Economic Tools for Nature Conservation in the Danube-Carpathian Region

Geographical location:

Europe/Middle-East > Eastern Europe > Bulgaria

Europe/Middle-East > Eastern Europe > Romania
Europe/Middle-East > Europe General

Summary

Halting biodiversity loss has become an important aim of community nature conservation policy. One important challenge is the substantial funding that the management of biodiversity will require, a problem that will be compounded in the current acceding countries where rapid economic development, political and social changes and pressure for quick profits are already pushing land owners and users to undertake activities that often lead to negative environmental impacts. Consequently, valuable environmental services are already being lost as a result of mismanagement and lack of incentives to preserve them.

Background

Agricultural landscapes in Europe are a recognised reservoir of biodiversity. However the value of agricultural land for biodiversity preservation can vary significantly depending on the agricultural systems in place. Efforts to enhance and maintain biodiversity in agricultural landscapes require consideration of incentives faced by individual land users, who decide what practices to use on their land, in general without considering biodiversity impacts. Where biodiversity-friendly agricultural practices are the most profitable, there may be convergence of private and social interests. However, this is seldom the case, as high-intensity practices that are generally harmful to biodiversity tend to carry more profit than low-intensity practices that are generally biodiversity-friendly.

Direct payments for biodiversity services, particularly in agricultural areas, have become a growing focus of attention in the European Union and elsewhere. However, the effectiveness and efficiency of these payments have often been questionable. The challenge is to establish a system in which the appropriate amount and form of payment for environmental services will have the desired effect in influencing the decisions of land owners.

Objectives

Overall objective

- Outline the necessary implementing arrangements in pilot contracts for biodiversity conservation, with a particular focus on land use.

Specific objectives

- Show the opportunity cost of land in order to provide a basis for payment levels under direct contract for biodiversity.

- Provide an outline of the magnitude of the benefits of such a contract.

- Suggest sustainable long-term financing sources, including co-financing from the existing community funds as well as other public and private sources.

Solution

One approach to supporting maintenance of biodiversity on agricultural land is to provide direct payments for the provision of biodiversity services. This approach internalises what had been an externality, ensuring that it is taken into consideration in decision-making by farmers.