Market-Based Instruments for Ecosystem Services: Institutional Innovation or Renovation?

Abstract

Recent years have seen widespread experimentation with market-based instruments (MBIs) for the provision of environmental goods and ecosystem services. However, little attention has been paid to their design or to the effects of the underlying promarket narrative on environmental policy instruments. The purpose of this article is to analyze the emergence and dissemination of the term ''market-based instruments'' applied to the provision of environmental services and to assess to what extent the instruments associated are genuinely innovative. The recommendation to develop markets can lead in practice to a variety of institutional forms, as we show it based on the example of payments for environmental services (PES) and biodiversity offsets, two very different mechanisms that are both presented in the literature as MBIs. Our purpose is to highlight the gap between discourse and practice in connection with MBIs.

The Biodiversity Offsetting Dilemma: Between Economic Rationales and Ecological Dynamics

“…In this perspective, the main problems highlighted are decision-makers' failure to take biodiversity losses into account in economic calculations, and the lack of policy tools encouraging the internalization of negative externalities resulting from biodiversity losses [19]. Following the finding that traditional approaches failed in meeting the expected conservation outcomes, economic incentives have increasingly been used by policy-makers over recent decades to address environmental concerns [2]. Incentive approach aims to encourage economic decision-makers to adopt good environmental practices by offering compensation or rewards to individuals in exchange for environmental services [12].…”

“…Seen as a way to provide economic incentives, the concept of biodiversity offsetting (henceforth BO) has recently enjoyed renewed political interest, and is endorsed in many political agendas [2]. Whilst BO requirements have been appearing in the environmental regulations of many countries since the 1970s (but rarely implemented in practice [3]), BO has recently re-emerged in biodiversity strategies across national and international policies as the main innovative tool for biodiversity conservation worldwide [4].…”

Do Consumers of Environmentally Friendly Farming Products in Downstream Areas Have a WTP for Water Quality Protection in Upstream Areas?

“…This aims to reduce/support negative/positive environmental externalities by transferring financial resources from downstream water users (beneficiaries) who benefit from clean water quality, to upstream farmers (service providers) who receive compensation by changing their farming practices [21]. Many PES schemes have been established and implemented in developed countries, such as the European Union and the United States, to motivate farmers to change their farming practices [22][23][24][25]. However, such attention on water-related ecosystem service valuation is currently much less in Asia in general and in South Korea in particular.…”

Paiements pour services environnementaux et vulnérabilité des populations locales dans les pays du Sud – Études de cas costaricien et congolais

“…Les PSE sont considérés par certains comme des « instruments de marché » (market-based instruments) permettant d'obtenir des résultats environnementaux plus efficients (Bulte et al, 2008). Un tel présupposé est largement remis en cause par les tenants de l'économie écologique institutionnaliste (Boisvert et al, 2013 ;Muradian et al, 2010 ;Muradian et al 2013 ;Vatn, 2010 ;Vatn et al, 2014). Ces derniers démontrent que les PSE ne sont pas des « instruments de marché » à proprement parler, qu'ils correspondent à une diversité d'arrangements institutionnels, et que leur efficacité environnementale et leur efficience économique, le plus souvent controversées, restent à démontrer.…”