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REWARDING BENEFITS THROUGH PAYMENTS AND MARKETS
Key Messages of Chapter 5
As highlighted throughout this report, the value of biodiversity and ecosystem services is not (fully) recognised
by markets: degradation and loss result from decision making that ignores or understates the local and global
benefits provided by ecosystems. We urgently need new policy frameworks that reward the provision
of ecosystem services and promote the greening of supply chains.
This chapter focuses on innovative tools to reward ecosystem benefits efficiently and equitably through direct
payments and tax incentives or by stimulating markets for products and services that have reduced environmental
impact. These tools can be combined with instruments and approaches discussed in other chapters
of this report. Effective policy mixes in each country will depend on national context and priorities.
National and international payments for ecosystem services (PES)
PES schemes that compensate those who maintain or enhance the flow of ecosystem services have already
demonstrated their potential. In a global context of stagnant funding for biodiversity conservation, PES offer
considerable potential to raise new funds for biodiversity or to use existing funding more efficiently. Both the
public and private sectors can play a role in establishing PES in different contexts. PES have proven to be a
highly flexible tool, providing both direct and indirect rewards for various ecosystem services and biodiversity
conservation at a range of different scales.
At an international scale, one of the most significant PES opportunities on the table is REDD (Reducing
Emissions from Deforestation and Forest Degradation in developing countries), which is being negotiated
as part of the post-2012 climate change regime under the United Nations Framework Convention on Climate
Change. Recent proposals for ‘REDD-Plus’ would offer incentives for forest conservation, sustainable forest
management and enhancement of existing forest carbon stocks. Deforestation is estimated to account for
up to 17% of global greenhouse gas (GHG) emissions: an agreement on such a mechanism could make a
significant contribution to addressing global climate change and also provide substantial biodiversity benefits
if designed and implemented with due consideration to the wide range of values of nature.
Recommendation: Promote PES demonstration activities and capacity building to develop the
knowledge base, reduce transaction costs and scale up successful initiatives. Further efforts are
needed to confirm where, in what form, and under what conditions PES work best for biodiversity, and to
improve their targeting, monitoring and governance. PES should be designed to ensure additionality
(i.e. going beyond ‘business as usual’) and to minimise leakage (i.e. displacement of damaging activities
elsewhere). Spatial analysis – including data on economic costs and benefits – can help to map areas that
are most important for providing ecosystem services, as well as the distribution of providers and beneficiaries,
in order to identify synergies and priorities for both policy makers and private investors. Due engagement
of local populations in the design and implementation of PES can be a critical factor in the success of
the instrument.
Recommendation: Support an international agreement on a REDD-Plus mechanism as part of the
global climate regime, while ensuring that other ecosystem services besides climate mitigation are
taken into account. Depending on how REDD-Plus is designed and implemented, it could not only provide
incentives for reducing emissions from deforestation and degradation but also secure biodiversity and other
benefits at international, national and local levels. Appropriate safeguards should be formulated to reduce
potential adverse impacts on biodiversity and to respect the rights and needs of indigenous and local communities,
without making the rules so onerous that investors are unduly discouraged.
TEEB FOR NATIONAL AND INTERNATIONAL POLICY MAKERS - CHAPTER 5: PAGE 2