Economic instruments for biodiversity

Over the years, biodiversity worldwide has been rapidly declining. Without new policies, we risk irreversibly damaging the natural resource base necessary to support economic growth and well-being. What European policies are needed to address the growing European footprint? How can European Member states best work together to tackle these challenges?

One promising policy option is to set up an European Biodiversity Trading System (EU BTS). This would imply that high-impact land use change activities are ‘taxed’ for their development activities through a requirement to compensate for all unavoidable impacts on biodiversity. Companies or sectors under the trading system need to buy biodiversity debits to cover their ecological footprint, which is determined by the quantity and quality of their land utilization. In this way, revenues are collected to finance biodiversity offsets. These offsets are supplied by (developing) counties that undertake additional efforts to preserve their valuable and threatened ecosystems.

This research report provides an analysis of some crucial policy options regarding biodiversity trade mechanisms on the European level. It is commissioned by the Dutch Ministry of Housing, Spatial Planning and Environment.