ECONOMIC MEASURES FOR BIODIVERSITY PLANNING: An ... - CBD

© IUCN – The World Conservation Union, 2001 Page 1

ECONOMIC MEASURES FOR BIODIVERSITYPLANNING: An Annotated Bibliography of Methods,

Experiences and Cases

Lucy EmertonMarch 2001

IUCNThe World Conservation Union

BIODIVERSITY ECONOMICSFOR EASTERN AFRICA

IUCN – The World Conservation UnionEastern Africa Regional OfficePO Box 68200, Nairobi, [email protected]

1 INTRODUCTION ......................................................................................................................... 32 ANNOTATED BIBLIOGRAPHY OF THE LITERATURE ......................................................... 43 INTERNET RESOURCES .......................................................................................................... 1044 INDEXES ..................................................................................................................................... 112

Regional index ........................................................................................................................... 112Country index ............................................................................................................................ 113Ecosystems and sectors index ................................................................................................. 117Topics index ............................................................................................................................... 119


Copyright: © IUCN – The World Conservation Union, 2001

Reproduction of this publication for educational and other non-commercial purposes is authorised without prior permission fromthe copyright holder, providing the source is fully acknowledged.Reproduction of the publication for resale or for other commercialpurposes is prohibited without prior written permission from thecopyright holder.

Citation: L. Emerton, Economic Measures for Biodiversity Planning: An AnnotatedBibliography of Methods, Experiences and Cases. IUCN — The WorldConservation Union, Eastern Africa Regional Office, Nairobi

ISBN: 2-8317-0596-7

Acknowledgement: This publication was produced for the UNDP-UNEP-GEFBiodiversity Planning Support Programme, as part of the sub-projectUse of Economic Incentives in National Biodiversity Strategies andAction Plans (GF/1200-99-70). It was co-funded under the generalagreement regarding co-operation on biodiversity conservation andsustainable development between the IUCN – The WorldConservation Union and the Swiss Agency for Development and Co-operation (SDC), as part of the project “Supporting Global Action toConserve Biodiversity and Sustainably Use Biological Resources:Phase III”. The document was produced under IUCN’s BiodiversityEconomics for Eastern Africa Programme.


1 INTRODUCTION

The aim of this document is to review literature on economic measures for biodiversity planning,so as to highlight available economic methods and to document examples of their application tobiodiversity. The main focus of the review is on economic valuation and economic incentives.Financial mechanisms for biodiversity conservation form the focus of a separate bibliography, soare not considered in detail here.

Economic concerns are of central importance to biodiversity conservation. Economic forcesunderlie and explain biodiversity degradation and loss, and economic measures provide a useful setof tools for strengthening biodiversity conservation, sustainable use and equitable benefit sharing.

If biodiversity policies, strategies and plans are to be effective they must be justifiable in economicterms. They also need to make efforts both to overcome the economic causes of biodiversity lossand to ensure that economic incentives are set in place which encourage biodiversity conservation.Equally, the goals and strategies they attempt to attain and use have to be acceptable to (andunderstood by) other “economic” sectors, decision-makers and planners, if they are to integratebiodiversity concerns into their own strategies, policies and plans.

Documenting experiences and lessons learned in the use of economic measures in biodiversitypolicies, strategies and plans, and providing guidance on best practices and methods for this, canthus make an important contribution to biodiversity conservation planning and managementpractice.

The review is focused on published literature on biodiversity economics which can easily beaccessed. Although there is a large amount of unpublished “grey material” dealing with economicmeasures for biodiversity planning (such as project documents, mission reports, notes from verbalpresentations, and so on), this material is not widely available, and often has limited access anddistribution. All of the literature referred to in this document can be obtained easily from publishedbooks and journals, from the internet, or from the organisations who have produced it.

Section 2: Annotated Bibliography of the Literature, presents the references in alphabeticalorder. Full details of the author, title, publication details and ISBN number are given for each.Indications of the regional and country coverage of the publication, its focus on key ecosystems orsectors, and the main topics it deals with are also summarised.

Section 3: Internet Resources, lists internet sites and web pages that refer to the economics ofbiodiversity. Many contain information about on-going biodiversity economics activities inparticular countries, regions or ecosystems. Others allow documents to be downloaded or ordered.

Section 4: Indexes, provides indexes of the literature by region, country, ecosystem or sector andtopic.

This bibliography is not exhaustive, and should be seen as a document in process. The economicsof biodiversity is a relatively recent, and dynamic, subject matter. New materials are constantlybeing added to the existing body of literature. This bibliography is therefore presented in a formthat can, and will, be updated periodically, as new literature becomes available or as additionalreferences are found and incorporated.


2 ANNOTATED BIBLIOGRAPHY OF THE LITERATURE

#1. Abala, D. O. (1987). 'A theoretical andempirical investigation of the willingness to payfor recreational services: a case study of NairobiNational Park', Eastern Africa EconomicReview 3 (2):111-119

This paper examines the factors that influencewillingness to pay for park services. Econometricmethods are applied to data from 333 NairobiNational Park users. The study shows that factorsthat may help to explain people's willingness topay for the park services fall into two categories:the socio-economic characteristics of park users,and the physical attributes of the park itself.However it is probable that non-economic factorsalso play an important role in the determinationof park users' willingness to pay for park services.An interesting result of the study is that humancongestion in the park has a significant negativeimpact on the users' willingness to pay for parkservices. The study further indicates that animalsper se do not seem to be significant indetermining the users' willingness to pay for parkservices. It is also clear that the current gatecharges should be raised to reflect the users'willingness to pay for park services, since this willnot affect the visitation rates to the park.

Coverage: Africa

Contains examples or case studies from: Kenya

Ecosystem or sector focus: Wildlife, ProtectedAreas, Tourism

Topics: Valuation, Travel Cost

#2. Acharya, G., (1998), Capturing theHidden Values of Wetland Ecosystems as aMechanism for Financing the Wise Use ofWetlands. Paper presented at workshop onMechanisms for Financing Wise Use ofWetlands, Second International Conference onWetlands Development and Conservation,Dakar, Senegal, 13 November 1998: 15 pp.

This paper focuses on the use of economicvaluation as an incentive for wetlandconservation. The environment's services arevaluable but these values are a) seldom recognisedand quantified and b) are often lost through

inappropriate development or used inefficiently.Linkages between use values and ecosystemfunctions will be stressed in this discussion. Thepaper emphasises that appropriate incentives canonly be developed once the values derived fromthese ecosystems are recognised. The role of thepublic and private sectors in initiating valuationstudies is discussed.

Coverage: Global

Ecosystem or sector focus: Wetlands, Water

Topics: Financial mechanisms, Economicinstruments, Incentive measures, Valuation,Convention on Biological Diversity, RamsarConvention

#3. Adamowicz, W., & Beckley, T. (1998). 'Insearch of forest resource values of indigenouspeoples: are non-market valuation techniquesapplicable?', Society and Natural Resources11:51-66

This article examines issues surrounding thepotential applicability of non-market valuationtechniques to indigenous peoples. A conceptualmodel examines relationships between naturaland conceptual environments and value systems.Problems of valuation identified include elicitingvalues for individuals, aggregating individualvalues into measures of social welfare, andcomparisons of welfare across culturally differentgroups. The influence of sacred or taboo goods,the potential for satiation, and variations inproperty rights are factors to address in assessingindividual values. Differences in political andproperty rights systems, and unique demographicstructures are seen as limits to aggregating valuesfor randomly selected individuals. Since valuationis endogenous to specific social environments,aggregations of indigenous and non-indigenousmeasures of social welfare may be inappropriate.

Coverage: Global

Ecosystem or sector focus: Forests

Topics: Valuation

#4. Adger, W. N., & Grohs, F. (1994).'Aggregate estimate of environmental

The Use of Economic Measures for Biodiversity Planning: An Annotated Bibliography of Methods, Experiences and Cases


degradation for Zimbabwe: does sustainablenational income ensure sustainability?',Ecological Economics 11:93-104

Standard measures of economic growth do notadequately reflect changes in aggregate welfareover time. Sustainable national income istherefore defined a Net National Product withadjustments for the degradation of renewable andnon-renewable capital. Productivity loss ratherthan replacement cost is the most theoreticallycorrect way to value resource depletion. Modifiednet national product is estimated for theagriculture and forestry sectors in Zimbabwe byvaluing the loss of forest stock and soil erosion.The results show that traditional measuresoverstate the value of the agricultural sector'soutput by approximately 10%. It is argued thatindicators of sustainable national income do notensure sustainable development, nor do theypoint to mechanisms that would ensuresustainable natural resource management.

Coverage: Africa

Contains examples or case studies from:Zimbabwe

Ecosystem or sector focus: Forests, Agriculture,Industry

Topics: Environmental accounting, Valuation,Soil erosion, Economic policies

#5. Adger, W. N., Brown, K., Cervigni, R., &Moran, D. (1995). 'Total Economic Value ofForests in Mexico', Ambio 24 (5):286-296

Failure to account for the numerous functionsand economic uses of forests have led to patternsof global forest use with many detrimentalenvironmental consequences. This studydemonstrates the economic techniques forestimating the total economic value of forests andapplies it to Mexico's forest estate. However, onlya proportion of this economic value can feasiblybe "captured" within Mexico: much of the benefitof Mexico's forests falls outside the country'sborders, and is therefore not considered by forestusers or national policymakers.

Contains examples or case studies from: Mexico


Topics: Valuation, Economic policies, Marketvaluation, Climate change, Effect on production

#6. Adger, W. N., (1997), Sustainability andSocial Resilience in Coastal Resource Use.Working Paper GEC 97-23, Centre for Socialand Economic Research on the GlobalEnvironment: London.

Sustainable development is defined in this paperas a set of necessary constraints in the areas ofefficiency, equity and resilience of social andnatural systems. This is novel in its emphasis onsocial resilience which captures many aspects ofthe institutional architecture required forsustainability. Social resilience can be observedthrough proxy measures associated with propertyrights and access to resources, throughdemographic changes and other measures. Inaddition, present day equity considerations areincorporated into the framework. The discussionfocuses on coastal resources because these areoften argued to be the most resilient ecosystemsbecause of their high functional diversity. Theyare also argued to be socially and economicallyresilient because of the diversity of economicactivities in coastal zones. The paperdemonstrates the usefulness of the approach byexploring its implications in two studies. Firstlyrecent attempts to derive the economic value ofecosystem functions are presented with thelimitations of this approach. In particulareconomic values are often site and culture specificand their influence on resource use isfundamentally determined by the property rightsgoverning entitlements to exchange andendowment. Even if equity is incorporated intoresulting values, the relative importance ofecosystems is shown to be different depending ontheir location. The second study is based on theconversion of mangrove forest in coastalnorthern Vietnam, showing again the importanceof equity considerations in the sustainability ofresource use decisions, and the impacts of suchconversion on social resilience.

Coverage: GlobalAsia

Contains examples or case studies from:Vietnam

Ecosystem or sector focus: Forests, Marine andcoastal

Topics: Valuation



#7. Adhikari, A. P., Bhandari, B., & Pyakuryal,B. (Eds.),(1998), Environmental Economics inNepal. Proceedings of the Proceedings of theWorkshop on Environmental Economics:Kathmandu, Nepal. 101 pp. ISBN 92-9144-028-0

This document reports on two workshops carriedout in Nepal on environmental economics and ongreen accounting. It includes the papers presentedat these workshops, their deliberations andconclusions reached.

Coverage: Asia

Contains examples or case studies from: Nepal

Topics: Valuation, Environmental accounting,Economic instruments

#8. Allaway, J., & Cox, P. (1989). 'Forests andcompeting land uses in Kenya', EnvironmentalManagement 13 (2):171-187

Indigenous forests in Kenya are under heavypressure from competing agricultural land usesand from unsustainable cutting. The problem iscompounded by high population growth rates andan agriculturally based economy. The economicand ecological consequences of these pressuresneed to be considered in land use decisionmaking. A method for combining ecological andeconomic considerations and for the analysis offorest land-use issues is illustrated using theKenyan situation. The status of principal forestareas in Kenya is summarised and competing landuses are compared on the basis of ecologicalfunctions and economic analysis. Replacementuses did not match the ecological functions offorests, although established stands of tree cropscould have roughly comparable effects on soiland water resources. Indigenous forests hadeconomic benefits from tourism and protectionof downstream agricultural productivity.Economic returns from competing land uses werevery varied, with tea having the highest returnsand fuelwood plantations having returnscomparable to some annual crops and dairyfarming. Combined consideration of economicand ecological factors suggested some trade-offsfor improving land allocation decisions andseveral management opportunities for increasingbenefits or reducing costs from particular landuses. A general strategy is proposed for forestland management in Kenya.

Coverage: Africa


Ecosystem or sector focus: Forests, Agriculture

Topics: Valuation, Causes of biodiversity loss,Economic instruments

#9. Anderson, T., (1996), Enviro-Capitalists:Why and How to Preserve Their Habitat.Paper presented at IUCN Workshop onEconomics of Biodiversity Loss, April 1996,Gland, Switzerland. 33 pp.http://www.biodiversityeconomics.org

This paper asks the following question: to whatextent should the private sector be left alone tomanage biodiversity? The answer presented is thatall too often political intervention in the marketplace either eliminates incentives forentrepreneurs to manage natural resources in asustainable way or generates other incentives thatlead to their actual destruction. Examples of eachscenario are given and the demonstration is madethat there are cases in which the individualentrepreneur alone has access to the time-specificand place-specific information required for soundbiodiversity management. The specialcontribution of this paper in the context of theWorkshop on the Economics of BiodiversityLoss is to show in concrete terms the way inwhich governmental intervention can bedetrimental to biodiversity conservation and theconsequent value of market approaches in thisrespect. This means that in designing abiodiversity impact assessment framework theeffects of market processes and of governmentalregulations must be taken into account.

Coverage: North America

Contains examples or case studies from: USA

Topics: Private sector, Economic instruments,Financial mechanisms, Incentive measures,Causes of biodiversity loss

#10. Andersson, J. E. C., & Ngazi, Z. (1995).'Marine resource use and the establishment of amarine park: Mafia Island, Tanzania', Ambio 24(7-8):475-481

This article quantifies the local economicopportunity costs and benefits of setting up amarine protected area. It looks at the market



value of fisheries activities foregone by localcommunities. The study demonstrates that localinvolvement can be of great value in findingsustainable viable solutions with regard to issuessuch as economic incentives, alternatives todestructive activities, education andcompensation. In addition it was found thatcompensation can be a cost efficient andsustainable means of enforcing regulations, buton the condition that it is appropriate and that itstems from the direct involvement of indigenousresource users.

Coverage: Africa

Contains examples or case studies from:Tanzania

Ecosystem or sector focus: Marine and coastal,Fisheries, Protected Areas

Topics: Valuation, Incentive measures

#11. Angelsen, A., & Kaimowitz, D. (1999).'Rethinking the Causes of Deforestation:Lessons from Economic Models', The WorldBank Research Observer 14 (1):73-98

This article, which synthesises the results of morethan 140 economic models analysing the causesof tropical deforestation, raises significant doubtsabout many conventional hypotheses in thedebate about deforestation. More roads, higheragricultural prices, lower wages, and a shortage ofoff-farm employment generally lead to moredeforestation. How technical change, agriculturalinput prices, household income levels, and tenuresecurity affect deforestation - if at all - isunknown. The role of macroeconomic factorssuch as population growth, poverty reduction,national income, economic growth, and foreigndebt is also ambiguous. This review, however,finds that policy reforms included in currenteconomic liberalisation and adjustment effortsmay increase the pressure on forests. Althoughthe boom in deforestation modelling has yieldednew insights, weak methodology and poor-qualitydata make the results of many modelsquestionable.

Coverage: Global


Topics: Incentive measures, Economicinstruments, Economic policies, Causes ofbiodiversity loss

#12. Arntzen, J., (1997), Economic ValuationOf Communal Rangelands in Botswana: ACase Study. CREED Working Paper Series No17, International Institute for Environment andDevelopment: London. 62 pp.

The literature on rangelands is extensive but verylittle includes an examination of rangelandvaluation. Where it does appear, rangelands tendto be undervalued, mainly due to the fact thatmost analyses are a) restricted to a specific sector,most commonly livestock production; b) biasedtowards one marketed product, frequently beefsales or slaughter; and c) limited to use values.Undervaluation of rangelands may contribute totheir mismanagement or their transformation tomonoculture, such as for livestock or wildlife.Similarly, this may lead to inappropriate policyrecommendations and prescriptions, for examplethat vegetation changes in rangelands are not aproblem as long as they do not affect livestockproductivity. This paper undertakes a valuationexercise in an effort to address the first twocauses of undervaluation mentioned above. Theobjective is to estimate the annual direct use valueof an average hectare of communal rangeland inBotswana, based on an analysis of secondary data.The exercise incorporates the three major directuses, both marketed and non-marketed, ofrangelands - livestock, wildlife and gathering. Thevaluation clearly shows that each use makes asignificant contribution to the direct use value: inthe case of hunting and gathering amounts toaround one third of the total direct use valueduring the period under study. Anotherconclusion is that non-marketed products are veryimportant; milk production and processingrepresent a considerable, although partlypotential, use value which requires furtherinvestigation. Considerable discrepancies werefound between private and social use values forlivestock, mostly as a result of governmentsubsidies to that sector. The use values forwildlife based on hunting quota has droppedsignificantly. This suggests a trade-off betweenlivestock and wildlife use values. With theobserved decline in wildlife numbers, a switchtowards game viewing offers opportunities toboost the use values. alternatively hunting valuesshould be raised to net market values. It is criticalto ensure that any benefits from wildlife shouldaccrue to the local population. These conclusionsraise important policy questions as to the futureuse of rangelands in Botswana. Total landproductivity per hectare should be the key



variable in assessing the significance of e.g.,vegetation changes or erosion, as well as themerits of different single or multiple use options,such as livestock expansion, wildlife utilisationand/or gathering. The growing resource scarcitynot only raises concerns about efficiency andsustainability but also about the distribution ofcurrent and future use values.

Coverage: Africa

Contains examples or case studies from:Botswana

Ecosystem or sector focus: Agriculture,Drylands, Wildlife, Protected Areas

Topics: Valuation, Markets and charges

#13. Aylward, B., (1991), The Economic Valueof Ecosystems: 3 - Biological Diversity.Gatekeeper Series GK 91-03, LondonEnvironmental Economics Centre: London. 10.

This paper looks at the valuation of biodiversity.It argues that biodiversity loss is caused in part bythe market, price and policy failures that under-value biodiversity. The paper attempts to clarifythe ecological and economic rationale behinddrawing a distinction between the values ofbiodiversity and biological resources. It concludesby proposing an alternative conceptual approachand methodological basis for attaching economicvalue to biodiversity.

Coverage: Global

Topics: Valuation, Causes of biodiversity loss

#14. Aylward, B., & Barbier, E. B., (1992),What is Biodiversity Worth to a DevelopingCountry? Capturing the PharmaceuticalValue of Species Information. LEEC Paper DP92-05, London Environmental EconomicsCentre: London. 17 pp.There has been a resurgence of interest in the useof biodiversity as a source of novel chemicalcompounds for the development of newpharmaceuticals. Both commercial companies anddeveloping-country governments are increasinglystarting to capture the "pharmaceutical value" ofbiodiversity. There are however some potentialmisunderstandings in the view thatpharmaceutical prospecting can serve as amechanism for developing countries to extract

compensation for the conservation of theirbiodiversity. This paper addresses this question,and looks at the economic relationships involvedin pharmaceutical prospecting. It argues that anover-emphasis on the question of how to capturethe value of biodiversity misses the key question:that of how to invest in the generation ofinformation about biodiversity. It suggests that inorder to capture the pharmaceutical value ofbiodiversity, developing countries would need tocome up with a practical mechanism forcontrolling access to their biodiversity. Theycould then move beyond deriving a fair share ofthe returns from raw materials to informationgenerating activities that add value to the resourceitself.

Coverage: Global

Topics: Bioprospecting, Trade, Incentivemeasures, Financial mechanisms, Valuation,Economic instruments, Markets and charges

#15. Aylward, B., Echeverria, J., & Barbier, E.B., (1995), Economic Incentives forWatershed Protection: A Report on an On-going Study of Arenal, Costa Rica. CREEDWorking Paper Series No 3, InternationalInstitute for Environment and Development:London. 22 pp.

Tropical moist forests provide a range of goodsand services to society. Traditionally, decisionsregarding tropical forest land use have been madeon the basis of major direct uses of forest landthat generate local and national benefits.Typically, this has meant timber extraction andthe conversion of forest to agricultural orlivestock uses. In recent years increasing attentionhas been given to the important economic rolenon-market benefits may play in providingincentives for the conservation of tropical forests.A number of studies have explored the local,national and global benefits generated by non-timber forest products, ecotourism,pharmaceutical prospecting and carbon storage.Another important ecological service that is oftencited as an economic justification of conservationactivities is the watershed protection functionprovided by tropical forests. Soil and waterconservation may yield benefits to land-ownersand alleviate damage to downstream economicactivities. Nevertheless efforts to conservewatersheds are plagued by the difficult nature ofthe externalities involved. The off-site nature of



many of the benefits of conservation activitiesmakes both valuation and internalization of theseexternalities difficult, thereby preventing thedevelopment of 'sustainable' watershed protectionprograms. This is even the case in areas wherepristine, mountainous forests providedownstream national benefits to hydroelectricityand irrigation schemes. The establishment ofincentive systems that solve market, policy andinstitutional failures impeding watershedprotection in such areas remains a vexingproblem for policy-makers, scientists andcommunities in developing countries. Drawing onthe literature and on-going research in Costa Rica,the paper outlines a collaborative research projectinvestigating the potential for economicincentives for watershed protection in the Arenalregion of Costa Rica.

Contains examples or case studies from: CostaRica

Ecosystem or sector focus: Forests, Water,Watersheds

Topics: Economic instruments, Incentivemeasures, Valuation, Economic policies,Payments for environmental services

#16. Aylward, B., & Porras, I., (1998), AnAnalysis of Private and Social DiscountRates in Costa Rica. CREED Working PaperSeries No 21, International Institute forEnvironment and Development: London.

The application of economic evaluation andvaluation methodologies depends heavily on theintertemporal weighting of monetary flows. Thisis of particular importance in the case ofenvironmental valuation where long-termenvironmental impacts are traded off againstshort-term productive benefits. A review ofdiscount rates applied in the literature and byfinancing agencies in Costa Rica suggests that themethods and the rates employed have littlegrounding in theory or empirical analysis. In orderto explore whether the ad hoc nature ofdiscounting in Costa Rica is likely to be leading toerror in economic analysis this paper reviewstheoretical and methodological issues indiscounting and then proceeds to a calculation offinancial and social rates of discount. The resultssuggest that the best estimate of the privateopportunity cost of capital, the consumption rateof interest (CRI) and the social discount rate areall in the 9-10% range. Given that the lack of a

significant difference between the cost of capitaland the CRI there is no immediate need todistinguish between the discounting ofconsumption and investment flows. The observedrange of variation in the CRI suggests thatdiscount rate sensitivity analysis should probablyemploy a range of from 7% to 10%. In otherwords, current practice may not be terriblyinappropriate given this preliminary examination.Further effort should, however, be devoted to theestimation of key parameters involved in themodels employed in the paper.

Coverage: Latin America

Contains examples or case studies from:Colombia

Topics: Valuation, Financial mechanisms

#17. Aylward, B., Echeverria, J., Allen, K.,Mejias, R., & Porras March, I., (1999), Marketand Policy Incentives for LivestockProduction and Watershed Protection inArenal, Costa Rica. CREED Working PaperSeries No 25, International Institute forEnvironment and Development: London.

Conventional wisdom amongst environmentalistsholds that the cutting of tropical forest forlivestock production is not only bad business butalso bad for the environment. In particular, it isthought that conversion to pasture leads to risingsedimentation of waterways and reservoirs, anincrease in flooding and loss of dry season watersupply. In the case of Lake Arenal, Costa Rica thisconventional wisdom is stood on its head in anevaluation of the market and policy incentivesguiding land use in the Chiquito watershed of theArenal region of Costa Rica. The study suggeststhat ranching, dairy and associated downstreamhydrological effects represent important values tothe Costa Rican economy, values that significantlyoutweigh expected returns from options forreforestation or forest regeneration. Further, thereappear to be no large market or policy incentivessubsidizing livestock production or providingincentives for rapid deterioration of soilproductivity. Thus non-hydrological externalitiesassociated with changing land use from forests tolivestock production, such as carbon fixation,biodiversity, ecotourism and existence values, arelikely to be of minimal importance in Chiquito.Therefore the analysis suggests that there is littlereason to encourage large-scale reforestation ofthe watershed or to purchase land for protection.



Instead efforts should focus on how to maximisethe complementary returns from livestock andwater production.



Ecosystem or sector focus: Wetlands, Agriculture

Topics: Incentive measures

#18. Bann, C., (1997), The EconomicValuation of Mangroves: A Manual forResearchers. International DevelopmentResearch Centre: Ottawa. 51 pp.

This manual on the economic valuation ofmangroves has been developed to aid researchersin South East Asia involved in the evaluation ofmangrove ecosystems. Its main components arean introduction to the values to mangroves andthreats to them, a theoretical introduction toenvironmental valuation, a methodology for theeconomic assessment of mangrove managementoptions, a qualitative discussion of the possibleimpacts associated with common developmentoptions for mangrove ecosystems, and two casestudy examples from Asia.


Contains examples or case studies from:Cambodia, Indonesia, Vietnam

Ecosystem or sector focus: Marine and coastal,Wetlands, Fisheries, Forests

Topics: Valuation

#19. Barbier, E. B., (1989), Economics,Natural Resource Scarcity and Development:Conventional and Alternative Views.Earthscan Publications Ltd: London. 223 pp. 1-85383-024-0

This book proposes a new economic approach tothe use of natural resources and particularly to theproblem of environmental degradation. It reviewsand criticises traditional approaches to resourceeconomics and instead outlines an alternativeview of environmental economics and naturalresource scarcity. Examples are given of theapplication of these economics approaches toenvironmental problems in Brazil and Indonesia.

Coverage: Global

Contains examples or case studies from: Brazil,Indonesia

Ecosystem or sector focus: Forests, Watersheds

Topics: Pollution, Valuation, Economicinstruments

#20. Barbier, E., & Conroy, C. (1989). 'Settingthe right economic environment for sub-SaharanAfrica', Appropriate Technology 16 (2):20-22Suggests that if the lessons of environmentaleconomics were applied to the problems of sub-Saharan Africa, there would be greater incentivesto preserve and enhance natural resources. Looksbriefly at: an economic evaluation of the costs andbenefits of resource use and degradation at aproject-specific or economy-wide level; and thedesign of incentive packages to improve resourcemanagement.

Coverage: Africa

Topics: Incentive measures, Valuation, Causes ofbiodiversity loss, Economic instruments

#21. Barbier, E. B., Burgess, J. C., Swanson,T., & Pearce, D., (1990), Elephants,Economics and Ivory. Earthscan PublishersLtd: London.

The dramatic decline in elephants numbers inmost of Africa has been largely attributed to theillegal harvesting of ivory. The decision to ban alltrade in ivory is intended to save the elephant.This book examines the ivory trade, its regulationand its implications for elephant managementfrom an economic perspective. It argues thatthere should be a very limited trade in ivory,designed to maintain the incentive for sustainabledevelopment in southern African countries and toencourage other countries to follow suit.

Coverage: Africa

Ecosystem or sector focus: Protected Areas,Drylands, Forests, Wildlife

Topics: Trade, Causes of biodiversity loss,Incentive measures, Financial mechanisms,International Conventions, Convention onInternational Trade in Endangered Species



#22. Barbier, E. B., (1991), The EconomicValue of Tropical Ecosystems 2 - TropicalForests. Gatekeeper Series 91-01, LondonEnvironmental Economics Centre: London. 1000. This paper presents a broad overview of thedifferent components of the total economic valueof tropical forest ecosystems. It looks at methodsfor the cost-benefit analysis of comparing theeconomic values associated with forestpreservation, conversion and sustainablemanagement, and gives an example from KorupNational Park, Cameroon. The paper concludesthat calculating the different components of thetotal economic value of forests is essential forapplying cost-benefit analysis to different forestland use options.

Coverage: Africa, Global

Contains examples or case studies from:Cameroon


Topics: Valuation, Deforestation

#23. Barbier, E. B., Bockstael, N., Burgess, J.C., & Strand, I., (1993), The Timber Trade andTropical Deforestation in Indonesia. LEECPaper DP 93-01, London EnvironmentalEconomics Centre: London. 17 pp.

This paper examines the links between the tradein tropical timber products and deforestation inIndonesia. It briefly reviews evidence suggestingthat timber production is a factor in tropicaldeforestation, and examines the role of timbertrade policy in Indonesia in influencing thisprocess by affecting forest-based industrialisation.A partial equilibrium timber trade model ofIndonesia is developed in order to analyse theeffects of various policy interventions on tradeand tropical deforestation. The paper concludesby summarising the results of the policy analysisand discussed policy options open to thegovernment and importing countries.

Coverage: Asia

Contains examples or case studies from:Indonesia

Topics: Trade, Causes of biodiversity loss,Incentive measures, Economic policies

#24. Barbier, E. B., Burgess, J. C., & Folke, C.,(1994), Paradise Lost? The EcologicalEconomics of Biodiversity. EarthscanPublications Ltd: London. 267 pp. ISBN 1-85383-181-6

This book shows how an interdisciplinaryapproach can understand and tackle issuesrelating to biodiversity conservation. It providesan overview of the causes of biodiversity loss andof previous approaches to dealing with them, andexamines the effects of biodiversity loss onspecific natural systems. It then looks at thepolicy implications of what we know, discussingthe ecological limits to economic activity and themanagement institutions needed to make anintegrated approach effective. Conclusions arepresented on the future research needed andpolicy challenges that have to be confronted.

Coverage: Global, Latin America, Caribbean,Africa, Asia

Contains examples or case studies from:MadagascarNigeria, Sweden, India, Australia, Korea, Kenya,Cyprus, Indonesia, Botswana

Ecosystem or sector focus: Forests, Fisheries,Wetlands, Marine and coastal, Drylands

Topics: Valuation, Economic instruments,Economic policies, Incentive measures,Disincentives, Causes of biodiversity loss

#25. Barbier, E. B. (1994). 'Valuingenvironmental functions: tropical wetlands',Land Economics 70 (2):155-173Recent studies have suggested that tropicalwetlands may have a crucial economic role to playin development. This paper provides an overviewof these benefits, using a general framework ofcost-benefit analysis as the methodologicalapproach to assessing wetland values. An analysisof the trade-offs between conserving orconverting tropical wetlands demonstrates thattaking into account the opportunity costs ofwetland loss leads to a lower level of conversionthan would otherwise be the case. Finally, thepaper discusses the extensions and limitations ofthe production function approach as applied tovaluing non-marketed wetland benefits.

Coverage: Global




Topics: Valuation

#26. Barbier, E. B., Acreman, M., & Knowler,D., (1997), Economic Valuation of Wetlands:A Guide for Policy Makers and Planners.Ramsar Convention Bureau: Gland. 127 pp.ISBN 2-940073-21-X

Many planning and development decisions aremade on economic grounds. While this paradigmhas its limitations, it is unrealistic to ignore it.Hence wetland goods and services must be givena quantitative value if their conservation is to bechosen over alternative uses of the land itself orthe water that feeds the wetlands. This book setsout to provide guidance to policy makers andplanners on what the potential is for economicvaluation of wetlands and how valuation studiescan be undertaken. A basic overview of differentvaluation methods is given, illustrated with casestudies from around the world, guidance onplanning a study and model terms of reference fortechnical consultants are also provided.

Coverage: Global, Africa, Europe, NorthAmerica

Contains examples or case studies from: Nigeria,USA, UK, Sweden, Indonesia


Topics: Valuation, Market valuation, Effect onproduction, Contingent valuation, Travel cost,Mitigative and avertive expenditures, RamsarConvention

#27. Barret, S., (1989), Deforestation,Biological Conservation and the OptimalProvision of Wildlife Reserves. LEEC PaperDP 89-06, London Environmental EconomicsCentre: London. 36 pp.

This paper uses the species-area relation tocharacterise the optimal deforestation programand to determine the optimal provision of wildlifereserves for tropical rain forest countries. Thesedecisions, it is shown, must be taken jointly. Themodel constructed in this paper is more generalthan those used previously for analysis of theeconomics of environmental preservation.Provided a very simple inequality is satisfied, itwill be optimal to set aside a greater quantity ofwildlife reserves and to choose a slower rate of

deforestation, even if the marginal returns todeforestation increase over time. Implications forpolicy are also discussed.

Coverage: Global

Ecosystem or sector focus: Forests, Wildlife,Protected Areas

Topics: Causes of biodiversity loss, Valuation,Incentive measures, Economic policies

#28. Barret, S., (1992), Some Economics ofthe Convention on Biological Diversity.Working Paper GEC 92-33, Centre for Socialand Economic Research on the GlobalEnvironment: London.

This paper considers two aspects of theConvention on Biological Diversity. The first ishow developing countries should pursue aprogramme for the conservation of biodiversitywithin a wider programme of development. Thesecond is how developed countries can sustain aco-operative agreement to compensatedeveloping countries for additional conservation,when the agreement must be self-enforcing.

Coverage: Global

Topics: Convention on Biological Diversity

#29. Bartelmus, P., Lutz, E., & Shweinfest, S.,(1992), Integrated Environmental andEconomic Accounting: A Case Study forPapua New Guinea. Environment WorkingPaper 54, Environment Department, WorldBank: Washington DC. 57 pp.

This document presents a case study of theapplication of environmental accounting to PapuaNew Guinea using the integrated environmentaland economic accounting framework developedby the United Nations Statistical Office.Environmental expenditures by government arelow. Depreciation of produced assets wascalculated at between 9-11% of GDP resulting ina NDP of between 89-91% of GDP.Environmental impacts in the agriculture,forestry, energy and mining sectors amounted toan average of 2.1% of NDP over the period 1986-90. The resulting environmentally adjusted NDPwas estimated to range from 90-97% of NDP.

Coverage: Pacific



Contains examples or case studies from: PapuaNew Guinea

Ecosystem or sector focus: Agriculture, Forests,Industry

Topics: Environmental accounting, Valuation

#30. Bartelmus, P., & van Tongeren, J., (1994),Environmental Accounting: An OperationalPerspective. Department for Economic andSocial Information and Policy Analysis, WorkingPaper No 1, United Nations: New York. 25 pp.

Economic growth has been overemphasised inthe past. As a consequence distributional andenvironmental aspects have been neglected.Sustainable development aims to incorporatethese dimensions in comprehensive broad-baseddevelopment planning. Integrated environmentaland economic accounting focuses on a number ofthe more obvious deficiencies of conventionalnational accounts with regard to the environment.This paper summarises practicalrecommendations on integrated environmentaland economic accounting and presents anoverview of the methodologies involved.

Coverage: Global


#31. Batagoda, B. M. S., Turner, R. K., Tinch,R., & Brown, K., (2000), Towards PolicyRelevant Ecosystem Services and NaturalCapital Values: Rainforest Non-TimberProducts. Working Paper GEC 2000-06, Centrefor Social and Economic Research on the GlobalEnvironment: London.

Logbook and survey data relating to theextraction of non-timber forest products in theSingharaja Forest has been used to calculate totalnon-timber forest product (NTFP) value flows,and the estimation of the production and laboursupply functions of resource users. The resultsindicate that the forest yields significant benefits,however the value of these NTFPs is insufficienton its own to economically and politically justifythe conservation of rainforest biodiversity. Otherland uses involving forest clearance seem togenerate higher financial returns. However thereare external costs such as soil erosion,sedimentation, and habitat loss associated with

alternative uses such as tea plantations. It can alsobe argued that the conservation strategyencourages other beneficial impacts such as theeffect that NTFP harvesting income has onoverall income distribution in local communities.Overall, forest biodiversity conservation will haveto be justified by a full total economic value (useand non-use values) appraisal, together with otherscientific and ethical reasoning, and cannot bepromoted solely on the basis of non-timberextraction value, as some commentators have inthe past claimed.

Coverage: Asia

Contains examples or case studies from: India


Topics: Valuation

#32. Bateman, I. J., (1993), Evaluation of theEnvironment: A Survey of RevealedPreference Techniques. Working Paper GEC93-06, Centre for Social and EconomicResearch on the Global Environment: London.

This paper sets out to examine in detail thetheoretical and methodological basisunderpinning two revealed preference methodsfor valuing environmental preferences namely thetravel cost method (TCM) and the hedonicpricing method (HPM). A guide to empiricalapplication is provided together with analysis ofrelevant specific economic theory. Considerableemphasis is given to discussions ofmethodological problems arising from suchapplication. A general conclusion is that bothmethods require a number of strong assumptionsto hold if they are to produce valid welfareestimates. Individuals' preference for andevaluations of environmental goods can, in somecircumstances, be revealed via their purchases ofcertain marketed goods associated with theconsumption of those environmental goods. Boththe travel cost method (TCM) and hedonicpricing method (HPM) discussed in this paperadopt revealed preference approaches toenvironmental evaluation. The TCM estimates therecreational value of a recreation site by analysingthe travel expenditures (petrol, etc.) of visitors tothat site, while the HPM often uses variation inhouse prices to estimate the value of localenvironmental quality. Both techniques onlycapture use values and thereby omit any passive-use values associated with the environmental



goods under investigation. As such thesetechniques may underestimate the total economicvalue of such goods. However use values willoften be of prime importance (and acceptability)to decisionmakers and both of these evaluationtechniques have been widely applied.

Coverage: Global

Topics: Valuation, Travel cost

#33. Bayon, R., & Deere, C., (1998),Financing Biodiversity Conservation: ThePotential of Environmental Funds. Paperpresented at a workshop on FinancialInnovations for Biodiversity, 10th GlobalBiodiversity Forum, Bratislava, Slovakia, 1-3May 1998. 30 pp.http://www.biodiversityeconomics.org

In the 1990s, Environmental Funds (EFs) haveemerged as promising long-term mechanisms forproviding financial support to biodiversityconservation and sustainable developmentactivities. Environmental Funds, however, varywidely depending on the source, management anddistribution of their funds. This paper respondsto frequently asked questions about the operationand performance of Environmental Funds. Itprovides several case studies to highlight why theyare attractive mechanisms for funding biodiversityprotection and seeks to draw some of the manylessons that have been learned as EnvironmentalFunds have matured and gained experience atmanaging assets and grant programs (particularlyin Latin America). Finally, the paper offers severalrecommendations for the Fourth Conference ofthe Parties to the Biodiversity Convention. Inparticular, it advises that Environmental Fundsare a good way to finance biodiversityconservation and for the Global EnvironmentFacility (GEF)to leverage its funds. Itrecommends that the GEF be called upon toexplore Environmental Funds as preferredfinancial mechanisms for investment inbiodiversity projects. Environmental Funds varygreatly in terms of their funding, governance,structure, purpose and funding priorities. Theyoperate at the local, national and sometimes,regional level. Yet, there are some commonthreads, both in terms of lessons learned andfeatures contributing to success. For instance, themost successful funds tend to operate likeindependent foundations, investing their assetsand using the interest to fund programs. They

tend to be governed by mixed public-privatesector boards, often with NGOs often as"majority stakeholders", helping manage thecapital, invest the funds, and determine whichprojects will receive funding. This paper looks atissues involved in Environmental Funds, andmakes a number of recommendations to theCBD.

Coverage: Global

Topics: Financial mechanisms, Trust Funds, Debtconversion, Convention on Biological Diversity

#34. Bayon, R., Deere, C., Norris, R., & Smith,S. E., (1999), Environmental Funds LessonsLearned and Future Prospects. IUCN - TheWorld Conservation Union. 26 pp.http://www.biodiversityeconomics.org

Environmental organisations have long realisedthat sustainable finance is a pre-requisite forsustainable development. One mechanismadvocated as a means of achieving sustainablefinance is the "Environmental Fund"(EF) (alsoknown as conservation trust fund, and nationalenvironment fund). Over the past ten years, anumber of EFs have been created in developingcountries by national governments, conservationorganisations and donors. They vary widelydepending on local actors and circumstances.Their record has been mixed: although some havebeen extremely effective at beginning toaccomplish the goals they have set, others havenot. While EFs have some impressiveaccomplishments, their long term success andimpact on conservation and sustainabledevelopment remain difficult to ascertain. In1998, the Global Environment Facility (GEF), animportant contributor to EFs world-wide, carriedout an evaluation of experience withEnvironmental Funds. This article draws on theGEF study and over five years experience withEFs to review the lessons learned. It describeshow EFs are structured and the kinds of activitiesthey have supported. It examines the keyconditions that influence their success or failure.It discusses factors that should be taken intoconsideration when deciding whether EFs may bean appropriate mechanism for supportingconservation activities in a particular setting.Finally, the article looks to the future and outlinesimportant trends that are likely to affect thefinancing and future development of EFs.

Coverage: Global



Topics: Financial mechanisms, Trust Funds, Debtconversion

#35. Bayon, R., Lovink, J. S., & Veening, W. J.,(2000), Financing Biodiversity Conservation.Sustainable Development Department TechnicalPapers Series, Inter-American DevelopmentBank: Washington DC. 42 pp.

Financing the conservation and sustainable use ofbiodiversity has been called one of the greatestchallenges. At the heart of this challenge lies thelow financial and political value which is oftenassigned to biodiversity and the resulting lack offinancial mechanisms for conservation andsustainable use. The biological diversity of LatinAmerica and the Caribbean is among the world’ srichest. This provides the region with a unique“comparative advantage”, including potentialbusiness opportunities based on the sustainableuse of biodiversity. This report provides anoverview of existing and experimental financingmechanisms that can be used to encourage theconservation and sustainable use of biodiversity.To help to better understand these mechanisms, itproposes a taxonomy that divides themechanisms into three categories: (i) those thatprotect biodiversity as a public good, (ii) thosethat require correcting so-called “negativeexternalities” that hamper biodiversityconservation, and (iii) those that can be used tosupport biodiversity-based businesses. Thedocument ends with recommendations on howthe Bank can support financing mechanisms thatpromote the conservation of biodiversity and itssustainable use.

Coverage: Latin America, Caribbean

Contains examples or case studies from: Mexico,Brazil, Ecuador, Costa Rica


Topics: Financial mechanisms, Private sector,Trust Funds, Economic instruments, Carbonoffsets, Payments for environmental services,Taxes, Incentive measures

#36. Bellu, L. G., & Cistulli, V., (1997),Economic Valuation of Forest RecreationFacilities in the Liguria Region (Italy).Working Paper GEC 97-08, Centre for Social

and Economic Research on the GlobalEnvironment: London.

This study is part of a broader research aimed atproviding decision-makers with data andinformation which would allow them to designmore appropriate land use policies. Specificobjectives were the inventory of forest resourcesand the economic assessment of the multipleservices of forests in the Liguria Region (Italy).The following pages address the issue of themeasurement of the economic value of openaccess recreation. Since open access recreation inforest areas belongs to the category of publicgoods for which market prices do not exist,Individual Travel Cost Method (ITCM) andDichotomous Choice Contingent ValuationMethod (CVMD) were used for their economicvaluation. This study analyses seven forest areasselected on the basis of three main criteria: (i) thesuitability of the area for tourism; (ii) the actualflow of tourism; (iii) the regional plans for thecreation of new parks. The following importantinsights emerged: (i) overall, the values obtainedwith the ITCM and CVMD methods are veryclosed and consistent with the underlyingeconomic theory; (ii) the value of forestrecreational services in Liguria is second only tosoil protection services and much greater thantimber production income; (iii) forest recreationincome would significantly contribute to theregional GDP if it were accounted for in regionaleconomic accounts; (iv) the development offorest recreational activities in the internal areasof Liguria would also contribute to the solution ofthe three major problems of the region, namely:unemployment, abandonment of internal areas,and excessive pressure of tourism in the coastalareas.

Coverage: Europe

Contains examples or case studies from: Italy

Ecosystem or sector focus: Forests, Tourism

Topics: Valuation, Contingent valuation, Travelcost

#37. Berg, H., Ohman, M. C., Troeng, S., &Linden, O. (1998). 'Environmental economics ofcoral reef destruction in Sri Lanka', Ambio 27(8):627-634

Coral reefs are a resource of immense importancefor a large number of people, especially coastalpopulations in the developing world. Available



information on coral reefs in Sri Lanka and SouthEast Asia has been used to evaluate the ecologicalservices provided by coral reefs and to assess thelong-term economic benefits derived from someof the ecosystem functions. The minimumestimate of economic value of coral reefs in SriLanka is US$ 140,000-US$ 750,000 per squarekilometre over a 20 year period. The economicconsequences of coral mining were alsoinvestigated and economic costs (US$ 110,000-7,360,000) were found to exceed net benefits(US$ 750,000-1,670,000) when analysed over 20years in tourism areas. The highest costs wereassociated with decreased tourism and increasederosion. However in rural areas there is still astrong incentive for coral mining, because itprovides a more profitable business than fishingor agriculture in the short-term. The results haveimplications for management and show that SriLankan legislation banning coral mining in thecoastal zone is beneficial to the country'seconomic development.

Coverage: Asia

Contains examples or case studies from: SriLanka

Ecosystem or sector focus: Marine and coastal,Fisheries, Tourism

Topics: Valuation, Contingent valuation, Effecton production, Mitigative and avertiveexpenditures, Replacement costs, Causes ofbiodiversity loss

#38. Bishop, J., Aylward, B., & Barbier, E. B.,(1991), Guidelines for ApplyingEnvironmental Economics in DevelopingCountries. LEEC Paper DP 91-02, LondonEnvironmental Economics Centre: London. 14pp.

These guidelines are intended to support the useof economic analysis in assessing environmentalproblems in developing countries. They havebeen written for an audience familiar with thelanguage of economics as a practical introductionto applied environmental economics. The firstsection deals with the assessment of naturalresource endowments, trends and potentialproblems, with a focus on defining economy-environment links and the valuation ofenvironmental degradation. The second sectionreviews the market failures underlying manyenvironmental problems including causes,

consequences and alternative policy responses.The final section reviews the impact of publicpolicy on the environment including the effects ofregulation, economic policy, public investmentand institutions.

Coverage: Global

Topics: Environmental accounting, Causes ofbiodiversity loss, Economic policies, Economicinstruments, Incentive measures, Disincentives,Valuation

#39. Bishop, J., (1995), The Economics ofSoil Degradation: An Illustration to theChange in Productivity Approach toValuation in Mali and Malawi. LEEC Paper DP95-02, London Environmental EconomicsCentre: London. 80 pp.

This paper looks at the economic costs of landdegradation and soil erosion. It begins byreviewing basic concepts and techniques used inthe economic analysis of soil degradation. Theimpacts of soil degradation on agriculture isdiscussed in terms of productivity, farmerresponse and technological change. A review ofvarious economic techniques for the valuationand an overview of the various policy failures andmarket distortions that give rise to soildegradation are presented. Results from casestudies of the economic valuation of soildegradation in Mali and Malawi are presented.

Coverage: Africa

Contains examples or case studies from: Malawi,Mali

Ecosystem or sector focus: Agriculture, Forests

Topics: Soil erosion, Land degradation, Valuation,Incentive measures

#40. Blackman, A., & Harrington, W., (1999),The Use of Economic Incentives inDeveloping Countries: Lessons fromInternational Experience with Industrial AirPollution. Discussion Paper 99-39, Resourcesfor the Future: Washington DC. 37 pp.

To what extent should developing countrieseschew conventional command and controlenvironmental regulation that is increasingly seenas inefficient and rely instead on economicincentives? This paper addresses this question as



it pertains to industrial air pollution. The paperdiscusses the advantages and disadvantages ofvarious economic incentive instruments, presentsin-depth case studies of their application inSweden, the United States, China, and Poland,and proposes a number of policy guidelines. Weargue that both design deficiencies and pervasiveconstraints on monitoring and enforcementimpede the effectiveness of economic instrumentsin developing countries. The latter are difficult torectify, at least in the medium term. As a result,tradable permits are generally not practical.Suitably modified however, emissions fee policiesprobably are appropriate. They can provide afoundation for a transition to an effectiveeconomic incentive system, and can raise muchneeded revenue for environmental projects andprograms. In addition, if political opposition canbe overcome, environmental taxes constitute asecond-best but potentially effective pollutioncontrol instrument.

Coverage: Global, North America, Asia, Europe

Contains examples or case studies from: USA,Sweden, China, Poland

Ecosystem or sector focus: Industry,Infrastructure, Urban settlements

Topics: Incentive measures, Pollution, Taxes,Markets and charges

#41. Blockhus, J., Bagri, A., & Vorhies, F.,(1999), Perverse Subsidies and BiodiversityLoss. IUCN - The World Conservation Union. 48pp. http://www.biodiversityeconomics.org

This paper examines one aspect of the interactionbetween biodiversity, the economy and society -the impact of public subsidies on biodiversity.Subsidies are actually a type of incentive measuredesigned to encourage certain behaviour. TheCBD in Article 11 calls on governments to designeconomically and socially sound measures whichprovide incentives for conservation andsustainable use. Subsequent deliberations of theCBD Conference of the Parties have furtheremphasised the need to address perverseincentives. (See in particular COP decisionsIII/18 and IV/10a). Perverse incentivesundermine conservation and sustainable use.

Coverage: Global

Ecosystem or sector focus: Drylands, Forests,Marine and coastal, Agriculture, Wetlands,Mountains, Industry, Infrastructure, Fisheries

Topics: Subsidies, Causes of biodiversity loss,Incentive measures, Disincentives, Convention onBiological Diversity

#42. Bojo, J. (1991). 'Economics and landdegradation', Ambio 20 (2):75-79

This article analyses the problem of landdegradation from an economic viewpoint, withparticular attention to the situation in developingcountries. It also discusses how economic analysiscan contribute to efficient land rehabilitation. Abrief review of available evidence of landdegradation, physical as well as economicassessments, is presented. The driving forcesbehind land degradation are discussed in terms ofmarket failure and policy failure that contribute toland degradation or hamper effective countermeasures. There is a brief discussion aboutattempts made to remedy the situation. In general,soil conservation appears to have beenunsuccessful. New ideas are emerging that set achallenging agenda for the future. It is argued thateconomics can play a positive role at the projectlevel and at the level of national and internationalplanning in improving land management.

Coverage: Global


Topics: Valuation, Economic policies, Causes ofbiodiversity loss, Economic instruments, Soilerosion, Land degradation

#43. Bojo, J., (1996), The Economics ofWildlife: Case Studies from Ghana, Kenya,Namibia and Zimbabwe. AFTES WorkingPaper No 19, Environmental Policy andPlanning, World Bank: Washington DC. 145 pp.

This report documents a study on wildlifeeconomics in four African countries. It aims toprovide experiences to help shape policy andproject interventions. The report looks at wildlifepolicies and legislation, and attempts to assess therelative profitability of wildlife management.

Coverage: Africa

Contains examples or case studies from: Ghana,Kenya, Namibia, Zimbabwe

Ecosystem or sector focus: Wildlife, ProtectedAreas

Topics: Valuation



Economic policiesCauses of biodiversity lossIncentive measures

#44. Bostedt, G., & Mattsson, L. (1995). 'Thevalue of forests for tourism in Sweden', Annalsof Tourism Research 22 (3):671-680

Sweden has a vast quantity of forests, and theright of common access allows tourists to freelyenter any forests no matter who owns it. Aneconomic valuation study was carried out in twotourism areas, one in the southern part of thecountry and one in the northern part. It wasshown that a considerable portion of the value totourists can be attributed to forest characteristics.Furthermore the results show that this value canbe increased by modifying forest managementpractices: for example by making clearcutssmaller, even if there were more of them, and byincreasing the proportion of broad leafed trees inforest stands.

Coverage: Europe

Contains examples or case studies from: Sweden

Ecosystem or sector focus: Forests, Tourism,Protected Areas

Topics: Valuation, Contingent valuation

#45. Bowles, I. A., Clark, D., Downes, D., &Guerin-McManus, M., (1996), EncouragingPrivate Sector Support for BiodiversityConservation: The Use of EconomicIncentives and Legal Tools. Policy PapersVolume I 1996, Conservation International:Washington DC. 12 pp.

This report summarises some of the keyapproaches to designing economic incentives forprivate sector participation in biodiversityconservation. It introduces the reader to some ofthe fundamental reasons why business cannotignore conservation. It also explores howeconomic incentives can often accomplish majorconservation objectives at a lower cost thantraditional approaches.

Coverage: Global

Topics: Incentive measures, Taxes, Financialmechanisms, Private sector

#46. Boyd, J., Caballero, K., & Simpson, D. R.,(1999), The Law and Economics of HabitatConservation: Lessons from an Analysis ofEasement Acquisitions. Discussion Paper 99-32, Resources for the Future: Washington DC.45 pp.

There is a growing interest in incentive-basedpolicies to motivate conservation by landowners.These policies include full- and partial-interestland purchases, tax-based incentives, and tradableor bankable development rights. Using legal andeconomic analysis, the paper explores potentialpitfalls associated with the use of such policies.Incentive-based policies promise to improve thecost effectiveness of habitat preservation, butonly if long-run implementation issues aremeaningfully addressed. While we compareconservation policies, particular attention isdevoted to the use of conservation easements andin particular a set of easement contracts andtransactions in the state of Florida. The easementanalysis highlights the importance of conservationpolicies' interactions with property markets, landmanagement practices, and bureaucraticincentives. Specific challenges include difficultiesassociated with the long-term enforcement andmonitoring of land use restrictions, the lack ofmarket prices as indicators of value for appraisal,and the way in which incentives target specificproperties for protection.



Topics: Economic instruments, Taxes

#47. Brouwer, R., Langford, I. H., Bateman, I.J., Crowards, T. C., & Turner., R. K., (1997), AMeta-Analysis of Wetland ContingentValuation Studies. Working Paper GEC 97-20,Centre for Social and Economic Research onthe Global Environment: London.

Recent years have seen a growing interest, bothfrom academics and policy makers, in thepotential for producing generally applicablemodels for the valuation of non-marketenvironmental goods and services which do notrely upon expensive and time consuming originalsurvey work but rather extrapolate results fromprevious studies of similar assets. This paperpresents such a meta-analysis for the use and non-use values generated by wetlands across Europe



and North America. This study directly addressestwo fundamental methodological issues: (i)whereas previous analyses have tended toexamine valuation differences between variousenvironmental goods, the present study focusesdown a further level to assess the valuesattributable to the individual use and non-usevalues associated with the ecological,biogeochemical and hydrological functionsprovided by a given complex environmental asset;(ii) previous meta-analyses have been criticised forinsufficiently addressing the potential problem ofclustering within the multiple values derived fromsingle valuation studies; this issue was examinedthrough the application of advanced, multi-levelmodelling methods which allow for thehierarchical structure of data implicit in suchclustering. The study opens with a qualitativedescriptive analysis of wetland functions. This isused as the basis of the subsequent quantitativemeta-analysis of evaluations derived from a largenumber of contingent valuation (CV) studies ofwetlands. These studies yield over 100 valueestimates which our meta-analysis relates to thepreviously defined function variables and variousCV design parameters. Results from the metaanalysis identify a number of distinct values forwetland functions. Interestingly, use values suchas flood control, water generation and waterquality attributes were found to exert a strongerinfluence over willingness to pay (WTP) thannon-use elements such as the biodiversityfunctions of wetlands, a result which accords withthe findings of recent mixed revealed andexpressed preference studies of non-marketgoods. A number of standard CV design effectswere also shown to have a significant impactupon WTP including the choice of paymentvehicle and elicitation method (the previouslyobserved discrepancy between dichotomouschoice and open ended formats being particularlynoticeable). Routine considerations of issues suchas inter-country effects were also conductedyielding interesting results. The analysis alsoincluded a number of novel elements such as ascope test, an assessment of study quality and theaforementioned investigation of potentialevaluation clustering due to identical surveydesign or sample population. Tests showed thatthis approach afforded a significant improvementin modelling of the data over that achieved bymore conventional meta-analyses. Althoughconsiderable effort has been put into specifyingthe characteristics of the environmental functionsand correspondingly the environmental goodsand services involved, many sample population

characteristics remain unevaluated. Typically, inmeta-analysis inferences are made on the basis ofinformation on global statistics, such as the meanand standard deviations of parameter estimates.These may or may not describe individualbehaviour adequately. In order to overcome thisproblem, a next step is to analyse individual datasupplied by authors of the studies included in themeta-analysis. This provides an important test ofthe appropriateness of meta-analysis as aninstrument to synthesise CV outcomes, forexample for the purpose of benefits transfer.

Coverage: Global, Europe, North America



#48. Brown, G., & Henry, W., (1989), TheEconomic Value of Elephants. LEEC Paper89-12, London Environmental EconomicsCentre: London. 18 pp.

This paper reports on a valuation study used toestimate the value of Kenya's elephants to touriststhrough a survey administered to visitors to majorNational Parks and lodges. It highlights thedecline of African elephant populations in the lastdecades, mainly due to poaching, and assesseshow this affects the value that wildlife viewingholds for tourists. Using contingent valuation andtravel cost techniques, the annual viewing value ofelephants was calculated at between US$ 25-30million. The paper recommends that more moneyshould be invested in protecting elephants frompoachers, which in the long run will generatemore income through sustained tourist earnings.

Coverage: Africa



Topics: Valuation, Contingent valuation, Travelcost, Financial mechanisms, Markets and charges

#49. Brown, K., Pearce, D., Perrings, C., &Swanson, T., (1993), Economics and theConservation of Global Biodiversity. WorkingPaper No 2, The Global Environment Facility:Washington DC. 75. 1-884122-01-9

This paper explores the relationship betweeneconomics and biodiversity conservation. It deals



with the concepts of costs and benefits as theyapply to biodiversity, assesses what is currentlyknown about extinction rates and species loss,and looks at efforts to place a value onbiodiversity. It also investigates the economiccauses of biodiversity loss. Finally, the paperconsiders ways in which the GEF might alleviatethe problem of under-investment in biodiversity.

Coverage: Global

Topics: Convention on Biological Diversity,Valuation, Economic instruments, Causes ofbiodiversity loss, Deforestation

#50. Brown, K., & Adger, W. N., (1993),Forests for International Offsets: Economicand Political Issues of Carbon Sequestration.Working Paper GEC 93-15, Centre for Socialand Economic Research on the GlobalEnvironment: London.Forests are important in the global carbon cycle,forming a major sink for carbon. Deforestation isa significant source of carbon dioxide emitted tothe atmosphere. There is some scope to enhancenatural carbon sinks, and therefore reduce netemissions of greenhouse gases, throughafforestation and conservation of existing forests.Such initiatives may be implemented to "offset"emissions of greenhouse gases from othersources. This may be undertaken by privatecompanies, or by governments as part of bi-lateralagreements or multi-lateral arrangements.International carbon offsets may be cost effectivein terms of reduction of carbon emissionsachieved, and may also be one way to mobiliseprivate capital to fund forest conservation. It isargued here that theoretically the internationaloffset of emissions may lead to a resource saving,and that forest conservation, as opposed toafforestation, may bring about many otherbenefits. However, such international contractsare unlikely to be feasible or make a majorcontribution to the control of greenhouse gases.The reasons for this are monitoring, enforcementand scientific uncertainties, and the implicitchange in property rights involved in "selling"carbon sequestration rights.

Coverage: Global


Topics: Climate change, Carbon offsets, Financialmechanisms

#51. Brown, K., & Moran, D., (1993), ValuingBiodiversity: The Scope and Limitations ofEconomic Analysis. Centre for Social andEconomic Research on the Global Environment:London. 30 pp.

The Biodiversity Convention recognises both theintrinsic value of biodiversity and its components,but also the need for greater understanding ofvaluation of these resources from ananthropocentric viewpoint. This paper discusseseconomic and other approaches to the valuationof biodiversity. Economic valuation is essentiallya utilitarian approach which distinguishes use andnon-use values of the assets involved. It is arguedthat these approaches have shortcomings,especially in the cultural, intrinsic and primaryaspects of value. For example, cultural values ofmedicinal plants tend not to be included indemonstrative economic valuation, yet in manyareas fundamentally determine the resourcemanagement of species rich areas and context ofhabitat conversion. Recognising its limitations,economic analysis does have a role inconservation policy. It is therefore vital thatpractitioners and protagonists converge in orderto develop an enhanced understanding of thevalues of biodiversity.

Coverage: Global

Topics: ValuationConvention on Biological Diversity

#52. Brown, P., (1998), Economic and LegalTools to Support Ecosystem Management inthe United States. World Resources Institute:Washington DC. 50 pp.

This document is intended to serve as a resourcefor landowners, policy makers from local tonational levels, as well as public and private landmanagers who would like to improve theenvironmental management of their lands and areseeking information and financial resources to doso. It describes a range of economic and legalinstruments, their advantages and disadvantages,and illustrates these with case studies from theUSA. Actions required to implement each tool arealso outlined.





Ecosystem or sector focus: Forests, Wetlands,Marine and coastal, Agriculture, Drylands

Topics: Financial mechanisms, Incentivemeasures, Causes of biodiversity loss, Economicinstruments

#53. Brown, K., Adger, W. N., Tompkins, E.,Bacon, P., Shim, D., & Young, K., (2000),Trade-Off Analysis for Marine Protected AreaManagement. Working Paper GEC 2000-02,Centre for Social and Economic Research onthe Global Environment: London.

This paper outlines an approach to naturalresource management that incorporates multipleobjectives for protected area management withina decision-making framework. Both regulatorsand other major stakeholders are directlyincorporated into the approach to enhancedecision-making processes. We call this approachtrade-off analysis. The approach uses aframework based on multi-criteria analysis butinvolves stakeholders at all stages. This holisticapproach is appropriate for multiple use, complexsystems such as coastal resources, where manydifferent users are apparently in conflict andwhere linkages and feedbacks between differentaspects of the ecosystem and economy exist. Thepaper applies trade off analysis to the case ofBuccoo Reef Marine Park in Tobago. Stakeholderanalysis is undertaken, and social, economic andecological criteria identified. The impacts of fourdifferent development scenarios are evaluated forthese criteria. Stakeholders are asked to weightdifferent criteria and then the outcomes ofdifferent stakeholder weightings in the multi-criteria analysis used to explore differentmanagement options. The approach has beenused effectively to enhance stakeholderinvolvement in decision-making and developconsensus-based approaches to management ofthe marine protected area.

Coverage: Caribbean

Contains examples or case studies from:Trinidad and Tobago

Ecosystem or sector focus: Marine and coastal,Tourism, Fisheries

Topics: Property rights

#54. Cabrera, M. A., Seijo, J. C., Euan, J., &Perez, E. (1998). 'Economic values of ecologicalservices from a mangrove ecosystem',Intercoast Network 32:1-2

This article reports on a valuation study carriedout to assess the Terminos Lagoon. It quantifiesthe value of destructive harvesting practices andeconomic activities, and also looks at the value ofdifferent mangrove goods and services.



Ecosystem or sector focus: Marine and coastal,Wetland, Fisheries

Topics: Valuation

#55. Carson, R. T. (1998). 'Valuation of tropicalrainforests: philosophical and practical issues inthe use of contingent valuation', EcologicalEconomics 24 (1):15-29This paper explores the possibility of using alarge-scale multi-country contingent valuationstudy for making decisions concerning globalresources in the specific context of valuing a largeset of tropical rainforests. Before considering thepractical issues involved in implementing such astudy, the paper addresses philosophical issuesrelated to the use of contingent valuationincluding the role of passive use motives such asaltruism and the role of information. Theimplications of empirically based criticisms whichargue that contingent valuation results areunreliable are also considered. The main portionof the paper sketches the practical difficultieslikely to be encountered in actually implementinga large contingent valuation study in multiplecountries which seeks to value a common set oftropical rainforests.

Coverage: Global



#56. Casellini, N., Foster, K., & Hien, B. T. T.,(1999), The "White Gold" of the Sea: A CaseStudy of Sustainable Harvesting of SwiftletNest in Coastal Vietnam. IUCN - The World



Conservation Union, Vietnam Country Office:Hanoi. 63 pp.

The sustainable exploitation of wild naturalresources, such as the nest from the edible-nestswiftlets, has been achieved in Vietnam withoutexternal aid or expertise. This study examineseconomic aspects of this trade and argues thatthis is an importance source of sustainablerevenue for Vietnam. It also documents attemptsmade by a private company to invest in scientificresearch and monitoring of harvesting, and totheir human and financial managementprocedures.

Coverage: Asia


Ecosystem or sector focus: Wildlife, Marine andcoastal

Topics: Trade, Valuation, Incentive measures

Other: Also published in Vietnamese

#57. Cervigni, R., (1993), Biodiversity,Incentives to Deforest and TradeableDevelopment Rights. Working Paper GEC 93-07, Centre for Social and Economic Researchon the Global Environment: London.

This paper addresses the main economic aspectsof habitat conversion in biodiversity rich areas.Land use changes are taking place as a result ofdemographic pressure (population growth and/ormigration) and because local resource users arenot able to capture the global benefits ofbiological resources; the particular case ofAmazon's "peasant cycle" is illustrated with theaid of the notion of bid-rent function. Amechanism to capture the global benefits ofconservation is to trade rights in land usesbetween tropical countries and the internationalcommunity. Based on the idea of InternationalFranchise Agreements (IFAs), a simplifiedframework is then formulated, to analyse underwhich conditions such a trade would be effectivein modifying local incentives. A significantelement of this problem is the choice of acontractual structure capable of minimizingconflicts of interest among the different partiesinvolved in the scheme. Finally, it is argued thatintroducing a market in land uses may have

general equilibrium effects whose final impact onconservation is worthwhile investigating.

Coverage: Global


Topics: Trade, Markets and charges, Incentivemeasures, Financial mechanisms

#58. Cervigni, R., (1995a), Incremental Costand the Convention on Biological Diversity:A Simple Model. Working Paper GEC 95-32,Centre for Social and Economic Research onthe Global Environment: London.The Convention on Biological Diversity stipulatesthe principle of incremental cost for theinternational financing of biodiversityconservation. There is little agreement in theinternational arena about the exact meaning of theconcept, and about its practical application. Thispaper uses some standard tools of demand theoryto analyze the notion of incremental cost in apartial equilibrium setting. The resulting allocationof resources is compared with a "domesticoptimum", where no collective action isundertaken to improve conservation, with ahypothetical "global optimum", and withalternative financing schemes. In connection tothe conduct of the country hosting biodiversity inthe negotiations on incremental cost, a distinctionis proposed between "quantity-" and "transfer-"taking behavior. The issue of price distortions inthe baseline is also addressed. The conservationlevel prevailing under the global optimum is onlyforthcoming when the host country is a quantitytaker, and is willing to accept a domestic benefitsclawback factor of 1, which implies payment ofnet incremental cost, and an unchanged welfarefor the host. A number of more detailed resultsare also derived and illustrated diagrammaticallyby imposing a particular multiplicative functionalform on the utility of both host and ROW.

Coverage: Global

Topics: Convention on Biological Diversity,Financial mechanisms

#59. Cervigni, R., (1995b), North-SouthTransfers, Incremental Cost and the RioEnvironment Conventions. Working PaperGEC 95-33, Centre for Social and EconomicResearch on the Global Environment: London.



Under the Framework Convention on ClimateChange and the Convention on BiologicalDiversity, the developed world agrees to bear the'incremental' costs that developing countries willface when implementing actions to secure globalenvironmental benefits. In this paper, we reviewthe origin of the concept of incremental cost,analyze its characterizing elements, and producealgebraic, graphical and verbal illustrations ofincremental cost calculations. Two main set ofproblems complicate the determination ofincremental cost. First, there is the treatment ofconcurrent domestic benefits generated byprojects addressing global environmentalconcerns. Second, in order to estimateincrements, there ought to be agreement on abaseline development plan, where the globallybeneficial action would not be taken. The processof establishing baselines is likely to be madecontroversial by imperfect information, perverseincentives and distortions in the pricing system.Both on domestic incremental benefits and onbaselines, we highlight the relevant trade-off. Theneed for providing incentives to developingcountries to comply with the convention shouldbe balanced off with cost-effectiveness criteria inprotecting the global environment. We argue thatbaselines should not incorporate policy measureswhich are clearly inconsistent with thefundamental purpose of the Conventions. Oftensome of those policies may be reformed at zeroor minimal costs.

Coverage: Global

Topics: UN Framework Convention on ClimateChange, Convention on Biological Diversity,Financial mechanisms

#60. Cesar, H., (1996), The Economic Valueof Indonesian Coral Reefs. AgricultureOperations Division and EnvironmentDepartment, World Bank: Washington DC. 9 pp.

This paper looks at the economic value of thebenefits associated with coral reefs in Indonesia.It also addresses the economic threats to reefbiodiversity. It investigates the private and socialeconomic trade offs involved in reefconservation, and concludes that the privatebenefits associated economic activities that lead toreef destruction are often great, but the socialcosts are also high. Government action is requiredto stop these threats.

Coverage: Asia


Ecosystem or sector focus: Marine and coastal,Fisheries

Topics: Valuation, Economic policies, Causes ofbiodiversity loss

#61. Cesar, H., Lundin, C. G., Bettencourt, S.,& Dixon, J. (1997). 'Indonesian coral reefs - aneconomic analysis of a precious but threatenedresource'', Ambio 26 (6):345-545

Indonesia's coral reefs are currently undergoingrapid destruction from human activities such aspoison fishing, blast fishing, coral mining,sedimentation, pollution and over-fishing. Thesedestructive activities are described and theirprivate gains valued. It is shown that the socialcosts by far outweigh private gains. The paperconcludes with a discussion on designingappropriate policy responses to these problems.

Coverage: Asia



Topics: Valuation, Economic instruments,Incentive measures, Market valuation,Disincentives, Causes of biodiversity loss,Economic policies

#62. Chomitz, K. M., & Kumari, K. (1998). 'Thedomestic benefits of tropical forests: a criticalreview', The World Bank Research Observer13 (1):13-35

Protecting tropical forests yields domesticeconomic benefits. This paper reviews attempts atthe valuation and quantification of such benefits.It finds that the quantifiable benefits of forestpreservation in providing hydrological servicesand nontimber forest products are highly variable.Locally important in some situations, these classesof domestic benefits may in general be smallerthan popularly supposed. This underscores theneed for financing conservation from the GlobalEnvironment Facility or other global sourcesrather than placing the burden entirely ondomestic resources.

Coverage: Global



Contains examples or case studies from:Philippines, Thailand, China, Malaysia, Brazil,Mexico


Topics: Land degradation, Soil erosion, Causes ofbiodiversity loss, Valuation, Economicinstruments, Financial mechanisms

#63. Chomitz, K. M., Brenes, E., &Constantino, L., (1998), Financingenvironmental services: the Costa Ricaexperience and its implications. DevelopmentResearch Group and Environmentally andSocially Sustainable Development, LatinAmerica and Caribbean Region, World Bank:Washington DC.

This paper describes an on-going initiative inCosta Rica - attempts to achieve environmentalgoals by creating markets for the environmentalbenefit of forests. This initiative takes aproposition from theoretical economics - thatforests would be better maintained if forestowners were compensated for all the services theyprovide - and puts it to work in the real world.The paper describes both the theory of thisinitiative, the practical problems that Costa Ricahas faced, and also identifies the issues andchallenges that remain in the futureimplementation of this initiative.



Topics: Economic instruments, Financialmechanisms, Incentive measures, Markets andcharges, Payments for environmental services

#64. Clark, R., (1996), The EconomicAnalysis of Soil Erosion and SoilConservation: A Literature Review ofMethodology. Working Paper GEC 96-13,Centre for Social and Economic Research onthe Global Environment: London.

Land degradation caused by soil erosion is amajor threat to the sustainability of agriculture.The costs of erosion can be used to prioritise

implementation of soil conservation, andeconomic analysis of alternative conservationtechnologies can be used to identify courses ofaction that efficiently employ available resources.A number of different approaches are currentlyused for the valuation and economic analysis oferosion and conservation. This paper reviews theapproaches used for the on-site and off-siteeffects of erosion and conservation, primarily indeveloping countries. The on-site effects oferosion can be valued in terms of the impacts onsoil properties, using the replacement cost, or theimpacts on crop production. Valuation ofconservation technologies requires additionalconsiderations: the effectiveness of thetechnology in reducing erosion; and valuation ofadditional benefits of the technology such asanimal fodder production. The off-site effects ofsoil erosion are numerous but are excluded frommany studies. Valuation is generally limited to theeffects of reservoir sedimentation on hydro-electricity generation and water supplies forirrigation. Economic appraisals of soil erosionand conservation generally use financial and/orcost benefit analysis. These appraisals are plaguedwith problems concerning the availability andaccuracy of data, making sensitivity analysis anecessary accompaniment. The studies reviewedvary widely in the discount rates and time periodsused, and the extent of sensitivity analysis. It istherefore essential that the findings of studies areaccompanied by explicit details of theassumptions and any necessary cautions about thequality and reliability of data.

Coverage: Global

Ecosystem or sector focus: Agriculture, Water,Infrastructure

Topics: Land degradation, Soil erosion, Valuation

#65. Clayton, C., & Mendelsohn, R. (1993).'The value of watchable wildlife: a case study ofMcNeil River', Journal of EnvironmentalManagement 39:101-106

This study measures the user value of McNeilRiver, a bear watching game sanctuary. Theresults of contingent valuation questions usingboth open-ended and discrete choice formats arecompared. Adjusting for outliers in all modelsreveals the users are willing to pay an average ofbetween US$228 and US$277 per person to visitthis unique site.







#66. Commission on National Parks andProtected Areas, (1995), EconomicAssessment of Protected Areas: Guidelinesfor their Assessment. Commission on NationalParks and Protected Areas, IUCN - The WorldConservation Union: Gland. 142 pp.

This document proposes an economic evaluationframework for protected areas. It illustrates thisframework for economic assessment with variouscase studies from around the world.

Coverage: Global, Latin America, NorthAmerica, Pacific, Australia and New Zealand

Contains examples or case studies from: Belize,Fiji, USA, Australia, Canada

Ecosystem or sector focus: Protected Areas,Wildlife, Forests, Marine and coastal, Tourism

Topics: Valuation

#67. Conservation International, (1997), TheEconomics of Biodiversity Conservation inthe Brazilian Atlantic Forest. Project ProfileNumber 1, Conservation International:Washington DC. 12 pp.

The Brazilian Atlantic forest is perhaps the moststriking example of a conservation "hotspot"-richin biodiversity, already heavily fragmented andunder continued threat. In 1993, CI made a newinvestment in the area to test a question that haschallenged conservationists for decades: how canwe articulate the value of biodiversity? We knowbiodiversity has many values. Intact forestsprotect watersheds. They provide the geneticclues for many pharmaceuticals. They buffer theclimatic system against change. They are thestorehouse for traditional medicines. But inSouthern Bahia, Brazil, these values often meanlittle to the individual landowner. The recent shiftof international markets away from Bahian cocoa,the region's main agricultural product, has causedlandowners to reconsider their traditionalconservation of the forest and to begin logging it

and converting it to cattle pasture. Against thisbackground, we set out to assess the economicsof conservation around the Una BiologicalReserve in Southern Bahia. We wanted to increaseour understanding of economic choices in orderto articulate the value of biodiversity at the levelof the individual landowner. Our assessmentsproduced striking results. For individuallandowners, investments in livestock provedmarginal at best and logging was profitable onlyfor the very short term, while certain forms ofconservation investments showed promise ofproducing higher returns. CI has used theseresearch results to design a strategic set ofconservation actions for the forest fragments thatborder the Una Reserve. For CI, ourunderstanding of the economics of biodiversity isincreased. Not all of our questions have beenanswered yet, but I believe our findings here inBahia will be critically important forconservationists world-wide.


Contains examples or case studies from: Brazil

Ecosystem or sector focus: Forests, ProtectedAreas, Agriculture

Topics: Incentive measures, Valuation, Causes ofbiodiversity loss, Bioprospecting

#68. Convery, F. J., (1995), Applyingenvironmental economics in Africa. WorldBank Technical Paper, 277(157): WashingtonDC.

The paper intends to show how environmentaleconomics could and should be used to improvethe quality of decision making in the process ofdrawing up National Environmental ActionPlans. After an introduction, there are 11chapters, covering: a theoretical review;environmental management as developmentstrategy; identifying perverse and positiveincentives to environmental degradation; non-price incentives; property rights and tenuresystems; general cost issues; estimating gross costs- a Ghana case study; evaluation of benefits;comparing benefits and costs; and institutionaldevelopment and cultural dimensions. Twoappendices cover the key literature and datasources and a hypothetical case study of thechoices facing an African farmer.

Coverage: Africa

Contains examples or case studies from: Ghana



Ecosystem or sector focus: Forests, ProtectedAreas, Agriculture

Topics: Causes of biodiversity loss, Economicinstruments, Economic policies, Valuation,Incentive measures

#69. Conway, T., (1998), A Framework forAssessing the Relationship Between TradeLiberalization and Biodiversity Conservation.United Nations Environment Programme andInternational Institute for SustainableDevelopment Working Paper: Nairobi. 72 pp.

This paper develops a framework for assessingthe impacts on biodiversity of trade policies suchas tariffs, non-tariff barriers and internationalliberalization agreements. The framework isdescribed, and applied to two case studies: PapuaNew Guinea and Indonesia. The framework isworth applying: the effects of trade in any contextare difficult to isolate and quantify, yetgovernments and international organisationsregularly undertake to do so anyway. For anumber of reasons, even a partial picture is betterthan none.

Coverage: Global, Asia, Pacific

Contains examples or case studies from:Indonesia, Papua New Guinea

Topics: Trade, Economic instruments, Economicpolicies, Taxes, Subsidies

#70. Costa, R., & Kennedy, E. T., (1996), SafeHarbor for Endangered Species on PrivateLands in the United States. Paper presentedat workshop on Incentives for Biodiversity:Sharing Experiences, 4th Global BiodiversityForum, Montreal, Canada 30 August - 1September 1996. 6 pp.http://www.biodiversityeconomics.org

This paper outlines efforts in North Carolina toprovide incentives for the preservation of habitatfor the endangered Red-cockaded woodpecker.The programme entails the establishment of 'safeharbours' for the woodpecker on private landsthrough a transferable certificate system whichreserves land for sustainable development anduse. The paper outlines the benefits of theprogramme on local and state wide levels, outlinesseveral lessons from the project, and highlights

recommendations for encouraging private sectorinvolvement in conservation efforts.



Ecosystem or sector focus: Wildlife

Topics: Economic instruments, Private sector,Incentive measures, Markets and charges

#71. Costa, P. M., Salmi, J., Simula, M., &Wilson, C., (1999), Financial Mechanisms forSustainable Forestry. Programme on Forests,United Nations Development Programme: NewYork. 122 pp.

This document outlines a comprehensive globalfinancing strategy for the implementation ofsustainable forest management. The corecomponents of this strategy include thedevelopment of enabling conditions includingappropriate policy frameworks, the targeted useof concessionary finance in leveraging privateinvestment, and the co-ordinated development ofwidely applicable instruments for sustainableforest management financing.

Coverage: Global


Topics: Financial mechanisms, Economicinstruments, Private sector, Trust Funds, Carbonoffsets, Debt conversion

#72. Costanza, R., Farber, S., & Maxwell, J.(1989). 'Valuation and management of wetlandecosystems', Ecological Economics 1:335-361

This article reports on a study of wetland valuesin coastal Louisiana that employed bothwillingness to pay and energy analysis basedmethodologies and were able to bracket a rangeof values within which the authors are confidentthat the true value lies. However there remains alarge amount of uncertainty. The current estimatefor the total present value of an average acre ofnatural wetlands in Louisiana are US$ 2,429-US$6,400 per acre (assuming an 8% discount rate) toUS$ 8,977-17,000 per acre (assuming a 3%discount rate). At the lowest value, the currentannual rate of loss of Louisiana wetlands (50square miles per year) is worth about US$ 77million. At the largest value it is worth about US$544 million. This paper discusses the fundamental



theoretical and practical problems underlyingnatural resource valuation, summarises themethods and findings for the case of Louisianaand elaborates on some of the more recalcitrantproblems attending applied natural resourcevaluation, including discounting and dealing withuncertainty and imprecision. The discount ratemakes more difference in the final result tan anyother factor, and yet there is much disagreementabout the appropriate approach to discountingnatural resources. This problem is discussed, andan argument made for lower discount rates to beapplied to the valuation of renewable naturalresources.



Ecosystem or sector focus: Wetlands, Water,Fisheries, Tourism

Topics: Valuation, Contingent valuation, Effecton production, Replacement costs

#73. Costanza, R. (Ed.), (1991), EcologicalEconomics: the Science and Management ofSustainability. Columbia University Press: NewYork. 525 pp. ISBN 0-231-07562-6

This book brings together different aspects ofecological economics including accounting,modelling and analysis of ecological economicsystems, and necessary institutional changes andcase studies.

Coverage: Global

Topics: Valuation, Incentive measures, Economicpolicies, Trade, Disincentives, Causes ofbiodiversity loss, Taxes, Subsidies

#74. Costanza, R., d'Arge, R., de Groot, R.,Farber, S., Grasso, M., Hannon, B., Limburg, K.,Naeem, S., O'Neill, R. O., Paruelo, J., Raskin,R. G., Sutton, P., & van den Belt, M. (1997).'The value of the world's ecosystem servicesand natural capital', Nature 387 (May):253-260The services of ecological systems and the naturalcapital stocks that produce them are critical to thefunctioning of the Earth's life support systems.They represent part of the economic value of theplanet. This article presents the findings of astudy which estimates the current economic value

of 17 ecosystem services for 16 biomes, based onpublished studies and original calculations.

Coverage: Global

Ecosystem or sector focus: Marine and coastal,Forests, Savannahs, Drylands, Wetlands,Agriculture

Topics: Valuation

#75. Council for Agricultural Science andTechnology (Ed.), (1999), Benefits ofBiodiversity. Task Force Report No. 133,Council for Agricultural Science and Technology:USA. 33. 0194-4088

This document argues that productive andefficient agriculture, which is the foundation ofmodern successful societies, has depended onbiodiversity and will be even more dependent onit in the centuries ahead. Yet expanding humanactivities are threatening this biodiversity, andthus compromising the long-term sustainability,productivity and stability of agriculture andsociety. The document looks at the economicbenefits of biodiversity, focusing on agriculturalsystems and agrobiodiversity. It presents anumber of examples of the value ofagrobiodiversity, and makes recommendationsabout the need to conserve biodiversity, preservenatural areas, preserve plant and animalgermplasm, and increase the effective use ofdiversity in agriculture.

Contains examples or case studies from: USA,Costa Rica, Kenya

Ecosystem or sector focus: Agriculture

Topics: Valuation

#76. Crowards, T., (1995), Non-Use Valuesand Economic Valuation of the Environment:A Review. Working Paper GEC 95-26, Centrefor Social and Economic Research on the GlobalEnvironment: London.

Nonuse value is a potentially very important butcontroversial aspect of economic valuation of theenvironment. In order to derive such value, anindividual need not ever make use of theresource, but may enjoy the satisfaction of simplyknowing that it exists. The number of individualsto which such values can be attributed couldconceivably therefore be very large, so that in the



aggregate, nonuse values could make up asubstantial proportion of the total value of anenvironmental resource. Much of the controversysurrounding nonuse values is focused upon theirmeasurement and in particular the contingentvaluation method. This paper focuses insteadupon the issues underlying the economic theoryof non-use motivations for attributing value tothe environment. Some fundamental aspects ofdefining and measuring nonuse values areconsidered, before analysing the normativeassumptions that economics makes concerningindividuals' preferences and motivations,especially with regard to altruism and thesatisfaction of others. A clear distinction is madebetween 'selfish' altruism and 'selfless' altruism,which has important implications for economicvaluation and willingness to pay analyses. Therelevance of this distinction for policyformulation is considered, and the concept of safeminimum standards is introduced as one possiblemeans of extending and improving purelyeconomic approaches to environmental resourcevaluation and allocation.

Coverage: Global

Topics: Valuation

#77. Crowards, T. (1996). 'Natural ResourceAccounting: a case study of Zimbabwe',Environmental and Resource Economics7:213-241

There is as yet no consensus on the mostappropriate way to incorporate the degradation ofnatural capital into national income accountingprocedures. The net price method is used toadjust the national accounts of Zimbabwe for thedepletion of forests, soils and mineral resourcesfor the period 1980-89. The results suggest thatthe economic depreciation of natural resourcesrepresents approximately 2% of GDP. Theimplications for integrating natural resourcedepletion into policy making, within the currentpolicy climate, are then addressed.

Coverage: Africa



Topics: Environmental accounting, Valuation,Economic policies, Soil erosion

#78. Czech, B. (2000). 'Economic growth asthe limiting factor for wildlife conservation',Wildlife Society Bulletin 28 (1):4-15

The concept of limiting factor includes the lack ofwelfare factors and the presence of decimatingfactors. Originally applied to populations andspecies, the concept may also be applied towildlife in the aggregate. Because the decimatingfactor of economic growth eliminates welfarefactors for virtually all imperiled species via theprinciple of competitive exclusion, economicgrowth may be classified as the limiting factor forwildlife conservation. The wildlife profession hasbeen virtually silent about this limiting factor,suggesting that the profession has been laboringin futility. The public, exhorted by neoclassicaleconomists and political leaders, supportseconomic growth as a national goal. To addressthe limiting factor for wildlife conservation,wildlife professionals need to become versed inthe history of economic growth theory,neoclassical economic growth theory, and thealternative growth paradigm provided byecological economics. The Wildlife Society shouldlead the natural resources professions indeveloping a position on economic growth.




Topics: Causes of biodiversity loss

#79. Davies, J., & Richards, M., (1999), TheUse of Economics to Assess StakeholderIncentives in Participatory ForestManagement: A Review. European TropicalForestry Paper 5, Overseas DevelopmentInstitute: London. 55 pp.

The environmental impacts of tropical forest lossand its consequences on people dependent insome way upon those forest resources have beena significant rationale for development assistanceto the sector in the past 20 years. In general,however, deforestation rates have not slowedsignificantly, and forest policies and programmeshave not had their desired effect. In part, this isdue to an inadequate understanding of the realcosts and benefits, and how these are sharedbetween forest stakeholders, and in part becauseof a perceived lack of economic methods andexperience in their application in project design



and implementation. Although economicsprovides a powerful body of theory and evidencefor explaining and predicting human behaviour,few studies have focussed on the incentives of thedifferent stakeholders within the forest sector, orconsidered the impact of non-forest sectoralinfluences on stakeholder livelihoods and land usedecision-making options. The main objective ofthis review is to explain and critically examineexisting and emerging economic methodologies interms of their potential and limitations to assessstakeholder incentives in participatory forestmanagement (PFM). Five hypotheses areproposed to explain why more economic analysishas not been carried out. First, it is often felt thateconomic tools tend to be reductionist and so arenot useful for understanding the complex realityof PFM; second, many of the tools are toocomplex to be accessible to potential users (inparticular, the non-economist); third, they are notaccessible because the methodologies are notclearly explained; fourth, economics is seen tohave lost credibility among professional PFMpractitioners, and fifth, as a result of perceptionslinked to the earlier hypotheses, donors havetended not to provide resources for exploringlocal economic incentives.

Coverage: Global


Topics: Incentive measures, Valuation

#80. Day, B., (2000), A Recreational DemandModel of Wildlife-Viewing Visits to the GameReserves of Kwazulu-Natal Province ofSouth Africa. Working Paper GEC 2000-08,Centre for Social and Economic Research onthe Global Environment: London.

In recent years, random utility models (RUMs)have become an increasingly popular approach toestimating the welfare benefits derived by visitorsto recreational sites. Researchers using suchmodels have tended to concentrate on the choicebetween sites; explaining a visitor's decision bymeans of the different qualities of the availablesites and the different costs of travelling to thosesites. This is all well and good for 'day trips' butfor recreational trips characterized by visits lastinga number of days, concentrating solely on thechoice between sites may be a grossoversimplification. For such 'away-breaks', avisitor's choice of accommodation and length ofstay may be just as important as the qualities of

the site and the length of the journey indetermining the costs and benefits that resultfrom the trip. This paper describes the applicationof a RUM known as a nested multinomial logitmodel (NMNL), which distinguishes the threedimensions of choice that characterise away-breaks; duration of stay, choice of recreational siteand choice of accommodation type. Four costsare important in determining choice for suchtrips; the cost of travel to the recreational site, thecost of accommodation at the site, the cost oftime whilst travelling and the cost of time whilston-site. Previous applications have frequentlyassumed that travel time can be valued at someexogenously determined proportion of the wagerate, whilst at the same time ignoring the value oftime spent on site. The specification of theindirect utility function in the model presentedhere, allows for the value of time to be inferredfrom the data by estimating the proportion of thewage rate that most appropriately values a unit oftime spent in different activities. The model isapplied to a unique dataset that records details oftrips made by domestic households to the gamereserves of the KwaZulu-Natal province of SouthAfrica. These trips are typical of away-breaks,since visitors tend to travel fairly large distancesto visit the reserves and typically stay one or morenights on site. Each of the game reserves affordsvisitors different wildlife-viewing opportunitiesand provides a variety of accommodation facilitiesthat vary greatly in their quality and price.Geographical information system (GIS)techniques have been used to establish exact doorto gate distances and provide accurate estimatesof travel costs and travel times that take accountof assumed road speeds. GIS techniques havealso been employed to garner socio-economicdata on the households in the dataset. Onefurther novel feature of the data is the use ofcomplex computer algorithms to accuratelyestablish the choice sets faced by individualhouseholds. The three-level NMNL model isestimated using full information maximumlikelihood (FIML). The results of the analysissupport the work of De Serpa (1971) in that theysuggest that recreationists have a positivewillingness to pay to save time in travelling to areserve, but as would be expected, are not willingto pay anything to save time spent on site. Themodel is used to calculate welfare estimates forcontinued access to the different game reserves.Average per-trip estimates of the consumersurplus enjoyed by domestic visitors range fromaround $15 for one reserve, up to almost $50 foranother. Boot-strapping techniques have been



employed to calculate standard errors for thesebenefit estimates. The model can also be used topredict the change in revenues that might berealised following increases in entrance and/oraccommodation charges. The model allows forthe possibility that households will substitutebetween options following price changes, andhence, could provide valuable information togame reserve managers deciding upon pricingpolicies.

Coverage: Africa

Contains examples or case studies from: SouthAfrica


Topics: Valuation, Contingent valuation, Marketsand charges

#81. de Alessi, M., (1996), Oysters in theWillapa Bay. Paper presented at a workshop onIncentives for Biodiversity: Sharing Experiences,4th Global Biodiversity Forum, Montreal,Canada 30 August - 1 September 1996. 3 pp.http://www.biodiversityeconomics.org

This paper outlines the importance of the privateownership of tidelands to the conservation of thecoastal waters. A long tradition of ownership oftidal waters by oyster-men who farmed thesewaters has created a strong impetus for privatestewardship and resource enhancement which isnow threatened by a desire to regulate theresource by the Washington State Government.This paper argues for continued localmanagement of coastal resources.




Topics: Incentive measures, Private sector

#82. des Clers, B., (1998), FinancialInnovations for Biodiversity: FinancingEmergency Actions for BiodiversityConservation. Paper presented at a workshopon Financial Innovations for Biodiversity, 10thGlobal Biodiversity Forum, Bratislava, Slovakia,

1-3 May 1998. 10.http://www.biodiversityeconomics.org

The authors wish to highlight the roots of theproblems which lead to loss of biodiversity onthis planet and suggest some financialmechanisms to provide the very large recurrentincome necessary to stop present trends inbiodiversity loss. The preservation of tens ofmillions of hectares requires recurrent financialresources of tens of billions of dollars each year inorder to secure the integrity of those ecosystemsby compensating governments and localstakeholders for the loss of income andopportunities for alternative development whichthis preservation requires. Furthermore, theinventories of the planet's biological diversity willtake time, possibly 50 or 100 years or more, andtherefore the expenditures for preservation duringsuch extended periods must be made on anongoing, recurrent basis, during which resourcescould be submitted to "soft" use, monitoring,research and adaptive management. Variousemergency actions are needed. Cultural and socialvalues as well as economical systems tend, inmany cases, to favour individual gains rather thancollective benefits (prisoner's dilemma). In suchcases, regulations, taxes, incentives or artificialmarket mechanisms are the best way to preventthe collective goods subject to degradationcoming from destructive activities servingindividual interests. There are certainly manydifferent ways to finance emergency actions forbiodiversity, some of which are more equitablethan others. Here again, our proposal does notpretend to be the best or only one. It is rather tofind an efficient mechanism, readily operational,which will enable countries to both take nationalmeasures and to do so participating in aninternational effort. A significant excise tax (10%or more) should be levied by each country onnatural products (flora and fauna), to raise themulti billion dollars per year required. Mostnatural products traded internationally should beable to bear the weight of an additional tax atsuch a level. The income from such a tax toremain in the country of origin and be earmarkedfor national programs of biodiversityconservation. An international body such as GEFor other donor agencies, might additionallysupport those countries which exports of naturalgoods are much lower than their conservationneeds.

Coverage: Global



Topics: Financial mechanisms, Economicinstruments

#83. Dixon, J. A., Carpenter, R. A., Fallon, L.A., Sherman, P. B., & Manipomoke, S., (1986),Economic Analysis of the EnvironmentalImpacts of Development Projects. EarthscanPublications Ltd: London. 134 pp. ISBN 1-85383-015-1

It has always been thought that some degree ofpollution and waste is unavoidable indevelopment projects. But no one has mademuch effort to quantify and assess the extent ofthis sort of damage. In this book a means ofconstructing useful economic evaluations of theimpacts of development projects on theenvironment is proposed. It demands thesystematic evaluation of all intentional andunintentional consequences of developmentinitiatives before they are determined upon.Various case studies from Asia are provided toillustrate valuation methods and environmentalimpacts of development projects.


Contains examples or case studies from: Nepal,Philippines, Thailand, Indonesia

Ecosystem or sector focus: Agriculture,Infrastructure, Fisheries, Industry

Topics: Valuation, Economic instruments,Economic policies, Soil erosion, Landdegradation, Pollution

#84. Dixon, J., & Hufschmidt, M. M. (Eds.),(1990), Economic Valuation Techniques forthe Environment: A Case Study Workbook.John Hopkins University Press: Baltimore andLondon. 203 pp. ISBN 0-8018-3308-6

Environmental impact is one of the mostsignificant considerations in the evaluation ofeconomic development projects, but it is also anextremely difficult factor to measure. This bookpresents detailed case studies of the economicevaluation of the environmental impacts ofdevelopment projects, from various parts of Asia.Three introductory chapters examine generalaspects of environmental valuation techniques,including the identification, quantification and

analysis of environmental effects. A hypotheticalcase study illustrates important differencesbetween financial and economic evaluations, andbetween market and shadow prices.

Coverage: Global, Asia

Contains examples or case studies from: Korea,Philippines, Japan, Thailand, China

Ecosystem or sector focus: Agriculture,Fisheries, Infrastructure, Marine and coastal,Urban settlements, Protected Areas, Forests,Wildlife, Water

Topics: Valuation, Economic policies, Economicinstruments, Pollution, Markets and charges

#85. Dixon, J. A., & Sherman, P. B., (1990),Economics of Protected Areas: A New Lookat Benefits and Costs. Earthscan PublicationsLtd: London. 234 pp. ISBN 1-85383-097-6

The true economic value of protected areas,including national parks, scientific reserves,wildlife sanctuaries, natural monuments andlandmarks, is often difficult to measure. They maybe the repository of unique or very valuablenatural assets, yet the short-term gains fromexploiting their natural resources can often appearmore attractive than the long-term benefits ofconservation. This book helps government andnon-governmental agencies to assess the costsand benefits associated with maintainingprotected areas. It also provides methodologiesfor valuing these benefits and costs in monetaryterms. Case studies are presented of the valuationof protected areas from Asia, Africa, LatinAmerica and the Caribbean.

Coverage: Global, Africa, Asia, Latin America,Caribbean

Contains examples or case studies from:Thailand, British Virgin Islands, Australia,Cameroon, Netherlands Antilles, St Vincent,Kenya, Indonesia

Ecosystem or sector focus: Protected Areas,Wildlife, Forests, Water, Tourism

Topics: Valuation, Economic instruments,Economic policies, Incentive measures, Causes ofbiodiversity loss

#86. Dyer, G., & Belausteguigoitia, J. C.,(1996), Structural Adjustment, Market and



Policy Failures: The Case of Maize. Paperpresented at IUCN Workshop on Economics ofBiodiversity Loss, April 1996, Gland,Switzerland. 14 pp.http://www.biodiversityeconomics.org

This paper analyses the effects of structuraladjustment policies in agriculture on cropdiversity. The specific case of maize in Mexico isstudied. The Mexican government has introducedhigh yielding varieties (HYVs) of maize into theagricultural sector in an attempt to increaseproductivity. In terms of biodiversity impact, theresult has been a shift from traditional varieties ofmaize to HYVs and consequently a loss of maizediversity. The main problem is that the benefitsfrom crop diversity are not internalised in themarket system and they are therefore not takeninto account by national policy-makers. Thesuggestion made in the paper is that policy-making must take place more at the local leveland be conducted in consultation with localpeasants. Structural adjustment policies inagriculture too often fail to consider effects at themicro-economic level. One of these effects canbe, as in the case of maize in Mexico, biodiversityloss.




Topics: Causes of biodiversity loss, Incentivemeasures, Economic policies, Taxes, Subsidies

#87. Earthwatch Institute, (1999), Businessand Biodiversity. Earthwatch Institute(Europe):Oxford. 19 pp. ISBN 0-9538179-2-X

This booklet provides a framework for involvingthe private sector in biodiversity conservation. Ithas been produced as a guide for all businesseswho wish to support the UK's NationalBiodiversity Strategy and Action Plan.

Coverage: Europe

Contains examples or case studies from: UK


Topics: Private sector, Economic instruments,Financial mechanisms

#88. Earthwatch Institute, (2000), CaseStudies in Business and Biodiversity.Earthwatch Institute(Europe): Oxford. 31 pp.ISBN 0-9538179-2-X

This booklet has been produced to encouragebusinesses to support the UK NationalBiodiversity Strategy and Action Plan. It providesexamples of best practice in biodiversityengagement, and uses case studies of a waterutility, leisure industry, airport, oil company andfinancial institution.

Coverage: Europe



Topics: Private sector, Economic instruments,Financial mechanisms

#89. Eaton, D., & Sarch, M.-T., (1997), TheEconomic Importance of Wild Resources inthe Hadejia-Nguru Wetlands, Nigeria. CREEDWorking Paper No 13, International Institute forEnvironment and Development: London. 41 pp.The Hadejia-Nguru wetlands play a major role inthe regional economy of northern Nigeria. Thispaper goes beyond attempts have been made tovalue the production of most of the major sub-systems in the floodplain, and looks at theeconomic value of wild resources. The aim of thisstudy was to provide new information fordevelopment planning in the region by increasingthe understanding of local economic activities. Avariety of values including financial and economicvalues, and returns to labour, are presented.

Coverage: Africa

Contains examples or case studies from:Nicaragua

Ecosystem or sector focus: Wetlands

Topics: Valuation

#90. Eltringham, K. (1994). 'Can wildlife pay itsway?', Oryx 28 (3):163-168

This article describes several ways that wildlifecan be used economically, indicating both theiradvantages and drawbacks. It concludes that anumber of schemes are profitable and that they



can thus be used to support the conservation ofwildlife. However, the article also points out thatthere will always be wildlife that cannot be madeto pay but should still be conserved. In thesecases it must be accepted that the costs ofconservation needs to be covered, but not bythose who are unable to pay.

Coverage: Africa

Ecosystem or sector focus: Wildlife, ProtectedAreas, Drylands

Topics: Valuation, Financial mechanisms, Privatesector

#91. Emerton, L. A., (1998a), Economic Toolsfor Valuing Wetlands in Eastern Africa.Biodiversity and Economics Programme, IUCN -The World Conservation Union Eastern AfricaRegional Office: Nairobi. 15 pp.

This manual provides a set of methods forvaluing the economic benefits of wetlands. Theapplication of these methods is illustrated withcase studies from the Eastern Africa region.

Coverage: Africa

Contains examples or case studies from: Zambia,Uganda, Kenya, Seychelles


Topics: Valuation, Contingent valuation, Travelcost, Market valuation, Effect on production,Replacement costs, Mitigative and avertiveexpenditures

#92. Emerton, L. A., (1998b), UsingEconomics for Biodiversity Strategies andAction Plans in Eastern Africa. Biodiversityand Economics Programme, IUCN - The WorldConservation Union, Eastern Africa RegionalOffice: Nairobi. 44 pp.

This manual provides a framework andmethodology for integrating economic concernsinto NBSAPs, including economic policy analysis,valuation, cost and benefit distribution, incentivemeasures and financing mechanisms. Theapplication of these methods is illustrated withcase studies from the Eastern Africa region.

Coverage: Africa

Contains examples or case studies from:Seychelles, Uganda, Eritrea, Djibouti, Sudan,Kenya, Tanzania

Ecosystem or sector focus: Marine and coastal,Protected Areas, Water, Wetlands, Wildlife,Forests, Agriculture

Topics: National Biodiversity Strategies andAction Plans, Valuation, Incentive measures,Economic planning, Economic policies,Convention on Biological Diversity, InternationalConventions, Economic instruments, Financialmechanisms

#93. Emerton, L. A., (1999a), Balancing theOpportunity Costs of Wildlife Conservationfor Communities Living Around Lake MburoNational Park, Uganda. International Institutefor Environment and Development: London. 27pp. ISBN 15618382

This study values the economic benefits and costsof Lake Mburo National Park for the park'smanaging authorities and for local communities.It finds that the opportunity costs incurred by thepark effectively outweigh local benefits generated,and that revenues are inadequate to cover thepark's management costs. It is concluded, toaddress these problems, that there must be anincreasing emphasis placed on more innovativefinancing mechanisms to cover these gapsbetween costs and benefits.

Coverage: Africa

Contains examples or case studies from: Uganda

Ecosystem or sector focus: Wildlife, Wetlands,Protected Areas

Topics: Valuation, Causes of biodiversity loss,Incentive measures, Disincentives, Economicinstruments, Financial mechanisms

#94. Emerton, L. A., (1999b), Buildingeconomics into National BiodiversityStrategies and Action Plans. Paper presentedat workshop on Building Biodiversity intoSectoral Strategies and Action Plans, 14thGlobal Biodiversity Forum, 18-20 June 1999,Montreal. 11 pp.http://www.biodiversityeconomics.org



This paper looks at lessons learned and bestpractices in the use of economics for BiodiversityStrategies and Action Plans. It is illustrated withexamples from Eastern Africa.

Coverage: GlobalAfrica

Contains examples or case studies from:Djibouti, Eritrea, Seychelles

Uganda

Topics: Economic instruments, Incentivemeasures, Causes of biodiversity loss, Valuation,Financial mechanisms

#95. Emerton, L. A., (1999c), CommunityEconomic Incentives for NatureConservation. IUCN - The World ConservationUnion: 41 pp.

This manual provides a framework foridentifying, using and applying economicincentives measures to community basedconservation. It also includes a list of relevantliterature and a series of detailed case studies ofthe use of economic incentive measures forcommunity nature conservation.

Contains examples or case studies from: Kenya,Tanzania, Uganda

Ecosystem or sector focus: Forests, Wetlands,Water, Wildlife, Protected Areas

Topics: Community-based management,Economic instruments, Incentive measures,Financial mechanisms, Causes of biodiversity loss,Economic planning

#96. Emerton, L. A., (1999d), EconomicsTools for Environmental Planning andManagement in Eastern Africa. Biodiversityand Economics Programme, IUCN - The WorldConservation Union, Eastern Africa RegionalOffice: Nairobi. 43 pp.

This manual provides a framework andmethodology for integrating economic concernsinto environmental planning and management,including economic policy analysis, valuation, costand benefit distribution, incentive measures andfinancing mechanisms. The application of thesemethods is illustrated with case studies from theEastern Africa region.

Coverage: Africa

Contains examples or case studies from:Djibouti, Eritrea, Kenya, Seychelles, Sudan,Tanzania, Uganda, Zambia

Ecosystem or sector focus: Marine and coastal,Water, Wetlands, Fisheries, Forests, Wildlife,Agriculture, Protected Areas

Topics: Valuation, Incentive measures, Economicpolicies, Economic instruments, Financialmechanisms, Causes of biodiversity loss

#97. Emerton, L. A., (1999e), EconomicsTools for the Management of MarineProtected Areas in Eastern Africa. Biodiversityand Economics Programme, IUCN - The WorldConservation Union, Eastern Africa RegionalOffice: Nairobi. 24 pp.This manual provides a framework andmethodology for using economic tools for themanagement of marine protected areas. Theapplication of these methods is illustrated withcase studies from the Eastern Africa region.

Coverage: Africa

Contains examples or case studies from:Djibouti, Eritrea, Kenya, Seychelles, Sudan,Tanzania, Uganda

Ecosystem or sector focus: Marine and coastal,Wetlands, Forests, Agriculture, Protected Areas

Topics: Valuation, Incentive measures, Economicpolicies, Economic instruments, Financialmechanisms, Causes of biodiversity loss

#98. Emerton, L. A., & Mfunda, I., (1999),Making Wildlife Economically Viable forCommunities Living Around the WesternSerengeti, Tanzania. International Institute forEnvironment and Development: London. 31 pp.ISBN 15618382

This study analyses the economic costs andbenefits of wildlife for local landholders, andexplains why the high opportunity costs ofwildlife, coupled with low economic benefitsfrom the Serengeti National Park, have failed topresent local economic incentives forconservation. It documents a number ofinnovations that have recently taken place inbusiness partnerships between local villages and



the private sector, and argues that thesearrangements may have the potential to redresscurrent imbalances in wildlife economic costs andbenefits.

Coverage: Africa

Contains examples or case studies from:Tanzania

Ecosystem or sector focus: Wildlife, Agriculture,Protected Areas


#99. Emerton, L. A., (1999f), Mount Kenya:the Economics of Community Conservation.International Institute for Environment andDevelopment: London. 20 pp. ISBN 15618382This study illustrates how traditionally exclusionistapproaches to forest conservation can lead to asituation where local communities areeconomically marginalised. Simultaneously arange of policy and market failures discriminateagainst sustainable forest management as aneconomically viable land use option in MountKenya. The paper proposes a number ofeconomic and financial mechanisms which maybetter capture the forest's economic benefits andprovide economic incentives for forestconservation.

Coverage: Africa


Ecosystem or sector focus: Forests, Watersheds,Wildlife, Protected Areas


#100. Emerton, L. A., (1999g), The Nature ofBenefits and the Benefits of Nature: WhyWildlife Conservation Has Not EconomicallyBenefited Communities in Africa. CommunityConservation Research in Africa: Principles andComparative Practice, Paper No 9, Institute forDevelopment Policy and Management,University of Manchester: Manchester. 20 pp.ISBN 1 900728931

Community-oriented approaches to wildlifeconservation usually have a strong economicrationale. They are typically based on the premisethat if local people participate in wildlifemanagement and economically benefit from thisparticipation, then a "win-win" situation will arisewhereby wildlife is conserved at the same time ascommunity welfare improves. This paperdescribes how the economic rationale behindsuch benefit-based approaches to communityconservation - that communities must benefitfrom wildlife if they are to be willing and able toconserve it - is sound. It constitutes a majoradvance from traditional exclusionist approachesto wildlife conservation which were largely basedon denying community access and gain fromwildlife, and has undoubtedly resulted in the moreequitable distribution of wildlife benefits. Thepaper however argues that such benefit-basedmodels are based on an incomplete understandingof the economics of community conservation andof the nature of wildlife benefits. Over the longterm they may lead neither to community welfareimprovement nor contribute to wildlifeconservation. Benefit distribution is a necessary,but in itself may not be a sufficient, condition forcommunities to engage in wildlife conservation.Whether or not communities have economicincentives to conserve wildlife, and whether ornot they are economically better off in thepresence of wildlife, goes far beyond ensuringthat a proportion of wildlife revenues are returnedto them as broad development or socialinfrastructure benefits. It also depends on theeconomic costs that wildlife incurs, on the formin which wildlife benefits are received, on thecosts and benefits of other economic activitieswhich compete with wildlife and on a range ofexternal factors which all limit the extent to whichcommunities are able to appropriate wildlifebenefits as real livelihood gains. Communityincentives to conserve wildlife, and the conditionsthey depend on, vary at different times fordifferent people. Additional economicconsiderations need to be incorporated intocommunity approaches to wildlife conservation,and form a part of whether such approaches canbe judged to have been successful in developmentand conservation terms.

Coverage: Africa

Contains examples or case studies from: Kenya,Tanzania, Uganda, South Africa, Zimbabwe,Zambia, Namibia

Ecosystem or sector focus: Wildlife, Forests,Protected Areas



Topics: Causes of biodiversity loss, Economicinstruments, Economic policies, Incentivemeasures, Valuation

#101. Emerton, L. A., (2000a), Economicsand the Convention on Biological Diversity.IUCN - The World Conservation Union: Nairobi.5 pp.This short paper outlines the links betweeneconomics and the CBD, focusing on economicvaluation, incentive measures, assessment andfinancing mechanisms. It provides a frameworkfor integrating economic concerns intobiodiversity planning.

Coverage: Global

Topics: Valuation, Convention on BiologicalDiversity, Economic instruments, Economicpolicies, Financial mechanisms, Incentivemeasures, Disincentives, Causes of biodiversityloss, National Biodiversity Strategies and ActionPlans

#102. Emerton, L. A., & Ferrin, R., (2000c),Usando la Economía para las Estrategias deBiodiversidad y Planes de Acción enAmérica Latina. IUCN - The WorldConservation Union, South America RegionalOffice: Quito. 55 pp.

This manual provides a framework andmethodology for integrating economic concernsinto NBSAPs, including economic policy analysis,valuation, cost and benefit distribution, incentivemeasures and financing mechanisms. Theapplication of these methods is illustrated withcase studies from the Latin America region.


Contains examples or case studies from:Honduras, Bolivia, Brazil, Mexico, Peru, ElSalvador, Venezuela, Costa Rica, Nicaragua,Ecuador, Netherlands Antilles, Chile, Colombia,Guatemala, Jamaica, Paraguay, Panama

Ecosystem or sector focus: Marine and coastal,Protected Areas, Water, Fisheries, Wetlands,Wildlife, Forests, Agriculture

Topics: National Biodiversity Strategies andAction Plans, Valuation, Incentive measures,Economic instruments, Economic policies,Financial mechanisms, Causes of biodiversity loss,

International Conventions, Convention onBiological Diversity

Other: Spanish language publication

#103. Emerton, L. A., (2000b), UsingEconomic Incentives for Biodiversity. IUCN -The World Conservation Union: Nairobi. 26 pp.

This document looks at the role of economicincentive measures in the CBD. It provides anoverview of different types of incentive measuresfor biodiversity, illustrating each with case studiesfrom around the world.

Coverage: Global

Contains examples or case studies from: SouthAfrica, St Lucia, Nepal, Kenya, New Zealand,Cyprus, USA, Eritrea, Brazil, Canada, DR Congo,Seychelles, Malawi, Philippines, Tanzania,Uganda, Zambia, Ghana, Madagascar, Nigeria,Jamaica, Zimbabwe

Ecosystem or sector focus: Forests, ProtectedAreas, Agriculture, Wildlife, Marine and coastal,Drylands, Savannahs, Fisheries

Topics: Valuation, Incentive measures,Convention on Biological Diversity, Causes ofbiodiversity loss, Economic instruments,Economic policies, Financial mechanisms,Economic instruments, Disincentives, Propertyrights, Private sector, Markets and charges, Taxes,Subsidies, Bonds and deposits

#104. Englin, J., & Mendelsohn, R. (1991). 'Ahedonic travel cost analysis for valuation ofmultiple components of cite quality: therecreation value of forest management', Journalof Environmental Economics andManagement 21:275-290

One benefit of managing forests is that one canalter the qualities of sites. The value of changingsite qualities, however, is generally not known.This paper develops a formal hedonic travel costmodel which can be used to estimate the value ofboth marginal and non-marginal changes to sites.This approach accommodates multiplesimultaneous changes in site characteristics.Estimating this model using a set of permits fromwilderness areas leads to revealed preferenceestimates of the recreational value of clear-cuts,old-growth, and nine other wilderness attributes.







#105. Erickson, J. D. (2000). 'Endangering theeconomics of extinction', Wildlife SocietyBulletin 28 (1):34-41

Species and ecosystems have been assigned dollarvalues through methods developed byeconomists. Their value is then measured infinancial terms and becomes comparable to anygood or service traded in markets. Thisassignment of economic value to biodiversity andspecies will not guarantee their protection. In fact,pricing these nonmarket values allows for theirdirect comparison with market goods on acommon metric, allowing for the possibility ofoptimal economic extinction of a species. Incontrast to a market model of choice, I propose adecision framework that incorporates complexity,uncertainty, and limits to substitution betweenbiodiversity and monetized goods and allows forcritical valuation decisions outside the marketmodel..




Topics: Valuation

#106. European Environment Agency, (1996),Environmental Taxes: Implementation andEnvironmental Effectiveness. EuropeanEnvironment Agency, Environmental IssuesSeries No 1.: Copenhagen. 62. ISBN 92-9167-000-6

This report intends to feed policy debates withthe best available information. This report focuseson the environmental effectiveness of green taxesand on political barriers and solutions to theirimplementation. It also tries to emphasise thevalue of non-energy taxes and to be accessible tonon-experts. One of the key advantages ofenvironmental taxes is that they correct false pricesignals in the market place by incorporating thecosts of pollution and other environmental costsinto prices - a process both of "getting the prices

right" and implementing the "polluter pays"principle. Over recent years there has been anincrease in the use of environmental taxes, butthere is still considerable scope for their wideruse. This report looks at the rationale for usingenvironmental taxes, the different types available,who is using them, whether they work, andbarriers and solutions to their implementation.

Coverage: Europe


Topics: Economic instruments, Economicpolicies, Incentive measures, Taxes, Subsidies,Pollution

#107. Fankhauser, S., (1993), GlobalWarming Economics: Issues and State of theArt. Working Paper GEC 93-28, Centre forSocial and Economic Research on the GlobalEnvironment: London.The paper presents an overview on the currentstate of the art of global warming economics. Itdeals with carbon abatement modelling as well aswith the question of greenhouse damageestimation. On the question of the optimal policyresponse it advocates a cost-benefit approach, butalso acknowledges the potential shortcomings ofthis method in particular with respect to itstreatment of the uncertainty issue. The paper alsocalls for a more comprehensive approach whichincorporates all greenhouse gases as well as other,connected externalities, e.g. from air pollution andthe distortions from governmental revenueraising.

Coverage: Global

Ecosystem or sector focus: Forests, Industry

Topics: Climate change, Carbon offsets

#108. Fankhauser, S., & Tol, R., (1995),Recent Advancements in the EconomicAssessment of Climate Change Costs.Working Paper GEC 95-31, Centre for Socialand Economic Research on the GlobalEnvironment: London.

Climate change is unique among theconsequences of fossil fuel burning in its far-reaching impact, both spatially and temporally.Earlier studies estimate the aggregated monetised



damage due to climate change at 1.5 to 2.0percent of World GNP; the OECD would lose1.0 to 1.5 percent of GDP; the developingcountries 2.0 to 9.0 percent, according to theseestimates. These figures are not comprehensiveand highly uncertain. More recent studiesincreasingly emphasise adaptation, variability,extreme events, other (non-climate change) stressfactors, and the need for integrated assessment ofdamages. As a result, differences in estimatedimpacts between regions and sectors haveincreased, the market impacts in developedcountries tended to fall, and non-market impactshave become increasingly important. Marginaldamages are more interesting from a policy pointof view. Earlier estimates range from about $5 to$125 per tonne of carbon, with most estimates atthe lower end of this range. These figures arebased on polynomial functions in the level ofclimate change, but the rate of change may beequally important, as are the speed of adaptation,restoration and value adjustment. Furthermore,future vulnerability to climate change will bedifferent from current vulnerability. On thewhole, the market impacts fall (relatively) witheconomic growth while the non-market impactsrise (relatively) with growth.

Coverage: Global

Topics: Climate change, Carbon offsets

#109. Feather, P., Hellerstein, D., & Hansen,L., (1999), Economic Valuation ofEnvironmental Benefits and the Targeting ofConservation Programs: The Case of theCRP. Resource Economics Division, EconomicResearch Service, U.S. Department ofAgriculture. Agricultural Economic Report No.778: Washington DC.

The range of environmental problemsconfronting agriculture has expanded in recentyears. As the largest program designed to mitigatethe negative environmental effects of agriculture,the Conservation Reserve Program (CRP) hasbroadened its initial focus on reductions in soilerosion to consider other landscape factors thatmay also be beneficial. For example, preservinghabitats can help protect wildlife, thus leading tomore nature-viewing opportunities. This reportdemonstrates how non-market valuation modelscan be used in targeting conservation programssuch as the CRP.



Ecosystem or sector focus: Protected Areas,Wildlife, Forests, Agriculture

Topics: Valuation

#110. Ferraro, P. J., & Simpson, D. R., (2000),The Cost-Effectiveness of ConservationPayments. Discussion Paper 00-31, Resourcesfor the Future: Washington DC. 29 pp.

Intact ecosystems provide important globalservices. Many valuable ecosystems are located inlow-income countries in which citizens are not ina position to provide global public goods gratis.To address this problem, internationalconservation and development donors have beenmaking substantial investments in habitatconservation. Among the more commonconservation schemes are interventions aimed atencouraging commercial activities that produceecosystem services as joint products. We arguethat it would be more cost-effective to pay forconservation performance directly. We use asimple yet general model to establish threeconclusions. First, the overall cost ofconservation is least when direct payments areemployed. Second, the donor will generally finddirect payments more cost-effective. Third, thepreferences of donors and eco-entrepreneurs areopposed: when the donor prefers directpayments, the eco-entrepreneur prefers indirectsubsidies. There are a number of reasons whydirect incentive programs may be difficult toimplement. We argue, however, that any approachto conservation will face similar challenges.Furthermore, we demonstrate with an empiricalexample that direct payment initiatives can offerspectacular cost-savings relative to less directapproaches. We therefore believe that continuedexperimentation with direct conservationincentives in the developing world is warrantedand will prove successful.

Coverage: Global

Topics: Incentive measures, Financialmechanisms

#111. Fischer, C., & Toman, M., (2000),Environmentally and EconomicallyDamaging Subsidies: Concepts and



Illustrations. Climate Change Issues Brief No.14, Resources for the Future: Washington DC.17 pp.

A common adage in environmental policydiscussions is that there are substantialopportunities for improving the environment andthe economy through elimination of varioussubsidies that distort the decisions made byproducers and consumers. Energy subsidyreduction has become an important componentof the debate over the economic burden ofgreenhouse gas (GHG) emissions and the policiesthat should be pursued toreduce these emissions. If there are substantialsubsidies that excessively encourage the use offossil energy, then reduction of these subsidieswould generate GHG savings at a negative cost –society as a whole would benefit in terms ofimproved allocation of scarce resources and intermsof reduced local environmental burdens. If thereis one thing on which economists agree, it is onthe elimination of subsidies that reduce economicefficiency. However, economists view bothsubsidies and economic efficiency from aperspective that is a little different from thecommon usage of these terms. For example, thefailure to address environmental spillovers inenergy pricing is a source of inefficiency from aneconomic perspective; yet it does not necessarilyfollow that elimination of this implicit subsidywould increase economic performance asconventionally defined. In other words,elimination of economically inefficient subsidiesmay still involve tradeoffs between environmentalvalues (including climate change mitigation) andconventional goods in many cases. Identifyingsubsidies that harm both the environment and theeconomy also gives rise to several trickymethodological questions. These issues areaddressed in this paper. It first discusses thedefinition of subsidy in somewhat more detail. Itthen discusses some challenges that arise inmeasuring environmentally and economicallydamaging subsidies. The paper provides severalillustrations of energy-related subsidies that seemclearly to be economically inefficient, but notesthat in several cases the environmental benefitsand GHG implications of their removal areunclear at best. It also discusses subsidiesintended to promote environmentally desirableoutcomes.

Coverage: Global

Ecosystem or sector focus: Industry

Topics: Subsidies, Taxes, Economic instruments,Economic policies, Climate change, Pollution

#112. Foley, M.-E., Moussa, J., & Verolme, H.J. H. (Eds.), (1999), Addressing theUnderlying Causes of Deforestation andForest Degradation - Case Studies, Analysisand Policy Recommendations. BiodiversityAction Network: Washington DC. 141. 0-9669599-0-6This reports on a global workshop looking at theunderlying causes of forest degradation. Itidentifies the actions that are required to haltforest loss, and presents a number of regional andcountry case studies from Africa, Asia, CIS,Europe, Latin America, North America andOceania.

Coverage: Global, Africa, Asia, Commonwealthof Independent States, Europe, Latin America,North America, Pacific, Australia and NewZealand


Topics: Deforestation, Economic policies, Causesof biodiversity loss, Incentive measures,Disincentives

#113. Freese, C. H., & Trauger, D. L. (2000).'Wildlife markets and biodiversity conservation inNorth America', Wildlife Society Bulletin 28(1):42-51

Commercial markets for wildlife and othercomponents of biodiversity are large, growing,and diversifying in North America. These marketsare a double-edged sword for biodiversityconservation: If well managed, they can be a toolto conserve biodiversity; if poorly managed, theycan lead to biodiversity loss. This paper reviewsrecent trends in some consumptive-use andnonconsumptive-use markets for wildlife and,more broadly, for biodiversity and theirimplications for biodiversity conservation inNorth America.




Topics: Valuation, Private sector, Markets andcharges



#114. Fullerton, D., & Stavins, R. N., (1998),How Do Economists Really Think About theEnvironment? Discussion Paper 98-29,Resources for the Future: Washington DC. 10pp.

On a topic like the environment, communicationamong scholars from different disciplines in thenatural and social sciences is both important anddifficult, but such communication has been farfrom perfect. Economists themselves may havecontributed to some rather fundamentalmisunderstandings about how economists thinkabout the environment, perhaps through ourenthusiasm for market solutions, perhaps byneglecting to make explicit all of the necessaryqualifications, and perhaps simply by the use ofjargon that has specific meaning only to othereconomists. In this brief essay, we seek to clarifysome of these misunderstandings and thus toimprove future interdisciplinary communication.We hope that natural scientists and other non-economists will take economic analysis andprescriptions more seriously when they seetempered enthusiasm, explicit qualifications, andbetter definitions. Our method is to posit a seriesof prevalent myths regarding how economiststhink about the natural environment. We thenexplain how each myth might have originatedfrom statements by economists that were meantto summarize a more qualified analysis. In thisway, we hope to explain how economists really dothink about the natural environment.

Coverage: Global

Topics: Economic instruments, Causes ofbiodiversity loss, Economic policies

#115. Furst, E., (1996), Environmental andNatural Resource Valuation Methodologies inLatin America and the Caribbean: AnAssessment of Five Case Studies. CentroInternacional en Politica Economica Para ElDesarollo Sostenible, Universidad Nacional deCosta Rica: San Jose. 12 pp.

This paper contains a summary of the analysis offive case studies that were chosen from apreselection of about 25 pieces of work on theeconomic valuation of natural resources andenvironmental quality in Latin America and the

Caribbean. These include valuations of airpollution in Chile, Coral reef degradation in theNetherlands Antilles, rural water supply in Haiti,rainforest conservation in Mexico and mangrovedeforestation in Nicaragua. Conclusions drawninclude that although these studies presentimportant policy recommendations, it isquestionable how much this information willactually be used and applied by policy makers anddecision makers. It is also apparent that there arelarge differences in access to research resourcesand information, and that the accuracy andreliability of results are also highly variable.Differences also exist in the way that authors dealwith different economic and environmentalissues, and the importance they accord to them.

Coverage: Global, Latin America, Caribbean

Contains examples or case studies from: Mexico,Nicaragua, Haiti, Netherlands Antilles, Chile

Ecosystem or sector focus: Marine and coastal,Forests, Water, Protected Areas, Urbansettlements, Infrastructure, Industry

Topics: Valuation, Pollution

#116. Gammage, S., (1997), Estimating theReturns to Mangrove Conversion:Sustainable Management or Short TermGain? Environmental Economics ProgrammeDiscussion Paper 97-02, International Institutefor Environment and Development: London. 81pp.

This study was carried out to make an economiccomparison of different management options formangroves in Gulf of Fonseca, El Salvador. Itinvolved the valuation of a range of differentmangrove products, using a range of differentmethods. Timber and fuelwood were valued usingactual market prices, input costs and volumesharvested. These values were cross-checked withvalues generated using surrogate prices for timberand fuelwood of the next most likely availablesubstitute. Thus fuelwood was also valued usingthe price of propane gas as a substitute, and othertypes of imported timber. In order to assess thevalue of resource use associated with differentmanagement scenarios, estimates were made ofthe effects of mangrove conservation anddegradation on the yields and values of products.




Contains examples or case studies from: ElSalvador

Ecosystem or sector focus: Marine and coastal,Fisheries, ForestsTopics: Valuation, Market valuation

#117. Gilbert, A., & Janssen, R., (1997), TheUse of Environmental Functions to EvaluateManagement Strategies for the PagbilaoMangrove Forest. CREED Working PaperSeries No 15, International Institute forEnvironment and Development: London.

Mangroves are part of rich ecosystems providinga variety of environmental goods and services.Underestimation of their value and of the impactsof human activities is a major factor contributingto the widespread loss and degradation ofecosystems. Economists frequently receive theblame for such environmental ills, but it may alsobe argued that ecologists inadequatelycommunicate their knowledge to decision makersand therefore have limited influence. This articlelinks information supplied by ecologists to theinformation required for effective and efficientmangrove management. A key problem faced byecologists is the high degree ofinterconnectedness within and betweenecosystems. This makes it difficult to predict whatis going to happen let alone understand what isgoing on. The concept of 'environmentalfunction' is used in combination with systemsdiagrams to address this problem. Systemdiagrams are used to identify and assess goodsand services produced by the ecosystem underdifferent management regimes. These goods andservices are then valued to facilitate an assessmentof the economic efficiency of the managementregimes.

Coverage: Asia

Contains examples or case studies from:Philippines

Ecosystem or sector focus: Forests, Marine andcoastal, Fisheries

Topics: Valuation

#118. Godoy, R., Lubowski, R., & Markandya,A. (1993). 'A method for the economic valuationof non-timber tropical forest products',Economic Botany 47 (3):220-233

By drawing on quantitative studies in socialanthropology, zoology, ethnobotany andeconomics, this article presents a method forconducting a valuation of non-timber forestproducts. A review of 24 studies, conducted invarious countries, suggests that the median valuefor non-timber forest products is aboutUS$50/ha/year. The article discusses problemswith past studies and suggests ways to get betterestimates of output quantities, marginal costs andprices.

Coverage: Global


Topics: Valuation, Market valuation, Contingentvaluation

#119. Gowdy, J. M. (2000). 'Terms andconcepts in ecological economics', WildlifeSociety Bulletin 28 (1):26-33

The meaning of sustainability is the subject ofintense debate among economists. The dominantschool of economics in the United States,neoclassical economics, equates human welfarewith the level of consumption of market goodsand sees the natural world merely as an input intothe economic process. To neoclassicaleconomists, sustainability means sustainingeconomic output. Ecological economists take abroader view of sustainability by recognizing thatessential features of the earth's life-supportingsystems also must be sustained. The sustainabilitydebate currently focuses on the ability of theeconomy to substitute human-createdinfrastructure for the services of the environment.The neoclassical concept is called "weak"sustainability, and the ecological economicsconcept is called "strong" sustainability. Themotivation for weak sustainability is preserving aneconomy's capital stock, which produceseconomic output. Capital stock consists ofhuman-made or "manufactured capital," theservices of the environment or "natural capital,"and the level of technology and training or"human capital." Weak sustainability assumes thatthese kinds of capital are substitutable for oneanother. The motivation for strong sustainabilityis recognizing that substitution possibilitiesamong these different kinds of capital are limited.This paper discusses some of the terms andconcepts behind the sustainability debate betweenneoclassical and ecological economics.






Topics: Valuation

#120. Gray, J. A. (1997). 'Underpricing andoverexploitation of tropical forests: forest pricingin the management, conservation, andpreservation of tropical forests', Journal ofSustainable Forestry 4:1-2

Forest pricing policies for tropical timber andforest concessions can play an important role inthe management, conservation, and preservationof tropical forests. The paper draws on regionalstudies by the author and others of forest revenuesystems and forest concession arrangements,country case studies, and studies in individualcountries of West and Central Africa and SouthEast Asia. Forest pricing and concessionmanagement policies, problems, and experiencesin individual countries are examined, commonproblems and experiences highlighted, andalternatives identified. From these, the elementsof a forest pricing and concession managementsystem which supports sustainable management,efficient utilisation, and forest renewal aredeveloped.

Coverage: Global, Africa, Asia


Topics: Valuation, Incentive measures, Marketsand charges, Causes of biodiversity loss

#121. Green, C. H., & Tunstall, S. M. (1991). 'Isthe economic evaluation of environmentalresources possible?', Journal ofEnvironmental Management 22:123-141

The meaningful economic evaluation ofenvironmental goods depends both uponeconomic theory adequate and a congruencebetween economic and environmental theories ofvalue. While the evaluation of user, andparticularly the recreational and amenity aspectsof environmental goods, is proving relativelystraightforward, it is argued that there remain anumber of theoretical as well as methodologicalproblems before valid and reliable measurementof non-use values of environmental goods can beachieved. In particular, while individualpreferences and willingness-to-pay for

environmental goods may be for the continuedexistence of the good in general terms, valueshave to be associated with individual sites.Second, there is as yet little empirical evidence asto the motivations which underlie any such non-use values, although economists have speculatedabout bequest and existence values. Third, thepopulation which benefits through such non-usevalues is unknown. A number of survey studiesare reported that have attempted to address thesequestions.

Coverage: Global



#122. Gren, I.-M., & Soderquist, T., (1994),Economic Valuation of Wetlands: A Survey.Beijer Discussion Paper No 54, BeijerInternational Institute of Ecological Economics,The Royal Swedish Academy of Sciences:Stockholm. 41 pp. ISBN 1102-4941

There is world-wide growing concern about theconversion of wetlands into other land uses. Onereason for this is that the total costs of wetlandconversion are not taken into account. This paperpresents a framework for the economic valuationof wetland services, which serves as the basis fora survey of 30 valuation studies in differentregions. According to the survey there is adifference between regions in the focus of thewetland services subjected to valuation, and aminor variation in the choice of methods used forestimating values.

Coverage: Global, North America, Europe, Asia,Africa, Caribbean, Australia and New Zealand

Contains examples or case studies from: USA,Sweden, UK, Australia, Italy

Ecosystem or sector focus: Water, Wetlands

Topics: Valuation

#123. Gren, I.-M., Folke, C., Turner, R. K., &Bateman, I. (1994). 'Primary and secondaryvalues of wetland ecosystems', Environmentaland Resource Economics 4:55-74

Wetlands are continuously degraded in manyparts of the world. One reason is the lack ofappropriate valuation of the multifunctionality ofwetlands. This paper discussed methods for



valuing the primary and secondary values ofwetlands. It presents three case studies ofdifferent valuation methods which to differentdegrees capture primary and secondary values. Itis concluded that only part of the total economicvalue of wetlands can be captured in monetaryterms.

Coverage: Europe

Contains examples or case studies from: UK,Sweden


Topics: Valuation, Contingent valuation,Replacement costs, Mitigative and avertiveexpenditures

#124. Gren, I.-M. (1995). 'The value ofinvesting in wetlands for nitrogen abatement',European Review of Agricultural Economics22:157-172

The values of nitrogen abatement throughmeasures involving investment in wetlands,sewage treatment plans and agriculture arecalculated and compared. The analytical resultsshow that the marginal value of investment inwetlands, including current and future utility, islikely to exceed that of other measures. This isdue to two factors: the joint production of severalenvironmental services and the net natural growthin the capacity to produce these services. Themultifunctionality implies that, in addition tonitrogen abatement, other outputs such asbuffering of water and biodiversity are producedjointly and the growth in wetlands, or the selforganising capacity, implies an increase in thesupply of future outputs. Examples are given forthe case of Gotland, an area with a highconcentration of nitrate in the groundwater,which suggest that the value of investment inwetlands could significantly exceed that of sewagetreatment plants.

Coverage: Europe

Contains examples or case studies from: Sweden

Ecosystem or sector focus: Wetlands, Water,Agriculture

Topics: Pollution, Valuation

#125. Grey, F., (1998), Estimating Values forAustralia's Native Forests. Environmental

Economics Research Paper No 4, Departmentof the Environment, Sport and Territories:Canberra. 68 pp. ISBN 0 642 24863 X

This document describes how various reportshave suggested that non-financial values shouldbe given weight alongside financial values, anddescribes the process by which forest values canbe given full consideration.

Coverage: Australia and New Zealand

Contains examples or case studies from:Australia


Topics: Valuation

#126. Grigalunas, T. A., & Congar, R. (Eds.),(1995), Environmental Economics forIntegrated Coastal Area Management:Valuation Methods and Policy Instruments.Regional Seas Reports and Studies No. 164,United Nations Environment Programme:Nairobi. 165. 92-807-1488-0

The importance of environmental issues indevelopment has received increased internationalrecognition over recent years. In environmentaleconomics major efforts are underway tointegrate environmental costs and benefits intoeconomic analysis. This document provides aseries of background reference materials on theapplication of environmental economics tools tomarine and coastal environments. It defineseconomic concepts and looks at the economicanalysis of environmental degradation. Thedocument also describes key economic valuationmethods and works through their application. Itdescribes a number of economic policyinstruments that can be used to improveenvironmental management in marine and coastalareas.

Coverage: Global

Ecosystem or sector focus: Marine and coastal

Topics: Valuation, Economic instruments,Incentive measures, Economic policies,Economic planning, Causes of biodiversity loss,Travel cost, Contingent valuation, Effect onproduction, Mitigative and avertive expenditures



#127. Grimes, A., Loomis, S., Jahnige, P.,Burnham, M., Onthank, K., Alarcon, R., Cuenca,W. P., Martinez, C. C., Neill, D., Balick, M.,Bennet, B., & Mendelsohn, R. (1994). 'Valuingthe Rainforest: The Economic Value ofNontimber Forest Products in Ecuador', Ambio23 (7):405-410

This paper reports on a study carried out tocalculate the economic value of 3 hectares ofprimary forest in the Upper Napo region ofAmazonian Ecuador, based on the potentialextraction of nontimber forest products. Throughethnobotanical and market surveys, the annualharvested levels, market prices and extractioncosts of seven fruits, three medicinal barks andone resin are measured. These values aresignificantly higher than the returns fromalternative land uses in this area.

Contains examples or case studies from:Ecuador


Topics: Valuation, Market valuation

#128. Gullison, R., Westbrook, T., Nissan, S.,Grieg-Gran, M., Hocking, D., EcoSecurities Ltd.,& Cannon, J., (1998), The Potential For UKPortfolio Investors To Finance SustainableTropical Forestry. Environmental EconomicsProgramme, CREED Discussion Paper DP 98-03, International Institute for Environment andDevelopment: London. 33 pp.

Sustainable forestry, which aims to producesustained yields of timber while simultaneouslymaintaining the environmental and social benefitsof forests, is being promoted as an alternative todestructive land uses such as unregulated loggingand unplanned conversion to agriculture oftropical forests. In part because of the newness ofthe concept of sustainable forestry, there has beenlittle implementation to date. The availability ofpublic sector funds from, developed countriesthat could be used to help implement sustainableforestry in developing countries is declining.However, private capital flows (portfolioinvestment and foreign direct investment) havebeen increasing rapidly. The objective of thisstudy is to determine whether portfolioinvestment, a major component of private capitalflows, is likely to fund sustainable forestry in

tropical countries. The approach of the study wasto survey UK fund managers of emerging markets1 and green/ethical 2 funds to establishinvestment preferences and requirements. Thisinformation was then compared to what iscurrently known about the structure andperformance of sustainable forestry investmentsin the tropics and subtropics. Two sourcesprovided information on financial returns. First, areview of the scientific and development literaturewas conducted to form a database on theprofitability of both plantations and natural forestmanagement. The literature review was thensupplemented by a survey of existing certifiedforest products companies. However, becausethere are so few certified producers, andresponding companies were unwilling to part withmuch commercially sensitive financialinformation, this study relies mainly on the resultsof the literature survey. The commercial nature ofthe information sought, and the relative youth ofsustainable forestry, meant that sample sizes werequite small for some aspects of this study. This isa general problem of studies in this field.Nevertheless, the findings are robust enough tocome to the following conclusions: From thelimited studies available, the financial returnsfrom both industrial plantations and verticallyintegrated natural forest management companiesappear to meet or exceed fund managerrequirements. This conclusion is tentative as it isnot clear that all case studies would meet all thecriteria for sustainable forestry as defined byorganisations such as the Forest StewardshipCouncil (FSC). The major risk associated withinvesting in forest products companies, asperceived by fund managers, is the cyclical natureof commodity prices. Although fund managersperceive some reduction in investment risk due tothe fact that a company has met the criteria forsustainable forestry, this is not sufficient for themto accept a lower return on their investmentcompared to investing in a conventional, non-certified forest products company. The mostlikely way that certification could address theconcerns of investors is if it could be shown thatcertified forest products are less susceptible toprice cycles than uncertified products. UK fundmanagers overwhelmingly prefer to invest inrelatively large, publicly listed companies. Theminimum market capitalisation to attractinvestment is $180m for emerging markets funds,and $33m for green/ethical funds. Certifiedforestry companies, particularly those indeveloping countries, are generally small andunder private ownership, and thus are not



attractive to UK portfolio investors. Thegeographic location of an investment can be animportant factor for UK fund managers.Green/ethical funds rarely invest outside ofNorth America and Europe. Thus, they areunlikely to invest in tropical sustainable forestrycompanies under any conditions. Emergingmarket fund managers will invest in tropical andsubtropical countries, but there are largedifferences in preference. Africa is the leastfavoured, and (at the time the survey wasundertaken), South East Asia the most, with LatinAmerica intermediate. Thus, the location of asustainable forestry company would appear tohave a significant bearing on its ability to attractinvestment from UK investors. The findingssuggest that the greatest obstacles for sustainabletropical forestry companies to obtain investmentfrom UK portfolio investors are their small sizeand the fact that they are not listed on a stockexchange. Perhaps the best way to overcome thisproblem is through the creation of a forestryfund, which would take on the ownership andmanagement of many smaller companies, butwould be large enough itself to be publicly listed.Until this or some other appropriate action istaken, it seems unlikely that significantinvestments in sustainable tropical forestry will bemade by UK fund managers.

Coverage: Europe, Asia, Africa, Latin America,Global



Topics: Financial mechanisms, Private sector,Markets and charges

#129. Gupta, A. K., (1996), Incentives,Institutions and Innovations: Golden Triangleof Sustainable Conservation. Paper presentedat a workshop on Incentives for Biodiversity:Sharing Experiences, 4th Global BiodiversityForum, Montreal, Canada 30 August - 1September 1996. 6 pp.http://www.biodiversityeconomics.org

Based on information from the Honey BeeNetwork in India, this paper advocates thedevelopment of institutional support forincentives to meet the objectives of sustainableconservation. It divides various kinds ofincentives under the following four categories: 1)Material - individual: The incentives for

conserving such biodiversity could be in materialform and for individual use. The author givesexamples such as A) Patent information system atdecentralised level to promote participation ofsmall scale sector in new ventures; B) To developlow cost decentralised system of registration ofinnovations/ inventions; C) Public watchdogcommittees to monitor and ensure sustainableextraction of biodiversity. 2) Material - collective:Here the author identifies four kinds of incentiveswhich could be designed to promote creativityand innovation in conservation of biodiversitysuch as: a) venture capital support, b) risk coverthrough insurance, guarantee and risk funds, c)trust funds with or without individual leadership,and d) infrastructural development in theeconomically disadvantaged biodiversity richregions. 3) Non-material - individual: Under thisheading the author discusses incentives such asrespect and recognition. 4) Non-materialcollective: The changes in curriculum andpedagogy are one of the most importantcandidates for consideration. Moreover policychanges in the regulatory as well as managerialsystems is another way in which incentives can begenerated for various local communities.

Coverage: Asia

Contains examples or case studies from: India

Topics: Incentive measures, Financialmechanisms, Trust Funds

#130. Hall, C. A. S., Jones, P. W., Donovan, T.M., & Gibbs, J. P. (2000). 'The implications ofmainstream economics for wildlife conservation',Wildlife Society Bulletin 28 (1):16-25

The most important problems facing wildlifeconservation are the growing human populationand its affluence, and the concomitantrequirement for resources to accommodate thisgrowth. A pressing question is how to maintainwildlife numbers and diversity when primewildlife habitat is needed for agriculture, resourceextraction, or urban expansion. Solutions to thisproblem may not be forthcoming becausemainstream (generally meaning neoclassical)economic logic and policies are often in directconflict with the goals of wildlife science. There isa great need for wildlife scientists to broaden theirview and sophistication of economics and also toexpand the wildlife field to encompass the largersocial forces that are changing the well-being ofwildlife species. In what follows we elaborate on



1) what we perceive to be the underlying problemof wildlife conservation; 2) why our currentsystem of economic valuation will, in the longterm, undercut the goal of wildlife conservation;and 3) how to incorporate these concepts intowildlife curricula and the wildlife profession.





#131. Hamilton, K. (1994). 'Green adjustmentsto GDP', Resources Policy 20 (3):155-168

A review of the green national accounts literatureshows that there is little agreement on whether toadjust gross or net product, or on the size ofsome of the adjustments proposed. A series ofmodels is presented to examine the treatment innational accounts of living resources,heterogeneous resource deposits, resourcediscoveries, environmental services, carbonemissions and defensive expenditures byhouseholds. A key conclusion is that expandingthe accounts to include non-marketenvironmental services result in a measure ofwelfare rather than product, and that the level ofenvironmental services is an integral componentof this welfare measure. These results arecompared with standard national accounts.Greener measures of wealth per capita andsavings rates will have more policy relevance ongauging progress towards sustainabledevelopment than adjustments to nationalproduct.

Coverage: Global


#132. Hamilton, K., Pearce, D., Atkinson, G.,Gomez-Lobo, A., & Young, C., (1994), ThePolicy Implications of Natural Resource andEnvironmental Accounting. Working PaperGEC 94-18, Centre for Social and EconomicResearch on the Global Environment: London.

Increasing concern about environmentaldegradation, resource depletion and thesustainability of economic activity have made thedevelopment of natural resource andenvironmental accounts an area of significant

activity. Yet, little attention has been devoted toasking exactly what ends do these accountsultimately serve. The primary goal of this paper isto examine, through a series of country casestudies, the linkages between the development ofthese new elements of national accounts (broadlyconceived) and the proposed or actual policy usedthat these accounts are designed to meet. Thecase studies reveal a variety of motivations whichunderlie attempts by governmental departmentsor national statistical offices to incorporateenvironmental concerns into national accountingpractice. This is followed by an assessment of theempirical experience obtained from a number ofexisting studies. The paper concludes with somegeneral inferences regarding the lessons to belearnt regarding future green accounting efforts inboth the developed and the developing world.

Coverage: Global

Topics: Environmental accounting, Valuation,Economic policies

#133. Hamilton, K., & Lutz, E., (1996), GreenNational Accounts: Policy Uses andEmpirical Experience. EnvironmentDepartment Papers No 039, EnvironmentalEconomics Series, World Bank: Washington DC.48 pp.Over the past 25 years the breadth ofenvironmental and natural resources policy-making has expanded, and governmentseverywhere have committed themselves to newsustainable development goals. As a result, policymakers need new measures of progress. Therehave been corresponding innovations ininformation systems to guide resource andenvironmental policies. One is the "greening" ofnational income accounts. This has highlightedthe critical role that policy and market failuresplay in the degradation of the environment. TheUnited Nations recently published interimguidelines on an integrated System ofEnvironmental and Economic Accounts. Thissystem aims to provide a common frameworkwithin which greener national accountingaggregates, natural resource accounts andpollution flow accounts have their appointedplaces. One of the goals of this report is tocritically examine the potential policy uses of thedifferent varieties of accounts. The second goal isto describe and assess the range of experiencethat has been published for both developed and



developing countries. The paper also provides ageneral background to the theory and practice ofintegrated Systems of Environmental andEconomic Accounts.

Coverage: Global, Asia, Latin America, NorthAmerica

Contains examples or case studies from: CostaRica, Indonesia, Japan, Mexico, Pakistan, USA


#134. Hecht, J. E., & Orlando, B. (1998). 'Canthe Kyoto Protocol Support BiodiversityConservation? Legal and Financial Challenges',Environmental Law Reporter September:20

This paper addresses the use of terrestrialecosystems to absorb carbon. It questionswhether this will create incentives and financialmechanisms for more effective and sustainablemanagement of forests and associatedbiodiversity, and looks at legal and financial issuesthat need to be resolved in this context. Itprovides background on the place of forests inthe carbon cycle, and the forest-related provisionsof the Kyoto Protocol. It then considers fiveissues that will arise regarding the impacts of theProtocol - (1) unresolved issues among the forestprovisions of the Protocol, (2) externalities (suchas biodiversity and watershed protection) thatmay be associated with the implementation offorest provisions of the Protocol, (3) risksassociated with carbon sequestration projects, (4)financial mechanisms that may help to reducethose risks, (5) the possible role of forests inemissions permits trading systems.

Coverage: Global


Topics: Climate change, Financial mechanisms,Convention on Biological Diversity, UNFramework Convention on Climate Change,Economic instruments, Land degradation,Deforestation, Incentive measures, Markets andcharges

#135. Hecht, J. E. (1999). 'EnvironmentalAccounting: Where We Are Now, Where We AreHeading?', Resources Spring 1999 (Issue135):14-17

The field of environmental accounting has madegreat strides in the past two decades, movingfrom a rather arcane endeavor to one tested indozens of countries and well established in a few.But the idea that nations might integrate theeconomic role of the environment into theirincome accounts is neither a quick sell nor a quickprocess; it has been under discussion since the1960s. Despite the difficulties and controversiesdescribed in this article, however, interest isgrowing in modifying national income accountingsystems to promote understanding of the linksbetween economy and environment.

Topics: Environmental accounting

#136. Higgins, S. I., Turpie, J., Costanza, R.,Cowling, R. M., Le Maitre, D. C., Marais, C., &Midgeley, G. F. (1997). 'An ecological economicsimulation model of mountain fynbosecosystems: dynamics, valuation andmanagement', Ecological Economics 22(2):155-169

Mountain fynbos ecosystems in South Africa arethreatened by alien plant invasions and by a lackof funding for effective management of theseinvasions. This paper develops an ecological-economic argument for the effective managementof plant invasions in mountain fynbosecosystems. This is done by building a dynamicecological economic model which values theecosystem services that fynbos ecosystemsprovide under different management systems. It isproposed that the services that mountain fynbosecosystems provide fall into six components:water production, wildflower harvest, hikervisitation, ecotourist visitation, endemic speciesand genetic storage. A scenario analysis based ona hypothetical 4 square kilometre mountainfynbos ecosystem in the western part of thefynbos biome estimated that the ecosystem'svalue varies from R19 million to R300 million(R4.50=US$1). Water production and geneticstorage were the most valuable ecosystemservices. The model showed that the cost ofclearing alien plants was a tiny (0.5-5%)proportion of the value of mountain fynbosecosystems. This result motivates an injection offunds for clearing alien plants from mountainfynbos ecosystems.

Coverage: Africa




Ecosystem or sector focus: Protected Areas,Mountains, Water, Tourism

Topics: Valuation

#137. Howard, P., (1996), The OpportunityCosts of Protected Areas in Uganda. Paperpresented at IUCN Workshop on Economics ofBiodiversity Loss, April 1996, Gland,Switzerland. 14 pp.http://www.biodiversityeconomics.org

This paper's aim is to assess in financial terms theopportunity cost of excluding human settlement,cultivation and pastoral activities from Uganda'sNational Parks, Game Reserves and ForestReserves. These protected areas represent 16.7%of the country's land area. Increasingdemographic, economic and associated politicalpressures are pushing for the opening of theselands for agro-pastoral use. The analysis of theopportunity cost is composed of six stages: first,the assessment of the land under cultivation;second, the assessment of the land area underprotection; third, assessment of the land areaavailable for livestock; fourth, the estimation ofland values under cultivation; fifth, the estimationof land values under livestock; and finally,calculation of the potential value of protected arealand under agro-pastoral development. The resultof the analysis is that the total opportunity cost ofmaintaining Uganda's protected areas amounts toan estimated US$110 million/yr. This numberexceeds the gross revenues of the protected areasystem by 100 times. Thus, the conversion toagro-pastoral use would be financially preferableto maintaining the status quo. The lesson in termsof biodiversity conservation is that incentivemeasures are necessary to make such preservationworthwhile in economic terms.

Coverage: Africa

Contains examples or case studies from: Uganda


Topics: Valuation, Economic instruments, Causesof biodiversity loss

#138. Huber, R. M., Ruitenbeek, J., & Seroa daMotta, R., (1998), Market Based Instruments

for Environmental Policymaking in LatinAmerica and the Caribbean: Lessons fromEleven Countries. Work in Progress for PublicDiscussion, Discussion Paper No. 381, WorldBank: Washington DC. 79 pp.

One of the greatest challenges facing developingcountries is to enhance growth while finding themost cost-effective way to reduce negativeenvironmental impacts. This document showshow traditional "command and control"approaches can be improved upon by the use ofbroad-based market instruments that provideeconomic incentives for changed behaviour. Itreports on a study of market-based instrumentscarried out in 11 countries in Latin America andthe Caribbean.


Contains examples or case studies from: Bolivia,Brazil, Chile, Colombia, Ecuador, Jamaica,Mexico, Peru, Venezuela

Topics: Economic instruments, Economicpolicies, Causes of biodiversity loss, Taxes,Pollution, Subsidies, Incentive measures,Financial mechanisms

#139. Hunt, C., (1997), EconomicInstruments for Environmental and NaturalResource Conservation and Management inthe South Pacific. Working Paper in EcologicalEconomics No 9706, Centre for Resource andEnvironmental Studies, Australian NationalUniversity: Canberra. 57 pp.

Trends in natural resource exploitation andconsumption patterns have increased the need forresource conservation and pollution control in theSouth Pacific. The need for greater governmentresources, implied by the intensification ofenvironmental management, has coincided withbudgetary restraints in the South Pacific that haveoften been severe. Economic (as opposed tocommand and control) instruments are ofincreasing interest because they possess thepotential to shift from government to producersor consumers the onus to comply withenvironmental measures. In this paper, argumentabout the applicability of economic instrumentsin conservation and management in developingcountries in general and the South Pacific inparticular, is prefaced by a brief exposition of thetheory and a description of the types of



instruments. An analysis of some twenty casestudies in the South Pacific enables someconclusions to be drawn about the conditionsnecessary for the application of economicinstruments and enables some recommendationsto be made about their adoption.

Coverage: Pacific, Australia and New Zealand

Contains examples or case studies from:Australia, Fiji, Papua New Guinea, Kiribati,Solomon Islands, Tuvalu, Micronesia, Vanuatu,New Zealand

Ecosystem or sector focus: Marine and coastal,Urban settlements, Industry, Infrastructure,Fisheries

Topics: Economic instruments, Bonds anddeposits, Markets and charges, Property rights,Financial mechanisms, Trust Funds

#140. Hussain, A., & Arif, T., (1998), LocalExamples of Financial Innovation. Paperpresented at a workshop on FinancialInnovations to Combat Desertification 12thGlobal Biodiversity Forum, Dakar, Senegal, 4-6December 1998. 3 pp.http://www.biodiversityeconomics.org

The UN Convention on CombatingDesertification provides a good opportunity fordevelopment in the marginal drylands to addressproblems of drought, land degradation anddegradation of social and physical infrastructure.The challenge is how to mobilise financialresources to initiate local area developmentprogrammes in the remote marginal areas, awayfrom markets, infrastructure and formal bankingand financial systems. Funding is largely out ofreach of communities. Even after establishmentof instruments like national desertification funds,it is unlikely for the community groups toapproach the money easily for implementingprojects. This paper documents experiences inPakistan.

Coverage: Asia

Contains examples or case studies from:Pakistan

Ecosystem or sector focus: Drylands

Topics: Financial mechanisms, Convention onCombating Desertification

#141. Huston, M. (1993). 'Biological diversity,soils and economics', Science 262:1676-1680Terrestrial biological diversity is supported bysolar energy captured by plants growing in soil.This soil-based plant productivity also providesthe foundation for human societies throughproduction of food and renewable forms ofenergy. Variations in plant productivity, resultingfrom differences in inherent soil fertility,variations in climate and weather, and differencesin chemical inputs and agricultural practices,produce patterns of biodiversity that areassociated with the agricultural component ofeconomic productivity. Ecological processes leadto a generally negative relation between thediversity of plant species and potential agriculturalproductivity at both local and global scales. Oneimplication of this negative relation is that thepreservation of areas of high plant biodiversitydoes not require the sacrifice of productiveagricultural lands.

Coverage: Global



#142. Inamdar, A., & de Merode, E., (1999),Towards Financial Sustainability forProtected Areas: Learning from BusinessApproaches. WWF-UK: Godalming. 56 pp.

This is a practical guide to help managers improvethe financial viability of protected area operations.It looks at basic tools and methods for financialmanagement that are commonly used in theprivate sector, and assess their application toprotected areas. Various case studies of this areprovided. The manual looks at success factorsassociated with creating greater commercialawareness and provides lessons learned and bestpractices in improving the financial viability ofprotected areas.

Coverage: Global

Ecosystem or sector focus: Protected Areas

Topics: Financial mechanisms, Private sector,Markets and charges, Incentive measures

#143. International Institute for Environmentand Development, (1997), Valuing the Hidden



Harvest: Methodological Approaches forLocal-Level Analysis of Wild Resources.Sustainable Agriculture and EnvironmentalEconomics Programmes, Research SeriesVolume 3 No 4, International Institute forEnvironment and Development: London. 71 pp.ISBN 1358-3775

There is a growing interest in the role of wildresources in local livelihoods. Yet many naturalresource policies fail to consider their fulleconomic benefits. Whose knowledge and whosevaluations count when conducting economicassessments? In many cases economic analysesare made on the basis of limited, highlyaggregated data and with limited insight into locallevel perspectives. This paper suggests somemethodological alternatives and presents casestudies of the local-level economic analysis ofwild resources.

Coverage: Global, Africa, Latin America, Pacific

Contains examples or case studies from:Botswana, Brazil, Zimbabwe, Nigeria, Papua NewGuinea

Ecosystem or sector focus: Agriculture, Forests,Wildlife

Topics: Valuation, Incentive measures

#144. Isaacs, J. C. (2000). 'The limitedpotential of ecotourism to contribute to wildlifeconservation', Wildlife Society Bulletin 28(1):61-69

Ecotourism has been proposed as a viableeconomic activity that can minimize negativehuman impacts on wildlife habitat and provide anincentive to preserve natural areas. The potentialof ecotourism as a wildlife conservation strategy islimited by its inability to insure the long-termprotection of environmental assets and by itstendency to contribute directly to environmentaldegradation. Ecotourism is a proxy marketdesigned to align consumers' preferences forrecreation with the protection of environmentalassets. Because it does not necessarily address thedirect protection of those assets, it is prone tomarket failure. Pressures on governments andfirms involved in providing ecotourism serviceswill impair their ability to minimize detrimentaleffects of human economic behavior. Ethicalappeals to minimize harmful practices face seriousobstacles. Promoting ecotourism may actually

distract from more appropriate means ofenvironmental protection.



Ecosystem or sector focus: Wildlife, Tourism

Topics: Markets and charges, Financialmechanisms, Incentive measures

#145. IUCN - The World Conservation Union(Ed.),(1994), Report of the First Global Forumon Environmental Funds. Proceedings of theFirst Global Forum on Environmental Funds:Santa Cruz, Bolivia. 128 pp. ISBN 2-8317-0247-X

This document covers the background toNational Environmental Funds, and therequirements for establishing and operating them.It also presents a series of profiles of differentenvironmental funds from around the world.

Coverage: Global, Africa, Asia, Europe, NorthAmerica, Latin America, Pacific

Contains examples or case studies from: Belize,Bhutan, Bolivia, Brazil, Chile, Colombia,Dominican Republic, El Salvador, Guatemala,Honduras, Indonesia, Jamaica, Mexico, Panama,Papua New Guinea, Peru, Philippines, Poland, SriLanka, Uganda

Ecosystem or sector focus: Forests, Wildlife,Protected Areas, Marine and coastal

Topics: Financial mechanisms, Economicinstruments, Trust Funds, Debt conversion

#146. James, R. F., (1991), WetlandValuation: Guidelines and Techniques.PHPA/AWB Sumatra Wetland Project Report No31, Asian Wetland Bureau - Indonesia: Bogor.160 pp. This document has been prepared as aguide for those wishing to conduct economicvaluation of wetlands. A number of key issues ofconcern when valuing natural areas are discussedbriefly, and detailed guidelines on the applicationof a number of specific valuation techniques arepresented. The document focuses mainly onpractical issues and methodologies.




Contains examples or case studies from: Nepal,USA, Fiji, Thailand, Korea, Philippines, Australia

Ecosystem or sector focus: Wetlands, Marineand coastal, Fisheries

Topics: Valuation

#147. James, A. N., Green, M. J. B., & Paine,J. R., (1996), Financial Indicators forBiodiversity Assessment: In SituConservation Investments. Paper presented ata workshop on Investing in Biodiversity, 5thGlobal Biodiversity Forum, Buenos Aires,Argentina, 1-3 Nov 1996. 20 pp.http://www.biodiversityeconomics.org

Drawing upon the results of a three year projectat the World Conservation Monitoring Centre,this paper examines the issues involved in thecompilation and analysis of financial indicatorsfor the assessment of in situ biodiversityconservation at the national level. An overview ofthe existing data on financial indicators andtargets for in situ conservation are presented,including the recently completed global survey ofgovernmental budgets for protected areas by theWCMC. The paper then discusses themethodological issues involved in standardisingdata on investment in biological diversityconservation, the determination of standards forjudging the adequacy of investment, and ways toimprove the future collection of suchinformation. The discussion is conducted withinthe framework of the upcoming national reportsby the Parties of the Convention on BiologicalDiversity, and the specific objective ofestablishing financial indicators from the dataincluded in the national reports.

Coverage: Global


Topics: Financial mechanisms, Economicinstruments, Convention on Biological Diversity

#148. Janssen, R., & Padilla, J. E., (1996),Valuation and Evaluation of ManagementAlternatives for the Pagbilao MangroveForest. CREED Working Paper No 9,International Institute for Environment andDevelopment: London. 47 pp.

Mangrove forests and swamps are rapidlydeclining in many parts of the world. This declinehas resulted in the loss of importantenvironmental and economic functions andproducts, including forest products, tidal wavecontrol, breeding ground for fish etc. One of themajor threats to mangroves in the Philippines isthe rapidly increasing aquaculture industry. Tounderstand the importance of mangroves insightinto the total economic value of mangroves isimportant. Comparisons are made with the totalvalue generated by alternative uses such asaquaculture and forestry. In addition to economicvalue, equity and sustainability objectives aretaken into account and analyzed according to theperspective of different types of decision makersinvolved. The aim of this paper is to demonstratethe use of results obtained from valuation ofmangroves to support an evaluation ofmanagement alternatives for the Pagbilaomangrove forest. The structure of this paper is asfollows: first the study site is introduced; this isfollowed by a review of management alternativesfor the Pagbilao mangrove forest, and anassessment of the values of the goods andservices linked to these management alternatives.Next, the results from the valuation are used tosupport the selection of the preferredmanagement alternative, first in a cost-benefitapproach, then combined with other types ofinformation in a multi-criteria approach. Thispaper concludes that if economic efficiency ismaximized, conversion to aquaculture is thepreferred alternative. However if equity andsustainability objectives are included, commercialforestry is the preferred alternative.

Coverage: Asia


Ecosystem or sector focus: Marine and coastal,Wetlands, Fisheries

Topics: Valuation

#149. Jordan, A., (1992), Financing GlobalEnvironmental Protection: The GlobalEnvironment Facility. Working Paper GEC 92-37, Centre for Social and Economic Researchon the Global Environment: London.

Although developed and developing countriesshare a common but differentiated responsibilityfor causing global environmental change, the



developing nations are usually too overburdenedwith domestic, developmental problems to givepriority to measures that specifically protect theglobal environment. The general feeling in theinternational community is that northerncountries will have to provide the South with 'newand additional' sources of finance, if globalenvironmental problems are to be resolved andsustainable development encouraged. The issue ofglobal environmental 'aid' proved to be a stickingpoint at the 'Earth Summit' in Rio, and seemspoised to dominate the North-South discourse inthe foreseeable future. In the aftermath of Rio, itseems likely that more intense attention will befocused on the Global Environment Facility(GEF), an experimental funding operationrecently established within the UN, with amandate to finance projects in the developingworld that realise global environmental benefits.This paper analyses the elaboration, structure andoperation of the Facility in its first two years, andsuggests interlinked themes that seem likely todominate the post-Rio functioning of the Facility.Attention is focused on the problematical roleplayed by the World Bank, the central actor inboth the elaboration and operation of the Facility.It is suggested that the GEF represents amicrocosm for exploring the far broader issues ofinstitutional change and adaptation, and thegradual reorientation of international relations inthe post-Cold War era.

Coverage: Global

Topics: Financial mechanisms, Convention onBiological Diversity, UN Framework Conventionon Climate Change

#150. Joshi, M., (1999), FinancingSustainable Forestry: Issues UnderInternational Deliberation. Programme onForests, United Nations DevelopmentProgramme: New York. 46 pp.

This background document was produced tofacilitate discussion on matters left pending onfinancing needs at the Third Session of theIntergovernmental Forum on Forests. It presentsa review of financial and economic aspects ofsustainable forest management.

Coverage: Global


Topics: Financial mechanisms, Economicinstruments, Trust Funds, Debt conversion,Carbon offsets

#151. Juma, C., Monteith, H., Krugmann, H.,Angura, T., Acquay, H., Akinlo, A. E., Wandera,P., & Mugabe, J. (Eds.), (1995), EconomicPolicy Reforms and the Environment: AfricanExperiences. Environment and Trade Series,United Nations Environment Programme:Geneva. 214 pp. ISBN 1020-1610

This book examines the relationship betweentrade and the environment, focusing especially onthe trade implications of domestic andinternational environmental measures, includingpossible trade distortionary effects ofenvironmental measures, and on theenvironmental effects of trade liberalisation. Itexamines African perspectives on structuraladjustment and sustainable development, andoutlines a number of country case studies whichanalyse the links between macroeconomic andtrade policy and the environment in differentsectors.

Coverage: Africa

Contains examples or case studies from: Kenya,Uganda, Nigeria, Ghana

Ecosystem or sector focus: Wildlife, ProtectedAreas, Forests, Industry

Topics: Economic instruments, Economicpolicies, Trade, Taxes, Subsidies, Causes ofbiodiversity loss, Disincentives

#152. Kaiser, J., & Lambert, A., (1996), DebtSwaps for Sustainable Development. IUCN -The World Conservation Union: Gland. 2-8317-0362-X

This handbook describes how debt conversionscan be implemented, using practical examples andcase studies from around the world. It dealespecially with debt swaps designed forsustainable development. The main conclusionsoffered in the handbook are that debt conversionis much less complicated in practice than itappears in theory, that there is no single "recipe"for all debt swaps, and that debt swaps oftenrequired a joint initiative of NGOs in both thedebtor and the creditor country.



Coverage: Global

Contains examples or case studies from: Zambia,Philippines, Mexico

Topics: Financial mechanisms, Economicinstruments, Economic policies, Economicpolicies, Private sector, Incentive measures

#153. Kramer, R. A., (1994), Cost andCompensation Issues in Protecting TropicalRainforests: Case Study of Madagascar.Environment Working Paper No 62, World BankEnvironment Department Africa TechnicalDepartment: Washington DC. 32 pp.Development projects for protecting rainforestsand other ecologically important ecosystems oftenhave considerable impacts on local residents. Thisstudy examines the cost to villagers of establishingthe Mantadia National Park in the easternrainforest of Madagascar. Two methods are usedto estimate economic impacts on villagers:opportunity costs based on household cashflowmodels, and contingent valuation analysis basedon direct questioning. The study concludes thatcompensation costs appear to be a significant partof the full costs of implementing protected areaprojects and should be built into project designfrom an early stage.

Coverage: Africa

Contains examples or case studies from:Madagascar


Topics: Valuation, Market valuation, Contingentvaluation, Economic policies, Economicinstruments

#154. Kramer, R. A., Richter, D. D.,Pattanayak, S., & Sharma, N. P. (1997).'Ecological and economic analysis of watershedprotection in Eastern Madagascar', Journal ofEnvironmental Management 49:277-295

Watershed protection is one of the many goodsand services provided by the world's tropicalforests. Flood damage alleviation is a particularlyimportant component of this service. This studyattempts to measure flooding alleviation benefitsresulting from the protection of upland forests inEastern Madagascar and to examine the

relationships between the economic concept ofvalue and the bio-physical dimensions of theprotected area. The results of this analysis shouldhelp policy makers assess the trade-offs betweenthe costs and benefits of protecting tropicalrainforest.

Coverage: Africa


Ecosystem or sector focus: Forests, Watersheds,Protected Areas, Wildlife

Topics: Valuation, Effect on production,Mitigative and avertive expenditures

#155. Kramer, R. A. (1997). 'Valuing a globalenvironmental good: US residents' willingness topay to protect tropical rain forests', LandEconomics 73:196-210Although contingent valuation (CV) is the mostcommon technique for valuing non-marketenvironmental resources, rarely has it beenapplied to global environmental goods. This studyuses CV in a national survey to assess the valueUS residents place on tropical rain forestprotection. On average, respondents were willingto make a one-time payment of approximately$21-31 per household to protect an additional 5percent of tropical forests. Although respondentswere able to give consistent responses across twodifferent CV formats, focus groups wereunwilling or unable to allocate their aggregaterainforest valuations across or among regions orspecific rain forests.

Coverage: Global, North America


Ecosystem or sector focus: Forests, Tourism,Protected Areas

Topics: Valuation, Contingent valuation,Financial mechanisms, Causes of biodiversity loss

#156. Kremen, C., Niles, J., Dalton, M., Daily,G., Ehrlich, P., Fay, J., Grewal, D., & Guillery, R.(2000). 'Incentives for Rain Forest ConservationAcross Scales', Science 288:1828-1832

Globally, tropical deforestation releases 20 - 30%of anthropogenic greenhouse gases. Conservingforests could reduce emissions, but the cost-effectiveness of this mechanism for mitigation



depends on the associated opportunity costs. Weestimated these costs from local, national, andglobal perspectives using a case study fromMadagascar. Conservation generated significantbenefits over logging and agriculture locally andglobally. Nationally, however, financial benefitsfrom industrial logging were larger thanconservation benefits. Such different economicsignals across scales may exacerbate tropicaldeforestation. The Kyoto Protocol couldpotentially overcome this obstacle to conservationby creating markets for protection of tropicalforests to mitigate climate change.

Coverage: Africa



Topics: Economic instruments, Causes ofbiodiversity loss, Climate change

#157. Kumar, R., & Young, C., (1996),Economic Policies for Sustainable Water Usein Thailand. CREED Working Paper No 4,International Institute for Environment andDevelopment: London. 33 pp.

This paper has been prepared as part of theongoing CREED project on Macro EconomicPolicies and the Environment in Thailand. Theobjective of the paper is to illustrate how theSocial Accounting Matrix of Thailand may beextended to incorporate water resources and giveexamples of what the supply and demandfunctions for water would look like. Theframework is based upon an integrated approachto demand and supply management of waterresources and its implications for water pricingpolicies. The discussion concentrates onmodifications and extensions of the socialaccounting matrix and on demand and supplyequations for water that reflect the true scarcity ofwater for different uses and from differentsources. There is an attempt, at the conceptuallevel, to introduce the user cost of water in theaccounting matrix, thereby enabling a linkbetween Computable General Equilibrium (CGE)models and user costs. Incorporation of themodified social accounting matrix and demandand supply equations for different water resourcesinto the general equilibrium model would be afollow up of this exercise, to be undertaken at alater stage.

Coverage: Asia

Contains examples or case studies from:Thailand

Ecosystem or sector focus: Water, Wetlands,Agriculture, Watersheds, Industry, Infrastructure,Urban settlements

Topics: Valuation, Economic instruments,Economic policies

#158. Kumari, K., (1995), An Environmentaland Economic Assessment of ForestManagement Options: A Case Study inMalaysia. Environment Department Papers No026, Environmental Economics Series, WorldBank: Washington DC. 49 pp.

The capacity of natural forests to supply, ifproperly managed, a perpetual stream of timberand non-timber goods and services has beenoverlooked virtually everywhere; and Malaysia isno exception. It has been established that one ofthe most urgent enabling measures for sustainableforest development is the valuation of theresource, in order to highlight the full extent ofbenefits that can be provided. The framework forvaluation adopted in this study was the totaleconomic valuation (TEV) approach whichrepresents both a pragmatic and consistentapproach, A TEV of the flow of benefits fromthe forests under a range of management optionswas derived for the peat swamp forests of NorthSelangor. The analysis sought to illustrate whatsuch TEV would mean in the context of themanagement of a particular forested site. Avariety of methods, such as use of market prices(where available), damage cost avoided approach,surrogate/replacement cost approach andproduction function effect, were adopted to valuesome key goods and services of that could beappropriated from the forests of the Study Site.The results of this case study show that evenwhen local benefits alone are considered it isfinancially profitable to shift from unsustainableto sustainable options. For the shift to moresustainable options to be actually adopted,however, there is a further requirement for newinternational financial mechanisms. Thesemechanisms would facilitate the localappropriation of globally provided forestconservation benefits. The results are significantat both the national and international level. At thenational level, a dual strategy must be adopted,one that targets concurrently both the forest and



non- forest timber policies. In particular.Peninsular Malaysia must take advantage of itsexemplary forest policy and legislation, and takethe step towards its practical enforcement. At theinternational level, the global public good natureof conservation benefits require that new resourcetransfer mechanisms are agreed and implemented.

Coverage: Asia

Contains examples or case studies from:Malaysia


Topics: Valuation, Economic instruments,Incentive measures, Economic policies

#159. Kumari, K., (1996), An application ofthe Incremental Cost Framework toBiodiversity Conservation: A Wetland CaseStudy in Malaysia. Working Paper GEC 96-15,Centre for Social and Economic Research onthe Global Environment: London.

Incremental cost refers to the difference betweenthe cost that a developing country will incur togenerate 'global environmental benefits' asrequired under the Convention on BiologicalDiversity (CBD) and what the country wouldotherwise incur under domestic considerations.This study estimates the incremental cost ofadjusting the forest management practice in thepeat forests of North Selangor to achieve definedglobal benefits in a cost-effective manner. Theshift from the current practice to therecommended alternative requires the adoption ofa log transportation method which is moreenvironmentally benign, but which does not nowconstitute a domestic priority. The recommendedtramline option, which has a less disruptiveinfluence on the overall bio-diversity of the peatforests, would also enhance the survivalprobability of the endangered Sumatranrhinoceros. Currently, however, canals are a moreprevalent means of transportation because theyrepresent the least-cost option to the loggers. Theincremental costs of shifting to the tramlineoption is estimated for two scenarios: first,through the use of reconditioned equipment and,second, where new equipment has to beprocured. Cost savings achieved due toconcurrent domestic benefits of adopting thetramline option are also estimated for two keycomponents: treatment of water abstracted fordomestic use, and forest rehabilitation. The

results show the annual incremental costs tologgers at the North Selangor peat forests torange from RM 0.19 million to RM 0.39 millionfor re-conditioned and new equipment,respectively. The annual cost-saving for domesticwater treatment is estimated at RM 0.48 millionand that for forest rehabilitation at RM 1.50million. Deducting these total cost savings (RM1.98 million) gives an incremental cost of RM -1.59 million/year if the logger has to acquire newequipment, whilst the use of reconditionedequipment gives an incremental cost of RM - 1.79million/year: i.e. incremental savings rather thancosts are accrued. The divergence between privateand social costs, and the occurrence of negativeincremental costs have to be discussed in thecontext of Malaysia's current forestry practicesand priorities if any meaningful and effectivecompensation is to be transacted.

Coverage: Asia



Topics: Valuation, Convention on BiologicalDiversity

#160. Lake, R., (1996), Financial Resourcesfor Biodiversity Conservation in DevelopingCountries: Indicators and Targets for DonorCountry Financial Assistance. Paperpresented at a workshop on Investing inBiodiversity, 5th Global Biodiversity Forum,Buenos Aires, Argentina, 1-3 Nov 1996. 7 pp.http://www.biodiversityeconomics.org

This paper evaluates whether funds beingprovided by developed countries for biodiversityconservation in developing countries represent"new and additional resources", as required byAgenda 21 and the Convention on BiologicalDiversity (CBD). The paper assumes thatresources should be "new and additional" inrelation to historical levels of both aid forbiodiversity and total aid before the signature ofthe CBD and the agreement of Agenda 21 in1992. It examines biodiversity spending by theGlobal Environment Facility and other bilateraland multilateral donors; aid for sectors relevant tobiodiversity conservation, such as agriculture,forestry and the integration of the environmentinto decision-making; total aid flow; debt; andstructural adjustment. It also summarises



estimates of the cost of biodiversity conservationin developing countries. Information ondeveloping countries' expenditure of their ownresources on conservation is provided to illustratethe scale of the current funding shortfall. Thechallenge of global biodiversity conservationrequires that donors fulfil their legal and politicalobligations to provide new and additionalfinancing. As part of this, the GEF should bereplenished at a level substantially higher in realterms than the $ 2 billion pledged for 1994-1997.

Coverage: Global

Topics: Financial mechanisms, Convention onBiological Diversity

#161. Langford, I. H., Kontogianni, A.,Skourtos, M. S., Georgiou, S., & Bateman, I. J.,(1997), Multivariate Mixed Models for Open-Ended Contingent Valuation Data: A CaseStudy on Willingness to Pay forConservation of Monk Seals. Working PaperGEC 97-10, Centre for Social and EconomicResearch on the Global Environment: London.

Although dichotomous choice (DC) contingentvaluation (CV) has been recommended by the USNOAA "blue-ribbon" panel for large-scalecontingent valuation studies, useful informationcan still be obtained from smaller, open-ended(OE) studies, often undertaken as a precursor to aDC survey. The CV [note use CV rather thanCVM throughout] study considered here wascarried out in Greece and looked at willingness-to-pay (WTP) for protecting the MediterraneanMonk Seal (Monachus-monachus) in the Aegeanarea. This is the most endangered seal in theworld, and the application of the CVMmethodology was the first such application inGreece. The OE data consists of two responses:first, a binary response detailing whether or notrespondents were in principle prepared to pay forthe protection of this seal; secondly, thoserespondents who answered "yes" to the firstquestion were then asked to state their maximumWTP for such protection. A multivariate binomial- log-normal mixture model is used to develop abid function including explanatory variables suchas income, sex, age and education. Such amodelling approach provides an alternative tomore commonplace tobit estimation. However,the model is extended to include furtherinformation which was collected on: (a) anincreased WTP amount given in response to

information that the initial WTP amount may notbe enough to prevent the extinction of the seal;(b) respondents were asked to divide their finalWTP amount between use, option and existencevalues, the latter requiring a multivariate modelwith four binary and four continuous responsesper individual in the same model. The discussionfocuses on the methodological issues raised withsome comment on the substantive interpretationof results.

Coverage: Europe

Contains examples or case studies from: Greece

Ecosystem or sector focus: Marine and coastal,Wildlife


#162. Leclerc, A., (1996), Generating Incomein Your Backyard: A Worthy Approach toFinancing Biodiversity. Paper presented at aworkshop on Investing in Biodiversity, 5th GlobalBiodiversity Forum, Buenos Aires, Argentina, 1-3 Nov 1996. 7 pp.http://www.biodiversityeconomics.org

While local revenue generation cannot beexpected to always raise the millions required toset up vast protection programs, it can at timesprovide the operations money for changing apaper park into a real operational protected area,or a desirable conservation concept into anapplied regulation or specific program forsustainable use. This however, calls for innovativethinking, and for carefully designed applicationsof the "user/benefactor pay" and "cost recovery"principles. It also calls for perceiving the privatesector as a partner of sort and not as an enemy,neither as an almighty driver as is sometimes thecase with the tourism industry in protected areas.In addition, it can mean that Environmental Non-Governmental Organisations (ENGOs) shouldbecome learned about, and involved with, theabove. This may enable them to suggest the viablefiscal solutions when recommending newgovernmental initiatives/programs. In doing so,ENGOs can more efficiently attempt to defusethe financial questions before they are evenposed. The paper addresses issues such as: a) userfees and other forms of revenue generation forparks - including partnership with the tourismsector, b) user fees for other governmentalconservation programs (with examples/casesfrom the review of potential cost recovery for



Environment Canada - this study has permitted toidentify a number of areas with significant costrecovery potential), and c) on the risks of poorlydesigned/applied revenue generation programs,d) the dangers with unpredictable public/mediaperception and reaction, e) the potentiallysignificant management related side benefitswhich includes cost recovery and local revenuegeneration.


Contains examples or case studies from: Canada

Ecosystem or sector focus: Protected Areas,Tourism

Topics: Financial mechanisms, Taxes, Marketsand charges, Private sector

#163. Lee, H.-D. (1998). 'Use and value ofcoastal wetlands in Korea', Intercoast Network32:7-8

This article looks at the productivity values ofcoastal wetlands in Korea, including fisheries,habitat functions, waste treatment services andaesthetic functions. It concludes that economicvaluation has an important role in contributing towell-informed policy decisions.

Coverage: Asia

Contains examples or case studies from: Korea


Topics: Valuation, Economic policies

#164. Lintott, J. (1996). 'Environmentalaccounting: useful to whom and for what?',Ecological Economics 16:179-190

The development of statistics can only beunderstood in relation to their particular uses.Proposals to integrate environmental costs andbenefits into national accounts can only beevaluated by considering them in the context oftheir likely policy use. Their most importantpotential use is as a measure of welfare orprogress. Environmentally adjusted nationalaccounts correspond to a very weak view ofsustainability. The use of environmental accountsas a measure of welfare assumes a completesubstitutability between manufactured and naturalcapital. Problems of monetary undervaluation arelikely to lead to a huge underestimation of

environmental costs. Issues of poverty andinequality are ignored. Policy targeting a revisednational income will continue to aim for everhigher output while making very limitedconcessions to environmental concerns. Analternative approach to allowing forenvironmental costs in policy making is theconstruction and use of a set of social andenvironmental indicators.

Coverage: Global


#165. London Economics, (1992), EconomicCosts of Carbon Dioxide ReductionStrategies. Working Paper Series No III, GlobalEnvironment Facility: Washington DC. 60 pp.

Over the last 5 years the problem of globalwarming has become one of the world's chiefenvironmental priorities. This paper considers therelevant economics of pollution control as appliedto carbon dioxide. The complexity of the policyframework is explored, and policy optionsexplored. Empirical evidence on the costs ofcarbon dioxide abatement are presented, andmajor sub-sectors such as electric power andtransport are examined. The document concludesby proposing an approach for developing a least-cost national strategy for carbon dioxideabatement.

Coverage: Global


Topics: Pollution, Climate change, Carbonoffsets, Economic instruments, Economicpolicies

#166. Lonergan, S., & Ruitenbeek, J. (1994).'Applications of ecological economics indeveloping countries', Ecological Economics11 (2):91-161This special issue contains five papers whichprovide an insight into how ecological economicsis being applied in selected developing countries.The first two papers are written from a macro-level perspective, providing a state-of-the-artexample of sustainable income accounting inZimbabwe and an account of sustainableapproaches to agricultural production in sub-



Saharan farming systems. The following threepapers are presented from a more sectoralperspective. In turn they address: the problem ofsetting compensation levels in the wake of forestconservation programmes in Brazil; applicationsof valuation methods to policies for improvingwildlife conservation in Kenya's national parks;and the importance of decentralised participationin tsetse fly control programmes in Ethiopia.

Coverage: Global, Africa, Latin America

Contains examples or case studies from: Brazil,Ethiopia, Kenya, Zimbabwe

Ecosystem or sector focus: Agriculture, Forests,Wildlife, Protected Areas

Topics: Economic instruments, Economicpolicies, Valuation, Environmental accounting

#167. Loomis, J. B. (2000). 'Can environmentaleconomic valuation techniques aid ecologicaleconomics and wildlife conservation?', WildlifeSociety Bulletin 28 (1):52-60

This article evaluates the potential usefulness ofnonmarket valuation concepts and techniquesfrom environmental economics for improvingwildlife conservation. The concepts includedistinguishing between on-site recreation usevalue and off-site passive use or existence values.In addition, it reviews 3 nonmarket valuationtechniques. I illustrate the concepts and use of thetechnique of contingent valuation with a casestudy of valuation of increased ecosystem servicesfor a riverine ecosystem. Results suggested thatthe benefits to households living along the riverexceeded the costs of water rental from farmersand conservation easements.





#168. Loureiro, W., & de Moura, R. P. R.,(1996), Ecological ICMs (Tax Over Circulationof Goods and Services): A SuccessfulExperience in Brazil. Paper presented atworkshop on Incentives for Biodiversity: SharingExperiences, 4th Global Biodiversity Forum,Montreal, Canada 30 August - 1 September

1996. 4 pp.http://www.biodiversityeconomics.org

This paper summarises changes in Brazilian taxlaws so that biodiversity conservation is rewardedinstead of penalise. The changes have resulted inan increased area of conservation, improvedquality of conservation areas, and municipalitieshave witnessed an increase in revenues whichhelp with the protection of sensitive areas. Thepaper recommends that fiscal compensation forland use restrictions should be developed tofoster local commitment to protected areas.



Ecosystem or sector focus: Forests, Agriculture,Protected Areas

Topics: Private sector, Taxes, Financialmechanisms, Incentive measures, Economicinstruments

#169. Maddison, D., (1994), A Cost BenefitAnalysis of Slowing Climate Change. WorkingPaper GEC 94-28, Centre for Social andEconomic Research on the Global Environment:London.

This paper attempts to condense a mass ofinformation relating to economic growthassumptions, carbon emissions forecasts,abatement cost estimates and global warmingdamage functions and incorporate it into a costbenefit analysis of slowing climate change. Bythese means it is possible to explore whatconventional assumptions imply about thedimensions of the climate change problem andprovide evidence on the extent to which societyought to incur control costs now in order toprevent future climate change using the rulescommonly associated with project appraisal. Thispaper develops a model which takes baselineeconomic growth and future greenhouse gasemissions as given and calculates the evolution ofCO2 concentrations over time according to astatistically estimated model of the carbon cycle.Average global temperatures respond to elevatedCO2 concentrations via a process of laggedadjustment and this rise in temperature is taken asan index of global environmental change. Thewarming of the planet can be slowed by reducingemissions from the baseline (which incurs a cost)or alternatively by terrestrial sink enhancement,i.e. planting forests to absorb carbon from the



atmosphere. In a business as usually scenario themodel predicts a temperature rise of 3.6oC abovepreindustrial levels by the end of the next centuryinflicting damage with a present value of $8.9trillion. An optimal policy however seems toinvolve an immediate 12.7% cut in emissions andthe establishment of 37.1 million hectares offorests. The optimal tax on carbon emissions forthe year 2000 is estimated to be $16.84 per tonneand the optimal policy reduces temperature riseby 0.3oC relative to business as usual. Byfollowing the optimal policy costs are reduced by$700 billion. It is also suggested that policies tohalt deforestation and remove the subsidies paidto fossil fuel producers might reduce overall costsby a further $1.1 trillion.

Coverage: Global


Topics: Climate change, Valuation, Carbonoffsets, Economic policies, Economicinstruments

#170. Maler, K.-G. (1991). 'National accountsand environmental resources', Environmentaland Resource Economics 1:1-15In this paper, optimal growth theory is used toderive the appropriate definition of the netnational product concept, when there areenvironmental resources and environmentaldamage to take into account. The basicconclusions are that conventionally defined NPshould be corrected by deducting environmentaldamage and adding the value of the net change ofall resources.

Coverage: Global


#171. Maler, K.-G., Aniyar, S., Casler, C., &Weir, E., (1997), The Economics of CoastalWetlands. Beijer Discussion Paper No 94,Beijer International Institute of EcologicalEconomics, The Royal Swedish Academy ofSciences: Stockholm. 25 pp. ISBN 1102-4941

This paper presents an approach to estimating thevalue of the services provided by mangroveforests, and by those in Los Olivitos, Venezuelain particular.


Contains examples or case studies from:Venezuela

Ecosystem or sector focus: Wetlands, Marineand coastal, Fisheries

Topics: Valuation

#172. Markandya, A., & Perrings, C., (1991),Resource Accounting for SustainableDevelopment: A Review of Basic Concepts,Recent Debate and Future Needs. LEECPaper DP 91-06, London EnvironmentalEconomics Centre: London. 53 pp.

Environmental accounting is motivated by adesire to bring environmental issues at the centreof the development debate. It tries to monitor theenvironmental impacts of economic activity, andto develop a set of indicators of these impacts inan integrated fashion, so that policy makers arebetter informed about environmental issues. Thispaper looks at the background to environmentalvaluation and indicators, and explains themethods and techniques for constructingenvironment accounting systems. It illustrates thiswith examples from forestry and wildlife sectors,and from Botswana and Indonesia.

Coverage: Global, Africa, Asia

Contains examples or case studies from:Botswana, Indonesia


Topics: Environmental accounting, Valuation,Economic instruments, Economic policies, Trade

#173. Markandya, A., & Richardson, J. (Eds.),(1992), The Earthscan Reader inEnvironmental Economics. EarthscanPublications Ltd: London. 469 pp. ISBN 1-85383-106-9

This reader is a sourcebook that brings togetherthe most important contributions to the literatureon environmental and natural resourceeconomics. It covers the theoretical issues, thedifferent ways of valuing the environment,economic instruments of environmental policy,environment and development, and globalenvironmental problems. An extensiveintroduction is provided which maps out the area



of environmental economics and the differentapproaches to it.

Coverage: Global, Latin America, North America

Contains examples or case studies from: CostaRica, El Salvador, USA

Ecosystem or sector focus: Wildlife, Fisheries,Industry

Topics: Valuation, Economic instruments,Economic policies, Trade, Incentive measures,Disincentives, Pollution, Taxes, Subsidies

#174. McNeely, J., (1988), Economics andBiological Diversity: Developing and UsingEconomic Instruments to ConserveBiological Diversity. IUCN - The WorldConservation Union: Gland. 232 pp. ISBN 2-88032-964-7

Current processes of development are depletingmany biological resources at such a rate that theyare rendered essentially non-renewable. Effectivegovernment intervention is needed to meet theneeds of society, because experience has shownthat to little biological diversity will be conservedby market forces alone. Economic inducementsare likely to prove an effective measure forconverting over-exploitation to sustainable use ofbiological resources. This book looks at thebackground and application of economicincentives for biodiversity conservation. Itexamines the economic costs and benefits ofbiological diversity, describes what economicincentives are and provides an overview andexamples of the use of economic incentives atcommunity, national and international levels. Italso describes mechanisms for funding incentivepackages, and presents guidelines for usingincentives.

Coverage: Global, Africa, Asia, Caribbean,Europe, Latin America, North America

Contains examples or case studies from: Brazil,Bolivia, Indonesia, Thailand, Zimbabwe, Nepal,Kenya, Mexico, China, Mali, Honduras, Japan,Philippines, Costa Rica, India, Zambia, USA

Ecosystem or sector focus: Forests, Wildlife,Protected Areas, Wetlands, Marine and coastal,Drylands, Watersheds, Industry

Topics: Incentive measures, Trade, Causes ofbiodiversity loss, Economic instruments,Disincentives, Economic policies, Financial

mechanisms, Valuation, Convention on BiologicalDiversity

#175. McNeely, J. (1989). 'How to pay forconserving biological diversity', Ambio 18(6):308-313

This article looks at ways of addressing thedifficulty of raising sufficient finance forbiodiversity conservation. Using case studies fromaround the world, it illustrates innovations inbiodiversity funding and makes conclusions aboutthe broader policy and institutional conditionsthat are necessary to ensure that conservation isproperly financed.

Contains examples or case studies from: CostaRica, Venezuela, Ecuador, Thailand, Coted'Ivoire, USA, Sri Lanka, Zambia, Zimbabwe,Nepal

Ecosystem or sector focus: Forests, ProtectedAreas, Marine and coastal, Water

Topics: Financial mechanisms, Incentivemeasures, Economic instruments, Convention onBiological Diversity

#176. McNeely, J., (1994), Trade andBiological Diversity: The Internalization ofEnvironmental Costs. 8 pp.

Trade is a dominant force in internationaleconomics. It also has a fundamentalenvironmental dimension, helping determine theway that nations utilize their natural resources.However, all too often trade policies havecontradictory effects, and the environment isusually the victim of such inconsistency. Tradepractices as they affect developing countries needto be viewed against the overwhelmingrequirement of sustainable development, andadjusted where they clearly conflict with it. It is atenet of economics that resources are used tobuild the capital necessary to invest inmodernizing the economy, an approach all themore justifiable in developing countries withyoung economies. Yet protectionism in the richercountries sharply reduces the ability of developingcountries to generate adequate income from theuse of the natural resources, causing needlessdepletion of the environment and a reduction ofthe capacity of the environment to fuel futuredevelopment. Add to this the unpredictable



nature of trade regulations, where new restrictionscan often undermine investments which weresensible in the context they were made, and itbecomes clear that developing countries navigatea treacherous course. The successful conclusionof GATT's Uruguay Round may be helpful to atleast some developing countries, but vigilance isrequired to ensure that developing countriesreceive their fair share of benefits, without payinghigh environmental costs. One means of doingthis is to ensure that trade liberalization isaccompanied by the removal of subsidies toagriculture in developed countries. A generalsolution would be for each nation to have a"Foreign Policy on the Environment", whichwould be published and widely disseminated.NGOs should encourage governments to effectsuch reviews as a matter of urgent conservationand development priority, perhaps as part of theNational Biodiversity Strategies called for underthe new Convention on Biological Diversity.

Coverage: Global

Topics: Trade, Incentive measures, Economicpolicies, Economic instruments, Taxes, Subsidies

#177. McNeely, J., & Weatherly, W. P., (1995),Innovative funding to support biodiversityconservation. IUCN - The World ConservationUnion: Gland. 23 pp.

It is widely appreciated that insufficientinvestment is being made in conservingbiodiversity, and that innovative approaches arerequired for generating the additional financialsupport required for implementing theConvention on Biological Diversity. It appearsthat domestic resources in most developingcountries will continue to be inadequate forfinancing the conservation of biodiversity due tofactors such as the limited tax and capital base ofmany of these countries, their under-developedtaxation systems and weak capital markets, andthe need to divert resources to servicing foreigndebt. Other reasons for socially insufficient levelsof investment in biodiversity include the lack ofwell defined transferable property rights, hightransaction costs, differences between social andprivate discount rates, imperfect information,inappropriate political institutions, skewedpolitical incentives, and bureaucratic. Clearly, suchproblems cannot be solved by simply providingmore funds. Instead, a combination of policychanges enabling new funding mechanisms is

required. This paper surveys the current situation,present trends, and promising innovations in thefinancing of biodiversity conservation. It paperseeks to help the widest range of investors whocould (and should) have a hand in crafting andusing these tools. Obviously, simply generatingmore money is not a sufficient response to theglobal loss of biodiversity, especially because somuch difficulty is already being experienced inspending the available funding in a credible way.Generating additional funds from governmentsources will require the general public to beconvinced that the funds generated will be used inthe common interest, and will be effective inconserving biodiversity.

Topics: Financial mechanisms, Convention onBiological Diversity, Economic instruments,Economic policies

#178. McNeely, J., (1996), Trade and theConvention on Biological Diversity:Internalizing the Costs of Trade onBiodiversity. Paper presented at Workshop onTrade Related Aspects of the Convention onBiological Diversity, Singapore, 11 December1996. 8 pp.

All civilizations have been based on trade. Intoday's world, no nation can maintain or improveits standard of living unless it is able to trade rawmaterials and manufactured goods from distantlands. This international trade has enabled theentire world to draw on local ecosystems, feedingthe growing population of the world at the cost ofover-exploiting some local resources and thusaffecting biological diversity. Thus trade is amajor factor in national programmes toimplement the Convention on BiologicalDiversity (CBD). Further, trade is fundamental tothe second and third objectives of the CBD --sustainable use and equitable sharing of thebenefits of use -- and thus directly affects the firstobjective -- conservation. In the modern globaleconomy, use almost always implies exchanges ortrades between producers and consumers ofbiological goods and services. Whether this tradeis sustainable is a fundamental concern of theCBD. Whether the distribution of returns fromtrade is equitable is also a fundamental concern ofthe CBD. Various decisions of the Conference ofthe Parties to the CBD clearly stake out at leastsome of the current interests of the CBDcommunity in trade issues. What has gone



unstated, however, is the recognition that achange in the relative prices of resources or in theinternational trade regime may be the single mostimportant factor affecting the resilience ofecological systems and the biodiversity thatsupports them. Trade by definition deals withproducts, while conserving biodiversity, usingbiological resources sustainably, and equitablysharing the benefits arising from such use areprocesses. Perhaps the major challenge facing therelationship between WTO and CBD is how toensure that the benefits and costs of global tradeon biodiversity are internalized into the pricespaid for commodities, and that the prices paid inturn feed back into maintaining the processes thatensure the continuing productivity of our planet'secosystems. This paper will discuss some of therelevant issues and suggest several ways to moveahead on these issues.

Coverage: Global

Topics: Trade, Convention on BiologicalDiversity, Economic policies

#179. McNeely, J., (1997), SustainableFinance for Protected Areas. Paper presentedat workshop on Protected Areas in the 21stCentury: From Islands to Networks, Albany,Western Australia, 24-28 November 1997. 14pp.

Insufficient investment is being made in protectedareas, and innovative approaches are required forgenerating the additional financial support . Theneed for additional resources arises from theimbalance between a country's needs formanaging protected areas on the one hand, andthe ability of the country to mobilize resources onthe other. Resources can be augmented throughexisting mechanisms, as well as through newmechanisms. Even so, it appears that domesticresources in most developing countries willcontinue to be inadequate for financing theconservation of biodiversity. Trying to financeprotected areas under current policy conditions,which include market failures and inappropriateincentives, will require unattainable levels offunding. This is the case because the world iscurrently spending about US$1 trillion in directand indirect subsidies of energy, water,agrochemicals, marginal agriculture, deforestation,and heavily polluting industries that undermineprotected area management. Without correctingthese distortions, additional funding for protected

areas is likely to be futile. Further, both the policyreforms and the more appropriate determinationof prices are likely to save financial resources andgenerate new funding, thereby further reducingthe need for additional resources. This papersurveys the current situation, present trends, andpromising innovations in the financing ofprotected areas, emphasizing innovative tools thatare relatively poorly known.

Topics: Financial mechanisms, Private sector,Economic instruments, Economic policies,Convention on Biological Diversity, Taxes,Subsidies

#180. McNeely, J., (1999), AchievingFinancial Sustainability in BiodiversityConservation Programmes. A frameworkpaper prepared for presentation at an InterAmerican Development Bank Workshop onInvesting in Biodiversity Conservation,Washington D.C., on the 28th October 1996. 58pp. http://www.biodiversityeconomics.org

It is widely appreciated that insufficientinvestment is being made in conservingbiodiversity, and that innovative approaches arerequired for generating the additional financialsupport required for implementing theConvention on Biological Diversity. The need foradditional resources arises from the imbalancebetween a country's need for capacity buildingand provision of basic infrastructure forconserving biodiversity on the one hand, and theability of the country to mobilise resources on theother. This paper surveys the current situation,present trends, and promising innovations in thefinancing of biodiversity conservation. Itdescribes each promising financial tool and thepolicies, technologies, and entrepreneurialinitiatives required to make the tool successful. Itestimates the importance of each tool, describeslimits to its wider use, and identifies actions thatcould enhance that tool's leverage. It emphasisesinnovative tools that are relatively poorly known.This paper seeks to help the widest range ofinvestors who could (and should) have a hand incrafting and using these tools. They include thefull spectrum of those active, and potentiallyactive, in biodiversity conservation: theinternational governing system; nationalgovernments; the private sector, both nationaland multinational; and NGOs, both local andinternational.



Coverage: Global

Topics: Financial mechanisms, Incentivemeasures, Economic instruments, Convention onBiological Diversity

#181. Mendelsohn, R., & Balick, M. (1995).'The value of undiscovered pharmaceuticals intropical forests', Economic Botany 49 (2):223-228

Previous estimates of the potential value of higherplants in tropical forests for pharmaceuticals aretoo high because analysts mistakenly used grossrevenues to value drugs instead of net revenues.Correcting this error, the article estimates thateach new drug is worth an average of US$ 94million to a private drug company and US$ 449million to society as a whole. Given recentexperience searching for new drugs, it is estimatedthat the higher plants of the world's tropicalforests contain about 375 potentialpharmaceuticals of which 48 (about one in eight)have already been discovered. Multiplying thesevalues by the number of potential new drugssuggests that a complete collection and screeningof all tropical plant species should be worth aboutUS$ 3-4 billion to a private pharmaceuticalcompany, and as much as US$ 147 billion tosociety as a whole.

Coverage: Global


Topics: Valuation, Bioprospecting

#182. Merrifield, J. (1996). 'A market approachto conserving biodiversity', EcologicalEconomics 16:217-226

The policy used to implement the EndangeredSpecies Act only prohibits actions that areharmful to listed species. While doing far too littleto advance the cause of biodiversity, suchprohibitions, or the prospect of them, seem to beimposing significant costs on many regionaleconomies, and much greater impacts are feared.The article describes a market mechanism forsimultaneously internalising the social cost ofeliminating especially scarce habitat, and the socialbenefits of protecting or producing it. Forlandowners with low value non-habitat uses, themarket mechanism transforms habitat from amajor liability into a money-making asset. For

landowners with high value non-habitat uses, themarket mechanism would be a very attractivealternative to the current slow and expensive case-by-case consultation process. Environmentalistswill appreciate the market process because it isless subject to politicisation, or being guttedbudgetarily or administratively, while assuring thatagreed-upon, safe biological minimums cannot beviolated.



Ecosystem or sector focus: Wildlife, Fisheries,Agriculture, Protected Areas, Forests

Topics: Economic instruments, Incentivemeasures

#183. Moran, D., (1994), ContingentValuation and Biodiversity Conservation inKenyan Protected Areas. Working Paper GEC94-16, Centre for Social and EconomicResearch on the Global Environment: London.28 pp.

The financial returns to Kenyan tourismdemonstrate the importance of the country'stourist potential to economic development, andthe role of wildlife protected areas in this. Yetthere is little coincidence between those thatbenefit from protected areas and those that payfor their continued existence. Kenyans pay animplicit subsidy to support conservation for thebenefit of the world at large. Using a contingentvaluation survey, this study attempts to calculatethe consumer surplus attached to the current non-consumptive use of protected areas by foreigntourists. This is more than double the opportunitycost of protected areas, and is additional tocurrent financial returns from tourism.Recommendations are made that more of thisconsumer surplus could be captured through thecurrent park entry fee structure.

Coverage: Africa



Topics: Valuation, Contingent valuation,Economic instruments, Incentive measures,Markets and charges, Financial mechanisms



#184. Munasinghe, M., (1992), EnvironmentalEconomics and Valuation in DevelopmentDecisionmaking. Environment Working PaperNo 51, Environment Department, World Bank:Washington DC. 77 pp.

One essential step towards achieving sustainabledevelopment is the economically efficientmanagement of natural resources. This paperexplains the key role of environmental economicsin facilitating the more effective incorporation ofenvironmental concerns into developmentdecision making. This paper reviews concepts andtechniques for valuation of environmentalimpacts that enable environmental considerationsto be explicitly considered in the conventionalcost-benefit calculus used in economic decisionmaking. Key related aspects includingenvironmental impacts of economy-wide policies,discount rate issues, and multi-criteria analysis arereviewed. The process of internalizingenvironmental externalities may be facilitated bymaking even rough qualitative assessments earlyon in the project evaluation cycle. The advantagesof such an approach include: the early exclusionof options that are not sound environmentally;more effective in-depth consideration of thosealternatives that are preferable from theenvironmental viewpoint; and betteropportunities for redesigning projects and policiesto achieve sustainable development goals. Thispaper seeks to help practitioners in the field ofenvironmental valuation, whose main concern isto keep up with, and make use of the advancesmost relevant to their own areas of application. Anumber of developing country case studies whichcover a wide range of practical valuation methods,are reviewed. The evidence presented suggeststhat the valuation techniques for determining "usevalues" may be applied successfully in appropriatecases. However, examples involving theestimation of "non-use values" are virtually non-existent in the developing world, and rather scarceeven in the industrialized nations. The use ofmulti-objective decision methods also needs to beexplored, where economic valuation is notfeasible.

Coverage: Global, Africa, Latin America,Caribbean

Contains examples or case studies from:Lesotho, Peru, Costa Rica, Kenya, Haiti

Ecosystem or sector focus: Water, Wildlife,Protected Areas, Forests, Tourism, Agriculture

Topics: Valuation, Economic instruments,Economic policies, Land degradation, Travel cost,Contingent valuation, Effect on production

#185. Munasinghe, M., & McNeely, J. (Eds.),(1994), Protected Area Economics andPolicy: Linking Conservation andSustainable Development. IUCN - The WorldConservation Union and The World Bank: Glandand Washington DC. 364. 0-8213-3132-9

This volume presents the papers presented at aWorkshop on the Economics of Protected Areasat the IUCN-World Conservation Union FourthCongress on National Parks and Protected Areas,held in Caracas Venezuela in 1992. They seek tobring the techniques of environmental economicsto bear on the vital task of improving the designand management of protected areas.

Coverage: Global

Contains examples or case studies from: Ghana,USA, Indonesia, Australia, Madagascar, Ecuador,UK, Canada, Nepal, Netherlands Antilles,Venezuela

Ecosystem or sector focus: Protected Areas,Marine and coastal, Forests, Drylands, Fisheries,Industry

Topics: Private sector, Valuation, Incentivemeasures, Economic instruments, Economicpolicies, Causes of biodiversity loss, Markets andcharges, Financial mechanisms

#186. Myers, N., (1996), Perverse Subsidies.Paper presented at IUCN Workshop onEconomics of Biodiversity Loss, April 1996,Gland, Switzerland. 11 pp.http://www.biodiversityeconomics.org

The question asked in this paper is: whichsubsidies are detrimental to society's overall andlong-term interests? Subsidies represent 3.8% of aglobal economy of $26 trillion and therefore playa prime role in the functioning of the globaleconomy. They can be detrimental, i.e. 'perverse,'to society in the sense that they contribute to thedestruction of the environment and the over-exploitation of natural resources. For example,agricultural subsidies can lead to over-loading ofcroplands and pollution from synthetic fertilisersand pesticides. The main problems associated



with subsidies are that they are very expensive forgovernments and that they cause inefficiencies inproduction or the misuse and over-use ofresources. The case of subsidies for marinefisheries is studied in detail. All major marinefisheries are considered to be over-exploited andwhile world-wide harvest has increased almostfivefold since 1950, the catch has been decliningsince 1989. Subsidies, aimed at preserving thefishermen's jobs, aggravate the situation byallowing the fishing industry to continue over-exploiting the fisheries in spite of the decliningannual catch. As a result, there is now anexcessive extractive capacity in the fishingindustry. Several policy responses are proposed,such as using the subsidies to retrain fishermenwho are put out of work through reducedcatches-whether reduced through declining stocksor through policy shifts. Another proposal is forgovernments to charge foreign fishermen for theright to catch off their shores. Finally, thesolution proposed is that of a limited number oftradeable fishing rights to individual fishermen.

Coverage: Global

Ecosystem or sector focus: Agriculture, Forests,Fisheries, Marine and coastal

Topics: Causes of biodiversity loss, Incentivemeasures, Disincentives, Taxes, Subsidies

#187. National Center for EnvironmentalEconomics, (2001), The United StatesExperience with Economic Incentives forProtecting the Environment. EPA-240-R-01-001, National Center for EnvironmentalEconomics, Office of Policy, Economics, andInnovation, Office of the Administrator, U.S.Environmental Protection Agency: WashingtonDC. 230 pp.

Over its 30-year history the predominant toolused by the U.S. Environmental ProtectionAgency (EPA) to help achieve the nation’senvironmental goals has been uniform, nationallyapplicable regulations derived fromenvironmental law. Those regulations, e.g.,source-specific emissions limits, productspecifications, and pollution-control guidelines,have been responsible for much of theimprovement in air and water quality that isevident in the country today. But over the past 20years, and during the past decade in particular,EPA has begun to use a much broader array of

tools to manage environmental quality. Amongthese relatively new tools, several kinds ofeconomic incentives are being applied more andmore widely. Because of the wide and growinguse of economic incentives at all levels ofgovernment in the United States, it is importantto understand them more clearly. For example,what kinds of economic incentives are being usedtoday to address what kinds of problems? Areparticular incentives better suited for use atspecific levels of government? Even moreimportant are questions regarding relativeeffectiveness. How well have economic incentivesperformed in terms of improving environmentalquality? How economically efficient and cost-effective have they been? To what extent havethey stimulated technological change andinnovation? How can past experience witheconomic incentives help improve their use todayand in the future? This report attempts to answerthose questions by providing a broad overviewand analysis of the current use of economicincentives as an environmental management toolin the United States.



Ecosystem or sector focus: Urban settlements,Industry, Infrastructure, Agriculture, ProtectedAreas, Wildlife, Forests

Topics: Incentive measures, Economicinstruments, Economic policies, Taxes, Subsidies,Markets and charges, Pollution

#188. Navrud, S., & Mungatana, E. (1994).'Environmental valuation in developingcountries: the recreation value of wildlifeviewing', Ecological Economics 11:135-151

Few environmental valuation studies have beencarried out in developing countries. This studyshows that the Travel Cost (TC) and theContingent Valuation (CV) methods can besuccessfully applied to value natural resources indeveloping countries. These two independentmethods were used to estimate the recreationalvalue of wildlife viewing, which is a valid, but veryconservative, estimate of the total economic valueof the wildlife species. The annual recreationalvalue of wildlife viewing in Lake Nakuru NationalPark in Kenya was found to be $7.5-$15 million.The flamingos accounted for more than one thirdof the value. Recognising that this is only one of



many parks in Kenya, and that wildlife viewing isbecoming an important part of the global trend ofincreasing ecotourism, this shows that sustainablemanagement of wildlife resources could provide avery significant and much needed revenue sourcefor developing countries in the future. Thechallenge for the developing countries is to findways to realise this economic potential, which alsosecures the preservation of wildlife.

Coverage: Africa


Ecosystem or sector focus: Wetlands, Water,Wildlife, Protected Areas, Fisheries

Topics: Valuation, Travel cost, Contingentvaluation, Financial mechanisms, Markets andcharges

#189. Newell, R. G., & Stavins, R. N., (1999),Climate Change and Forest Sinks: FactorsAffecting the Costs of Carbon Sequestration.Discussion Paper 9-31, Resources for theFuture: Washington DC. 43 pp.

The possibility of encouraging the growth offorests as a means of sequestering carbon dioxidehas received considerable attention because ofconcerns about the threat of global climatechange due to the greenhouse effect. In fact, thisapproach is an explicit element of both U.S. andinternational climate policies, partly because ofevidence that growing trees to sequester carboncan be a relatively inexpensive means ofcombating climate change. But how sensitive aresuch estimates to specific conditions? Weexamine the sensitivity of carbon sequestrationcosts to changes in critical factors, including thenature of the management and deforestationregimes, silvicultural species, agricultural prices,and discount rates. We find, somewhat counter-intuitively, that the costs of carbon sequestrationcan be greater if trees are periodically harvested,rather than permanently established. In addition,higher discount rates imply higher marginal costs,and they imply non-monotonic changes in theamount of carbon sequestered. Importantly,retarded deforestation can sequester carbon atsubstantially lower costs than increasedforestation. These results depend in part on thetime profile of sequestration and the amount ofcarbon released upon harvest, both of which mayvary by species, geographic location, and

management regime, and are subject to scientificuncertainty.

Coverage: Global


Topics: Markets and charges, Economicinstruments, Climate change, Carbon offsets

#190. Norgaard, R. B. (1987). 'Economics asmechanics and the demise of biologicaldiversity', Ecological Modelling 38:107-121

Macro explanations of the loss of biologicaldiversity have emphasised how higher populationlevels have forced the transformation of relativelyundisturbed areas and how industrial pollutantsand energy-intensive agriculture have put new,and relatively uniform, selective pressure onspecies. This paper explores how a third macrophenomenon, social organisation based onspecialisation and exchange, has contributed tothe demise of biological diversity. It argues thatknowledge, technologies and supportingstructures evolved relatively independently upuntil a century ago, like patches on a patchworkquilt, with only regional exchange, including cropsand agriculture. Hence people applied diverseselective pressure to a portion of each patch,meaning that people had little detrimental impacton biological diversity overall and in some caseseven enhanced it. During the past century thispatchwork quilt has transformed into a globalexchange economy supporting a fourfold increasein population. The global order is organisedaround a monolithic vision based on comparativeadvantage, specialisation and exchange. This hadresulted in a reduction of the number of cropsgrown over broad regions. Yet there is morevariation within a given region with respect tocrops grown in a given year, because each regionresponds to market signals generated by changesin all of the regions. Specialisation has reducedthe diversity of selective pressure of agriculturalpractices on species, while increased annualvariation within each region has selected againstspecies with narrow niches. The dominant visionof social organisation stems from the Newtonianmodel of systems consisting of mechanicallyrelated atomistic parts. This article presents acontrasting model of ecological systemsconsisting of tightly coevolved parts and relations.The maintenance of biodiversity will requiremoderation of the dominant vision and social



organisation more often designed around acoevolutionary view.

Coverage: Global


Topics: Causes of biodiversity loss, Economicinstruments

#191. Norton-Griffiths, M., & Southey, C.(1995). 'The opportunity costs of biodiversityconservation in Kenya', Ecological Economics12:125-139

This paper estimates the opportunity costs ofbiodiversity conservation in Kenya from thepotential net returns of agricultural and livestockproduction, and compares them with the netreturns from tourism, forestry and otherconservation activities. At the national level,agricultural and livestock production in the parks,reserves and forests of Kenya could support 4.2million Kenyans and generate gross annualrevenues of $565 million and net returns of $203million. These forgone net returns of $203million, some 2.8% of GDP, represent theopportunity cost to Kenya of biodiversityconservation. The current combined net venuesof $42 million from wildlife tourism and forestryare thus inadequate to cover these opportunitycosts to land. The government of Kenya is clearlysubsidising conservation activities whose chiefvalues are all indirect and external to Kenya, andtheir ability to continue doing so will be afunction of growth and modernisation in theKenyan economy. Dependency on land willincrease if the economy stagnates and ruralpopulations continue to grow, and while thegovernment of today may not considerdisbanding the parks and reserves, the situationcould be different in 25 years when ruralpopulations have doubled again. In contrast,dependency on land will fall only once theeconomy grows and modernises and ruralpopulations are drawn off the land and intoindustrial and service sectors. It is argued thatgiven the global nature of the benefits fromKenya's conservation efforts, it is inappropriatethat so much of the cost is born by Kenya. Thepresent scale of subsidies should instead form thebasis for international negotiations to transferfunds to meet all or part of them. At present theglobal environment facility (GEF) is the onlyoperational programme through which suchcontributions can be channelled to meet the

incremental costs of biodiversity conservation,but situations such as the one described forKenya were never envisaged when the GEF wasdesigned. If the developed world expects acountry like Kenya to maintain conservationestate on its behalf, then it must be prepared tocontribute substantially towards these costs untilsuch time as Kenya can afford to carry the burdenitself.

Coverage: Africa


Ecosystem or sector focus: Wildlife, Agriculture,Forests, Protected Areas

Topics: Valuation, Economic policies, Incentivemeasures, Subsidies, Financial mechanisms

#192. O'Neill, J. (1997). 'Managing withoutprices: the monetary valuation of biodiversity',Ambio 26 (8):546-550

Environmental managers manage without prices -their day to day decisions are normally madewithout any appeal to monetary values or anyother single common measure. But neo-classicaleconomic theory suggests that monetary valuationis necessary in decision-making. This paperexamines three arguments for monetary valuationof biodiversity and shows that none aresatisfactory. While there may be problems inexisting procedures for environmental decision-making, these do not include the failure to usemonetary values.

Coverage: Global

Topics: Valuation, Markets and charges

#193. Organisation for Economic Co-operationand Development, (1994), Economic IncentiveMeasures for the Conservation andSustainable Use of Biological Diversity:Conceptual Framework and Guidelines forCase Studies. Organisation for Economic Co-operation and Development: Paris. 29 pp.In 1993 the OECD Group on Economic andEnvironmental Policy Integration formed anExpert Group on Economic Aspects ofBiodiversity to undertake a two year project onthe use of economic incentive measures for theconservation and sustainable use of biologicaldiversity. At the first meeting of the expert group



it was agreed that the development of countrycase studies would be an appropriate and practicalapproach to acquiring better understanding of theuse of economic incentives in support ofbiodiversity. This conceptual framework placesthe use of economic incentives into a largerperspective, linking incentives with the maincauses of biodiversity loss and the objectives ofthe CBD.

Coverage: Europe

Topics: Convention on Biological Diversity,Incentive measures, Economic instruments,Economic policies, Causes of biodiversity loss

#194. Organisation for Economic Co-operationand Development, (1996), Handbook ofIncentive Measures for Biodiversity: Designand Implementation. Organisation forEconomic Co-operation and Development:Paris. 171 pp. ISBN 92-64-17059-6This is a practical handbook to assist policymakers in the design and implementation ofappropriate incentive measures for the effectivemanagement of biodiversity. It synthesises thelessons learned from the experiences of OECDMember countries in the use of a variety ofincentive measures, and combines this with aconceptual framework to develop comprehensiveguidance on the policies available for preventingbiodiversity loss. It uses case studies to illustratethe practical application of incentive measures forbiodiversity in European countries and elsewhere.

Coverage: Global, Europe, Australia and NewZealand, Asia, Latin America

Contains examples or case studies from:Australia, Austria, Canada, Denmark, Finland,France, Germany, Greece, Japan, Korea, Mexico,Netherlands, New Zealand, Poland, Turkey, UK,USA

Ecosystem or sector focus: Protected Areas,Agriculture, Forests, Fisheries, Marine andcoastal, Wildlife, Water, Wetlands, Fisheries

Topics: Incentive measures, Economicinstruments, Economic policies, Trade,Disincentives, Causes of biodiversity loss, Taxes,Subsidies, Financial mechanisms

Other: Also published in French

#195. Organisation for Economic Co-operationand Development, (1999), EconomicInstruments for Pollution Control and NaturalResources Management in OECD Countries:A Survey. Organisation for Economic Co-operation and Development: Paris. 115 pp.

The OECD Working Party on Economic andEnvironmental Policy Integration (WPEEPI)decided at its 12th Session on 6-7 November1997, to launch a survey on the use of economicinstruments for pollution control and naturalresource management in OECD countries. Theobjectives of the survey were to update theOECD database on the use of economicinstruments for pollution control in OECDcountries (last updated in 1992-1993); survey theuse of economic instruments in OECD countriesfor natural resource management; and survey theuse of financial assistance schemes in OECDcountries for both pollution control and naturalresource management. The ongoing OECD workprogramme on statistics on environmental taxesprovided information on the use ofenvironmentally related taxes for pollutioncontrol. Accordingly, a comprehensivequestionnaire on the use of environmentallyrelated economic instruments was sent to OECDcountries in 1998, and responses were receivedfrom 24 of the 29 Member countries. Thisdocument presents the information contained inthose submissions.

Coverage: Europe

Topics: Economic instruments, Incentivemeasures, Financial mechanisms, Economicpolicies


#196. Othman, M. S. H., & Abdullah, N. M. R.,(1991), Economic Valuation of Wetland Plant,Animal and Fish Species of Tasek Bera andResidents' Perceptions on Development andConservation. AWB Publication No 77, AsianWetland Bureau: Kuala Lumpur. 46 pp.This document reports on a survey carried out onthe economic values of plant, animal and fishspecies utilised by residents of the wetlands ofTasek Bera in Malaysia. Perceptions onconservation issues arising from agricultural



developments and proposed power transmissionlines are also evaluated. The study suggests thatthe average annual household value derived fromwetlands is RM 2,504, to a total of RM 463,166for the whole community. Younger generationsare found to not support any developmentprogrammes, while those in the higher incomebracket are ignorant of the environmental effectsof developments. Although some kinds of passivedevelopment projects are welcomed by thecommunity, most respondents preferred theirarea to be conserved for the benefit of futuregenerations. The study concludes that there is aneed to develop the Tasek Bera area, but caremust be taken in carrying out such projects sothat damage to forest and wetland areas isminimised.

Coverage: Asia


Ecosystem or sector focus: Marine and coastal,Wetlands, Agriculture, Infrastructure, Fisheries,Forests

Topics: Valuation, Causes of biodiversity loss,Market valuation

#197. Pacini, C., Wossink, A., Vazzana, C., &Omodei-Zorini, L., (2000), EnvironmentalAccounting in Agriculture: A TheoreticalOverview with Special Reference to Tuscany.American Agricultural Economics AssociationAnnual Meeting, July 30-August2: Tampa,Florida. 21 pp.

This paper addresses its specifics ofenvironmental accounting for agriculture.Particularly it focuses on (a) datacollecting/presenting or the environmentalaccounting methodology in agriculture, and. (b)indicators to measure the environmentalconsequences of agricultural production. Thepaper takes farming systems in the TuscanyRegion in Italy and its specific environmentalpolicy and management issues as a back drop. Anew Environmental Accounting InformationSystem (EAIS) is exposed that comprises both aset of environmental indicators for the evaluationof the farm externalities and the estimate of thefarm environmental capital, a data collectionsystem (the Environmental AccountingQuestionnaire) and a set of elaborationmethodologies for the indicators calculation.

Examples about how to collect data andindicators elaboration methodology applicationare presented with special concern to ecological-environmental models and yardsticks (GLEAMS,EPRIP), biodiversity indicators and landscapeevaluation.

Coverage: Europe

Contains examples or case studies from: Italy



#198. Panayotou, T. (1994a). 'Conservation ofbiodiversity and economic development: theconcept of transferable development rights',Environmental and Resource Economics 4(1):91-110

Coastal areas of the Akamas Peninsula in north-west Cyprus have a high level of biodiversity, aswell as containing several rare and endemic plantspecies. Part of the Akamas Peninsula has beenzoned by the Government of Cyprus as a non-development area. So as to save costs in itsconservation, raise funds and avoid conflicts withpotential developers, a system of transferabledevelopment rights has been proposed. Underthis scheme developers, rather than beingcompensated with cash for activities foregone,would retain their rights to development but notbe able to exercise them on-site. Developmentrights could be traded for property in other areas,or sold to groups concerned with theconservation of the Akamas Peninsula.

Coverage: Europe

Contains examples or case studies from: Cyprus

Ecosystem or sector focus: Marine and coastal

Topics: Economic instruments, Markets andcharges, Property rights

#199. Panayotou, T., (1994b), EconomicInstruments for Environmental Managementand Sustainable Development. EnvironmentalEconomics Series Paper No 16, United NationsEnvironment Programme: Nairobi. 108 pp.The importance of economic instruments forenvironmental policy is stressed in both the RioDeclaration and Agenda 21. Economicinstruments provide a way of internalising the



costs of environmental degradation andinstituting the polluter-pays principle. They alsoprovide a means for governments to deal withenvironmental issues in a cost effective manner.This report presents a comprehensive outline ofeconomic instruments for environmentalmanagement, illustrated with case studies fromaround the world.

Coverage: Global

Contains examples or case studies from: USA,Germany, Netherlands, Denmark, France, Italy,Norway, Sweden, New Zealand, Finland, Brazil,Cote d'Ivoire, Sri Lanka, Papua New Guinea,Congo, Ghana, Central African Republic, China,Pakistan, Chile, Malaysia, Poland

Ecosystem or sector focus: Marine and coastal,Fisheries, Forests, Water, Industry, Urbansettlements

Topics: Incentive measures, Economicinstruments, Financial mechanisms, Taxes,Subsidies, Markets and charges, Bonds anddeposits, Property rights, Deforestation,Pollution, Economic policies

#200. Panayotou, T., (1994c), FinancingMechanisms for Environmental Investmentsand Sustainable Development. EnvironmentalEconomics Series Paper No 15, United NationsEnvironment Programme: Nairobi. 44 pp.

This document addresses the issues involved infinding funds to fill the financing gap ofimplementing sustainable development initiatives,and meeting the obligations attached tomultilateral environmental agreements. It looksboth at ways of reducing existing financing needs,of generating additional resources from existingmechanisms, and of deploying new andinnovative financing mechanisms forenvironmental conservation. Examples offinancing mechanisms are given from around theworld.

Coverage: Global

Topics: Financial mechanisms, Economicinstruments, Economic policies, Bioprospecting,Markets and charges, Taxes, Subsidies,International Conventions

#201. Pearce, D., Barbier, E. B., & Markandya,A., (1988), Environmental Economics and

Decision-Making in Sub-Saharan Africa.LEEC Paper DP 88-01, London EnvironmentalEconomics Centre: London. 23 pp.

Africa's economic crisis is largely an agriculturalcrisis, which means that it is also anenvironmental crisis. Analysing the interactionbetween economy and the environment is thesubject matter of environmental economics. Thispaper applies environmental economics principlesand tools to economic and environmental issuesin Sub-Saharan Africa. It looks at assessing thestate of the environment, at identifying economicfactors that lead to natural resource changes, atshifts in economic behaviour and theirmotivations, at valuation of the costs ofenvironmental degradation and at devising marketand economic policy measures which aim toprovide incentives for sustainable developmentand environmental management.

Coverage: Africa


Topics: Incentive measures, Valuation, Trade,Causes of biodiversity loss, Economicinstruments, Economic policies

#202. Pearce, D., (1991a), Afforestation andthe Greenhouse Effect: The Economics ofFixing Carbon by Growing Trees. GatekeeperSeries, GK 91-04, London EnvironmentalEconomics Centre: London. 5 pp.

Concern about global warming has focusedattention on ways of reducing greenhouse gasemissions. This short paper looks at carbon fixingby trees, and suggests methods with which tocalculate the economic value of this.

Coverage: Global


Topics: Climate change, Valuation

#203. Pearce, D., (1991b), An EconomicApproach to Saving the Tropical Forests.London Environmental Economics Centre:London. 30 pp.This paper examines economic aspects of forestconservation and degradation. It describes oneapproach to decision-making about tropical forestuse - the cost-benefit approach. Describing the



total economic value of tropical forests, the papergives examples of how they can be calculated. Itconcludes that the concept of total economicvalue offers a comprehensive framework withinwhich to value tropical forests.

Coverage: Global


Topics: Valuation, Economic policies

#204. Pearce, D., (1992), Economic Valuationand the Natural World. Centre for Social andEconomic Research on the Global Environment:London. 170 pp.

This document introduces the concepts andmethodologies for environmental valuation. Itargues that making choices in the context ofenvironmental quality involves comparing privateand public, priced and unpriced goods. In thiscontext it is necessary to impute a value toenvironmental goods and services, and makingsure that these values are reflected in economicpolicies and programmes and in market prices.The paper describes the importance of valuingenvironmental goods and services, and presentsmethods and examples of this for differentcountries and ecosystems.

Coverage: Global

Ecosystem or sector focus: Forests, Wetlands,Protected Areas, Water, Wildlife, Urbansettlements, Industry

Topics: Valuation, Economic planning,Economic policies

#205. Pearce, D., & Bann, C., (1993), North-South Transfers and the Capture of GlobalEnvironmental Value. Working Paper GEC 93-24, Centre for Social and Economic Researchon the Global Environment: London.

As the 20th Century closes there is a recognitionthat many environmental problems have theproperties of a global public good, or, perhapsbetter expressed, a global public 'bad'. If goodscreate human wellbeing, bads detract from it.Public goods are shared by all because theirconsumption by one person (or one country),entails their consumption by another person (oranother country). For a good to be truly public itmust also be effectively impossible to exclude

these 'joint consumers' through pricing or othermeans. A global public bad, then, is a loss ofglobal wellbeing brought about by the actions ofindividuals and nations and which it is impossible,or very difficult, for any one individual or countryto avoid. The solutions to such problems tend toinvolve a deliberate change in property rights,usually through the creation of an internationalagreement to protect the global environment.Effectively, such agreements convert what wereglobal open access resources into global commonproperty resources. With open access there are noowners. With common property there arecommunal owners and their success in controllingthe problem will depend on the design ofincentives to maintain the agreement.

Coverage: Global

Topics: Financial mechanisms, Incentivemeasures

#206. Pearce, D., & Warford, J., (1993), WorldWithout End: Economics, Environment andSustainable Development. Oxford Universityfor the World Bank: Washington DC. 440 pp.ISBN 0-19-520881-1

This book explores how economic growth canbecome environmentally sustainable. It provides abackground and overview to the concept ofsustainable development, and to the links betweeneconomic theory and the environment. The bookaddresses the causes of and policy responses toresource degradation as well as analysinginternational environmental issues from aneconomic standpoint.

Coverage: Global

Ecosystem or sector focus: Agriculture, Forests,Water, Industry, Infrastructure

Topics: Valuation, Trade, Economic instruments,Financial mechanisms, Taxes, Subsidies,Disincentives, Causes of biodiversity loss,Economic policies, Incentive measures, Climatechange, Pollution

#207. Pearce, D., & Moran, D., (1994), TheEconomic Value of Biodiversity. EarthscanPublications Ltd: London. 172 pp. ISBN 1 85383195 6



Economics and conservation are at loggerheads.In particular, economic forces drive biodiversityloss. This book argues that this conflict doesn'thave to be the case. It is the result of marketfailures, producing skewed decisions anddestructive policies. Yet the values of biodiversitycan be captured, and used to change economicdecisions. This book looks at the economiccauses of biodiversity loss, and describesmethodologies for economic valuation. Casestudies from different countries and sectors arealso presented to illustrate the economic valuationof biodiversity. The book also looks at ways ofcapturing biodiversity values through markets andother means. It concludes by looking at the waysin which economic development can bereconciled with biodiversity conservation goals.

Coverage: Global, Africa, Latin America

Contains examples or case studies from:Botswana, Peru

Ecosystem or sector focus: Drylands, Wetlands,Marine and coastal, Agriculture, Forests

Topics: Valuation, Causes of biodiversity loss,Economic instruments, Economic policies,Incentive measures, Financial mechanisms,Convention on Biological Diversity

#208. Pearce, D., (1997a), Can Non-MarketValues Save the World's Forests? WorkingPaper GEC 97-13, Centre for Social andEconomic Research on the Global Environment:London.

Tropical forests are disappearing at the rate ofabout 0.8% per annum. Their disappearance islargely explained by the 'unlevel playing field'between conservation and development values.Many conservation values have no market. Thispaper reviews the available data on what thoseconservation values are and shows that manyhave been exaggerated. In particular,pharmaceutical and other non timber values willbe sufficient to justify conservation in only alimited number of cases. Maximum willingness topay for carbon storage, on the other hand, couldoutweigh timber values. Much therefore dependson whether the world will agree a carbon tradingregime to control global warming.

Coverage: Global

Ecosystem or sector focus: Forests, Topics:Valuation, Markets and charges, Climate change,Carbon offsets, Financial mechanisms

#209. Pearce, D., (1997b), An EconomicOverview of Wildlife and Alternative LandUses. Working Paper GEC 97-05, Centre forSocial and Economic Research on the GlobalEnvironment: London.

The 'sustainable use' of wildlife, as opposed to itsoutright preservation through command andcontrol' policies, has a clear economic rationale.That rationale is based on the fact that wildlifecompetes with human appropriation of the landfor food supply, infrastructure, and othereconomic development. Stripped of its economicvalue, wildlife cannot compete - the competitiveplaying field is too heavily tilted against it. Someconservation policies have perverse effects.Forbidding the use of wildlife products cansimply 'disinvest' economic value, i.e. make theresource valueless (or less valuable) from aneconomic point of view. Since much wildlife isalso a nuisance, both in terms of disease,interference with crops, and even danger tohuman life, the effect of taking economic valueaway is to lose the potential for a conservationrelationship between wildlife and localcommunity. One answer to such problems is toinvest economic value in wildlife by creatingmarkets for its use and then, critically, sharing theresulting revenues with local communities.Another solution lies in privatisation where thelandowner collects the revenues and hopefullyshares them with local communities or, at least,provides employment. The clue to sucharrangements lies in positive incentives, notthreats of fines or worse for failing to conserve.Moreover, traditional preservationist approachesleave all the pressures on land unaffected: peopleare simply excluded from access to land andnothing happens to change the demand for thatland. Evidence on the financial rates of return towildlife utilisation is fairly extensive, though notalways in a form that makes assessment easy.Where it has been standardised in terms ofdifferent 'models' of revenues and costs, theevidence suggests that, on many occasions,privatised wildlife pays far better than the usualalternative of cattle, but that on some occasionsneither option would meet a standard financialtest of being worthwhile. In the long run wildlifewill have to pay its way on a more sustainablebasis. Economic appraisal, as opposed to financialappraisal, suggests that when modifications forovervalued exchange rates and for the 'true' cost



of labour, rates of return increase. In turn thissuggests at least that the wildlife sector should bebetter treated by national governments, e.g. withfavourable tax regimes. Further and widereconomic appraisal assesses not the flow of costsand revenues, but the total willingness to pay forwildlife. Only a few studies have been carried outfor Africa but they all suggest substantialwillingness to pay for conservation, particularlyfrom tourists. The relevance of these exercises isthat they are, in effect, tracing out the demandcurve for wildlife. This then permits anassessment of the effects of charging differentlevels of price for wildlife viewing andconsumptive uses. Several of the economicstudies suggest that Africa under-prices itswildlife. The wider economic studies also suggestthat there has to be a greater effort to tap the'global value' of African wildlife, i.e. the amountthat individuals will pay to visit Africa, toconserve the option of future visits, and evensimply to conserve wildlife even if there is nochance of the individual ever visiting reserves forreal. The Global Environment facility exists to'capture' such global value, but its resources aremodest. This suggests a full exploration of thepanoply of global financing mechanisms that existor that could exist, from debt-to-nature swaps tocarbon offsets.

Coverage: Africa


Topics: Valuation, Financial mechanisms,Markets and charges

#210. Peres, C. A., (1997), Evaluating theSustainability of Subsistence Hunting InTropical Forests. Working Paper GEC 97-22,Centre for Social and Economic Research onthe Global Environment: London.

Large-bodied vertebrates are perhaps the mostecologically sensitive extracts of tropical forests,and their sustained management will becomeincreasingly critical to the long-term integrity ofthese ecosystems. This paper presents the resultsof a long-term programme (1986-1996) of wildlifesurveys, based on a standard line-transectcensusing technique, which was designed toquantify the impact of different levels of huntingpressure across a wide range of amazonian foresthabitats. This is the most comprehensive set ofquantitative biodiversity inventories of large-

bodied birds and mammals for a given region oftropical forest. Population density and biomassestimates obtained at 25 terra firme andfloodplain forest sites are used to determinewhich game species are most susceptible topopulation declines and local extinctions resultingfrom subsistence hunting practices. Theseestimates are then applied to a demographicmodel to determine the potential production andsustainable harvest of different game specieswithin two broad classes of forest types. Datapresented here indicate that estimates of forestproductivity and baseline population density areessential components of sampling protocolsdesigned to evaluate to what extent a gameharvest regime can be considered to besustainable.

Coverage: Global

Ecosystem or sector focus: Wildlife, Forests

#211. Perrings, C., Gilbert, A., Pearce, D., &Harrison, A., (1989), Natural ResourceAccounts for Botswana: EnvironmentalAccounting for a Natural Resource-BasedEconomy. LEEC Paper DP 89-11, LondonEnvironmental Economics Centre: London. 66pp.For various reasons the existing national accountsdo not contain adequate measures of the naturalresources used in Botswana. The main reason forthis is that many resources are under communalor common ownership, and are not traded. Thismeans that there are no market prices by which tomeasure their relative value. This report considersthe advantages of creating a set of accounts toinclude measures of the value of environmentalgoods and services, and suggests methods forproceeding with the construction of suchaccounts.

Coverage: Africa

Contains examples or case studies from:Botswana

Topics: Environmental accounting, Valuation,Incentive measures, Economic policies, Causes ofbiodiversity loss

#212. Perrings, C., Folke, C., & Maler, K.-G.,(1992), The Ecology and Economics ofBiological Diversity: Elements of a Research



Agenda. Beijer Discussion Paper No 1, BeijerInternational Institute of Ecological Economics,The Royal Swedish Academy of Sciences:Stockholm. 28 pp. ISBN 1102-4941

This paper lists the issues that are thought to beimportant elements of a research agenda on theecology and economics of biodiversity loss, butwith emphasis on the economics of the problem.It also provides some motivation for the prioritiessuggested. The first cluster of priorities relates toecological questions concerning the nature andmeasurement of change in biodiversity, bothglobally and at the level of particular ecosystems.The second concerns economic valuation. Thethird concerns the driving forces behindbiodiversity loss, and the fourth concerns thequestion of what is to be done.

Coverage: Global

Topics: Valuation, Incentive measures, Economicinstruments, Economic policies, Causes ofbiodiversity loss, Carbon offsets

#213. Perrings, C., & Pearce, D. (1994).'Threshold effects and incentives for theconservation of biodiversity', Environmentaland Resource Economics 4:13-28

Biological diversity is a central component of thestock of natural capital on which all economicdevelopment is based. Other things being equal,loss of biological diversity implies loss ofdevelopment potential, and its conservationthrough sustainable use or outright protectionimplies the protection of that potential. Onecharacteristic of biodiversity loss of especialimportance is that it is associated with ecologicalthreshold effects. This paper explores theimplication of this characteristic for the propertiesof a biodiversity conservation strategy.

Coverage: Global

Topics: Incentive measures, Causes ofbiodiversity loss, Economic instruments,Economic policies

#214. Perrings, C., Maler, K.-G., Folke, C.,Holling, C. S., & Jansson, B.-O. (Eds.), (1995),Biodiversity Loss: Economic and EcologicalIssues. Cambridge University Press:Cambridge. 348 pp. ISBN 0-521-47178-8

This volume reports key findings of theBiodiversity Program of the Royal SwedishAcademy of Sciences' Beijer Institute. Theprogram brought together a number of eminentecologists and economists to consider the natureand significance of the biodiversity problem. Inencouraging collaborative work between theseclosely related disciplines it sought to shed newlight on the concept of diversity; the implicationsof biological diversity for the functioning ofecosystems; the driving forces behind biodiversityloss; and the options for promoting biodiversityconservation. The results of the program aresurprising. It is shown that the core of thebiodiversity problem is a loss of ecosystemresilience and the insurance it provides against theuncertain environmental effects of economic andpopulation growth. This is as much a local as aglobal problem, implying that biodiversityconservation offers benefits that are as much localas global. The solutions as well as the causes ofbiodiversity loss lie in incentives to local users.

Coverage: Global

Ecosystem or sector focus: Water, Wetlands,Drylands, Forests

Topics: Causes of biodiversity loss, Incentivemeasures, Economic instruments, Valuation,Economic policies

#215. Perrings, C., (1995), Economic Valuesof Biodiversity. Reprint Series, BeijerInternational Institute of Ecological Economics,The Royal Swedish Academy of Sciences:Stockholm. 87 pp.The important gap between the market price ofenvironmental resources and their value toindividuals and society is only gradually coming tobe understood. Together market and policyfailures are the main underlying causes ofbiodiversity loss. To resolve these we need first toevaluate their consequences. Valuation can beseen as a method of determining the relativeimportance of the environmental consequences ofeconomic activities. This paper describes in detail,with examples, the theory and methodology ofbiodiversity valuation. It then goes on to explainand illustrate how valuation can be applied andused as a tool for biodiversity conservation, suchas through the use of incentive measures.

Coverage: Global




Topics: Deforestation, Valuation, Economicinstruments, Economic policies, Contingentvaluation, Travel cost, Effect on production,Market valuation, Incentive measures, Marketsand charges, Taxes, Subsidies

#216. Perrings, C. (Ed.), (2000a), TheEconomics of Biodiversity Conservation inSub-Saharan Africa: Mending the Ark.Edward Elgar Publishers Ltd: Cheltenham. ISBN1840641509

This book contains case studies of the economiccauses of biodiversity loss in a range ofecosystems including wetlands, montane forests,tropical moist forests, semi-arid savannahs andlakes, discussing the policy options for conservingbiodiversity in each case. They also analyse indetail the environmental consequences of policyreform in Ghana on the large and small scale, andpresent practical recommendations forimplementing the Convention on BiologicalDiversity. Among other areas they consider arethe Hadejia- Nguru wetlands of northern Nigeria,Nyae Nyae in Namibia, Marsabit Forest Reservein Kenya, and demersal and gillnet fisheries inMalawi.

Coverage: Africa

Contains examples or case studies from: Ghana,Kenya, Nigeria, Namibia, Malawi

Ecosystem or sector focus: Water, Wetlands,Forests, Wildlife, Protected Areas, Fisheries,Drylands

Topics: Convention on Biological Diversity,Causes of biodiversity loss, Valuation, Economicinstruments, Economic policies

#217. Perrings, C., (2000b), The Economicsof Biodiversity Loss and AgriculturalDevelopment in Low Income Countries.Environment Department, University of York:York. 26 pp.

Biodiversity conservation has traditionally beenseen as problem of protecting genetic diversity.Increasingly, however, biodiversity conservation isbeing taken out of zoos and protected areas. It istherefore interesting to consider the problem ofbiodiversity loss not just in refugia, but inmanaged ecosystems. These are ecosystems from

which some species have been deleted in order toenhance the productivity of others. The problemof biodiversity conservation in such cases doesnot therefore involve preservation of all existingspecies. It involves maintenance of sufficientinterspecific and intraspecific diversity to protectthe productivity of the system. Put another way,the problem of biodiversity conservation inmanaged systems requires us to think about theoptimal or efficient level of species deletion. Themain this paper poses is whether current rates ofbiodiversity loss are efficient, especially inagroecosystems. It considers three aspects of theproblem. The first, is to identify the external costsof biodiversity loss in agroecosystems indeveloping countries. The second is therelationship between market failure and income.The third is to consider what can be donethrough market based instruments, institutionaland property rights reform to address theproblem. The conclusions of the paper can besummarised as follows. Biodiversity loss mattersin agroecosystems for a number of reasons, themost important of which are that it reduces thecapacity of farmers to cope with external shocks(whether market or environmental). These costsof biodiversity loss are external to the market-theyinvolve market failure. The problem is mostsevere in low-income countries wheremechanisms for private and social insuranceagainst the risks to agricultural incomes arelimited. Governments frequently act as insurers oflast resort, distributing famine relief when farmincomes fail. Given the limited resources ofgovernments in low-income countries, however,and given the fact that the risks to farm incomesare often highly correlated within such countries,this is seldom an effective solution. In theabsence of effective private or social insurancemechanisms, the best way to deal withbiodiversity externalities may be through theprivate costs of different farming systems. Wherebiodiversity-poor farming systems involve greatersocial cost, they should also involve greaterprivate cost.


Topics: Causes of biodiversity loss, Economicinstruments, Markets and charges, Economicpolicies

#218. Peters, C., Gentry, A., & Mendelsohn, R.(1989). 'Valuation of an Amazonian rainforest',Nature 339:655-656



In an exercise to estimate the conservation valueof an area of Amazonian rain forest in terms of itsvalue for sustainable non-timber and timberproduct extraction, local market prices (lesscollection and transport costs) were used. Thiswas based on data collected on market prices, andanalysis of quantities of products harvested andsold. Using a 5% discount rate, a "net presentconservation value" of US$ 6,800 per hectare offorest was calculated, This figure was far higherthan the returns from clear-cut timber harvesting,or from subsequent plantations or cattle ranching.


Contains examples or case studies from: Peru


Topics: Valuation, Market valuation

#219. Phillips, A. (Ed.), (1998), EconomicValues of Protected Areas: Guidelines forProtected Area Managers. IUCN - The WorldConservation Union: Gland and Cambridge. 52.2-8317-0461-8

These guidelines look at how economic valuescan be assessed for protected areas, and identifycases where protecting the environment has madea significant contribution to the economy. Theyuse a number of case studies to illustrate thesemethods, and to reveal that protected areas areoften significant revenue earning entities and canprovide great benefits to national and localeconomies. This, in turn, provides an opportunityfor sustainable industries and for the generationof financial returns. With proper management,these economic values can be identified andcaptured for the benefit of both conservation andeconomic development.

Coverage: Global

Contains examples or case studies from: Kenya,Uganda, Madagascar, Croatia, India, Nepal, SouthAfrica, Australia, Honduras, Belize, Fiji


Topics: Valuation

#220. Phillips, A., (2000), Financing ProtectedAreas: Guidelines for Protected AreaManagers. IUCN - The World ConservationUnion: Gland. 58 pp. ISBN 2-8317-0544-4

These guidelines aim to provide protected areamanagers with information about financing theirprotected areas and where to look for financebeyond existing sources. Access to funds isbecoming increasingly important for effectivemanagement. The guidelines cover thedevelopment of a financial strategy, provideinformation on financing sources, and illustratethis with a number of national case studies.

Coverage: GlobalAustralia and New ZealandAfricaLatin America

Contains examples or case studies from: CostaRica, New Zealand, South Africa


Topics: Financial mechanisms

#221. Repetto, R., (1996), MacroeconomicPolicies and Biodiversity Loss. Paperpresented at IUCN Workshop on Economics ofBiodiversity Loss, April 1996, Gland,Switzerland. 8 pp.http://www.biodiversityeconomics.org

This paper focuses on macroeconomic policy andits relationship to the destruction of tropicalforests. Forests and woodlands are threatened bydemand for agricultural land, which depends ondomestic demand for agricultural products, whichresponds to growth in population, per capitaincome and income distribution, which, in turn,depend on macroeconomic policies. Severalmacroeconomic policies are identified as havingpervasive influences on the use and conservationof forest resources. These include forest revenuestructures, trade and investment incentives topromote wood-using industries, and credit, taxand pricing incentives for land-intensiveplantations and ranches. For instance, a policy ofopenness to international trade can aggravate theproblem of biodiversity loss because it willincrease the demand for forest products andbecause countries at early stages of developmentthat export mostly primary commodities will notresist the pressure to cut down their forests.

Coverage: Global


Topics: Causes of biodiversity loss, Economicinstruments, Economic policies



#222. Repetto, R., & Austin, D., (2000), PureProfit: The Financial Implications ofEnvironmental Performance. World ResourcesInstitute: Washington DC. 64 pp.

This report demonstrates how environmentalissues can successfully be integrated into financialanalysis. It explains a newly developedmethodology derived from fundamentalprinciples of financial analysis and demonstratesthe approach by applying it empirically tocompanies in the U.S. pulp and paper industry.The results show clearly that companies withinthis industry face environmental risks that are ofmaterial significance and that vary widely inmagnitude from firm to firm. These risks are notevident in companies ’ financial statements norare they likely to be incorporated in currentmarket valuations. The methodology is consistentwith the framework used by analysts to evaluateconventional business risks and opportunities,and avoids some of the limitations of otherapproaches currently used to relate environmentaland financial performance. The approach isforward-looking and scenario-based, recognizingthat financial markets are concerned more withthe future than with the past. It deals explicitlywith uncertainties regarding future environmentalpolicies and other environmental pressures on thefirm, rather than merely assessing past andpresent levels of environmental performance. Ituses standard techniques of financial analysis toderive measures of expected environmentalimpacts on share values and financial measures ofenvironmental risk. It focuses on thoseenvironmental issues deemed most important byindustry experts and not simply those for whichdata are readily available. This tool will be ofinterest to professionals in both investment andcorporate communities. Investors can use it tointegrate environmental risks more fully intofinancial analysis in evaluating in insuranceunderwriting. Environmental managers can use itto quantify their environmental exposures andrisks; to benchmark their companies (orfacilities)against rivals; to identify whichinvestments in environmental control would domost to reduce their outstanding environmentalrisks; and to move beyond compliance-basedenvironmental actions toward a more forward-looking and strategic approach. Managers andCFOs could use it to gauge how much it wouldbe worth spending in self-insurance to eliminateenvironmental risks, or as part of a strategicmanagement system emphasizing real options.




Topics: Economic instruments, Economicpolicies, Private sector, Markets and charges

#223. Richards, M. (1994). 'Towards valuationof forest conservation benefits in developingcountries', Environmental Conservation 21(4):308-319

This article argues that the valuation of bothmarketed and non-marketed forest benefits formsa vital tool for policymaking and decision making.It presents basic concepts in the economicanalysis of forest conservation, describes differentvaluation methods, and provides case studies ofthe valuation of forest conservation benefits fromvarious developing countries.

Coverage: Global, Africa, Asia, Latin America,Middle East, North Africa and Gulf States

Contains examples or case studies from:Cameroon, Costa Rica, Djibouti, Ethiopia,Morocco, Nepal, Nicaragua, Peru, Uganda,Zimbabwe

Ecosystem or sector focus: Forests, Wetlands

Topics: Valuation

#224. Richards, M., & Costa, P. M. (1999).'Can Tropical Forestry be made Profitable by'Internalising the Externalities'?', NaturalResource Perspectives (46):1-6

This paper discusses the potential and constraintsof a range of ‘innovative incentive mechanisms’for stimulating sustainable (natural) forestmanagement and conservation, including thoselike carbon offset trading which attempt tocapture the global public good values (orexternalities) of tropical forests and internalisethem into positive incentives for forest users ormanagers. Its policy conclusions are: Forestexploitation and degradation happen because it isprofitable; the main causes of this are market andpolicy failures, including weak regulation.Innovative incentive mechanisms should aim totackle market and policy failures and bring privatereturns into line with social returns as far aspossible. No innovative incentive mechanism canbe successful without effective regulation. At the



international level, without environmentalregulations there is insufficient demand orwillingness to pay. At the national level, increasingthe profitability of forestry would also increaseforest exploitation without effective regulation.‘Innovative financing’ can help to build theregulatory framework. Fiscal market-basedinstruments, such as forest pricing incentives andcharges made on the principle of the ‘polluter andbeneficiary pays’, score highly in terms of bringingprivate costs closer to social costs, but demandstrong political commitment. Donors couldencourage them more by funding research toestablish optimum tax levels and likely economicand environmental impacts, and by helping tobuild the administrative capacity required toimplement and monitor them. Efforts toencourage sustainable forestry should becomplemented by measures to make forest-degrading activities less attractive, especially bytackling extra-sectoral causes of forestdegradation and investing in social capital andlabour-intensive agriculture.

Coverage: Global


Topics: Financial mechanisms, Incentivemeasures, Economic instruments, Economicpolicies, Taxes, Subsidies, Markets and charges,Debt conversion, Carbon offsets

#225. Richards, M., (1999), 'Internalising theexternalities' of tropical forestry: a review ofinnovative financing and incentivemechanisms. European Tropical ForestryPaper 1, Overseas Development Institute:London. 44 pp.

The main objective of this paper, commissionedby the European Commission, is to review thepotential of ‘innovative’ financing and financialincentive mechanisms (IFIMs) for ‘sustainable’forestry in the tropics, and to attempt to providepolicy guidance for donors and other decisionmakers. The approach taken is to examine the keyproblems that IFIMs seek to overcome. It wasfound that the issues of financing and how tocreate positive financial incentives are not easy toseparate. It is argued that the main problem is nota lack of finance per se, but that forestry isunattractive compared to alternative land uses,primarily due to market and policy failures whicheither depress the value of forest products andservices, or make other land uses more profitable.

Policy failures in particular cause negative orperverse incentives for forestry. Thus the keychallenge is to find ways of modifying marketincentives so that forestry becomes moreattractive than alternative land uses, includingforest exploitation. This can result either fromimproving returns to forestry or by reducing itsopportunity cost. A key aspect of this is forestry’stime or discounting problem: forest managers canrarely afford to wait for the benefits of long-termmanagement when alternative land uses providemuch quicker returns. The main reasondeforestation occurs is because people find itprofitable. At the same time, and by definition,‘sustainability’ demands that the underlyingproblems be tackled. IFIMs should thereforecounter market and policy failures as far aspossible. These factors point to a high potentialfor carbon trading, ‘polluter and beneficiary pays’taxes and other market-based instruments,appropriate forest pricing and performancebonds, always accompanied by appropriateregulatory measures. An essential complement toattempts to make sustainable forestry moreattractive (which many see as a losing battleanyway) is to make forest degradation lessattractive. The paper also concludes that no IFIMwill work unless and until there is effectiveregulation, whether at the national or internationallevel. The ‘catch-22’ of IFIMs is that theinstruments with higher potential tend to facemost technical and political problems. Tacklingpolicy failure is likely to have the most impact,but forestry is not always high up a country’s setof priorities. Analysis of the distribution of thecosts and benefits of sustainable forestry and theoptions for donors implies that there could be aglobal negotiating table for IFIMs in whichgovernments undertake to tackle policy failure aslong as donors make every effort to capture andreturn global externalities.

Coverage: Global


Topics: Incentive measures, Financialmechanisms, Taxes, Subsidies, Debt conversion,Carbon offsets, Trust Funds, Markets and charges

#226. Rietbetgen-McCracken, J., & Abaza, H.,(2000a), Economic Instruments forEnvironmental Management: A WorldwideCompendium of Case Studies. United NationsEnvironment Programme and Earthscan



Publications Ltd: London. 208 pp. ISBN 1 85383690 7

There is now key empirical evidence of the powerof economic instruments in managing theenvironment. This volume describes a variety ofenvironmental problems to which economicinstruments can be applied. It is illustrated withcase studies from different sectors and countries.

Coverage: Global, Africa, Asia, Europe, LatinAmerica

Contains examples or case studies from:Botswana, Zimbabwe, Ghana, Malaysia, Thailand,Poland, Hungary, Mexico, Colombia, Chile, Brazil

Ecosystem or sector focus: Forests, Drylands,Water, Urban settlements, Infrastructure,Protected Areas

Topics: Economic instruments, Economicpolicies, Markets and charges, Subsidies,Pollution, Taxes

#227. Rietbetgen-McCracken, J., & Abaza, H.,(2000b), Environmental Valuation: AWorldwide Compendium of Case Studies.United Nations Environment Programme andEarthscan Publications Ltd: London. 232 pp.ISBN 1 85383 695 8

The use of economic valuation methods isfundamental in the management of theenvironment and natural resources. This volumepresents the results of a rage of internationalapplications of different valuation techniques. It isillustrated with case studies from different sectorsand countries.

Coverage: Global, Africa, Asia, Europe, LatinAmerica

Contains examples or case studies from: Kenya,Ghana, Cameroon, Philippines, Taiwan, SriLanka, Estonia, Russia, Chile, NetherlandsAntilles, Haiti, Mexico, Nicaragua

Ecosystem or sector focus: Water, Wildlife,Protected Areas, Forests, Infrastructure, Marineand coastal, Topics: Valuation, Market valuation,Contingent valuation, Travel cost, Effect onproduction, Mitigative and avertive expenditures

#228. Rubec, C., (1996), Canadian CaseStudy on a National Tax Incentive Measure

for Biodiversity. Paper presented at workshopon Incentives for Biodiversity: SharingExperiences, 4th Global Biodiversity Forum,Montreal, Canada 30 August - 1 September1996. 2 pp.http://www.biodiversityeconomics.org

This paper summarises amendments to Canadiantax law which enable people to donateecologically sensitive lands to conservationinterests. Seen as a complement to traditionalconservation efforts such as establishing parks,this new law uses economic incentives to furtherbiodiversity conservation.


Contains examples or case studies from: Canada

Ecosystem or sector focus: Forests, ProtectedAreas, Wildlife

Topics: Private sector, Incentive measures, Taxes

#229. Rubino, M. C., de Callejon, D. P., & Lent,T., (2000), Business and Biodiversity in LatinAmerica. Discussion Paper, EnvironmentalProjects Unit, International Finance Corporation:Washington DC. 53 pp.

This document looks at the emerging sector ofbiodiversity business. It argues that the alliancebetween businesses and conservation interestsoffers enormous potential benefits. The reportoutlines the business and conservation rationalefor such investments, and some of the investmentopportunities in biodiversity-linked businesses. Italso analyses financing needs for such initiatives.Illustrative case studies are provided fromdifferent countries in Latin America.


Contains examples or case studies from:Argentina, Brazil, Bolivia, Chile, Costa Rica,Ecuador, Honduras, Mexico, Paraguay, Peru,Venezuela

Ecosystem or sector focus: Agriculture, Forests,Tourism

Topics: Trade, Private sector, Economicinstruments, Financial mechanisms

#230. Ruitenbeek, J. (1992). 'The rainforestsupply price: a tool for evaluating rainforest



conservation expenditures', EcologicalEconomics 6:52-78Economic policies are often suggested asmechanisms for promoting rainforestconservation in developing countries. To helpdecide whether international resources should beused to protect specific rainforests, the calculationof a 'rainforest supply price' (RSP) is proposed.Korup National Park in Cameroon contains theoldest rainforest in Africa and as a haven forimportant endangered species - it is the subject ofactive international conservation efforts. A cost-benefit analysis of a conservation project toprotect Korup from increased land-use pressuressuggests that it is not in Cameroon's interestunless a 5.4 million ECU inducement istransferred to Cameroon. Given the protectionafforded, the transfer is equivalent to a RSP of1060 ECU per km "SUP 2" per year. Evaluationof six other tropical rainforest projects suggestthat international donors made transfers havingvalues ranging from 15 to 1575 ECU per km"SUP 2" per year. It is thus concluded that theinducements required are within a range thatconservation interests are apparently willing tomobilise.

Coverage: Global, Africa, Asia, Latin America

Contains examples or case studies from: Bolivia,Cameroon, Costa Rica, Ecuador, Nigeria,Philippines


Topics: Valuation, Economic instruments,Economic policies, Financial mechanisms

#231. Saichoono, S. M. (1995). 'Contingentvaluation as an additional tool for evaluatingwildlife utilisation management in Zambia:Mumbwa Game Management Area', Ambio 24(4):246-249

This case study evaluates self interest in wildlifemanagement by the local community of theMumbwa Game Management Area in Zambia.The discussion centres on the methods employed- contingent valuation. The results show apositive reception to new approaches by the parkmanaging authority. The contingent valuationapproach is used to determine the willingness topay and willingness to accept compensation bycommunity members based on their consumptionof wildlife. The study however also demonstrates

a land use conflict with negative responses towildlife.

Coverage: Africa

Contains examples or case studies from: Zambia

Ecosystem or sector focus: Wildlife, ProtectedAreas, Drylands

Topics: Valuation, Contingent valuation, Causesof biodiversity loss, Financial mechanisms

#232. Salazar, J. E., (1998), EnvironmentalFinance: Linking Two Worlds. Paperpresented at a workshop on FinancialInnovations for Biodiversity, 10th GlobalBiodiversity Forum, Bratislava, Slovakia, 1-3May 1998. 15 pp.http://www.biodiversityeconomics.org

Why financiers can not digest and incorporate -easily- environmental issues into its core business?In building a bridge between the financial and theenvironmental world there are many issues to beaddressed to. Financiers and environmentalistsare people with its own approach, philosophy,language, definition on success and failure,accounting, among other. Then in promotingfinancial innovations for biodiversity,discrepancies and coincidences should beanalysed. In Peru, from 1996 several workshops,interviews and a survey at the financialcommunity were carried out (sponsored by theUniversity of Kent, the Ebert Foundation, GTZ,British Council and PROFONANPE) to learnabout local financier's use of eco-criteria into itsdecision making process. Here the driving ideawas that by changing financier's criteria, businesspractices could change. In Peru, financiers have astrong influence on their clients' practices(because of their small capitalisation level anddependence on debt) and are a reduced numberwhile the business community is enormous. As atJuly 1998, in Peru there is no privateenvironmental funds (venture or developmentcapital), so for developing the first one it wascritical to identify a project pipeline (e.g., to offerto potential investors) to market this initiative. Indoing so, financiers found difficult to understandbio-conservation rationale but it was easy (forfinanciers) to digest clean technology issues(driven by eco-efficiency). So financier'spreferences for brown (to green) projects arehighlighting critical issues, which must beanalysed in detail.





Topics: Financial mechanisms, Private sector,Trust Funds, Taxes

#233. Salazar, J. E., (2000), El BanqueroExitoso del Tercer Milenio. Friedrich EbertStiftung: Lima. 146 pp.

This book looks at needs and opportunities forthe financial sector in Peru to take account ofenvironment and biodiversity concerns. It aims toinfluence decision-makers and policy makersfrom banks and other financial institutions tolook at the sustainability of their businessoperations. It makes a number of proposals andrecommendations for the opportunities for bio-financing, and outlines some of the tools andmethods available for achieving this.



Topics: Financial mechanisms, Economicinstruments, Economic policies, Incentivemeasures


#234. Sanchirico, J. N., & Wilen, J. E., (1998),Marine Reserves: Is There a Free Lunch?Discussion Paper 99-09, Resources for theFuture: Washington DC. 27 pp. This paperemploys a spatial and intertemporal model ofrenewable resource exploitation to investigate theeffects of marine reserve creation. The modelcombines the H. S. Gordon/Vernon Smithhypothesis of a rent dissipation process withRicardian notions that resources are exploitedacross space in a pattern dependent upon relativeprofitabilities. The metapopulation modelemployed here incorporates modern biologicalideas that stress patch heterogeneity, linkages, anddispersal processes between patches. The spatialbioeconomic model is then used to simulate theeffects of reserve creation under variousecological structures. It finds, under certainparameter configurations and ecological linkages,that there is potential for a "double-dividend"where both aggregate biomass and harvestincrease after an area of the fishery is set asideand protected from exploitation.

Coverage: Global

Ecosystem or sector focus: Marine and coastal,Fisheries, Protected Areas

Topics: Incentive measures, Valuation, Causes ofbiodiversity loss

#235. Sarmiento Gutierrez, M. B., (1992),Estimating the Environmental Benefits of theAmazon Forest: An Intertemporal ValuationExercise. Working Paper GEC 92-44, Centre forSocial and Economic Research on the GlobalEnvironment: London.

The social valuation of natural resources andecosystems has led researchers to investigate thenature of the benefits and costs of theirpreservation, as well as to develop concepts andmethodologies suitable to reflect their socialvaluation. The total economic value concept(TEV) (Randall, 1989) tries to capture all thecomponents that are supposed to affect directlyand indirectly human welfare with respect toenvironmental resources. TEV comprises thedirect use values of a resource (e.g. timber,recreation), preferences towards the mereexistence of natural resources (existence value),and the value of the ecological functionsperformed by them (indirect use values),regardless of the existence of markets. Thepurpose of this article is twofold. First, anintegrative approach to valuing tropical forests issuggested. Krutilla and Fisher (1975) developedan intertemporal framework to value naturalresources in which emphasis is given toirreversibility of development decisions, a rate ofappreciation of the preservation benefits and atechnological decay function for prevailingdevelopment technologies. We integrate theKrutilla and Fisher model (1975) with the TEVconcept to seek a partial valuation of Amazonforest functions. Such valuations are useful for (a)refined project appraisal incorporatingconservation benefits and (b) an estimate ofvalues which could be used to serve as a basis ininternational agreements on financingconservation of such an ecosystem. In the moregeneral case, where policy makers have to decideland use and planning in the Amazon forest,estimates of the cost of deforestation could serveto incorporate the criterion of minimizing thetotal social costs of deforestation as a goal.






#236. Schelske, O., (1998), FinancialInnovations for Biodiversity: the SwissExperience. Paper presented at a workshop onFinancial Innovations for Biodiversity, 10thGlobal Biodiversity Forum, Bratislava, Slovakia,1-3 May 1998. 28 pp.http://www.biodiversityeconomics.org

In Switzerland, the issue of biodiversityprotection is addressed through several sectoralpolicies. This paper analyses two cases of sectoralpolicies: ecological direct payments, which arewithin the realm of Swiss agricultural policy; andthe activities of the Swiss Foundation for theConservation of Cultural Landscapes (FondsLandschaft Schweiz, FLS) which is within therealm of Swiss conservation policy. Both casesrepresent examples of the use of financialinstruments for the protection of biodiversity.One of the most highly regulated and controlledsectors in Swiss economy, Swiss agriculture wasreformed in 1992 due to the GATT UruguayRound. Agricultural price and income policieswere separated and domestic support prices weredecreased. Swiss agriculture became multi-functional. Its objectives are now to ensure foodsupply for the national population, to protectnatural resources (especially biodiversity), toprotect traditional landscapes and to contribute tothe economic, social and cultural life in ruralareas. On one hand, direct payments are used toease the transition of Swiss agriculture towardglobal and free market conditions. On the otherhand, direct payments are offered to thosefarmers who are willing to use more ecologicaland biodiversity-sound management practices.This paper shows the design and success of thesedirect payments. Another instrument forbiodiversity protection is the Swiss Foundationfor the Conservation of Cultural Landscapes(Fonds Landschaft Schweiz). It was set up by theSwiss Parliament during Switzerland's 700-yearcelebration in 1991. The Foundation supportsspecific projects for nature and landscapeconservation, for example the conservation andsustainable use of old orchards, corridors ofregional ecosystems, or old chestnut plantationsin southern Switzerland. The Foundation isfinanced by federal, cantonal and communalauthorities and by private donations. Biodiversity

protection policies are beginning to beimplemented into agricultural and landscapepolicies. Because biodiversity protection is abroad concept, a concentration on funds fromagricultural and landscape policies will not besufficient. Therefore, instruments focusing onother sectors should be suggested.

Coverage: Europe

Contains examples or case studies from:Switzerland


Topics: Economic instruments, Taxes, Subsidies,Financial mechanisms, Private sector, Causes ofbiodiversity loss

#237. Sedjo, R., & K., S. S., (1999), Eco-Labeling and the Price Premium. DiscussionPaper 00-04, Resources for the Future:Washington DC. 17 pp.

International environmental and governmentorganizations propose eco-labeling as a marketincentive to cause industry to operate in anecologically sustainable and biodiversity-friendlymanner. A microeconomic analysis questionswhether eco-labeling will cause producer profitsin a competitive industry to decline, even under avoluntary system, and whether eco-labeling willnecessarily generate different prices for labeledand unlabeled product. Using wood product as anexample, results identify conditions that may existwhen firms lose profits, even under a voluntarysystem, and where existing production constraintsmay lead to a single price, regardless of labeling.

Coverage: Global


Topics: Markets and charges, Economicinstruments

#238. Sedjo, R., & Sohngen, B., (2000),Forestry Sequestration of CO2 and Marketsfor Timber. Discussion Paper 00–35,Resources for the Future: Washington DC. 86pp.

Forestry has been considered to have potential inreducing the atmospheric concentration of carbondioxide by sequestrating carbon in above-groundtimber and below-ground roots and soil. Thispotential has been noted in the Kyoto Protocol,



which identified specific forestry activities forwhich carbon sequestration credits could beobtained. To date, a few forestry efforts havebeen undertaken for carbon purposes, but mostof these efforts have been on a small scale.Proposals have been under discussion, however,that would result in the creation of very largeareas of new forest for the purpose of offsettingsome of the additional carbon that is beingreleased into the atmosphere. Concerns areexpressed, however, that large-scale sequestrationoperations might have impacts on the worldtimber market, affecting timber prices and therebyreducing the incentives of traditional suppliers toinvest in forest management and new timberproduction. Such a “crowding out” or “leakage”effect, as it is called in the literature, could negatemuch or all of the sequestered carbon by thenewly created sequestration forests. Accordingly,the purpose of this study is to examine and assessthe interactions between carbon sequestrationforestry, particularly, newly created carbonforests, and the markets for timber. The approachof this study involves utilizing an existingDynamic Timber Supply Model (DTSM) toexamine the interactions between newly createdsequestration forests and the markets for timber.This model has been used to examine globaltimber supply and, more recently, has beenmodified to include carbon considerations. Thisstudy suggests that even without any specificsequestration efforts, commercial forestry offersthe potential to sequester substantial volumes ofcarbon, approaching ten gigatons (Gt) (orpetagrams (Pg)), in vegetation, soils and marketproducts over the next century. At current ratesof atmospheric carbon build up this is equal toabout three years of net carbon releases into theatmosphere. This volume of carbon sequestrationcould be increased 50–100% by 50 millionhectares (ha) of rapidly growing carbon-sequestering plantation forests, even given theanticipated leakages due to market price effects.Finally, the projections suggest that the amount ofcrowding out and carbon leakages are likely to bevery modest. The 50 million ha of carbonplantations are projected to reduce land areas inindustrial plantations, that is, crowd out, onlyfrom 0.2 to 7.8 million ha over the 100-yearperiod. The addition of carbon sequestrationforests offers the potential to increase the carbonsequestration of the forest system more than50%, up to 5.7 Gts, above that already capturedfrom market activity. This estimate assumes thatcrowding out and associated projected leakageswill occur. At current rates of atmospheric carbon

buildup, about 2.8% of the expected total buildupin atmospheric carbon over the next centurycould be offset by 50 million ha of carbonplantations.

Coverage: Global


Topics: Financial mechanisms, Markets andcharges, Carbon offsets, Climate change

#239. Seidl, A., (1998), Financing OpenSpace in Colorado, USA. Paper presented at aworkshop on Financial Innovations forBiodiversity, 10th Global Biodiversity Forum,Bratislava, Slovakia, 1-3 May 1998. 12 pp.http://www.biodiversityeconomics.org

The Colorado State Land Board's StewardshipTrust was established through a constitutionalamendment in November of 1996. The Board isrequired to designate 295,000 to 300,000 acres oftrust lands into a special trust--the StewardshipTrust by January 1, 2001. This land will bepreserved and managed as to preserve its naturalvalues. The Board can use a number of landmanagement tools in order to accomplish its goalsincluding: conservation easements, the purchaseof development rights, sales, leases, exchanges forconservation purposes etc. Lands must benominated for the Trust and evaluated basedupon their potential value to the common good inpreserving representative ecosystems and criticalhabitats in the state of Colorado. The GreatOutdoors Colorado (GOCO) program wasestablished in 1992 and charged with makingmatching fund grants to local governments, parkand recreation districts and non-profit landprotection organisations to facilitate the purchaseand protection of land. Programs include trailconstruction, open space, wildlife and riverpreservation, environmental education, parkpromotion, wildlife and outdoor recreation.GOCO is financed through earmarked statelottery funds and has provided more than $100million for 808 projects to date. Several otherstates including Utah, Montana, and Wisconsinare considering creating similar quasi-governmental programs for decentralised land useplanning. The proposed Colorado Wilderness Taxwould be the first state sales tax to target non-consumptive users of natural resources. TheWilderness Tax would be imposed on itemscommonly purchased by non-consumptive usersof the state's natural resources including: cameras



and film, binoculars, camping equipment,backpacks and hiking boots. Tax revenues are tobe earmarked for the management and protectionof Colorado's wilderness areas. Voters areconflicted over the equity and efficiency of theproposed legislation.



Ecosystem or sector focus: Protected Areas,Tourism

Topics: Financial mechanisms, Taxes, Privatesector

#240. Shogren, J. F., Tschirhart, J., Anderson,T., Whritenour Ando, A., Bessinger, S. R.,Brookshire, D., Brown, G., Coursey, D., Innes,R., Meyer, S. M., & Polasky, S. (1999). 'Whyeconomics matters for endangered speciesprotection', Conservation Biology 13 (6):1257-1261This article offers three reasons why economicsmatters more to species protection than manypeople think and what this implies for theongoing debate over the reauthorisation of theUS Endangered Species Act of 1973. Economicsmatters because human behaviour generally, andeconomic parameters in particular, help determinethe degree of risk to a species. In a world ofscarce resources, the opportunity cost of speciespreservation must be taken into account indecision making. Economic incentives are criticalin shaping human behaviour, and consequentlythe recovery of species. Endangered speciesprotection that explicitly addresses these basicprinciples can avoid wasting valuable resourcesthat yield no gain in species protection.




Topics: Incentive measures, Causes ofbiodiversity loss

#241. Shogren, J., & Toman, M., (2000), HowMuch Climate Change Is Too Much? AnEconomics Perspective. Climate Change

Issues Brief No. 25, Resources for the Future:Washington DC. 22 pp.

Having risen from relative obscurity as few as 10years ago, climate change now looms large amongenvironmental policy issues. Its scope is global;the potential environmental and economicimpacts are ubiquitous; the potential restrictionson human choices touch the most basic goals ofpeople in all nations; and the sheer scope of thepotential response—a significant shift away fromusing fossil fuels as the primary energy source inthe modern economy—is daunting. Themagnitude of these changes has motivated expertsthe world over to study the natural andsocioeconomic effects of climate change as wellas policy options for slowing climate change andreducing its risks. The various options serve asfodder for often testy negotiations within andamong nations about how and when to mitigateclimate change, who should take action, and whoshould bear the costs. Lurking behind these policyactivities is a deceptively simple question: Howmuch climate change is acceptable, and howmuch is “too much”? (The other key questionsare, Who is going to pay for mitigating the risks?What policies will be used for mitigation?) Thelack of consensus on this issue reflects theuncertainties that surround it and differences invalue judgments regarding the risks and costs.This paper, reviews the economic approach to thequestion of how much climate change is toomuch. The economic perspective emphasizes theevaluation of benefits and costs broadly definedwhile addressing uncertainties and importantconsiderations such as equity. It also considerssome important criticisms of the benefit–costapproach. Then, it discusses the key factors thatinfluence the benefits and costs of mitigatingclimate change risks. This discussion leads to areview of findings from the many quantitative“integrated assessment” models of climate changerisks and response costs. This review does notlead to a simple answer to our overarchingquestion about how much climate change is toomuch. But the paper does identify several goodreasons for taking a deliberate but gradualapproach to the mitigation of climate changerisks. The issues covered are both diverse—ranging from the economics and philosophy oflong-term cost-benefit analysis, to modelingstrategies for representing climate change risksand greenhouse gas abatement costs—and, attimes, somewhat complex. The paper tries to befairly comprehensive while seeking to make thediscussion as accessible as possible.



Coverage: Global

Topics: Climate change

#242. Simpson, R. D., (1995), Biodiversityprospecting and biodiversity conservation.Paper presented at IUCN Workshop onFinancing Biodiversity Conservation Harare,Zimbabwe 13-15 September 1995. 12 pp.http://www.biodiversityeconomics.org

Biodiversity prospecting is the search forchemicals produced by wild organisms. Theauthor of this paper argues that the economicvalues generated by biodiversity prospecting arenegligible, that investments made in strengtheningbiodiversity prospecting capacity are likely to havelittle effect on economic incentives for theconservation of endangered habitats, and that inaddition to their shortcomings as conservationstrategies, biodiversity prospecting may also havesever drawbacks as development strategies.

Coverage: Global

Topics: Bioprospecting, Valuation

#243. Simpson, R. D., & Sedjo, R. A., (1996b),Investments in Biodiversity Prospecting andIncentives for Conservation. Discussion Paper96-14, Resources for the Future: WashingtonDC. 17 pp.

There is considerable interest in biodiversityprospecting (the search for valuable new productsfrom natural sources) as a conservation strategy.In an earlier paper, we have argued that the valueof the marginal species (and, by extension, theincentives for the conservation of the habitat onwhich it is found) is small. In this paper, we showthat investments in biodiversity prospecting areunlikely to increase incentives for conservation bymuch. If the value of the marginal species wereappreciable, researchers ought already to havemade investments to exploit it. If it is not, it isdoubtful that additional investments will generateany substantial increase. It is important to be clearabout our findings: we are not saying that none ofthe myriad uses of biodiversity is important. Quiteto the contrary, we are saying that if biodiversityis important, more effective strategies for itsconservation must be found.

Coverage: Global

Topics: Bioprospecting, Financial mechanisms,Incentive measures, Markets and charges

#244. Simpson, R. D., & Craft, A. B., (1996),The Social Value of Using Biodiversity inNew Pharmaceutical Product Research.Discussion Paper 96-33, Resources for theFuture: Washington DC. 46 pp.

Biologists and conservation advocates haveexpressed grave concern over perceived threats tobiological diversity. "Biodiversity prospecting" --the search among naturally occurring organismsfor new products of agricultural, industrial, and,particularly, pharmaceutical value -- has beenadvanced as both a mechanism and a motive forconserving biological diversity. Economists andothers have attempted to estimate the value ofbiodiversity for use in new pharmaceutical projectresearch. Most of these existing approaches areincomplete, however, as they have not consideredfull social welfare, i.e., both consumer surplus andprofit. This paper addresses social welfare bycalibrating a model of competition betweendifferentiated products with data from thepharmaceutical industry. We find that themagnitude of losses from even catastrophicdeclines in biodiversity are negligible incomparison to the value of world production.While social values of biodiversity prospectingmight motivate habitat conservation in someareas, these values are likely to be small relative toland value in other uses in even some of the morebiologically rich regions of the world.

Coverage: Global

Topics: Bioprospecting, Causes of biodiversityloss, Incentive measures, Financial mechanisms,Markets and charges

#245. Simpson, D. R., & Sedjo, R. A., (1996a),Valuation of Biodiversity for Use in NewProduct Research in a Model of SequentialSearch. Discussion Paper 96-27, Resources forthe Future: Washington DC.

We develop a model of search in which aresearcher chooses the size of sequential batchesof samples to test. While earlier work hasconsidered similar questions, the contribution ofthis paper is to use the search model to place avalue on the marginal research opportunity. The



valuation of such opportunities may be of littleinterest or relevance in many of the contexts inwhich search models are employed, but we applyour analysis to an area of considerable societalinterest: the valuation of biological diversity foruse in new product research. While data fromwhich to make inferences are limited, we findthat, using plausible estimates of relevantparameters, the value of biodiversity in theseapplications is negligible.

Coverage: Global

Topics: Bioprospecting, Incentive measures,Valuation, Markets and charges

#246. Simpson, R. D., (1999), The price ofbiodiversity.http://www.nap.edu/issues/15.3/simpson.htm

This paper looks at the ways in whichconservation agencies use economic arguments toconvince people in developing countries toconserve biodiversity. It argues that all too oftensuch attempts are misguided, and can lead toserious inequities. These failures also damage thecredibility of conservationists, who would dobetter to take a different approach to promotingbiodiversity.

Coverage: Global

Ecosystem or sector focus: Tourism

Topics: Financial mechanisms, Private sector,Bioprospecting, Markets and charges, Incentivemeasures

#247. Smith, D. (Ed.), (1995), The Use ofEconomic Principles for IntegratedManagement of Freshwater Resources.United Nations Environment Programme,Freshwater Unit: Nairobi. 110 pp.

This reports on a workshop, the purpose ofwhich was to provide a practical introduction tohow economic principles and tools could be usedto improve the environmental sustainability ofwater use. The workshop was aimed at water andenvironmental managers and policymakers. Theperspective behind the workshop was that it wasnot necessary (or even desirable) to applysophisticated economic instruments to achievemarked improvements in the sustainability of

water use and economic welfare. Rather, thatapplying some basic economic principles wouldsignificantly improve the efficiency of water useand thereby provide more people with clean wateron an environmentally sustainable basis.

Coverage: Global

Ecosystem or sector focus: Fisheries, Water,Wetlands

Topics: Markets and charges, Economicinstruments, Economic policies

#248. Smith, J., Mourato, S., Veneklaas, E.,Labarta, R., Reategui, K., & Sanchez, G.,(2000), Willingness to Pay for EnvironmentalServices Among Slash-And-Burn Farmers inthe Peruvian Amazon: Implications forDeforestation and Global EnvironmentalMarkets. American Agricultural EconomicsAssociation Annual Meeting, July 30-August2:Tampa, Florida. 7 pp.

A Contingent Valuation survey shows that thepossibility of trade in carbon sequestrationservices exists between utility companies andslash-and-burn farmers in the Amazon and thatfarmers positively value the environmentalservices of the forest. Global environmentalmarkets could enhance the effectiveness oftraditional forest conservation efforts whilebenefiting resource-poor farmers.




Topics: Valuation, Contingent valuation, Marketsand charges

#249. Soderbaum, P., (2000), EcologicalEconomics. Earthscan Press Ltd: London. 254pp. ISBN 1853836850

Economics is often presented as the study of theimpersonal forces of supply and demand and thelaws relating to them. Rational Economic Man isthe agent generating these forces. This book takesquite a different approach, presenting theindividual as a political being and a responsibleactor. It proposes the Political Economic Personas the central actor and the Political EconomicOrganization - rather than firms exclusively



driven by profit maximization - as the basis forunderstanding corporate behaviour. Ideologies,worldviews, beliefs and scientific perspectiveshave all to be taken into account if economics isto deal successfully with the social andenvironmental problems we face. Starting fromthe roles individuals have as citizens, parents,professionals, or consumers, it offers a differentway of understanding the market economy, fromthat of conventional or neo-classical economics.This both accounts for the enormousenvironmental problems we face, and suggestshow we can address them. For example, businesshas to be understood in terms of a broader ideaof efficiency than that of cost-revenue analysis, ormonetary reductionism. Such broader ideas of thepurpose of business are needed for improvedenvironmental performance. It is argued thatcooperation - as opposed to competition andconfrontation - can be both rational and sociallynecessary. The book presents an ecologicaleconomics that is interdisciplinary and pluralistic.Taking account of the viewpoints of the keyplayers, it offers an approach to achieving asocially and ecological sustainable society.

Coverage: Global

#250. Sohngen, B., Sedjo, R., Mendelsohn, R.,& Lyon, K., (1996), Analyzing the EconomicImpact of Climate Change on Global TimberMarkets. Discussion Paper 96-08, Resourcesfor the Future: Washington DC. 63 pp.In this paper, we show how ecological andeconomic models can be linked to determine theeconomic impact of climate change on globaltimber markets. We begin by discussing some ofthe important issues relevant to global impactanalyses such as this. We then outline our generalmodeling framework and discuss the particularmodels that will be used. Finally, we discuss someof the important issues involved with linking thetwo types of models.

Coverage: Global


Topics: Markets and charges, Economicinstruments, Climate change

#251. Southgate, D., Coles-Ritchie, M., &Salazar-Canelos, P., (1996), Can Tropical

Forests be Saved Harvesting Non-TimberProducts? Working Paper GEC 96-02, Centrefor Social and Economic Research on the GlobalEnvironment: London.

Presented in this paper are the results of a studyof vegetable ivory production in westernEcuador, which is one of the largest extractiveindustries in the hemisphere. We have found that,until very recently, payments received byhouseholds that collect tagua (Phytelephasaequatorialis) barely covered the opportunity costof labour employed in harvesting. By contrast,super-normal profits have been captured by a fewfirms that slice tagua into disks, which areexported to overseas button manufacturers. Thisconcentration of economic returns at the top ofthe domestic marketing chain has been typical ofnon-timber extraction throughout Latin America.Processing and exporting are becoming morecompetitive and, as a result, producer-level pricesare increasing. Nevertheless, our research findingslead us to doubt that vast tracts of tropical forestwill be saved by the collection of non-timberproducts.


Contains examples or case studies from:Ecuador


Topics: Valuation, Markets and charges, Trade

#252. Spaninks, F., & van Beukering, P.,(1997), Economic Valuation of MangroveEcosystems: Potential and Limitations.CREED Working Paper No 14, InternationalInstitute for Environment and Development:London. 53 pp.

Mangrove ecosystems provide a range of non-marketed as well as marketed goods and servicesboth on and off-site. Yet, the full value ofmangrove products is not easily recognised, andare, therefore, often neglected in developmentplanning. As a result it is often concluded thatmangrove forests should be converted to useswhich generate directly marketable products, suchas aquaculture. Economic valuation methodsoffer a more comprehensive assessment of themany goods and services provided by mangroveecosystems, and hence may contribute to moreinformed decision-making. The objective of thispaper is to review and analyse the scope and



limitations of different valuation methods forassessing management alternatives for mangroveecosystems. The paper compares a range ofstudies on mangroves with regard to themethodologies employed and the range ofproducts and services valued. It includes adiscussion of the benefits of valuation methodsfor assessing management alternatives, withparticular reference to the goods and services ofPagbilao Bay in the Philippines - the study site ofthe project, Economic Valuation of Mangrove-Fishpond Interactions, for which this paper waswritten. The literature review and the discussionof the Pagbilao case study illustrate the potentialof valuation methods for evaluating managementalternatives, as well as the practical limitations totheir application. In principle, methods areavailable but the lack of data and quantitativeknowledge regarding some key ecologicalrelationships affirm the need for further inquiry.

Coverage: Asia



Topics: Valuation

#253. Spurgeon, J. P. G., & Aylward, B.,(1992), The Economic Value of Ecosystems:4 - Coral Reefs. Gatekeeper Series No GK 92-03, London Environmental Economics Centre:London. 15 pp.Coral reef ecosystems provide a variety ofvaluable economic benefits to individuals andsociety. Yet, despite this high economic value theyare threatened by human activities. This paperoutlines methods and examples for the economicvaluation of coral reefs. It suggests that a properunderstanding and accounting of these economicbenefits will lead to improved management ofreef ecosystems.

Coverage: Global


Topics: Valuation, Bioprospecting

#254. Spurgeon, J. P. G. (1998). 'The socio-economic costs and benefits of coastal habitat

rehabilitation and creation', Marine PollutionBulletin 37 (8-12):373-382This paper provides and overview of the meritsand limitations of using an economics-basedapproach to assess and implement initiatives forcoastal habitat rehabilitation and creation. Areview of the literature indicates that habitatrehabilitation/creation vary widely between andwithin ecosystems. For coral reefs, costs rangefrom US$10,000 to 6.5 million per hectare; formangroves US$3,000-510,000/ha; for seagrassesUS$9,000-680,000/ha; and for saltmarshesUS$2,000-160,000/ha. A review of the economicbenefits derived from various coastal habitatsusing a Total Economic Value approach revealsthat many thousands of dollars per hectare couldultimately accrue from theirrehabilitation/creation. The paper concludes thatdespite its limitations, a benefit-cost analysisframework can play and important role both inassessing the justification of coastal habitatrehabilitation/creation initiatives, and by helpingto improve the overall effectiveness of suchinitiatives.

Coverage: Global


Topics: Valuation, Replacement costs, Effect onproduction, Mitigative and avertive expenditures

#255. Stedman-Edwards, P., (1998), RootCauses of Biodiversity Loss: An AnalyticalApproach. Macroeconomics Program, WWF -World Wide Fund for Nature: Washington DC.86 pp.

This document presents an in-depth analysis ofthe economic and non-economic root causes ofbiodiversity loss. It presents a framework foridentifying and analysing root causes ofbiodiversity loss, collecting data and applyingconceptual models. These are illustrated withexamples from around the world.

Coverage: Global

Contains examples or case studies from: Mexico,Guatemala, Bolivia, Indonesia, Thailand,Cameroon, Honduras, Ecuador, India

Ecosystem or sector focus: Agriculture, Forests,Marine and coastal

Topics: Trade, Economic instruments, Incentivemeasures, Disincentives, Deforestation, Land



degradation, Soil erosion, Community-basedmanagement, Private sector, Population growth,Taxes, Subsidies

#256. Steenblik, R., (1998), Subsidy Reform:Doing More to Help the Environment bySpending Less on Activities that Harm It.Paper presented at a workshop on Doing MoreWith Less, IUCN's 50th Anniversary,Fontainebleau, France, November 1998. 23 pp.http://www.biodiversityeconomics.org

This paper has one overarching objective: tounderline the importance of continuing thereform of government policies and programmesthat generate "biodiversity-perverse" subsidies,and to encourage the conservation community tofurther develop their capacity to speakauthoritatively on the issue. As a prelude, thepaper reviews the inefficiencies created bysubsidies, and the effects they have on theenvironment in general and biodiversity inparticular. It then turns to the current multilateralmechanisms being applied to discipline subsidiesto resource-based sectors, with a view toidentifying areas in need of further strengthening.Most of the mechanisms used to date reflectattempts to deal with the trade and budgetaryeffects of subsidies. The application of thesedisciplines can be expected, in general, to reduceor even eliminate many of the policy-drivenincentives to farm intensively, overfish and burndirty fuels. But governments usually haveconsiderable discretion in how they interpret suchdisciplines; large variations in the incidence ofsubsidies within nations can have importantimplications for their effects on particularecosystems. It is in identifying such links, thispaper suggests, that civil society, particularlyenvironmental NGOs, can make the greatestcontribution to the process of subsidy reform.

Coverage: Global

Topics: Causes of biodiversity loss, Subsidies,Economic instruments, Economic policies

#257. Stone, R. (1994). 'A lesson in biodiversityeconomics ... versus biodiversity law', ScienceA plan released by the Wilderness Society isdesigned to acquire and preserve some privatelands for their biological value while using tax

credits and penalties to sweeten the deal forprivate landowners. The plan calls for developinga protected network of connected public andprivate lands to preserve ecosystems. The secondpart of this article discusses a law suit filed by agroup of Wisconsin botanists andenvironmentalists who sued the US Forest Servicefor ignoring an ecosystem approach and thusmismanaging forests. The group argued that theForest Service is required by law to use the latestscientific thinking on ecosystems, rather thanfocusing on protecting a handful of species, suchas the Northern Spotted Owl, that may or maynot reflect the health of a forest.



Ecosystem or sector focus: Wildlife, Forests,Protected Areas

Topics: Economic instruments

#258. Stone, S., (1996), Economic Trends inthe Timber Industry of the Brazilian Amazon:Evidence from Paragominas. CREED WorkingPaper Series No 6, International Institute forEnvironment and Development: London.The timber industry of the Brazilian Amazon ischanging rapidly. From a slowly evolving base ofextraction in the estuary areas, the industry hasexpanded along an extensive road networkstraddling upland forests. This research examinesthe changes in the economic profile of timberextraction and processing in an old frontier areaof Brazil, the county of Paragominas in theEastern Amazonian state of Para. As one of theearliest centres of upland logging in the Amazon,its experience after twenty years offers insights tothe development of the industry as it spreads toother regions of the basin. This paper presents atheoretical model of industry evolution in frontierareas, and analyses industry response inParagominas to local shortages in raw material,rising international wood prices and increasinglystable property rights.




Topics: Causes of biodiversity loss, Markets andcharges



#259. Stone, D., Ringwood, K., & Vorhies, F.,(1997), Business and Biodiversity: A Guidefor the Private Sector. World Business Councilfor Sustainable Development and IUCN - TheWorld Conservation Union: Gland. 68 pp. ISBN2-8317-0404-9

The world's biological resources are used everyday by industry - the agricultural, pharmaceuticaland forestry industries to mention but three.However, the Earth's resources are limited andconcern has been growing about the way in whichthey have been managed. This guide has beendevised specifically to represent business interests,to tell business people how to become moreengaged in implementing the Convention, and toencourage the private sector to contribute itsvaluable experience to the process under way. Toachieve this, the guide proposes a medium-termwork program for business. The information inthis guide is both theoretical and practical and hasbeen designed to be as relevant to the chiefexecutive officer as it is to corporate orenvironmental affairs managers or local sitemanagers. The guide's aim is to explain whybusiness should be involved in the biodiversitydebate and to suggest how it can participate.

Coverage: Global

Topics: Private sector, Financial mechanisms,Trade, Economic instruments

#260. Stone, C. D., Downes, D., & deFontaubert, A. C., (1998), Biodiversity, tradeand the fisheries sector, Case Study: WestAfrica. IUCN - The World Conservation Union.50 pp.http://www.biodiversityeconomics.org

In 1997, IUCN-The World Conservation Union,with the financial support of the German FederalMinistry for Economic Co-operation andDevelopment, initiated a project to examine therelationship between the Convention onBiological Diversity (CBD) and the rules ofinternational trade-those administered by theWorld Trade Organisation (WTO), in particular.The project was motivated by a widely sharedconcern that the aims of the CBD, which areessentially to conserve and equitably distribute thebenefits of the environment, might beundermined by the WTO, which aims at theliberalisation of trade. Liberalised trade has the

potential to integrate economies, regionally andglobally, in mutually beneficial ways. But someobservers are concerned that it may do so at acost of impairing the environment and amplifyingdisparities in wealth, much of which, in poorernations, is disproportionately represented inendowments of natural resources. Othercommentators have claimed to locate synergisticpotential, suggesting, for example, that trade law'santi-subsidy disciplines might be conscripted intothe campaign against environmental abuses suchas over-fishing. 1 Can the agenda of the tworegimes be reconciled--with each other and withother major regimes shaping internationalrelations, such as the Law of the Sea? To foster aconcrete discussion, the Project Advisorslaunched three Case Studies. The studies aredesigned to identify how the institutional tensionsmight be affecting sustainable development ofresources in the field.

Coverage: Africa

Ecosystem or sector focus: Marine and coastal,Fisheries, Wetlands

Topics: Trade, Convention on BiologicalDiversity

#261. Stonich, S., (1995), 'Development, ruralimpoverishment and environmental destructionin Honduras', In M. Painter, & W. Durham(Eds.), The Social Causes of EnvironmentalDestruction in Latin America. University ofMichigan Press: Ann Arbor.

There is a long history of rapid shifts betweendifferent export crops in Southern Honduras,primarily driven by the changing demands ofinternational markets, and the government policyof promoting the expansion of export crops inorder to generate foreign exchange. These exportcrop shifts have included, since the 1940s, cotton,cattle, shrimp and melon farming. Each newagricultural boom has increased the concentrationof land, driving small farmers off more fertilelands in favour of large commercial producers,and increasing the rates of land clearance, use ofagro-chemicals and the intensity and continuity ofcultivation. In turn, these changes in land use andownership have led to greater economic inequalityand environmental degradation.


Contains examples or case studies from:Honduras




Topics: Subsidies, Trade, Economic instruments,Economic policies, Causes of biodiversity loss

#262. Swallow, B. M., & Bromley, D. W. (1995).'Institutions, governance and incentives incommon property regimes for Africanrangelands', Environmental and ResourceEconomics 6 (2):99-118

The general distinctions between open access,state property, common property and privateproperty are now well established in the academicliterature. When applied to African rangelands,however, common property admits a wide varietyof resource management regimes. To formulateeffective policies it is necessary to understand thestructure and operations of particular regimes.This paper discusses three examples of commonproperty regimes, two from the southern Africannation of Lesotho and one from the west Africannation of Senegal, to illustrate some of the keycharacteristics of common property regimes. Inparticular, it is important to understand thestructure of governance, the types of institutionsthat govern behaviour, and the compatibilitybetween governance, institutions and individualincentives. A common property regime can onlybe effective if its institutions are compatible withthe structure of governance. The extent of itseffectiveness also depends upon the incentivesand expectations of individuals expected toenforce the rules of the institutions or complywith their terms. At present, most Africangovernments lack the organisational capacity andpolitical will necessary to implement stateproperty regimes, official regulations on resourceuse, or individual property rights for rangelandsresources. In many cases it is more appropriatefor governments to define and enforce grouprights to particular resources, than help toestablish conditions in which internal groupdynamics yield efficient resource managementoutcomes.

Coverage: Africa

Contains examples or case studies from:Lesotho, Senegal

Ecosystem or sector focus: Drylands, Agriculture

Topics: Incentive measures, Economicinstruments, Economic policies

#263. Swanson, T., & Barbier, E. B., (1992),Economics for the Wilds: Wildlife, Wildlandsand Diversity. Earthscan Press Ltd: London.254 pp. ISBN 1853831247

Surely the wilds - both species and habits - shouldbe free of human interference and the cost-benefit analyses of economists if they are to bepreserved? Not according to the authors of thisbook, who argue forcefully and in careful detailthat an economics that properly values theresources of the wilds offers the best long-termsecurity for their future. Most of the world's wildshave, in fact, always been utilized by localsocieties who have managed their resourcessustainably, and one important guarantee for theirpreservation is therefore the continuedparticipation of those communities and anadequate reward to them for their management.The first four chapters of the book look at thequestions involved - at the complexity and globalnature of the issues, at the application ofeconomics to the wilds and at the policies fortheir conservation and sustainable managementwhich then result. The following five chaptersexamine specific forms of utilization of wildspecies and habitats, both sustainable andunsustainable, and including community baseddevelopment, tourism, the use of rainforestproducts, poaching and the impact ofconservation on wildlife use. The conclusionargues that a comprehensive utilization strategyfor wild resources is needed to ensure theircontinued existence and the continuing flow ofbenefits from them.

Coverage: Global

Ecosystem or sector focus: Wildlife, Forests,Protected Areas, Tourism


#264. Swanson, T., (1992a), The EconomicsOf A Biodiversity Convention. Working PaperGEC 92-08, Centre for Social and EconomicResearch on the Global Environment: London.

The object of this paper is to demonstrate theapplication of three basic steps that must be takento reach the point of implementing an effectiveinternational resource management regime, in thecontext of biodiversity. The three steps are asfollows - identification of the nature of the basicforces affecting the resource; the identification of



failures in the existing institutional structure forresource management; and lastly, theidentification of the institutional changesnecessary to address the identified systemicproblems. Three essential elements of aninternational agreement for the conservation ofbiological diversity are: informational resourcerights; biological diversity reserves; and wildlifetrade regimes.

Coverage: Global

Topics: Convention on Biological Diversity,Trade, Economic instruments, Economic policies

#265. Swanson, T., (1992b), The EconomicsOf Extinction Revisited And Revised. WorkingPaper GEC 92-40, Centre for Social andEconomic Research on the Global Environment:London.

This paper provides a new economic model ofextinction. It demonstrates that the currentmodel, based on the analysis of Colin Clark, dealswith only the proximate forces of extinction (i.e.overexploitation), while the more fundamentalexplanation of species extinction is the failure ofhuman societies to invest in these species. Whenhuman societies do not invest in a species, itsstock levels are subject to disinvestment, possibleto the level of zero, or extinction. One form ofstock disinvestment is the direct disinvestmentanalysed by Clark, i.e. the decision to remove aspecies on account of the increased value ofinvesting the returns from disinvestment in otherassets. This applies to the depletion of slow-growing valuable species, such as the blue whale.Other forms of stock disinvestments occur in lessdirect fashion. Species require not only priorstocks to continue in existence, they also requirebase resources (land in the case of terrestrialspecies) and in many cases human management.The failure to invest in the provision of theseresources for a given species can also result instock disinvestment, and possibly extinction. Theconversion of land to the use of other speciesexplains the bulk of current and threatenedextinctions, i.e. the biodiversity problem. Thefailure to invest in management services explainsthe depletion of species of medium value and lowgrowth, such as the African elephant andrhinoceros. At base, the fundamental cause of allspecies depletion is the perceived incentives forinvestment in those species.

Coverage: Global


#266. Swanson, T., (1992c), Regulating OverExploitation: Over Exploitation asUnderinvestment. Working Paper GEC 92-39,Centre for Social and Economic Research onthe Global Environment: London.

There are two competing explanations for thedepletion of renewable resources:underinvestment and overexploitation. Onetheory argues that renewable resources aredepleted on account of the lack of incentives toinvest in them; the other theory argues that theseresources are depleted due to humanmismanagement, especially in respect to the useof inferior management regimes such as openaccess. This paper demonstrates that theseexplanations are not competing, and that themore fundamental of the two is theunderinvestment hypothesis. In regard toterrestrial resources, mismanagement via openaccess regimes is not a fundamental explanationof resource depletion because it remains necessaryto explain why such a regime would be applied.This paper demonstrates that the nature of themanagement regime is a function of the state'sdetermination whether to invest in the provisionof management services for the resource. Whenthere are insufficient incentives for states to investin management, then overexploitation is thepredictable result. Nevertheless, the fundamentalcause of the depletion remains the failure toinvest. This paper serves two related purposes. Itprovides an analytical proof that underinvestmentis the fundamental cause of resource depletion. Italso provides a bio-institutional model thatdemonstrates how states make decisionsconcerning investment and management ofrenewable resources. This model is useful indemonstrating the mode for intervention innational decision making concerning naturalresources.

Coverage: Global


#267. Swanson, T., (1994), Economics andAnimal Welfare: A Policy Analysis of the LiveBird Trade. Working Paper GEC 94-09, Centre



for Social and Economic Research on the GlobalEnvironment: London.

There is a popular perception that thecommercialisation of the wildlife trade leads toboth the endangerment and abuse of the species,and that such trade should therefore be banned.Captive breeding programmes have beenadvocated as a substitute supplier of wild birds.Bans on trade would of course be effective if thealternative to legal exploitation wasnonexploitation of the species or its habitat. Sincethe exploitation of wildlife will usually occur ineither event (i.e. with or without a ban), thechoice is often between legal and illegalexploitation. This paper investigates the impact ofillegal methods of exploitation on the welfare ofthe tropical birds captured in open forests. Itdemonstrates that the illegal exploitation ofwildlife minimises the values of the resource, andresults in wasteful and abusive forms ofutilisation. It also analyses the role of captivebreeding as a substitute supplier, and finds it to bemerely a method for transporting the geneticresource from the South to the North. A faire andeffective form of regulation (to advance animalwelfare) would take the form of transporting therental value of the resource from North to South,rather than the resource from South to North.

Coverage: Global


Topics: Trade, Markets and charges

#268. Swanson, T. (Ed.), (1995a), TheEconomics and Ecology of BiodiversityDecline: The Forces Driving Global Change.Cambridge University Press: Cambridge. 176pp. ISBN 0521482305

This book surveys from a wide range ofviewpoints from ecology and economics in thesearch for a systematic explanation of changes inthe biosphere at a global level. Economistsanalyse how economic growth predictably altersthe earth, and ecologists consider how the drivefor fitness and consequent population growthchanges the globe. Both look at the institutionalinterface between humans and the biosphere, andexplain global change as the consequence ofhuman non-cooperation and conflict.

Coverage: Global


#269. Swanson, T., (1995b), The Theory andPractices of Transferring DevelopmentRights: The Institutions for Contracting forBiodiversity. Paper presented at IUCNWorkshop on Financing BiodiversityConservation Harare, Zimbabwe 13-15September 1995. 17 pp.http://www.biodiversityeconomics.org

This study explains why the theory of transferabledevelopment rights, runs into difficulty becauseof the lack of legal bases and institutions for thetransfer. The problem, in brief is that whileownership rights at a domestic level can be "un-bundled" though legal agreements such as leasesor land zoning, the same can not be accomplishedacross borders. This model runs into problemswhen applied to a case of international transfers,where there is no reciprocity (as in agreementswhere both countries agree to conserve similarportions of wetlands or forests). Transferring use-rights in land to a foreign entity could not belegally enforced. Swanson instead suggests thatthe model to adopt is that of the franchise, inwhich three parties are involved: the globalcommunity, owner states, and land-owners. Theauthor also suggests what institutions would beneeded to enforce these contracts.

Coverage: Global

Topics: Economic instruments, Financialmechanisms, Markets and charges

#270. Swanson, T., (1996), The UnderlyingCauses of Biodiversity Decline: AnEconomic Analysis. Paper presented at IUCNWorkshop on Economics of Biodiversity Loss,April 1996, Gland, Switzerland. 14 pp.http://www.biodiversityeconomics.org

This paper opens with the premise that all of thevarious examples of biodiversity loss areconsequences of human and societal choices andthat humans should be seen as beingfundamentally responsible for all of the variousforms of biodiversity decline by reason of theirchoices regarding the allocation of resources. Thepaper commences by setting forth the originaleconomic framework utilised to explain overexploitation-based resource depletion, and thengoes on to demonstrate how this "irresponsible"



behaviour may be incorporated within a morefundamental theory of human choice regardingresource allocation and biodiversity depletion.This theory is then developed in order todemonstrate how each of the various phenomenaassociated with biodiversity loss is a proximatecause of biodiversity decline resulting fromfundamental human choices concerning theallocation of the resources required for continuedsurvival. The paper argues that economic forcesdrive biodiversity losses which implies theconclusion that the assessment of biodiversitydecline requires an understanding and assessmentof these economic forces. In order to redress thedecline of diversity it will be necessary to reshapethe economic incentives that cause humansocieties to choose systematically to reshape theliving world in the way that they do.

Coverage: Global

Topics: Incentive measures, Disincentives, Causesof biodiversity loss, Subsidies, Economic policies

#271. Tacconi, L., (2000), Biodiversity andEcological Economics: Participation, Valuesand Resource Management. Earthscan PressLtd: London. 254 pp. ISBN 1853836761

It is vital that we adopt interdisciplinaryapproaches such as ecological economics to gainan understanding of the values that determinehuman interaction with, and use and abuse of, theenvironment. This book is a model of appliedecological economics. It presents an accessibleintroduction to the subject while at the same timebroadening its theoretical basis by introducing apost-positivist, participatory method. Thetheoretical framework is applied to case studies inbiodiversity conservation, drawn from around theworld and a range of different ecosystems.

Coverage: Global

#272. Tan, J., (1998), EnvironmentalFoundations: Funding CommunityInnovations in Biodiversity Conservation.Paper presented at a workshop on FinancialInnovations for Biodiversity, 10th GlobalBiodiversity Forum, Bratislava, Slovakia, 1-3May 1998. 7 pp.http://www.biodiversityeconomics.org

Environmental foundations managing relativelylarge funds for environmental projects areproviding access to international funds for localNGOs. These foundations, considered asNational Environmental Fund holders or NEFsare able to act as conduit for international fundsto be distributed to local, particularly, communitybased NGOs or people's organisations (POs).The Foundation for the Philippine Environmentor FPE is one of seven NEFs in the Asia-PacificRegion. The Establishment of FPE was aninitiative of the Philippine and U.S. NGOs withthe support of the governments of the twocountries. In 1990, a Memorandum of Agreementbetween the Philippines and U.S. governmentsestablished the Natural Resources ManagementProgram to support NGO activities for thepurpose of creating an endowed, private, non-profit foundation for the environment. In April1991, USAID and WWF/US signed a co-operative agreement to complete the first of twodebt-for-nature swaps amounting to USD 5million, planned for a total of USD 25 million. InJanuary 1992, FPE was officially registered withthe Securities and Exchange Commission. InMarch 1993, a Memorandum of Understandingwas concluded among the governments of thePhilippines (represented by the Department ofFinance) and the U.S. (represented byUSAID/Manila) and FPE for the establishmentof the endowment. In September 1993, thesecond debt-for-nature swap was concluded forUSD 13 million. A subsequent debt-for-natureswap financed by the Bank of Tokyo cost USD104 thousand. Under its agreement with USAID,FPE's endowment fund was initially managed byWWF/US. In June 1994, the endowment fundwas formally transferred to FPE's management,making FPE an independent institution Activelyfunding on-the-ground biodiversity conservationprograms in the Philippines. The endowment thatFPE manages was initially valued at almost USD22 million converted immediately into PhilippinePesos at almost 570 million. FPE vision is of an"ecologically balanced, clean and healthyenvironment with communities living fully andcaring responsibly for their environment."

Coverage: Asia



Topics: Financial mechanisms, Debt conversion,Trust Funds



#273. Tejam, C., & Ross, A., (1997), Manual ofPractices: Contingent Valuation Survey forIntegrated Coastal ManagementApplications. GEF/UNDP/IMO RegionalProgramme for the Prevention and Managementof Marine Pollution in the East Asian Seas:Quezon City.

This manual outlines the steps and methods inconducting contingent valuation study. Itdescribes a contingent valuation survey used toassess the perceived conservation value ofBatangas Bay in the Philippines, and thewillingness of coastal dwellers to pay for thisconservation. This included questions about theamount that householders would be willing toincrease their garbage collection and sewagetreatment payments so as not harm the marineenvironment, their willingness to pay fees tomaintain fisheries resources and to contributetowards coral reef conservation. Results of thesurvey indicated people's willingness to pay foractions to conserve the marine environment - thevalue that they place on various attributes ofBatangas Bay.

Coverage: Asia


Ecosystem or sector focus: Marine and coastal,Urban settlements, Industry, Infrastructure


#274. Tietenberg, T., (1995), 'Design lessonsfrom existing air pollution control systems: thecase of the United States', In S. Hanna, & M.Munasinghe (Eds.), Property Rights in aSocial and Ecological Context: Case Studiesand Applications. Beijer International Instituteof Ecological Economics and World Bank:Stockholm and Washington DC.

Beginning in 1975, the Environmental ProtectionAgency in the USA has piloted various incentivesschemes together known as the "EmissionsTrading Program". Here, the introduction oftradable permits for emissions are used asincentives for firms to limit the pollution loadsthey generate, or to force polluting industries topay for the emissions they discharge. One of thefirst steps was to allow firms which reducedemissions below that required by their standards

to gain an emissions reduction credit, that couldthen either be offset against emissions createdelsewhere by the firm, or sold to other industries.This type of approach was then applied to lead ingasoline, where a fixed amount of lead rights wasallocated to oil refiners. Refiners who did not usetheir full allocation of rights were permitted to sellthem to others. Similar systems have since beenapplied to ozone-depleting chemicals, acid rain-causing electric utility emissions and smogproduction. More recently, the principle of credittrading has evolved into one of allowance trading.Newer programmes are based on allowancesdefined in discrete terms, rather than credits forpollutant flows (for example a permit for a certainamount of tons, rather than tons per year, whichhas to be renewed once used up). The systemnow also contains a set-aside of allowable permitsthat they government can sell, should the needarise.



Ecosystem or sector focus: Urban settlements,Industry, Infrastructure

Topics: Economic instruments, Markets andcharges

#275. Tobias, D., & Mendelsohn, R. (1991).'Valuing ecotourism in a tropical rainforestreserve', Ambio 20 (2):91-93

This article reports on a study carried out tomeasure the value of ecotourism at a tropicalrainforest site in Costa Rica, using the travel costmethod. By observing travel behaviour, the studyreveals that Costa Rican visitors are willing to payconsiderably for the experience of visiting the site.The current value of the site per hectare, based ondomestic and foreign tourism alone, is between 1-2 times higher than the purchase price currentlypaid by the reserve for the acquisition of newlands.




#276. Toman, M., (1998), Research Frontiersin the Economics of Climate Change.



Discussion Paper 98-32, Resources for theFuture: Washington DC. 24 pp.

Academic and policy debates over climate changerisks and policies have stimulated economicresearch in a variety of fields. This article brieflydiscusses eight overlapping areas of currentresearch in which further effort particularly iswarranted. These areas include decision criteriafor policy; risk assessment and adaptation;uncertainty and learning; abatement cost and theinnovation and diffusion of technology; and thecredibility of policies and internationalagreements. Further analysis in these areas notonly will advance academic understanding butalso will provide insights of considerableimportance to policymakers.

Coverage: Global

Topics: Climate change, Carbon offsets,Economic instruments

#277. Totten, M., (1999), Getting it Right:Emerging Markets for Storing Carbon inForests. World Resource Institute: WashingtonDC. 49. 1-56973-413-5

This document sets out the potential forbusinesses and the environmental community tofind common solutions that use forests tomitigate the climate-warming dangers ofgreenhouse gases. It argues that there is anaccelerating momentum to create a market forforests as sinks for carbon emissions. Examplesof this emerging market in carbon offsets aregiven from around the world.

Coverage: Global

Contains examples or case studies from: CostaRica, Belize, Paraguay, Bolivia, Malaysia, USA,Brazil, Australia, Mexico, Honduras, Netherlands

Ecosystem or sector focus: Forests, Watersheds

Topics: Climate change, Markets and charges,Financial mechanisms, Economic instruments,Deforestation

#278. Tressler, S., (1995), Charitable Givingin the United States: A Model andOpportunity for Funding Conservation ofBiodiversity. Paper presented at IUCNWorkshop on Financing BiodiversityConservation Harare, Zimbabwe 13-15

September 1995. 7 pp.http://www.biodiversityeconomics.org

The purpose of this paper is to explore trends incharitable giving that suggest opportunities tosupport conservation of biodiversity around theworld. The level of charitable giving in the UnitedStates, which totalled $129.88 billion in 1994 1 ,suggests that serious consideration should begiven to developing this source of funding forconservation of biodiversity. The U.S. modelcould be replicated in other developed countriesand emerging economies. The latter presents aparticular opportunity to build philanthropictraditions as economies grow.



Topics: Economic instruments, Financialmechanisms, Taxes

#279. Trexler, M., (1995), BiodiversityConservation Through Joint Implementation:Advancing Common Agenda Elements.Paper presented at IUCN Workshop onFinancing Biodiversity Conservation Harare,Zimbabwe 13-15 September 1995. 7 pp.http://www.biodiversityeconomics.org

This paper reviews the successes and difficultiesof Joint Implementation of carbon offset projectsfor forest conservation. This paper considers onlyone method used for carbon offsets, but thismethod is considered to be the one which has thegreatest impact on biodiversity conservation. TheJoint Implementation concept in the Conventionon Climate Change (CFFF) has led to a pilotphase, which this author argues should bedevelop to provide strong incentives for privatesector industry (power plants, manufacturers) toendorse offsets as alternatives to facility-specificemissions reductions. Several industry-financedoffset projects are briefly summarised. Howeveroffset projects face important barriers, notably theburden of proving that preservation will result incarbon offset rather than displace the destructionof the forest elsewhere. The author calls for astrengthening of policy frameworks to enable JIprojects to overcome barriers, and suggests sevenkey points to address in the design of future JIprojects.

Coverage: Global




Topics: Climate change, Carbon offsets, Privatesector, Financial mechanisms, Economicinstruments

#280. Trexler, M., (1999), Innovative ForestFinancing Options and Issues: ForestConservation and Management for ClimateChange Mitigation. Programme on Forests,United Nations Development Programme: NewYork: New York. 69 pp.

This issues paper focuses on one potentialinnovative financing mechanism for sustainableforest management activities - the CleanDevelopment Mechanism. It covers thebackground to the climate change issue, looks atdifferent options for integrating forest and land-use based options into the SDM and givesexamples of ongoing forestry projects beingpursued for climate change mitigation purposes.The strengths and weaknesses of differentfinancing mechanisms and strategies are assessed.

Coverage: Global, Asia, Latin America

Contains examples or case studies from: Belize,Bolivia, Costa Rica, Ecuador, Guatemala,Malaysia, Mexico, Paraguay, Peru


Topics: Financial mechanisms, Economicinstruments, Private sector, Climate change,Carbon offsets

#281. Tri, N. H., Adger, W. N., Kelly, M.,Granich, S., & Ninh, N. H., (1996), The Role ofNatural Resource Management in MitigatingClimate Impacts: Mangrove Restoration inVietnam. Working Paper GEC 96-06, Centre forSocial and Economic Research on the GlobalEnvironment: London. 27 pp.

The risk that tropical storm occurrence may alteras a result of global warming presents coastalmanagers with a serious challenge. This paperexamines a strategy to protect coastal populationsand resources against these effects, based on therehabilitation of a natural ecosystem, themangrove. It quantifies the economic benefits ofmangrove rehabilitation undertaken to enhancesea defence systems in three coastal districts ofnorthern Vietnam. The results of this analysisshow that mangrove rehabilitation can be

desirable from an economic perspective solely onthe direct use benefits by local communities. Suchactivities have even higher benefit:cost ratios withthe inclusion of the indirect benefits resultingfrom the avoided maintenance costs for the seadike systems which the mangroves protect fromcoastal storm surges.

Coverage: Asia


Ecosystem or sector focus: Marine and coastal,Wetlands

Topics: Valuation, Climate change, Marketvaluation, Effect on production, Mitigative andavertive expenditures

#282. t'Sas Rolfes, M., (1995), Private SectorMechanisms for Financing BiodiversityConservation: Some Lessons From SouthernAfrica. Paper presented at IUCN Workshop onFinancing Biodiversity Conservation Harare,Zimbabwe 13-15 September 1995. 11 pp.http://www.biodiversityeconomics.org

There are two approaches to overcoming the"missing markets" for biodiversity: eitherinternalise the externalities of conservation, theapproach favoured by most multilateral bodies, orcreate a market. This paper explains why marketmechanisms have greater promise of succeedingin Southern Africa, despite the opposition ofsupporters of species preservation. It backs upthis argument with a case study of the SouthAfrican ecotourism company ConservationCorporation (ConsCorp). By giving private orcommunal landowners the right to sell theproducts of biodiversity on markets there is anincentive to conserve - where strict efforts topreserve the same species creates no suchincentive. Given the right legal framework, themarket can do a better job than either the state, orforeign NGO's. Who presently invests inconservation? Investors include miningcorporations, livestock and game ranchers,wealthy individuals seeking the tax breaksafforded to farmers, and most recentlyenvironmental entrepreneurs such as Conscorp.

Coverage: Africa





Topics: Financial mechanisms, Private sector

#283. t'Sas Rolfes, M., (1996), The Use ofAuctions as an Incentive Measure for WildlifeConservation. Paper presented at workshop onIncentives for Biodiversity: Sharing Experiences,4th Global Biodiversity Forum, Montreal,Canada 30 August - 1 September 1996. 3 pp.http://www.biodiversityeconomics.org

This paper highlights the success of public gameauctions as a means of providing incentives forwildlife conservation in South Africa. The initialexperiences of the National Parks Board in sellingWhite Rhinos to the private sector were notsuccessful for conservation because the set priceof purchasing a rhino from the NPB wassignificantly less than the price obtained fromtrophy hunters. Once auctioning was introducedas a pricing mechanism the purchasing price roseand private landowners had the incentive to breedtheir own rhino populations. This paper reviewsthe case and provides a summary of 'lessonslearned'.

Coverage: Africa



Topics: Incentive measures, Economicinstruments, Financial mechanisms, Markets andcharges

#284. Turner, R. K., Perrings, C., & Folke, C.,(1995), Ecological Economics: Paradigm orPerspective? Working Paper GEC 95-17,Centre for Social and Economic Research onthe Global Environment: London.

This paper addresses the issue of whetherecological economics represents a separate anddistinct paradigm from environmental economics.The latter is taken to represent the application ofthe standard economic tool kit to environmentalissues. It is concluded that the competingparadigms thesis is at best only partially true.Most important is the finding that there appearsto be an emerging consensus around a new

substantive research agenda which straddlesenvironmental, resource and ecologicaleconomics.

Coverage: Global

#285. Turpie, J., Smith, B., Emerton, L. A., &Barnes, J., (1999), The Economic Value of theZambezi Basin Wetlands. IUCN - The WorldConservation Union, Regional Office forSouthern Africa: Harare. 346 pp.

This reports on a study carried out to value theZambezi Basin wetlands in Southern Africa. Itpresents an overview of the theoreticalbackground to economic valuation, and theavailable methods and techniques for valuation. Itlooks in detail at four major wetland sites andpresents monetary estimates of their direct andindirect values. The impacts of macroeconomicand sectoral economic policies on wetland statusare analysed, and recommendations made for theuse of economic instruments and incentives forwetland wise use and sustainable management.

Coverage: Africa

Contains examples or case studies from:Botswana, Malawi, Mozambique, Namibia,Zambia, Zimbabwe

Ecosystem or sector focus: Wetlands, Water,Forests, Marine and coastal, Drylands, Fisheries

Topics: Valuation, Contingent valuation, Marketvaluation, Effect on production, Mitigative andavertive expenditures, Replacement costs,Economic instruments, Economic policies,Disincentives, Incentive measures, Causes ofbiodiversity loss

#286. Umana, M. R., (1996), ConservationStrategies and Incentive MechanismsImplemented Within the La AmistadConservation Development Initiative forCosta Rica and Panama. Paper presented atworkshop on Incentives for Biodiversity: SharingExperiences, 4th Global Biodiversity Forum,Montreal, Canada 30 August - 1 September1996. 5 pp.http://www.biodiversityeconomics.org

Based on the experiences of the La AmistadConservation and Development Initiative, this



paper outlines several methods undertaken bythat group to conserve and sustainably use theresources of La Amistad Biosphere Reserve.These efforts include a revolving credit fund, treenurseries, diversification of crops, theestablishment of market opportunities, reducingsoil erosion, providing technical training, andenhancing environmental education. These effortsemploy a variety of direct and indirect incentivessuch as subsidies, cost sharing programmes, andagency support. The paper outlines the initiative,the institutional and legal frameworks, theeffectiveness of the incentives, and lessons andrecommendations.


Contains examples or case studies from: CostaRica, Panama

Ecosystem or sector focus: Forests, ProtectedAreas

Topics: Incentive measures, Financialmechanisms, Trust Funds

#287. United Nations, (1993), IntegratedEnvironmental and Economic Accounting.Department for Economic and Social Informationand Policy Analysis, Statistical Division, Studiesin Methods Series F No 61, United Nations: NewYork. 182 pp. ISBN 92-1-161359-0

This handbook presents methods for integratedenvironmental and economic accounting. It givesa conceptual basis for implementing a satellitenational account system for environmental andeconomic accounting that describes therelationships between the natural environmentand the economy. Ultimately, integratedenvironmental and economic accounting isintended to support integrated social, economicand environmental policy by means of anintegrated information system.

Coverage: Global


#288. United Nations Environment Programme,& International Institute for SustainableDevelopment, (2000), Environment and Trade:A Handbook. The United Nations EnvironmentProgramme, Division of Technology, Industryand Economics, Economics and Trade Unit and

the International Institute for SustainableDevelopment: Geneva. 96 pp. ISBN 1-895536-21-9

The handbook has been developed to highlightthe relationship between environment and trade.The primary aim is to foster a broaderunderstanding of these interlinkages to enablegovernments to develop practical approaches tointegrating these policies. It is possible, but by nomeans automatic, that trade and environmentalpolicies should support each other in achievingtheir objectives. Close integration of these policiesis necessary to maximize the benefits that tradecan bring to increase human welfare andeconomic development more sustainably. Thehandbook is aimed mainly at those with someknowledge about trade, environment ordevelopment, but not expert on the intersectionof the three. It is also a practical reference tool forpolicy-makers and practitioners. But the targetaudience is not just government policy-makers;the media and public may also find it useful. Thehandbook uses clear language and a minimum ofjargon to foster a greater understanding by allelements of civil society. This handbook shouldhelp us understand how trade can affect theenvironment, for better and for worse, and howenvironmental concern can work through thetrading system to foster or frustrate development,in both rich and poor countries. It is critical toensure that trade’s potential for growth anddevelopment does, in fact, lead toenvironmentally sustainable development.Broader understanding and awareness of theselinkages will then be the foundation on which fairand environmentally sustainable policies and tradeflows are built.

Coverage: Global

Topics: Trade

#289. United Nations Environment Programme(Ed.),(2000), Funding Protected Areas in theWider Caribbean: A Guide for Managers andConservation Organizations. Proceedings ofthe Ninth Intergovernmental Meeting on theAction Plan for the Caribbean EnvironmentProgramme and Sixth Meeting of theContracting Parties to the Convention for theProtection and Development of the MarineEnvironment of the Wider Caribbean Region:Kingston, Jamaica, 14-18 February 2000. 48 pp.



This document is an orientation to sources offunding for protected areas and biodiversityconservation. It is intended to serve as a primerand basic guidelines for protected area agenciesand managers, as well as NGOs. It deals bothwith financing mechanisms and funding sourcesavailable for protected areas and biodiversityconservation in the Wider Caribbean. It shows,through many case studies and examples fromLatin America and the Caribbean, the many waysin which protected area managers haveincorporated different funding sources forestablishment and management of parks. Thedocument includes sections in planning forfinancial sustainability, cross-cutting themes inbiodiversity finance, finance and revenue-generating mechanisms and fundraising frominternational donors. It also presents sources ofinformation and technical assistance for fundingprotected areas.

Coverage: Caribbean, Latin America

Contains examples or case studies from:Antigua, Netherlands Antilles, Belize, Costa Rica,British Virgin Islands, Guatemala, Panama

Ecosystem or sector focus: Marine and coastal,Protected Areas, Tourism

Topics: Financial mechanisms, Economicinstruments, Markets and charges, Trust Funds,Debt conversion, Carbon offsets, Bioprospecting,Taxes, Valuation, Private sector

#290. Vallejo, N., & Hauselmann, P. (Eds.),(1998), From Theory to Practice: IncentiveMeasures in Developing Countries. Benefitingfrom Biodiversity Series, WWF - World WideFund for Nature: Gland. 42 pp. 2-88685-216-1

Five years after the establishment of theConvention on Biological Diversity, the massivedegradation of ecosystems continues. Thousandsof species have disappeared, the climate ischanging. Are the efforts to save the planetwithout hope? This publication shows, to thecontrary, that some initiatives - born and tested indeveloping countries - are beginning to reversethese trends. It looks at what incentive measuresare, and what types of incentive measures areavailable for biodiversity conservation. Presentingcase studies of the introduction and use ofincentive measures for biodiversity from a rangeof countries and ecosystems, the document makesconclusions as to successful elements and lessons

learned in the design and use of incentivemeasures for biodiversity conservation.

Coverage: Global, Africa, Asia, Latin America

Contains examples or case studies from: Brazil,Kenya, Colombia, Cameroon, Cote d'Ivoire,Uganda, India, Malaysia


Topics: Taxes, Subsidies, Economic instruments,Incentive measures, Financial mechanisms,Economic policies, Private sector, Community-based management, Causes of biodiversity loss

#291. van Tongeren, J., Lutz, E., & Shweinfest,S., (1991), Integrated Environmental andEconomic Accounting: A Case Study forMexico. Environment Working Paper 50,Environment Department, World Bank:Washington DC. 34 pp.

This document presents a case study of theapplication of environmental accounting toMexico using the integrated environmental andeconomic accounting framework developed bythe United Nations Statistical Office.Depreciation of produced asset balances wascalculated and deducted from the GDP to arriveat the standardised NDP. Depletion of oil wasaccounted for, and degradation concerns wereaddressed. These effects were valued.Environmentally adjusted NDP ranged from 94%of traditional NDP to 87% when deducting thecost of degradation.





#292. Verbruggen, H., Kuik, O., & Bennis, M.,(1995), Environmental Regulations as TradeBarriers for Developing Countries: Eco-labelling and the Dutch Cut Flower Industry.CREED Working Paper Series No 2,International Institute for Environment andDevelopment: London.

The present expansion of environmentalstandards and regulations in industrialisedcountries can have significant impacts on the



market access of developing countries. The fear inmany developing countries is that stricter productstandards in the markets of developed countrieswill act as trade barriers for their exports.Moreover, there is widespread suspicion thatenvironmental restrictions are sometimes used asan indirect means of protecting northernindustries. This paper briefly examines theseissues, focusing on recent eco-labelling schemesfor cut flowers in the Netherlands. The paperconcludes that eco-labels may have a significantnegative impact on the export opportunities of anumber of developing countries.

Coverage: GlobalEurope

Contains examples or case studies from:Netherlands


Topics: Markets and charges, Trade

#293. Verbruggen, H., Kuik, O., Bennis, M.,Hoogeven, H., & Mollerus, R., (1998),Environmental Product Measures: Barriersfor South-North Trade? CREED WorkingPaper Series No 18, International Institute forEnvironment and Development: London.

An increasing volume of exports from the southis subject to environmental regulations innorthern markets. The frequency of incidence ofthese measures, their coverage in value terms andtheir impacts on the market access for exportersfrom developing countries, are the subjects of thispaper. In order to assess the extent and coverageof such environmental measures two indices aredeveloped - the Frequency Index ofEnvironmental Measures (FIEM) and theCoverage Index of Environmental Measures(CIEM) - and are applied to developing countries'exports to the EU market in 1992. In order toassess the impacts of environmental measures onthe market access of products from developingcountries, the results of a survey amongZimbabwean exporting firms are presented. It isconcluded that FIEM and CIEM are potentiallyvaluable monitoring tools and somerecommendations for further work are proposed.

Coverage: Global, Europe, North America,Africa


Topics: Trade

#294. von Moltke, K., & Spanninks, F., (2000),Traditional Chinese Medicine and speciesendangerment: an economic researchagenda. CREED Working Paper Series No 32,International Institute for Environment andDevelopment: London.

The debate about Traditional Chinese Medicine(TCM) and species endangerment has generallyfocused on the species themselves and their rolein the TCM pharmacopeia. There has been littleresearch on the economics of TCM and itsimplications for species endangerment. Yet inChina, the rapid transformation of the economyand the associated increase in the purchasingpower of Chinese consumers mean that, left to itsown dynamics, the market pressures on medicinalspecies for TCM will grow over the coming years.While the pressures themselves may beunavoidable, further research may contribute tomitigating the impacts. Based on discussions at aworkshop held in China 1997, this paperidentifies some key issues regarding therelationship between the demand for TCM andthe endangerment of medicinal species. It alsoproposes a research agenda in the economics ofTCM which may go some way towards identifyingoptions for alleviating the economic pressure onendangered species.

Coverage: Asia

Contains examples or case studies from: China


Topics: Trade, Valuation

#295. Windevoxhel, N., (1992), ValoracionEconomica Parcial de los Manglares de laRegion II de Nicaragua. Unpublished Tesis deMagister Scuientiae, Turrialba.

The value of mangroves of Héroes y Mártinez onthe North Pacific coast of Nicaragua was valuedby looking at loss of local income andproductivity resulting from deforestation. Thesurvey looked at the value of direct uses ofartisanal forestry, fishing and mollusc extraction,and related fall in availability and yield to loss ofmangroves. It then builds up ecological-economic



models to assess values under different mangroveexploitation scenarios.



Ecosystem or sector focus: Marine and coastal,Forests, Fisheries

Topics: Valuation, Market valuation, Effect onproduction


#296. Winpenny, J. T., (1991), Values for theEnvironment: A Guide to EconomicAppraisal. HMSO Press: London. 277 pp. 0-11-580257-6This practical guide to the economic treatment ofenvironment in project appraisal uses cost-benefitanalysis as the decision framework. The mainenvironmental impacts of projects and themethods available for placing economic values onthem are discussed, and the feasibility ofenvironmental valuation for projects is thenillustrated for a range of sectors, ecosystems andcountries. The guide concludes with a review ofrelevant policy issues.

Coverage: Global, Global, Africa, Asia, LatinAmerica, Middle East, North Africa and GulfStates, North America

Contains examples or case studies from: Nepal,Morocco, Indonesia, El Salvador, Mali, Australia,Nicaragua, USA, Cameroon, Lesotho, Korea,Ethiopia, Nigeria, Botswana, Philippines,Ecuador, Kenya, Thailand, Egypt, China,Colombia, Brazil, Sudan

Topics: Valuation, Economic instruments,Economic policies, Contingent valuation, Marketvaluation, Effect on production, Replacementcosts, Mitigative and avertive expenditures

#297. Winpenny, J. T., (1995), The EconomicAppraisal of Environmental Projects andPolicies. Organisation for Economic Co-operation and Development: Paris. 171 pp.ISBN 92-64-14583-4

Economic appraisal of environmental impacts is akey element of the decision to invest in new

projects and policies. Several methods exist forcarrying out these appraisals. The purpose of thistechnical guide is to explain to policy analysts anddecision makers the basic principles, fields ofapplication, strengths and weaknesses of existingeconomic evaluation techniques. Case studies areprovided from both industrialised and developingcountries.

Coverage: Global, Africa, Australia and NewZealand, Europe, Asia, Latin America

Contains examples or case studies from: SouthAfrica, Mali, India, Cameroon, China, Nigeria,Zimbabwe, Kenya, USA, Costa Rica, India, UK,Djibouti

Ecosystem or sector focus: Agriculture, Water,Wetlands, Forests, Fisheries, Protected Areas,Wildlife, Industry, Infrastructure, Urbansettlements

Topics: Valuation, Economic instruments,Economic policies, Disincentives, Causes ofbiodiversity loss, Financial mechanisms, Taxes,Subsidies, Land degradation, Soil erosion,Pollution


#298. World Resources Institute, (2000a),Financing Biodiversity Conservation. WorldResource Institute. http://www.wri.org

Innovative funding mechanisms will be requiredto support conservation efforts. Thesemechanisms should be based on the principle thatthose who benefit from biological resourcesshould pay more of the costs of ensuring thatsuch resources are used sustainably. Efforts arerequired at the community level to provideeconomic incentives for conservation, at thenational level to ensure that the governmentpolicies are compatible with such incentives, andat the international level to ensure that thewealthy nations benefiting from the biologicalresources of the tropics are able to invest inconserving the productive capacity of thoseresources.

Coverage: Global

Topics: Financial mechanisms, Convention onBiological Diversity



#299. World Resources Institute, (2000b),Valuing Ecosystem Services. World ResourceInstitute. http://www.wri.org

What are Mother Nature's life-support servicesworth? In one sense, their value is infinite. TheEarth's economies would soon collapse withoutfertile soil, fresh water, breathable air, and anamenable climate. But "infinite" too oftentranslates to "zero" in the equations that guideland use and policy decisions. Practitioners in theyoung field of ecological economics believe moreconcrete numbers are required to help nationsavoid unsustainable economic choices thatdegrade both their natural resources and the vitalservices that healthy natural ecosystems generate.

Coverage: Global

Topics: Valuation, Incentive measures, Financialmechanisms, Convention on Biological Diversity

#300. Young, C., & Aylward, B., (1995),Adjustment Policies and the Environment: ACritical Review of the Literature. CREEDWorking Paper Series No 1, InternationalInstitute for Environment and Development:London.

Adjustment programmes in developing countrieshave been the subject of an intense debate sincetheir debut in the early 1980s. Consideration ofthe environmental consequences of adjustmenthas added a new dimension to the discussion.This paper seeks to review the existing literature,examining the links between adjustment policies,the environment and the use of natural resources.Special attention is paid to the evidence presentedin selected country case studies. A wide diversityof findings suggests that there is no simple answerto the question of whether adjustment is good orbad for the environment. The complexity ofadjustment itself makes generalisation impossible,as do the varying circumstances of adjustingcountries.

Coverage: Global

Topics: Economic policies, Economicinstruments, Causes of biodiversity loss


3 INTERNET RESOURCES

ANSZEE: Australia & New Zealand Society for Ecological Economicshttp://www.cres.anu.edu.au/anzsee

This site provides information about ANZSEE, a regional node of the International Society for EcologicalEconomics (ISEE).

Association of Environmental and Resource Economistshttp://www.aere.org/

Founded in 1979, the Association of Environmental and Resource Economists (AERE) was established as ameans of exchanging ideas, stimulating research, and promoting graduate training in resource andenvironmental economics. Today, with a membership of over 1000 from more than thirty nations, AERE is astrong, active organization. AERE's members come from academic institutions, the public sector, and privateindustry. It draws from traditional economics, agricultural economics, forestry, and natural resource schools.AERE provides many forums for exchanging ideas relevant to the allocation and management of natural andenvironmental resources. This site contains information about AERE.

Beijer Institutehttp://www.beijer.kva.se/publications/pdf-archive/pdf_archive.html

The Beijer Institute is an international research institute under the auspices of the Royal Swedish Academy ofSciences. The goal of the Beijer Institute is to foster interdisciplinary activities among natural and socialscientists, in order to deepen understanding of the interactions between humans and nature, and to informmanagement of our common environment. The Institute seeks to realize this goal through a variety ofactivities, including research and training programs, seminars and conferences, and publications aimed both atthe general public and the scientific community. This site contains downloadable articles, working papers andother documents. Books and other publications may also be ordered through the site.

Biotrade Initiativehttp://www.biotrade.org/

UNCTAD launched the BIOTRADE Initiative at the third Conference of the Parties of the Convention onBiological Diversity (CBD) in November 1996. The mission of BIOTRADE is to stimulate trade andinvestment in biological resources to further sustainable development, in line with the three objectives of theCBD. The BIOTRADE Initiative seeks to enhance the capability of developing countries to produce value-added products and services from biodiversity for both domestic and international markets. It is an integratedprogramme consisting of three complementary components: the BIOTRADE country programmes; marketresearch and policy analysis; and Internet services. The BIOTRADE country programmes are the mostcomprehensive part of the Initiative. They identify opportunities and constraints for sustainable resourcedevelopment in each country, focusing on bio-business development, bio-partnerships, sustainable use,conservation, and benefit-sharing incentives. Country programmes are managed by national focal points withlong standing experience in the area of sustainable development and strong links with other nationalorganisations. This site contains information about Biotrade, as well as a “Biolibrary”.



CANSEE: Canadian Society for Ecological Economicshttp://socserv2.socsci.mcmaster.ca/~cansee

This site provides information about CANSEE, a regional node of the International Society for EcologicalEconomics (ISEE).

Centre for Social and Economic Research on the Global Environment (CSERGE)http://www.uea.ac.uk/env/cserge/

CSERGE is an interdisciplinary research centre with an international profile. The Centre's core academicobjectives are to undertake policy-relevant research on global environmental issues and problems, bridgingnatural and social sciences. This site contains downloadable articles, working papers and other documents.Books and other publications may also be ordered through the site.

Conservation International (CI)http://www.conservation.org/library.htm

Conservation International (CI) is a field-based, non-profit organization that protects the Earth's biologicallyrichest areas and helps the people who live there improve their quality of life. This site contains downloadablearticles, working papers and other documents. Books and other publications may also be ordered through thesite. Information about CI’s Conservation Economics Programme can be accessed onhttp://www.conservation.org/WEB/FIELDACT/C-C_PROG/ECON/Econ.htm

Convention on Biological Diversity (CBD)http://www.biodiv.org/

This site includes background and papers on the role of economics in the CBD.

ECOECO – Brasil: Brazilian Society for Ecological Economicshttp://www.eco.unicamp.br/ecoeco

This site provides information about ECOECO – Brazil, a regional node of the International Society forEcological Economics (ISEE).

Economy and Environment Programme for South East Asia (EEPSEA)http://www.eepsea.org/

Established in 1993, EEPSEA supports training and research in environmental and resource economics inSouth East Asia. It uses a networking approach to provide financial and technical support to researchers in itsten member countries. The network meets in May and November of each year. This site containsdownloadable articles, working papers and other documents.

Ecosystem valuationhttp://www.ecosystemvaluation.org./

This website describes how economists value the beneficial ways that ecosystems affect people – ecosystemvaluation. It is designed for non-economists who need answers to questions about the benefits of ecosystem



conservation, preservation or restoration. It provides a clear, non-technical explanation of ecosystemvaluation concepts, methods and applications.

Envaluehttp://www2.epa.nsw.gov.au/envalue/

The NSW Government has a strong commitment to including the environment in decision makingthrough valuation of changes in environmental quality. The ENVALUE environmental valuation database,developed by the NSW EPA and first released in 1995, is a systematic collection of environmentalvaluation studies presented in an on-line database. It is expected that the ENVALUE database willassist decision makers in government and industry as well as academics, consultants andenvironmental groups, to incorporate environmental values into cost-benefit analyses,environmental impact statements, project appraisals and overall valuation of changes inenvironmental quality.

Environmental Economics Network for Eastern and Southern Africa (EENESA)http://www.ranesa.co.za/eenesa_home.htm

In November 1993 extensive consultation with university departments of economics and environmentalstudies and research institutes from Botswana, Eritrea, Ethiopia, Kenya, Lesotho, Mozambique, Namibia,South Africa, Tanzania, Uganda, Zambia and Zimbabwe led to the formation of the EnvironmentalEconomics Network for Eastern and Southern Africa (EENESA), which was formally established in October1994. The network’s goal is to develop a regional analytical capacity for natural resource and environmentalmanagement. It aims to integrate environmental issues into development planning and macroeconomicpolicies. The network provides support to research, runs training courses and disseminates information. Thissite contains information about EENESA.

Environmental Valuation Reference Inventory (EVRI)http://www.evri.ec.gc.ca/evri/

The EVRI is a searchable storehouse of empirical studies on the economic value of environmental benefitsand human health effects. It has been developed as a tool to help policy analysts use the benefits transferapproach. Using the EVRI to do a benefits transfer is an alternative to doing new valuation research. Theinformation in the EVRI is available to subscribers.

ESEE: European Society for Ecological Economicshttp://www.euroecolecon.org/

This site provides information about ESEE, a regional node of the International Society for EcologicalEconomics (ISEE).

Forum for Economics and Environment (South Africa)http://www.econ4env.co.za/

It is the mission and aim of the Forum for Economics and Environment to promote the interface ofeconomics and the environment in southern Africa through the dissemination of information and thefacilitation of open debate. This site presents information about FFE and also contains a number of reportson research in progress.



International Development Research Centre (IDRC)http://www.idrc.ca/resources/index_e.html

The International Development Research Centre is a public corporation created by the Canadian governmentto help communities in the developing world find solutions to social, economic, and environmental problemsthrough research. IDRC connects people, institutions, and ideas to ensure that the results of the research itsupports and the knowledge that research generates, are shared equitably among all its partners, North andSouth. This site contains the IDRC Library catalogue, and a collection of IDRC project descriptions, via itsweb interface. It also provides access to a large number of documents and publications, as well as IDRC’Sonline publication “Reports”.

INSEE Indian Society for Ecological Economicshttp://indev.nic.in/insee/

This site provides information about INSEE, a regional node of the International Society for EcologicalEconomics (ISEE).

International Institute for Environment and Development (IIED)http://www.iied.org/infopubs/index.html

IIED aims to provide expertise and leadership in researching and achieving sustainable development at local,national, regional and global levels. In alliance with others we seek to help shape a future that ends globalpoverty and delivers and sustains efficient and equitable management of the world's natural resources. Thissite contains downloadable articles, working papers and other documents. Books and other publications mayalso be ordered through the site.

International Society for Environmental Economics (ISEE)http://www.ecologicaleconomics.org/

ISEE is a nonprofit, member-governed, organization dedicated to advancing understanding of therelationships among ecological, social, and economic systems for the mutual well-being of nature and people.The Society assists its members and ecological economists generally, regional societies of ecologicaleconomics, related societies, and other organizations in such matters of common concern as can be dealt withmore effectively by united action. To this end, the Society publishes a research journal, books, and othermaterials; holds and sponsors scientific meetings; develops educational materials; and facilitates a voice forecological economists in public forums. ISEE, and its regional societies, provide an international forum sothat we might all better understand these issues. This site provides information about the ISEE, includingregional nodes.

IUCN – The World Conservation Union, Economics Unithttp://www.biodiversityeconomics.org

The Economics Unit of IUCN – The World Conservation Union focuses on: Encouraging the private sectorto conserve biodiversity; Influencing governments & civil society on the economics of global biodiversitypolicies; Assisting the conservation community in accessing solid, practical information on biodiversityeconomics; Integrating an efficient & effective Economics Unit into the new results-driven IUCNprogramme. This site contains a large number of downloadable articles, working papers and otherdocuments.



London Group on Environmental Accountinghttp://ww2.statcan.ca/citygrp/london/london.htm

The London Group on Environmental Accounting was created in 1993 to provide an informed forum forpractitioners to share their experience of developing and implementing environmental satellite accountslinked to the economic accounts of the System of National Accounts. It convened its first meeting in March1994 in London, England. Successive meetings have been held in Washington, U.S.A. in 1995, Stockholm,Sweden in 1996, Ottawa, Canada in 1997, Fontevraud, France in 1998 and in Canberra, Australia inNovember, 1999. The next meeting will be held in Voorburg, Netherlands. Participation includesrepresentatives from statistical offices and international organizations. The meetings are hosted voluntarily byparticipants one at a time and each has provided facilities and secretarial functions for the meetings. A Papersand Proceedings volume has been compiled after each meeting. This site provides information about theLondon Group on Environmental Accounting.

Organisation for Economic Co-operation and Development (OECD)http://www.oecd.org/env/online.htm

This site contains a number of documents that can be downloaded or ordered from OECD, including thosedealing with environmental and economic policies, economic aspects of biodiversity, trade and environment,environment and transport, environment and energy, climate change, sustainable consumption andproduction, taxes and other economic instruments for environment and biodiversity.

Overseas Development Institutehttp://www.odi.org.uk/publications/intro.html

The Overseas Development Institute is Britain's leading independent think-tank on internationaldevelopment and humanitarian issues. Its mission is to inspire and inform policy and practice which lead tothe reduction of poverty, the alleviation of suffering and the achievement of sustainable livelihoods indeveloping countries. It does this by locking together high-quality applied research, practical policy advice,and policy-focused dissemination and debate. ODI works with partners in the public and private sectors, inboth developing and developed countries. work centres on five research and policy programmes: Poverty andPublic Policy, International Economic Development, Humanitarian Policy, Rural Policy and Environment,and Forest Policy and Enviornment. This site contains information about ODI’s programmes, as well as alarge number downloadable reports and working papers.

Resource Accounting Network for Eastern and Southern Africa (RANESA)http://www.ranesa.co.za/

A number of institutions collaborated over the past few years to support research work and capacity indevelopment and use of natural resource accounts in Africa. Following pilot projects in Botswana andNamibia, the USAID Regional Center for Southern Africa funded a regional natural resource accounting(NRA) project involving three countries in southern Africa: Namibia, Botswana and South Africa. The saidproject is now in its second year of operation and is coordinated from the University of Pretoria and theDirectorate of Environmental Affairs in Namibia. In late 1997, a group of environmental economists fromseveral countries in eastern and southern Africa came together at to a workshop to develop a strategy andplans for furthering NRA efforts in the region. The workshop produced a proposal for establishing a networkfor NRA in E&SA choosing the name: Resource Accounting Network for E&SA (RANESA). The objectiveof this network is to consolidate ongoing initiatives and enhance capacity in NRA. This site containsinformation about RANESA, as well as a number of documents that can be downloaded.



Resources for the Future (RFF)http://www.rff.org

RFF is a nonprofit and nonpartisan think tank located in Washington, DC that conducts independentresearch – rooted primarily in economics and other social sciences – on environmental and natural resourceissues. This site contains a large number of downloadable articles, working papers and other documents.

Russian Chapter of ISEEhttp://www.ulb.ac.be/ceese/STAFF/safonov/ISEERC.htm

This site provides information about the Russian Chapter of the International Society for EcologicalEconomics (ISEE).

South Asian Network for Development and Environmental Economics (SANDEE)http://www.sandeeonline.com/

SANDEE is a new network that hopes to bring together analysts from the different countries in South Asiato address environment-development problems. SANDEE's mission is to strengthen the capacity ofindividuals and institutions in South Asia to undertake research on the inter-linkages among economicdevelopment, poverty, and environmental change and to disseminate practical information that can beapplied to development policies. This site contains information about SANDEE.

Sustainable Economics Network (SEN)http://www.geocities.com/wwfsen/

The SEN is an informal group of professionals interested in the use of economic tools to achieve natureconservation. It was established on November 26, 1999 among a few WWF colleagues. The SEN aims toimprove the effectiveness of conservation work through appropriate application of economic approaches.Three objectives are: 1. Increase the economics capacity by developing and applying economic methods andskills to conservation priorities, including training and capacity building; 2. Enhance the effect of specializedexpertise in conservation organizations through professional support, peer review, and skills and informationsharing; 3. Promote the vision of sustainable development and the practice of sustainable economics to keyaudiences. This site presents information about SEN.

United Nations Environment Programme (UNEP) Economics and Trade Unithttp://www.unep.ch/etu/

The Economics and Trade Unit (ETU) is one of the five units within UNEP's Division of Technology,Industry and Economics.It works in four areas: Research - On major environment and trade issues and onpractical ways to integrate these policies for sustainable development; Capacity Building - To enhancecountries’ capacities to develop mutually supportive environment and trade policies; Consensus Building -Through raising awareness, consultation and dialogue. ETU finds areas of shared perception and approachamong stakeholders; Patrnerships – To build synergies with other organisations working in the environment-trade domain. This site contains information about UNEP’s Economics and Trade Unit.



United Nations Environment Programme (UNEP) Financial Services Initativehttp://www.unep.ch/etu/finserv/fin_home.htm

The Financial Services Initiatives (FSI) are based on voluntary commitments by the financial industries.UNEP has played a catalytic role in the development of these initiatives, which are run by the sectorsthemselves. UNEP has launched several initiatives, promoting sustainable development and environmentallysound business practices. This site provides information about the FSI.

USSEE United States Society for Ecological Economicshttp://www.ussee.org

This site provides information about USSEE, a regional node of the International Society for EcologicalEconomics (ISEE).

ValuAsia: Benefits Transfer for Southeast Asiahttp://www.geocities.com/valuasia/

A free, searchable archive for benefit transfer, emphasising Asian studies. The ValuAsia Archive encouragesless developed and developing countries in Southeast Asia, such as the Philippines, to consider theenvironment in policy development and decision making endeavours. The ValuAsia Archive accomplishessuch an endeavour by being a conveniently ready database of environmental valuation studies focusing onprimary studies from Southeast Asia and from other countries. It also encourages the proper use of benefitstransfer, to help narrow the information gap that hinders policy makers from fully considering environmentalfactors in decision-making. Such an effort would also increase the use of environmental valuation in decision-making. The ValuAsia Archive is open to future additions and/or revisions of whatever information itcontains. It is envisioned to provide intelligent and practical solutions and answers to environmental valuationproblems and needs of Southeast Asia.

World Bank Environmental Economics and Indicatorshttp://www-esd.worldbank.org/eei/

Several major focus areas are presented on this site. Green Accounting includes the widely noted newestimates of national wealth (the wealth of nations with four component parts), and the policy-linkedmeasures of genuine savings. Environmental Valuation presents several documents with applications ofenvironmental economics to project analysis, especially valuation of environmental impacts. EnvironmentalPolicy presents a report of what has been attempted world-wide by national governments and internationalinstitutions to foster the use of economic, regulatory, and institutional instruments to better manage theenvironment as well as a policy matrix that identifies four sets of different policy instruments. New Initiativesinclude a multi-year program on trade, macro-reform and the environment, a project on how to mainstreamenvironment into the World Bank's Country Assistance Strategies, economic valuation of cultural heritage, aproject on policy instruments for sustainable development, and a study of linkages between poverty and theenvironment. Several publications are available in electronic versions. This site contains downloadablearticles, working papers and other documents. Books and other publications may also be ordered through thesite.

World Resources Institute (WRI)http://www.wri.org/wripubs.html

The World Resources Institute provides information, ideas, and solutions to global environmental problems.Its mission is to move human society to live in ways that protect Earth’s environment for current and futuregenerations. Its program meets global challenges by using knowledge to catalyze public and private action. Its



goals are to: Reverse the rapid degradation of ecosystems, assuring their capacity to provide the goods andservices on which human well being depends; Halt the changes to the Earth's climate caused by humanactivity; Catalyze the adoption of policies and practices that expand prosperity while reducing the use ofmaterials and generation of wastes; Guarantee people's access to information and decisions regarding naturalresources and environment. This site contains a large number of downloadable articles, working papers andother documents.

WWF Macroeconomics for Sustainable Developmenthttp://www.panda.org/resources/publications/sustainability/mpo/

The objective of this programme is to analyze the impact of macroeconomic practices, and to promotealternative approaches that integrate environmental and social concerns into macroeconomic planning andapplication. This site contains information about the Macroeconomics for Sustainable DevelopmentProgramme.


4 INDEXES

Regional index

Reference #

Africa ...................................................... 1; 4; 8; 10; 12; 20; 22; 26; 24; 21; 39; 43; 48; 68; 75; 77; 80;85; 89; 90; 91; 92; 93; 94; 96; 97; 99; 100; 98; 112; 120; 122;128; 136; 137; 143; 145; 151; 153; 154; 156; 166; 172; 174;175; 183; 184; 188; 191; 209; 201; 207; 216; 211; 220; 223;226; 227; 230; 231; 260; 262; 282; 283; 285; 290; 293; 296;297;

Asia ......................................................... 6; 7; 18; 23; 24; 31; 37; 40; 56; 60; 61; 69; 84; 83; 85; 112;117; 120; 122; 128; 129; 133; 140; 145; 146; 148; 157; 158;159; 163; 172; 174; 175; 194; 196; 223; 226; 227; 230; 252;272; 273; 280; 281; 290; 294; 296; 297;

Australia and New Zealand .................... 66; 112; 122; 125; 139; 146; 194; 220; 297;

Caribbean ............................................... 24; 35; 53; 85; 102; 115; 122; 138; 174; 184; 289;

Europe .................................................... 26; 36; 40; 44; 47; 87; 88; 106; 112; 124; 123; 122; 128; 145;161; 174; 193; 194; 195; 197; 198; 226; 227; 236; 292; 293;297;

Latin America ......................................... 17; 16; 24; 35; 54; 66; 67; 75; 85; 86; 102; 112; 115; 116;128; 133; 138; 143; 145; 166; 168; 171; 173; 174; 175; 184;194; 207; 218; 220; 223; 226; 227; 229; 230; 232; 233; 235;248; 251; 258; 261; 280; 286; 289; 290; 291; 295; 296; 297;

Middle East, North Africa and GulfStates...................................................... 296, 223;

North America ........................................ 9; 26; 40; 46; 47; 52; 65; 66; 70; 72; 75; 78; 81; 104; 105;109; 112; 113; 119; 122; 130; 133; 144; 145; 146; 155; 162;167; 173; 174; 175; 182; 187; 222; 223; 228; 239; 240; 257;274; 278; 293; 296;

Pacific ..................................................... 29; 66; 69; 112; 139; 143; 145; 146;



Country index

Reference #

Antigua ................................................... 289

Argentina ................................................ 229

Australia ................................................. 24; 66; 85; 122; 125; 139; 146; 185; 194; 219; 277; 296;

Austria .................................................... 194

Belize ...................................................... 66; 145; 219; 277; 280; 289;

Bhutan .................................................... 145

Bolivia..................................................... 102; 138; 145; 174; 229; 230; 255; 277; 280;

Botswana................................................ 12; 24; 143; 172; 207; 211; 226; 285; 296;

Brazil....................................................... 19; 35; 62; 67; 103; 102; 138; 143; 145; 166; 168; 174; 199;226; 229; 258; 277; 290; 296;

British Virgin Islands.............................. 85; 289

Cambodia ............................................... 18

Cameroon ............................................... 22; 85; 223; 227; 230; 255; 290; 296; 297;

Canada.................................................... 66; 103; 162; 185; 194; 228

Central African Republic........................ 199

Chile........................................................ 102; 115; 138; 145; 199; 226; 227; 229;

China....................................................... 40; 62; 84; 174; 199; 294; 296; 297;

Colombia ................................................ 6; 102; 138; 145; 226; 290; 296

Congo (Brazzaville) ............................... 103; 199

Congo (Democratic Republic) ............... 199

Costa Rica .............................................. 17; 15; 35; 63; 75; 102; 133; 173; 174; 175; 184; 220; 223;229; 230; 275; 277; 280; 286; 289; 295; 297;

Côte d'Ivoire ........................................... 175; 199; 290

Croatia .................................................... 219

Cyprus .................................................... 24; 103; 198

Denmark ................................................. 194; 199

Djibouti ................................................... 92; 94; 96; 97; 223; 297

Dominican Republic............................... 145

Ecuador .................................................. 35; 102; 127; 138; 175; 185; 229; 230; 251; 255; 280; 296;

Egypt....................................................... 296

El Salvador ............................................. 102; 116; 145; 173; 296

Eritrea ..................................................... 92; 94; 96; 97; 103

Estonia.................................................... 227



Ethiopia................................................... 166; 223; 296

Fiji ........................................................... 66; 139; 146; 219

Finland.................................................... 194; 199

France..................................................... 194; 199

Germany ................................................. 194; 199

Ghana ..................................................... 43; 68; 103; 151; 185; 199; 216; 226; 227;

Greece..................................................... 161; 194

Guatemala .............................................. 102; 145; 255; 280; 289

Haiti......................................................... 115; 184; 227

Honduras ................................................ 102; 145; 174; 219; 229; 255; 261; 277;

Hungary .................................................. 226

India ........................................................ 24; 31; 129; 174; 219; 255; 290; 297;

Indonesia ................................................ 18; 19; 26; 23; 24; 60; 61; 69; 83; 85; 133; 145; 172; 174;185; 255; 296;

Italy ......................................................... 36; 122; 197; 199

Jamaica................................................... 102; 103; 138; 145

Japan ...................................................... 84; 133; 174; 194

Kenya...................................................... 1; 8; 24; 43; 48; 75; 85; 91; 92; 95; 96; 97; 99; 100; 103;151; 166; 174; 183; 184; 188; 191; 216; 219; 227; 290; 296;297;

Kiribati .................................................... 139

Korea ...................................................... 24; 84; 146; 163; 194; 296;

Lesotho................................................... 184; 262; 296

Madagascar ............................................ 24; 103; 153; 154; 156; 185; 219;

Malawi..................................................... 29; 103; 216; 285

Malaysia.................................................. 62; 158; 159; 196; 199; 226; 277; 280; 290;

Mali ......................................................... 39; 174; 296; 297

Mexico .................................................... 5; 35; 54; 62; 86; 102; 115; 133; 138; 145; 152; 174; 194;226; 227; 229; 255; 277; 280; 291;

Micronesia .............................................. 139

Morocco.................................................. 223; 296

Mozambique ........................................... 285

Namibia................................................... 43; 100; 216; 285

Nepal....................................................... 7; 83; 103; 146; 174; 175; 185; 219; 223; 296;

Netherlands ............................................ 7; 83; 85; 103; 102; 115; 146; 174; 175; 185; 194; 199; 219;223; 227; 277; 289; 292; 296;

Netherlands Antilles............................... 85; 102; 115; 185; 227; 289;



New Zealand........................................... 103; 139; 194; 199; 220

Nicaragua ............................................... 89; 102; 115; 223; 227; 296;

Nigeria .................................................... 26; 24; 103; 143; 151; 216; 230; 296; 297;

Norway.................................................... 199

Pakistan .................................................. 133; 140; 199

Panama................................................... 102; 145; 286; 289

Papua New Guinea................................. 29; 69; 139; 143; 145; 199;

Paraguay................................................. 102; 229; 277; 280

Peru......................................................... 102; 138; 145; 184; 207; 218; 223; 229; 232; 233; 248; 280;

Philippines.............................................. 62; 84; 83; 103; 117; 145; 146; 148; 152; 174; 227; 230;252; 272; 273; 296;

Poland..................................................... 40; 145; 194; 199; 226

Russia..................................................... 227

Senegal................................................... 262

Seychelles .............................................. 91; 92; 94; 96; 97; 103

Solomon Islands..................................... 139

South Africa............................................ 80; 100; 103; 136; 219; 220; 282; 283; 297;

Sri Lanka................................................. 37; 145; 175; 199; 227

St Lucia................................................... 103

St Vincent ............................................... 85

Sudan...................................................... 92; 96;97; 296

Sweden ................................................... 26; 24; 40; 44; 124; 123; 122; 199;

Switzerland............................................. 236

Taiwan .................................................... 227

Trinidad & Tobago.................................. 53

Tanzania ................................................. 10; 92; 95; 96; 97; 100; 103; 98;

Thailand.................................................. 62; 84; 83; 85; 146; 157; 174; 175; 226; 255; 296;

Turkey..................................................... 194

Tuvalu ..................................................... 139

Uganda ................................................... 91; 92; 93; 94; 95; 96; 97; 100; 103; 137; 145; 151; 219;223; 290;

UK ........................................................... 26; 87; 88; 123; 122; 128; 185; 194; 297;

USA......................................................... 9; 26; 40; 46; 52; 65; 66; 70; 72; 75; 78; 81; 103; 104; 105;109; 113; 119; 122; 130; 133; 144; 146; 155; 167; 173; 174;175; 182; 185; 187; 194; 199; 222; 239; 240; 257; 274; 277;278; 296; 297;

Vanuatu................................................... 139



Venezuela ............................................... 102; 138; 171; 175; 185; 229;

Vietnam................................................... 6; 18; 56; 281

Zambia .................................................... 91; 96; 100; 103; 152; 174; 175; 231; 285;

Zimbabwe ............................................... 4; 43; 77; 100; 103; 143; 166; 174; 175; 223; 226; 285; 293;297;



Ecosystems and sectors index

Reference #

Agriculture.............................................. 4; 8; 12; 17; 29; 39; 41; 42; 52; 64; 67; 68; 74; 75; 77; 84;83; 86; 92; 96; 97; 103; 102; 98; 109; 124; 134; 141; 143;157; 166; 168; 172; 182; 184; 186; 187; 190; 191; 194; 196;197; 201; 207; 206; 217; 229; 236; 248; 255; 261; 262; 291;292; 297;

Drylands ................................................. 12; 24; 21; 41; 52; 74; 90; 103; 140; 174; 185; 207; 216;214; 226; 231; 262; 285;

Fisheries ................................................. 10; 18; 24; 37; 41; 53; 54; 60; 61; 72; 81; 84; 83; 96; 103;102; 116; 117; 139; 146; 148; 163; 171; 173; 182; 185; 186;188; 194; 196; 199; 216; 234; 247; 252; 254; 253; 260; 285;295; 297;

Forests.................................................... 3; 6; 5; 4; 8; 11; 15; 18; 19; 22; 24; 21; 27; 29; 31; 35; 36;39; 41; 42; 44; 50; 52; 55; 57; 63; 62; 66; 67; 68; 71; 74; 77;79; 84; 85; 92; 95; 96; 97; 99; 100; 103; 102; 107; 109; 112;115; 116; 117; 118; 120; 121; 125; 127; 128; 134; 137; 143;145; 150; 151; 153; 155; 154; 156; 158; 165; 166; 168; 169;172; 174; 175; 181; 182; 184; 185; 186; 187; 189; 191; 194;196; 199; 202; 203; 204; 208; 207; 206; 210; 215; 216; 214;218; 221; 222; 223; 225; 224; 226; 227; 228; 229; 230; 235;237; 238; 248; 250; 251; 255; 257; 258; 263; 275; 277; 279;280; 285; 286; 290; 291; 295; 297;

Industry................................................... 4; 29; 40; 41; 77; 83; 87; 88; 106; 107; 111; 115; 139; 151;157; 165; 173; 174; 185; 187; 199; 204; 206; 258; 273; 274;291;

Infrastructure.......................................... 40; 41; 64; 84; 83; 87; 88; 106; 115; 139; 157; 187; 196;206; 226; 227; 273; 274; 297;

Marine and coastal ................................. 6; 10; 18; 24; 37; 41; 53; 52; 54; 56; 60; 61; 66; 74; 81; 84;92; 96; 97; 103; 102; 115; 116; 117; 126; 139; 145; 146;148; 161; 163; 171; 174; 175; 185; 186; 194; 196; 198; 199;207; 227; 234; 252; 254; 253; 255; 260; 273; 281; 285; 289;295;

Protected Areas...................................... 1; 10; 12; 21; 27; 35; 43; 44; 48; 65; 66; 67; 68; 80; 84; 85;90; 92; 93; 95; 96; 97; 99; 100; 103; 102; 98; 104; 109; 115;136; 137; 142; 145; 147; 151; 153; 155; 154; 162; 166; 168;174; 175; 182; 183; 184; 185; 187; 188; 191; 194; 204; 209;216; 219; 220; 226; 227; 228; 231; 234; 239; 240; 257; 263;272; 282; 283; 286; 289; 297;

Tourism................................................... 1; 36; 37; 44; 48; 53; 65; 66; 72; 80; 85; 136; 144; 155; 162;184; 215; 229; 239; 246; 263; 275; 282; 289; 290;

Urban settlements .................................. 40; 84; 87; 88; 106; 115; 139; 157; 187; 199; 204; 226; 273;274; 297;

Water....................................................... 2; 15; 19; 25; 26; 47; 63; 62; 64; 72; 84; 85; 91; 92; 95; 96;99; 102; 115; 124; 123; 122; 136; 154; 157; 159; 174; 175;184; 188; 194; 199; 204; 206; 216; 214; 226; 227; 247; 277;285; 297;



Wetlands................................................. 2; 17; 18; 25; 26; 24; 41; 47; 52; 54; 74; 72; 89; 91; 92; 93;95; 96; 97; 102; 124; 123; 122; 146; 148; 157; 159; 163;171; 174; 188; 194; 196; 204; 207; 216; 214; 223; 247; 252;260; 281; 285; 297;

Wildlife.................................................... 1; 12; 21; 27; 35; 43; 48; 56; 65; 66; 70; 78; 80; 84; 85; 90;92; 93; 95; 96; 99; 100; 103; 102; 98; 104; 105; 109; 113;119; 130; 137; 143; 144; 145; 151; 153; 154; 161; 166; 167;173; 174; 182; 183; 184; 187; 188; 191; 194; 204; 209; 210;216; 227; 228; 231; 240; 257; 267; 263; 282; 283; 294; 297;



Topics index

Reference #

Bioprospecting....................................... 14; 67; 181; 200; 245; 242; 246; 244; 243; 253; 289;

Carbon offsets........................................ 35; 50; 71; 107; 108; 150; 165; 169; 189; 208; 212; 225;224; 238; 276; 279; 280; 289;

Causes of biodiversity loss ................... 8; 9; 11; 13; 20; 23; 24; 21; 27; 37; 38; 41; 42; 43; 49; 52;60; 61; 62; 67; 68; 73; 78; 85; 86; 93; 94; 95; 96; 97; 99;100; 101; 103; 102; 98; 112; 114; 120; 126; 130; 137; 138;141; 151; 155; 156; 174; 185; 186; 190; 193; 194; 196; 201;207; 206; 216; 217; 212; 211; 214; 213; 221; 231; 234; 235;236; 240; 244; 256; 258; 261; 268; 270; 263; 285; 290; 297;300;

Climate change....................................... 5; 50; 59; 107; 108; 111; 134; 149; 156; 165; 169; 189; 202;208; 206; 238; 241; 250; 276; 277; 279; 280; 281;

Convention on Biological Diversity....... 2; 28; 33; 41; 51; 49; 58; 59; 92; 101; 103; 102; 134; 147;149; 159; 160; 174; 175; 178; 179; 180; 177; 193; 207; 216;260; 264; 298; 299;

Debt conversion ..................................... 33; 34; 71; 145; 150; 225; 224; 272; 289;

Economic instruments........................... 2; 7; 8; 9; 11; 14; 15; 20; 19; 24; 35; 38; 42; 46; 49; 52; 61;63; 62; 68; 69; 71; 70; 82; 84; 83; 85; 87; 88; 92; 93; 94; 95;96; 97; 99; 100; 101; 103; 102; 98; 106; 111; 114; 126; 134;137; 138; 139; 145; 147; 150; 151; 152; 153; 156; 157; 158;165; 166; 168; 169; 172; 173; 174; 175; 176; 179; 180; 177;182; 183; 184; 185; 187; 189; 190; 193; 194; 195; 198; 199;200; 201; 207; 206; 215; 216; 217; 212; 214; 213; 221; 222;224; 226; 229; 230; 233; 236; 237; 247; 250; 255; 256; 259;257; 261; 262; 264; 269; 274; 276; 277; 278; 279; 280; 283;285; 289; 290; 296; 297; 300;

Economic policies.................................. 5; 4; 11; 15; 23; 24; 27; 38; 42; 43; 60; 61; 68; 69; 73; 77;84; 83; 85; 86; 92; 96; 97; 100; 101; 103; 102; 106; 111;112; 114; 126; 133; 132; 138; 151; 152; 153; 157; 158; 163;164; 165; 166; 169; 170; 172; 173; 174; 176; 178; 179; 177;184; 185; 187; 191; 193; 194; 195; 199; 200; 203; 204; 201;207; 206; 215; 216; 217; 212; 211; 214; 213; 221; 222; 224;226; 230; 233; 247; 256; 261; 262; 264; 270; 285; 290; 296;297; 300;

Environmental accounting..................... 4; 7; 29; 30; 38; 77; 131; 133; 132; 135; 164; 166; 170; 172;197; 211; 287; 291;

Financial mechanisms ........................... 2; 9; 14; 16; 21; 33; 34; 35; 45; 48; 50; 52; 57; 58; 59; 63;62; 71; 82; 87; 88; 90; 92; 93; 94; 95; 96; 97; 99; 101; 103;102; 98; 110; 128; 129; 134; 138; 139; 140; 142; 144; 145;147; 149; 150; 152; 155; 160; 162; 168; 174; 175; 179; 180;177; 183; 185; 188; 191; 194; 195; 199; 200; 208; 209; 205;207; 206; 220; 225; 224; 229; 230; 231; 232; 233; 236; 238;239; 246; 244; 243; 259; 265; 266; 269; 272; 277; 278; 279;280; 282; 283; 286; 289; 290; 297; 298; 299;

Incentive measures ................................ 2; 9; 10; 11; 14; 17; 15; 20; 23; 24; 21; 27; 35; 39; 38; 40;



41; 43; 45; 52; 56; 57; 61; 63; 67; 68; 70; 73; 79; 81; 85; 86;92; 93; 94; 95; 96; 97; 99; 100; 101; 103; 102; 98; 106; 110;112; 120; 126; 129; 134; 138; 142; 143; 144; 152; 158; 168;173; 174; 175; 176; 180; 182; 183; 185; 186; 187; 191; 193;194; 195; 199; 205; 201; 207; 206; 215; 212; 211; 214; 213;225; 224; 228; 233; 234; 240; 245; 246; 244; 243; 255; 262;265; 266; 270; 283; 285; 286; 290; 299;

Markets and charges.............................. 12; 14; 40; 48; 57; 63; 70; 80; 84; 103; 113; 120; 128; 134;139; 142; 144; 162; 183; 185; 187; 188; 189; 192; 198; 199;200; 208; 209; 215; 217; 222; 225; 224; 226; 237; 238; 245;246; 244; 243; 247; 248; 250; 251; 258; 267; 269; 274; 277;283; 289; 292;

National Biodiversity Strategies andAction Plans ...........................................

92; 101; 102

Payments for environmental services... 15; 35; 6319; 40; 84; 83; 106; 111; 115; 124; 138; 165; 173;187; 199; 206; 226; 297;

Pollution ................................................. 19; 40; 84; 83; 106; 111; 115; 124; 138; 165; 173; 187; 199;206; 226; 297;

Private sector ......................................... 9; 35; 45; 71; 70; 81; 87; 88; 90; 103; 113; 128; 142; 152;162; 168; 179; 185; 222; 228; 229; 232; 236; 239; 246; 255;259; 279; 280; 282; 289; 290;

Soil erosion ............................................ 4; 39; 42; 62; 64; 77; 83; 255; 297;

Subsidies................................................ 41; 69; 73; 86; 103; 106; 111; 138; 151; 173; 176; 179; 186;187; 191; 194; 199; 200; 206; 215; 225; 224; 226; 236; 255;256; 261; 270; 290; 297;

Taxes....................................................... 35; 40; 45; 46; 69; 73; 86; 103; 106; 111; 138; 151; 162;168; 173; 176; 179; 186; 187; 194; 199; 200; 206; 215; 225;224; 226; 228; 232; 236; 239; 255; 278; 289; 290; 297;

Trade....................................................... 14; 23; 21; 56; 57; 69; 73; 151; 172; 173; 174; 176; 178;194; 201; 206; 229; 251; 255; 260; 259; 261; 264; 267; 288;292; 293; 294;

Trust Funds ............................................ 33; 34; 35; 71; 129; 139; 145; 150; 225; 232; 272; 286; 289;

Valuation................................................. 1; 2; 3; 6; 5; 4; 7; 8; 10; 12; 13; 14; 15; 16; 18; 20; 19; 22;25; 26; 24; 27; 29; 30; 31; 32; 36; 37; 39; 38; 42; 43; 44; 47;48; 51; 49; 54; 55; 56; 60; 61; 62; 64; 65; 66; 67; 68; 73; 74;72; 75; 76; 77; 79; 80; 84; 83; 85; 89; 90; 91; 92; 93; 94; 96;97; 99; 100; 101; 103; 102; 98; 104; 105; 109; 113; 115;116; 117; 118; 119; 120; 121; 124; 123; 122; 125; 126; 127;130; 131; 133; 132; 136; 137; 141; 143; 146; 148; 153; 155;154; 157; 158; 159; 161; 163; 164; 166; 167; 169; 170; 171;172; 173; 174; 181; 183; 184; 185; 188; 191; 192; 196; 197;202; 203; 204; 208; 209; 201; 207; 206; 215; 216; 212; 211;214; 218; 219; 223; 227; 230; 231; 234; 235; 245; 242; 248;251; 252; 254; 253; 273; 275; 281; 285; 287; 289; 291; 294;295; 296; 297; 299;

Documents

ECONOMIC MEASURES FOR BIODIVERSITY PLANNING: An ... - CBD