Payment for biodiversity and ecosystem services

One of the underlying reasons for the loss of biodiversity is that biodiversity is a public good. It is frequently accessible to everyone and it is free. As a result, there is a widespread failure to recognise the significance and value of ecosystem services and a lack of adequate financing mechanisms for them. The social costs are not passed on in the price of goods produced at the expense of biodiversity. This frequently leads to excessive use of resources and a failure to invest in sustaining the capacity of ecosystems to continue providing goods and services (‘Tragedy of the Commons'). An additional factor in developing countries is that the very poorest tend to be most dependent on natural resources but lack the capacity to invest in sustainable management of those resources. Making biodiversity a more explicit consideration in economic and monetary decisions is a way of combating poverty directly.

There are various approaches that can help eliminate the economic mechanisms leading to biodiversity loss:

• Better regulation of the fair distribution of biodiversity benefits and of access to natural resources while safeguarding property and user rights.
• Clear pricing of products and services provided by ecosystems. Markets for biodiversity and related goods and services will create opportunities for more sustainable management. The opportunities are considerable, for example in relation to international agreements on measures to mitigate the effects of climate change by preventing deforestation and degradation of moorlands.
• The prescription of requirements for (any remaining) unsustainable use of biodiversity, for example through compensation.

The government of the Netherlands will develop activities along these lines. However, it cannot do this alone and depends on international collaboration and cooperation with non-governmental organisations. Together with its partners, the Dutch government will investigate what organisational and governance structure, as well as formal and informal agreements are needed at national and international level to successfully implement forms of payment for biodiversity and how they can be put in place. The government will make greater use of market-driven instruments for the preservation and sustainable use of biodiversity. The coalition agreement states that the government wishes to achieve its ambitious targets in pillar three, a sustainable living environment, largely through financial incentives and disincentives to encourage environmentally friendly behaviour. The policy programme ‘Working together, living together' also states that unsustainable use of biodiversity must be compensated. For this reason, specific attention will be devoted to developing and implementing instruments to compensate for the loss of biodiversity.