Incentives for Ecosystem Services

Mandatory regulations

Prohibition of use:

Command-and-control measures prohibiting negative impacts on ecosystem goods and services, e.g. in protected forest, coastal areas and riparian buffer zones.

Taxes/ charges:

Environmental or green taxes levied on ecosystem "bads" that can be used to correct or modify existing land-use practices.

E.g. Taxes on financial transactions, fisheries, pesticide and fertilizer usenatural capital levies on non-renewable natural capital use, tourism etc., to ring-fence finance for conservation and social outcomes. 

Example

Example

Green Dot, Germany: Imposes a payment per unit of packaging, to encourage reductions in solid waste.

Property use rights:

Controlled or regulated use through different ownership and management; exclusion of non-owners or marginal groups.

Example

Example

Indonesia: Different forest ownership and management rights, ranging from production and community forest, to conservation and protected forest

Mandatory farm set-asides:

Legislation requiring land-owners to give up the right to use part of all of their farmland for land restoration, reforestation, forest and riparian conservation, or habitat connectivity.

Example

Example

Brazil's Forest Law: Legislation requiring up to 80% (dependent on State) of private properties to be retained as forest or riparian forest habitat (along water bodies and around headwaters) and protected.


Regulatory measures, however, are costly for governments to implement and enforce. They also pose social cost to farmers through restricted and lost livelihood opportunity costs.

More flexible regulations or voluntary investments may, therefore, be needed to provide incentives to assist compliance.