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«EUI Working Papers RSCAS 2012/23 ROBERT SCHUMAN CENTRE FOR ADVANCED STUDIES Global Governance Programme-18 MULTILEVEL GOVERNANCE OF INTERDEPENDENT ...»

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The changes were mostly studied and applied in national environmental policies in the West and in the context of pollution control. From there, they have been spilling over to other areas and jurisdictions, but only slowly. On the international level, most of the regulatory options were pioneers in the context of the climate change regime, and most of the lessons have accumulated there. The flexible mechanisms of the Kyoto Protocol have contributed to, if not initiated, much legal activity for reducing greenhouse gasses on international, regional, and national levels (on this, see above footnote 1). Some market mechanisms involving private actors have also been set up in relation to biological resources in a national context. Particularly echoed is the example of the US wetland banking scheme, designed to achieve no net-loss of the US wetlands and uphold their benefits of watershed protection (see in particular Salzman and Ruhl, 2000, 2006; Ruhl and Gregg, 2001).

These new instruments have not gone un-criticised. They are supposedly damaging the core values of environmental law, and require too high a price for achieving efficiency, which may be undermining goals of biodiversity conservation (Robertson, 2004; Salzman and Ruhl, 2000, 2006). A close engagement of conservation activities with the private sector has also been criticised for commodifying nature, and surrendering to the larger project of neoliberal capitalism (MacDonald, 2010; Winter, 2010, criticising that in emissions trading the economic logics has supplanted ecological logics). In a way then, by not engaging with the private actors and economic mechanisms, the CBD has in fact distanced itself from being associated with the criticism these novelties have generated.

It took a few years for the CBD to position itself in these developments, embracing markets and the private sector. As the CBD identified, there are a number of reasons for the involvement of the private sector in the advancing of the goal of the Convention (CBD Secretariat, 2005). One is that of accountability: businesses have impact on biodiversity, while at the same time their activities draw on biodiversity for its resources. The other reason is that of a potential for norm promotion and communication, as the business world is supposed to have an influence on the public opinion, and thus has potential for raising the profile of the Convention and its objectives. Finally, there are the financial reasons: the private sector represents an important donor.

I borrow the notion of a toolbox from Elizabeth Fisher (2001), who argues that in the EU questions about regulatory design are obscuring questions about democratic governance, such as that of legitimacy and transparency of public institutions.

Bobbitt (2008) argues that nation state is being superseded by a ‘market state’, which promises to maximise the opportunities of the people. The consequence of the rise of a market state is privatisation of many state activities, decrease of influence of voting and representative government and a state that is more responsive to the market.

Generally, nothing better exemplifies the rise in importance of private actors than the whole body of literature on Transnational Private Regulation (TNP).

International incentive mechanisms for conservation of biodiversity and ecosystem services This section has ventured over the regime's deficiencies by sketching the discrepancy between its internal provisions and the expectations of the external environment. The purpose of the next section is to review the attempts to fill this gap. The CBD has the necessary institutional provisions to, not only maintain itself as a ‘living treaty’, but also to react to the external environment in the course of its life.

In addition to adopting protocols (CBD, 1992, Article 28), amendments of the Convention (CBD, 1992, Article 29), the COP is explicitly authorised to “undertake any additional action that may be required for the achievement of the purposes of this Convention in light of experience gained in its operation.” (CBD, 1992, Article 28, Paragraph 4 (i)). It is precisely because these structures enable the CBD to develop in a responsive manner that its conduct should be scrutinised.

International Incentives for Protection of Biodiversity and Ecosystems Services

The CBD process Aware of its limitations, the CBD put in place its own process of encouraging the implementation more actively. The parties' attention was first directed to incentives at the third COP in 1996 (UNEP/CBD, 1996b). Without defining ‘incentives’ at that stage, the parties recognised their “central importance to the realization of the objectives of the Convention,” and agreed to include the issue on their agenda. From today's perspective, this decision marks the first phase of problem identification as lack of incentives, which will be followed by phases of identification of perverse incentives impeding better implementation of the Convention, exchange of experience on national incentives, and an attempt of the development of international incentives. Immediately, an important role in this process was predicted for the private sector.

At the beginning, and explicitly within the 2000 Programme of work on incentive measures (UNEP/CBD, 2000a), incentives were viewed as country-specific, and the work was focused on national incentives. Only later did the parties reveal that they also had in mind the possibility of international incentives. In that context, the UNFCCC (United Nations Framework Convention on Climate Change) seemed an attractive avenue, and incentives therein were explored to also benefit the biodiversity regime (UNEP/CBD, 2002a, 2011). Any incentives being developed with the primary purpose of protecting biodiversity were not actively explored, more in terms of integration, like an idea of a global initiative on banking, business, and biodiversity (UNEP/CBD, 2002c). Generally, the role of incentives was defined as: “the purpose of incentive measures is to change institutional and individual behaviour in order to achieve in whole or in part the [...] objectives of the Convention” (UNEP/CBD, 2002c).





The Programme of work was reviewed in 2008. If one expected self-standing incentive mechanisms, run by the CBD, progress was modest. On a closer look, however, these were not even the objectives of the work of the Convention on incentive measures. Rather than establishing institutional mechanisms as such, the aim of the efforts seems to have been set on enabling the process. In this context, the objectives of the activities related to incentive measures were a review of existing incentive measures; integration of information on biodiversity in consumer decisions;

assessment of the values of biodiversity in order to internalise them in public policy initiatives and private-sector decisions; a consideration of biodiversity concerns in liability schemes; and integration of biodiversity concerns in all sectors (UNEP/CBD, 2000a, paragraph 2). These steps may well be preliminary, as the process started from scratch, and incentives may develop as to depend on institutions in the future.

Jerneja Penca

Most of the work within the CBD relates to modest incentives at best, such as a collection of case studies and lessons learned. 27 One of the central tools is a web-based ‘clearing house,’ through which information on national incentive measures and good practices are shared. The parties are free - and encouraged - to use the information, but it does not have any prescriptive role. A mechanism that stands out from otherwise dominating documents is a funding mechanism called LifeWeb, aimed at funding protected areas, complementing the GEF in that. LifeWeb is a database which links donors and recipients of funds, but allows the former to choose which projects they will finance. This is an innovative way of dealing with demand and supply of funds, as it allows donors to be more flexible in choosing where their money goes, and the recipients to structure projects according to their needs, and then seek funding. It attempts to join both private and public funding. Although the private sector as well as NGOs are invited to participate alongside the governments, to date no projects have been funded from private sources.

An analysis of the CBD's work would be incomplete without its role in two less tangible, but influential processes: that of valuation and discursive change.

(Economic) valuation The strategy on incentive measures within the CBD regime consisted for a large part of promoting the use of valuation methods in decision-making. A broad set of different methods fall under the term, which can take into account economic and other values (for an overview of methods, see Organisation for Economic Co-operation and Development, 2002). In its very first decision on incentive measures, the COP recognised the importance of highlighting the market and non-market values in any policy or programme (UNEP/CBD, 1995, paragraph 4). The COPs consistently drew attention to the economic valuation, as well as the social, cultural and ethical valuation, as important tools for well-targeted and relevant incentive measures (e.g. UNEP/CBD, 1998, 2006b). Valuation acts as an incentive in itself, but it is used also as a means of developing other incentives, as it breaks down various aspects of biodiversity and forces one to value them. Although biodiversity valuation is a fairly young strand of economics, and much of the research agenda is still to be fulfilled, the discipline has taken a huge step ahead in coming to terms with developing the right methodologies, and admitting its limitations. In this process, two studies have been extremely influential. One is the 2005 Millennium Ecosystem Assessment, and the second the TEEB research, both of which have not only carried out large scale assessments of the global ecosystems, but also popularised the notion of benefits derived from nature.

Change of discourses The second of the salient processes, an incentive on its own, and also an illustrative consequence of the attempt to mainstream the business’ case on biodiversity, can be noticed on a terminological level.

In the documents of the ninth COP of the CBD (year 2008), one can observe the introduction of a number of new concepts to support the business’ case for biodiversity and to appeal to the private sector. ‘Business’ is now mentioned alongside or instead of ‘the private sector,’ the private sector’s ‘contributions’ have been transformed into ‘investments’, and the concept of ‘ecosystem services’ is consistently associated with, but separate from, ‘biological diversity’. All these and other changes foster the idea that the biodiversity concerns may, and should be, integrated into the usual businesses processes, and do not represent a challenging of them (UNEP/CBD, 2011, the phrase in use throughout the document is “biodiversity and its associated ecosystem services").

Some of the documents that the CBD Secretariat has issued are Proposals for the Design and Implementation of Incentive Measures (2004) and Incentive measures for the conservation and sustainable use of biological diversity: Case studies and lessons learned (2011). Both of these, and other tools, are accessible at the (‘CBD Incentive Tool Website’, 2012).

International incentive mechanisms for conservation of biodiversity and ecosystem services These attempts to recast the norm of biodiversity conservation is a search to align it with the predominant norms. Social constructivists have suggested some features of more frequent - and thus more influential - norms. One is specificity and clarity of a norm, as opposed to complexity and ambiguity (Legro, 1997). The other is compatibility with existing dominant norms (Florini, 1996, pp.369, 376), among which free trade ranks highly (Cortell and Davis Jr, 1996, p.452). More recently, it has been shown that “issues readily framed within the business case discourse are likely to garner the most interest.

Conversely, ethical imperatives, such as claims to a fairer distribution of resources or moral arguments for cultural self-determination, are not so easily accommodated into the prevailing [...] discourse.” (Richardson, 2008, p.455) The developments which are visible within the CBD documents, but are in fact the result of a much wider process, have effectively been about a promotion of a new norm for biodiversity protection, one that promises to be more successful in gaining support from the changed world of increased presence of private actors and market rationale. This evolution does not qualify as an incentive, but it very much sets the stage for incentives to develop. It is particularly conducive to economic ones.

Mechanisms outside the CBD A more tangible, and therefore seemingly stronger, expression of the governance changes in the biodiversity field is to be detected outside the CBD. The avenues parallel to the state-centred regime share the norms of the treaty process, but they are not pre-determined by the type of actors who get involved, and the type of instruments which can be used. Incentives that develop there are more responsive to the determinants of the governance field, or in the language of economics, more reflective of demand. Below, I offer a short ‘tour’ of these more independent mechanisms, which developed outside the CBD. While the scale of the projects presented here should not be overstated, their importance is worth a reflection, as “they could serve as the precursors to larger, more broadbased biodiversity markets in the long term. Essentially, they demonstrate that there can be a business case for investing in biodiversity conservation.” (Bayon, 2008).



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