TARGET 3 - Technical Rationale extended (provided in document COP/10/INF/12/Rev.1)

Technical rationale: Substantial and widespread changes to incentives, including subsidies, are required to ensure sustainability. Ending or reforming incentives, including subsidies, harmful to biodiversity is a critical and necessary first step that would also generate net socio-economic benefits. In addition, the creation or further development of positive incentives for the conservation and sustainable use of biodiversity, provided that such incentives are in harmony with the Convention and other relevant international obligations, could also help in the implementation of the Strategic Plan by providing financial or other incentives to encourage actors to undertake actions which would benefit biodiversity. Fishery subsidies that contribute to overcapacity, and overfishing globally are potential areas for reform as is the continued and deepened reform of production-inducing agricultural subsidies still prevalent in most Organisation for Economic Co-operation and Development (OECD) countries.⁸ Bearing in mind the principle of common but differentiated responsibilities, this target would not imply a need for developing countries to remove subsidies that are necessary for poverty reduction programmes.

Implementation: Current negotiations under the Doha Trade Round aim to clarify and improve World Trade Organization (WTO) disciplines on fisheries, taking into account the importance of this sector to developing countries, and to achieve substantial reductions in trade-distorting agricultural subsidies, with special and differential treatment for developing countries being an integral part of the negotiations. These negotiations have the potential to generate high synergies with this target, and are therefore a key vehicle for achieving the target. However, as these negotiations focus on overcapacity/overfishing or trade-distorting effects of subsidies, approaches which focus specifically on subsidies that are harmful to biodiversity may be required. In addition, countries or regional groups may, where necessary, take their own initiatives to phase out and/or reform environmentally harmful incentives, including subsidies, bearing in mind the principle of common but differentiated responsibilities. The recent decision of the G20 to phase out or rationalize inefficient fossil fuel subsidies by 2020 could be taken as an example, and would also contribute to the target. A more effective use of strategic environmental assessment could also be one mechanism to help implement effective policies and actions towards this target. The Convention’s work on economic, trade and incentive measures and on impact assessment are relevant to this target.

Indicators and baseline information: Estimates of the value of harmful subsidies, using criteria developed by WTO and OECD, would be an indicator. Baseline data is already published. Process indicators might include the successful conclusion of WTO negotiations on fisheries subsidies and on agricultural domestic support. Possible indicators for the application of positive incentive measures include the number and types of positive incentive mechanisms being developed and applied. The economic and financial values of biodiversity and ecosystem services captured via payments for ecosystem services, user fees, taxes and other mechanisms could also be used to track progress.


⁸The Economics of Ecosystems and Biodiversity. (2009) TEEB for Policy Makers, Summary, Chapter 6.