate perverse incentives will therefore contribute to increase the cost-effectiveness of monetary incentive programmes.

Innovative funding mechanisms such as, for instance, revolving funds or public-private partnerships could be used, possibly with involvement and financial contributions from nongovernmental organizations, the private sector, and/or from any direct beneficiaries of specific ecosystem services.

F. Scientific, technical and human capacity building

28. To cover the needs arising in the field of scientific, t e chnical and human capacity-building, due consideration and practical commitments should be taken by developed country Parties to assist developing countries and countries with eco n omies in tran s ition to address the following issues:

28.a)   Realizing the potential value of biodiversity resources. It is important to build scientific, technical and human capacity, including through training and education, to promote expertise in, and understanding of, the potential value of biodiversity resources and the design, and implementation and review of positive incentive measures, such as market creation, that allow the realization of these biodiversity values.

29.b)   Training and education for local producers. Consideration could be given to implement training and education programmes for small and medium-sized producers, with a view to make them aware of, and enable them to take advantage of, potential market opportunities that support the conservation and sustainable use of biodiversity. These programmes could also include capacitybuilding and financing for the development and voluntary certification of 'biodiversity friendly' products.

30.c)   Capacity-building for non-governmental organizations. Consideration could be given to the need for strong and effective non-governmental organizations with the expertise to act as cooperative partners and assist Governments and others through research and policy recommendations as well through the design and implementation of positive incentive measures.


[2]/ Not all proposals made by Parties have been fully reflected in this Chair's text. The text has not been negotiated.

  • United Nations
  • United Nations Environment Programme