Assessing the role of economic instruments in a policy mix for biodiversity conservation and ecosystem services provision: a review of some methodological challenges
In the context of the EU 2010 goal of halting biodiversity loss, researchers have been called upon to evaluate the role of economic instruments for cost-effective decision-making, as well as non-market methods to assess their benefits. This paper reviews a number of methodological challenges of evaluating and designing economic instruments aimed at biodiversity conservation and ecosystem services provision in an existing policy mix. The study draws on experiences from Brazil and Costa Rica.
The authors argue that cost-effectiveness analysis (CEA) and non-market valuation (NMV) methods are necessary, but not sufficient, approaches to assessing the role of economic instruments in a policy mix. In addition, the document concludes the following:
- legal, informational and economic instruments are often implemented simultaneously and play complementary roles
- CEA of economic instruments is complicated by the fact that they are usually part of a path-dependent policy package co-developed over time
- in evaluating a policy mix, a combination of methodologies is needed, such as a spatial theory of land rents and a tiered framework for evaluating governance context
- an approach to decomposing economic instruments into its underlying institutional characteristics would make it easier to evaluate policy mixes as portfolios of characteristics, rather than instruments themselves
- cross case comparison of the roles of economic instruments in a policy mix needs a common framework for comparison, which the principles of Social-Ecological Systems (SES) might provide
- SES variables provide a comprehensive check list for evaluating site similarity and a priori validity of benefits transfer.
Nevertheless, the authors think that cost-based approaches will often be sufficient to demonstrate economic feasibility of payments for ecosystem services (PES) in particular forest stands at farm scales.