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News: It has been found that India has not been able to mobilise private and public finance through Payments for Ecosystem Services (PES). This could have helped India achieve the 2030 agenda for sustainable development and the Paris Agreement on climate change.
What are the biodiversity finance measures that can enable biodiversity protection and sustainable use?
There are incentives like biodiversity-relevant taxes, fees, levies, tradeable permits, and Payments for Ecosystem Services (PES).
There has been governmental support and political will to mobilize finance through pesticide levies, admission fees to natural parks, hunting and fishing permit fees, and the trade-in energy-saving certificates.
About the PES
It works through the establishment of performance contracts. People who can help provide the desired ecosystem service are rewarded based on their actions, or the quantity and quality of the services themselves.
It incentivizes local people to manage threatened ecosystems. It helps in the achievement of Sustainable Development Goals through conservation as well as poverty alleviation
What are the issues in biodiversity financing in India?
The government has not been able to promote monetisation of environmental benefits or the Payments for Ecosystem Services (PES). PES is a pivotal economic instrument that can be used for conservation and increasing ecosystem services.
The PES has not achieved much attention either in the research or policy mandate in the Indian subcontinent.
However, it has seen successful implementation in Latin American and African countries. For example,
(1) In the Western Cape, South Africa, the Cape Nature Stewardship Program protects biodiversity on private lands.
(2) Kenya’s Wildlife Conservation Lease Programme, maintains open areas for wildlife and grazing on personal grounds.
(3) In terms of raising money, PES programs such as Costa Rica’s Pago Por Servicios and Ecuador’s Socio Bosque were among the few to mobilize significant finances.
Why have such economic incentives for ecological restoration not received academic, research, and policy prioritisation?
There is an absence of a solid institutional mechanism that ensures simultaneous transfer of funds from buyers to suppliers, investment in local capacity building, cost efficiency, the scope for development benefits, and maintaining the sustainability of funds.
However, the PES mechanism is yet to be implemented or even tested for efficacy.
What should be done?
A local monitoring mechanism is key to successfully implementing a PES program. For example, there have been successful local institutional mechanisms for PES implementation in the Kodagu district of Karnataka, where native trees were restored in the coffee plantations.
The OECD highlighted that the studies should be conducted to the evaluation of the impact of the PES Programs as the financial instruments for biodiversity conservation.
The TEEB India Initiative can play a role in highlighting the economic consequences of the loss of biological diversity. Thus, would help prioritize ecosystem restoration financing through a direct approach.
The environmental economist or stakeholders should build a successful PES program. It will automatically overcome the impediments to implementation.
Source: The post is based on the article “A direct approach to conservation” published in The Hindu on 30th June 2022.
