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Economic Instruments

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Environmentally Motivated Subsidies

Economic instruments are essential mechanisms of conservation finance as many environmental services and costs are external to private company finances. Economic instruments are efficient means for governments to bring these externalities into market prices. By definition, economic instruments include “fiscal and other economic incentives and disincentives to incorporate environmental costs and benefits into the budgets of households and enterprises” (Glossary of Environment Statistics, UN 1997). They seek to achieve this role of incorporating costs and benefits into budgets through “full-cost pricing” - that is increasing the prices of environmentally harmful products and services and decreasing the costs and prices of positive environmental goods and services.

The OECD Policy Instruments for the Environment (PINE) database includes six categories of policy instruments, five of which are included(*) in this category (OECD, accessed January 10th, 2020).4 Some definitions are adapted from the PINE Glossary.

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Environmentally Related Taxes

These instruments specify payments to the government from a tax base of “environmental relevance,” which typically includes taxable organizations or individuals with a proven and defined negative impact on the environment. They are described as “unrequited” payments in that distributions are not proportional to payments. The intent is to increase costs of environmentally harmful activities including pollution and thus incentivize actors to reduce those activities. Industries subject to these taxes typically include energy, transport equipment or services, pollution (water, air, waste management, noise), and natural resources. It should be noted that taxes, along with other economic instruments often combine two objectives: raising revenue and influencing incentives. There are certain taxes that minimize impacts on incentives, such as income tax and value added tax (VAT) while others are designed to have an impact – such as taxes on pollution where the goal is to reduce pollution in an economical manner. In some cases, so called “sin taxes” such as those on tobacco and alcohol can generate substantial revenue as demand for these products is not very price sensitive (low demand elasticity) indicating that they must be taxed substantially if the goal is to reduce consumption. Taxes on these products as well as fossil fuels have been used for environmental and health expenditures (see Earmarking Revenues for Nature, below).

One example of an environmental tax is a plastic bag levy in Ireland. Beginning in 2002, the Irish Government began imposing a 0.15 euro charge on plastic bags which was raised to 0.22 euro in 2007. The tax has simultaneously reduced plastic bag pollution (from 5% to just 0.13% of all litter) and also raised hundreds of millions in euros for environmental projects. Another older example is the earmarking of hunting and fishing equipment taxes for state wildlife management in the USA.

Corporate Social Responsibility Tax

Special form of government taxation that requires (usually large) companies to spend a percent of their profits every year on corporate social responsibility (CSR) - usually through financing NGOs or paying into government social investment funds. The main difference from traditional taxations is that the companies will be able to decide where to invest and implement programs. This solution has been piloted in only a few countries (e.g. India, Seychelles), with limited documented evidence of its effectiveness relative to other approaches.

A Corporate Social Responsibility Tax has been put in place in the Seychelles since the year 2013, with funds raised through the tax mostly funding community projects. The tax (0.5%) is imposed on businesses with an annual turnover equal to or exceeding the liability threshold of approximately USD 75,100. To read more about the Seychelles Corporate Social Responsibility Tax, please visit here.

Taxes, Fees and Royalties in the Forestry Sector

Taxes, fees, royalties and other charges on the extraction, transport and/or use of forests and forestry activities. Following the user-pays principle (and polluter pays), these levies help to capture the benefits of production services from nature and internalize the true cost of ecosystem degradation by influencing the price of the "consumed" natural capital. Revenues may or may not be allocated to environmental purposes. The most used forms of taxation are stumpage fees, concessions fees, royalties based either on the volume or the value of the timber harvested and export levies (e.g. Ghana has applied rates from 1 to 2 per cent on timber exports).

Several countries around the world have put in place a system of taxes, fees and/or royalties in the forestry sector. Washington State enacted an excise tax, known as the timber tax, in 1971. In place of a property tax on tress, timber owners pay a 5 percent excise tax on the stumpage value of their timber when it is harvested. In 1982m the Forest Tax was extended to timber harvested from state and federal land, in addition to private land. Read more about the Washington State timber tax here.

Tariffs, Fees and Taxes in the Water Sector

General (local and national) taxes and special levies charged in exchange for a service, for example water and wastewater bills, property assessments or fees/charges applied to improve the quality of the water, and developer fees which may fund water infrastructure and watershed rehabilitation.

The Netherlands has in place two different kinds of taxes on water; a tap water tax and VAT. The stated aim of these taxes is to encourage companies and households to use water more sparingly. Tap water suppliers pay tap water tax to the Tax and Customs Administration, recharging the tax to their customers. The government charges VAT on the consumption of tap water. This has been set at the low VAT rate of 9%. To learn more about the water taxes in the Netherlands, click here.

Taxes and Fees in the wildlife sector

Taxes, fees, royalties, quotas, and permits for wildlife capture, hunting, and trade. These mechanisms can be used to generate revenue and to support the sustainable use of wildlife including wild animals, plants, and fungi.

In the state of Mississippi, conservation programs run by the Mississippi Department of Wildlife, Fisheries, and Parks (MDWFP) are almost entirely financially supported from hunters and anglers. License fees and excise taxes on hunting and fishing equipment generates $17 million and $11.4 million, respectively, for the state. Revenue from Waterfowl Stamps, which all waterfowl hunters are required to buy, contribute directly towards helping the state and federal governments to manage waterfowl habitat. To learn more about the Taxes and fees in the wildlife sector of Mississippi, or about the Waterfowl stamps specifically, please click here.

Taxes on Renewable Natural Capital

Any tax, fee, or charge paid for the extraction and/or use of renewable natural resources (e.g. timber or water). Following the polluter-pays or user-pays principles, these levies help to catpure the production value of nature and internalize the true cost of ecosystem degradation by influencing the price of the natural capital “consumed”. Note: this solution is also captured elsewhere in the catalogue including forestry and water entries.

Taxes on Natural Resources (non-renewables)

Any tax, fee, or charge paid for the consumption or economic use of non-renewable natural resources. Sometime referred to as natural capital levies, this broad category includes taxes on fuels and carbon. Such taxes help to more effectively value on non-renewable natural capital and to internalize the cost of biodiversity degradation caused by resource extraction.

In 2008, the Canadian province of British Columbia instituted a carbon tax which applies to the purchase and use of fossil fuels and covers approximately 70% of provincial greenhouse gas emissions. On April 1, 2019, the carbon tax rate was increased, and will be increased every year until 2021. New revenues generated from increasing the carbon tax will be used to: provide carbon tax relief and protect affordability, maintain industry competitiveness, and encourage new green initiatives.

To learn more about the carbon tax in British Columbia, visit here.

Taxes on Fuel

A fuel tax, fee, or charge paid for the consumption or economic use of fuel (i.e. coal, gas, oil, others). Fuels are typically utilized for transportation, building heating and cooling, industrial uses, among others. Fuel taxes can reduce the consumption of fossil fuels and greenhouse gas emissions (i.e. a carbon tax). They can also price other negative externalities such as air pollution and congestion. Tax revenues may be allocated for biodiversity protection purposes.

In the United States, the Leaking Underground Storage Tank (LUST) Trust Fund was established in 1986 in order to address petroleum releases from federally regulated underground storage tanks. Specifically, the LUST Trust Fund provides money to :

a. Oversee cleanups of petroleum releases by responsible parties

b. Enforce cleanups by recalcitrant parties

c. Pay for cleanups at sites where the owner or operator is unknown, unwilling, or unable to respond, or which require emergency action

d. Conduct inspections and other release prevention activities

The LUST Trust Fund is financed by a 0.1 cent tax on each gallon of motor fuel sold nationwide.

Find out more about the LUST Trust Fund and the 0.1 cent tax on motor fuel here.

Taxes on Pesticides and Fertilizers

Any tax, fee, or charge paid for the consumption and economic use of pesticides and fertilizers. Taxes on pesticides and fertilizers can reduce the overdue of these potentially harmful substances and decrease adverse impacts to biodiversity and habitats. Tax revenues may be allocated for biodiversity management purposes.

In France, under the law on water and the freshwater environment, 7 water taxes were introduced – including tax on diffuse pollution, which was levied on the sale of pesticides. This tax rate varied according to the toxicity of the substances, and in 2014 the revenue from the ta was approximately 110M Euros. A substantial portion of the revenue is funneled into the a strategic plan to reduce pesticide use, called the “Ecophyto Plan”. To learn more about the tax and the Ecophyto plan, please visit here.

Taxes and Fees in the Tourism Sector

Detailed guide entry

The collection of taxes and fees (or comparable instruments such as the sale or auctioning of concessions) from the tourism sector and/or directly from tourists. This revenue can provide guaranteed financing for protected areas or other biodiversity conservation measures either through retaining fees, revenue sharing agreements with communities, or receiving earmarked transfers from the central government.

Known as the quintessential example of a successful, transparent green tourist fee, the Pristine Paradise Environmental Fee (PPEF) of Palau was developed to support conservation and effective management of natural resources. The fee consists of a $100 PPEF on all international airline tickets to Palau. In addition to this fee, visitors are not issued a visa until they sign a pledge promising to respect the environment and culture Palau. In the Fiscal Year of 2018, the PPEF presumably generated annual revenue well over $10M. The fee is spent in the following ways:

a. Fisheries Protection Fund: $10

b. State Government: $12.50

c. Operations of Palau International Airport: $25

d. National Treasury: $22.50

e. Protected Areas Network (PAN): $30

To get a more detailed assessment of the PPEF, please visit here.

Taxes, Fees and Quotas in the Fishery Sector

The taxation of the fishery sector and/or the introduction of fees and quotas can provide ring-fenced financing for conservation as well as influence market behavior in order to reach a biologically and economically sustainable level of fish stocks and harvests (i.e. reduce over-fishing).

· Fisheries Protection Fund: $10

· State Government: $12.50

· Operations of Palau International Airport: $25

· National Treasury: $22.50

· Protected Areas Network (PAN): $30

To get a more detailed assessment of the PPEF, please visit here.

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Fees and Charges

Fees and charges can be described as obligatory payments to the government in exchange for specific government services. As such, they differ from taxes in that they are often (but not entirely) “requited” or that payments and benefits returned are at least somewhat proportional to each other and directed to specific uses. As some taxes can be earmarked for specific uses or for funds, the general distinction between taxes and fees is that the latter is tied to a service cost or some value gained. Permits and licenses are generally considered fees and charges when there is a charge associated with the issuance of the permit or license. The use of fees and charges is common for a wide range of governmental services including many that are environmental and related to conservation. Examples for nature include fishing licenses, protected areas entrance fees, stumpage fees, and biosecurity fees. Water and energy tariffs can be used to finance environmental objectives and in many cases, water tariffs are earmarked for Water Funds (very similar to Conservation Trust Funds) that provide subsidies and grants for watershed maintenance.

Bio-security Fee

The fee charged to the importer of biological material into a country. It can be used to recover the expenditures of the national agency mandated with preventing alien invasive species (AIS), health threats and other agricultural pests from entering certain geographical areas. Mostly used in island states. It can also be part of an import duty or fee.

In the state of Western Australia, a system of fees and charges for biosecurity services came into effect on July 1, 2018. Western Australia is free of many pests and diseases found in other parts of Australia, and its sound biosecurity system including border inspection and fees helps to maintain this freedom. To review in detail the Biosecurity fees and charges of Western Australia, please visit here.

Conservation or wildlife themed items

Special commercial products featuring wildlife are sold at an extra price to costumers and the extra revenues are channelled to environmental causes and projects illustrated by the product/item, mostly related to conservation and the protection of wildlife. Examples include, licence plates, special ringtones and screensavers (mobile communication), gifts sold at zoos, etc.

The Department of Motor Vehicles in the state of Pennsylvania (USA) has a long history of producing license plates for conservation. The two license places currently available date back to 1999 and 1996, respectively, with proceeds being used to either support the management of the Commonwealth’s unique flora and fauna, or to benefit the Pennsylvania Zoological Council’s six member zoos. To read more about the Pennsylvania license places, visit this website.

Conservation License plates

Special license plates featuring wildlife images that are sold at a higher price to car owners. The extra income is channelled to environmental causes and projects illustrated by the plate, mostly related to conservation and protection of wildlife. This practice is used in many states in the USA.

Fees, penalties, and management expenditures for Environmental (and Social) Impact Assessment

Environmental (and Social) Impact Afeesssessments (EIA) are conducted to evaluate the environmental and social risks of a development project including mining, hotels, and other large infrastructure projects. A range of expenditures and investment to preserve nature are associated with the EIA process including permitting fees, expenditures for the assessment itself, expenditures for implementation of the environmental and social management plans, performance bonds, insurance products, biodiversity offsets etc. Additionnally, penalties may be directly triggered by non-compliance to the EIA and its associated management plans.

Studies have been conducted by the European Union to assess the relative costs and benefits associated with implementation of Environmental Impact Assessments in selected countries within the European Union. The study found that by far the main cost component (between 60% and 90% of the cost of EIAs) is incurred in carrying out environmental studies and writing the Environmental Impact Statement. It was found that these costs were borne largely by the developer or project promoter.

It should also be noted that for 60% of the projects examined, EIA costs amounted to less than 0.5% of the overall capital cost, with the actual costs of EIA raising in direct relation to the capital cost of the project.

More details regarding this study can be found here. Unfortunately the studies themselves are out of print.

https://ec.europa.eu/environment/archives/eia/eia-studies-and-reports/eia-costs-benefit-en.htm

Environmental Impact Assessment Permitting and Review Fees

More details regarding this study can be found here. Unfortunately the studies themselves are out of print.

https://ec.europa.eu/environment/archives/eia/eia-studies-and-reports/eia-costs-benefit-en.htm

Payment for Ecosystem Services

Beneficiaries/users of an ecosystem service, such as water regulation, make a direct or indirect payment to the provider of that service in exchange for service provision and maintenance. This "user pays" concept is that whoever preserves or maintains an ecosystem service should be paid for doing so. Beneficiaries/users of an ecosystem service can make a direct payment to the provider of that service through a private contract or an indirect payment through the intermediation of the State who charges the users through a tax or fee. Payments for ecosystem services are mostly found in the water, forest, agriculture and energy sectors. Also known as "Payment for Environmental Services".

An excellent example of a Payment for Ecosystem Services (PES) scheme can be found in the Indian Himalayas. A newly constructed reservoir in the village of Kuhan was collecting large amounts of silt, halving its capacity. It was found that most of the silt came from the grazing land of the upstream Ooch village. An agreement was found, with the Ooch village banning grazing for eight years on its four-hectare common land in addition to planting saplings of frit and fodder bearing trees. In exchange, Kuhan paid for the saplings and worked out an arrangement to sell irrigation water to Ooch when required. This led to a reduction in silt load.

Read more about this example here.

Payment for Ecosystem Services-private to private

Beneficiaries/users of an ecosystem service make a direct payment to the provider of that service. The system can be voluntary using a private contract. Payments are mostly found in the water, forest, agriculture and energy sectors. For example, Nestle (formerly Vittel) pays farmers to refrain from using chemicals in north-eastern France and the City of New York pays farmers and other land owners to protect watersheds in the Catskill mountains, thus saving billions of dollars by aoviding the construction of major water treatment systems.

In response to an increasing risk of nitrate contamination which threatened the production of ‘natural mineral water’, Nestle (the producer) proposed to farmers to transform their intensive dairy farming system into a system with no pesticides and chemicals. This was done through the use of incentives to encourage farmers to permanently change their farming practices. The buyer of the ecosystem service is Nestle Waters, with the sellers being the 37 farmers active in the catchment when the PES program was first implemented. To read a more detailed review on the Nestle PES, please visit here.

Payment for Ecosystem Services - state intermediation and/or fee

Beneficiaries/users of an ecosystem service make a indirect payment to the provider of that service through an intermediary such as the state where the public authority disburses the compensation to the service provider for conservation for maintenance. To fund the compensations, countries either rely on the general budget or introduce PES-like taxation systems with special-purpose taxes and fees, targeting the tourism, water, electricity, transport and extractives sectors (i.e. the beneficiaries of the ecosystem services). Mexico has a national level scheme that also encourages the establishment of private to private PES systems.

Between 1990 and 2010, Mexico lost 5.5 million hectares (or 7.8 percent) of its forest cover. In response to this, Mexico’s National Forestry Commission (CONAFOR) introduced a Payment for Ecosystem Services (PES) program in 2003. This PES encourages forest conservation by making payments to owners of ecologically valuable land. The program has grown to encompass 2.5 million hectares of forests as of the end of 2013, making it by far the largest PES program in Latin America. Read more about this PES program here.

Pasture (and grazing) Fees

Fees for access to rangelands on public lands including in Protected Areas. Fees and permits are used to regulate usage and avoid overgrazing and rangeland degradation.

In the United States, a formula calculating a grazing fee was established by Congress in the 1978 Public Rangelands Improvement Act and has remained in use under a 1986 presidential Executive Order. In 2019, the federal grazing fee in the United States was $1.35 per head month (HM( for lands administered by the United States Department of Agriculture’s (USDA) Forest Service and $1.35 per animal unit month (HM) for public lands administered by the Bureau of Land Management. This is decrease from the 2018 fee, which was $1.41. Read more about the USDA’s grazing fees here.

Forestry Stumpage Fees

A fee paid for the right to harvest timber from a given area. Typically paid to a private land owner or the government (if the land is public land). Stumpage fees are determined by a combination of fixed or market prices and the volume harvested (e.g. cubic metres, board feet, tons).

The New York State Timber Harvest Statistics consolidates data on the stumpage fees for various species throughout the State. In New York, prices are determined using market prices and the volume harvested. The prices for the year 2018 range from a low of $2-4 for Pine, to a high of $1000 for Black Cherry.

Forestry Concession Fees

Fees paid for access to exploit forestry areas usually under public ownership and government control. Often there is a requirement for the concessionaire (holder of the concession) to produce a management plan that is approved by the land owner. Concession fees and systems allow for private long term planning if the concessions are of adequate length to make a rotational forestry practice feasible. Concession fees are based on an economic assessment of the value of the timber or other forest resources (which can include non-use values such as recreation).

Canada’s forest concessions have been overwhelmingly successful in economic terms, even if not in direct revenue terms. Canada, having approximately 265 million ha (76% of its total forest cover) under forest concessions is second only to Russia, that has over 600 million ha, or 68% of its total forest cover under concessions. The Canadian forest sector makes an annual contribution to Canadian GDP of CAD 20 billion. The forest sector in Canada employs about 300,000 people with a payroll of CAD 8 billion (2014 figures). However, despite its success, critiques have been levied against the Canadian forest concessions. One of the critiques concern the fact that most concessions are allocated by negotiation rather than by competitive tender. This has led to cases of overlapping tenures which become problematic, and there has been a criticism regarding the low stumpage prices effectively acting as a subsidy to Canadian forest companies. Read more about Forestry Concession Fees and examples from around the world here.

Other Forestry Royalties

Other types of royalties can be paid for forests and forestry products including collection fees for Non Timber Forest Products (NTFP, see below) such as mushrooms, fruit, honey, etc. recreational exploitation (hotels, restaurants, etc.), access (pipelines, telephone towers, electricity, etc.), and real estate (e.g. home ownership).

It is known to be difficult to interest governments in effective NTFP law and policy because NTFPs fall into institutional and sectoral cracks, and are usually part of information or loosely organized trade. When governments do engage with this sector and draft laws, it is common for implementation, monitoring and compliance to be poor since resources and capacity are rarely allocated to what are perceived as minor products.

In Fiji, for example, the government recently sought to regulate the NTFP sector more effectively through the 2007 National Forest Policy and the Endangered and Protected Species Act of 2002. Despite good intentions, however, implementation has been weak; few traders know of the laws, and monitoring and enforcement is nonexistent.

To read more about NTFP and related regulation throughout the world, consult “Non-Timber Forest Products in the Global Context” Shackleton, S., Shackleton, C., Shanley, P. Chapter 11.4.4 Inconsistent and Often Underfunded Policy Implementation (2011)

Forestry Transportation Fee

Forestry transportation fees can be used in addition to stumpage or other fees as either a cost recovery tool to pay for roads and other transport infrastructure, or as a means to improve regulation and control of the industry. It should be noted that any fee that raises cost of production or transport may influence the market price and trading volumes. For example, export levies capture forestry revenue and have been used to encourage increased domestic value-added wood industries by charging much higher levies on raw wood as compared to furniture.

Non-Timber Forest Product Harvesting licenses and fees

Licenses and other fees associated with the collection, transport and sale of Non-Timber Forest Products including mushrooms, latex (sap), honey, flowers, tubers, etc.

Taxes, fees and quotas in the Fishery Sector

New Zealand introduced an Individual Transferable Quota (ITQ) system in 1986 in order to aid the replenishment of local fish stocks. The Quota Management System (QMS) was introduced in 1986 because of the perception that many, if not most, of the inshore fish stocks were suffering from high levels of biologic and economic overfishing. Total Allowable Catch (TAC) for the overexploited inshore species were set at levels from 25% to 75% of the pre-QMS catch levels, depending on the biological status and management objectives for each Fishstock.

Since the implementation of the ITQ and Quota Management System (QMS), most of the major Fishstocks that are below the Biomass that will support the maximum sustainable yield (BMSY) are now being rebuilt. To read more about the New Zealand case of quotas in the fishery sector, please refer to this link. The New Zealand section begins on page 342.

Fisheries Landing Fee

As an alternative from quotas the fisherfolk pays a fee to an authority based on the quantity of fish caught. The landing fee ensures that the true economic price is paid for the fish, thereby removing any incentive for overfishing. The money raised by the landing fee could be allocated to sustainable fishery or marine conservation activities.

In Alaska, the Fisheries Resource Landing Tax, in the Federal Year of 2013, was valued at a total of $13,381,669. The tax is based on the unprocessed value of the resource, which is determined by multiplying a statewide average price by the unprocessed weight. The Fishery Resource Landing Tax is collected primarily from factor trawlers and floating processors which process fishery resources outside of the state’s 3-mil limit and bring their products into Alaska for transshipment. To read more about the Alaska Seafood Industry Taxes and Fees to State, Local and Federal Government, visit here.

Fisheries licensing fee

In the state of Alaska, the Commercial Fishing Vessel License revenue from FY 2014 amounted to $678,400. The Commercial Fisheries Entry Commission administers permitting for commercial fishing and commercial fishing vessels. Commercial fishery entry permits and Crew license fees include a mandatory fee that is transferred to the Fishermen’s Fund, administered by the Department of Labor, which provides for medical coverage up to $10,000 for treatment of injuries in commercial fishing. Read more.

Refining incentives and other regulations in the fishery sector

A wide range of supporting policies and regulations can have an economic impact on the fishery sector including regulating the number of support vessels per fishing vessel, reducing subsidies for fuel and equipment, boats, ice etc. The sector and specific fisheries should be explored from a systems perspective to identify underlying policy, subside, and regulatory opportunities.

Water Tariffs

Also called "water rates," fees collected through water utilities and other suppliers of water to consumer including households and businesses. The tariffs are a cost recovery mechanism and are targeted to pay for the costs of water treatment, storage, transport, recovery and treatment of wastewater, and administrative costs. Water tarrifs can also be applied to cover the costs of watershed and wetland maintenance and protection, adding significant additional financing for biodiversity.

The State of Maryland instituted a Bay Restoration Fee which collects $15.00 per quarter charge ($6) per year) on the sewer or water bills of property owners served by public utilities. The Bay Restoration Fee increases to $60 per year on property owners who have private septic systems and are not served by public water. The funds will be used to upgrade facilities statewide. Read more about the Bay Restoration Fee here.

Water Abstraction Charges

A user fee charged for the diversion or use of water from lakes, rivers, and underground sources and applied to decrease waste and increase regulation and measurement. Where water abstraction is regulated, there is greater opportunity for water supply markets.

For more than 50 years water abstraction charges have been levied by the Water Agencies in France. The revenues from these levies are spent by the Agencies on investments in the protection and improvement of water resources (surface water and groundwater). The charge has to be paid by all those who abstract water (with some exemptions). The rates differ by Water Agency. The highest rates (up to a maximum of 0.10 euros per meter-cubed) are levied on water used for drinking water.

The water abstraction charge reflects the ‘water pays for water’ principle and is generally accepted as a fair payment for the use of a scarce resource. The levy itself is too small to have a significant incentive impact on water consumption, but together with the water pollution levy (which is about three times higher) and the fact that a substantial part of the water bill is charged at a variable (per m3 ) rate it provides an incentive for efficient water use. Read more about the water abstraction charges in France here.

Wastewater fees

Fees charged for sewer and wastewater discharge that are designed for cost recovery. The fee structure may include differential fees for private vs commercial users. Wastewater discharge permit fees may include some economic costs of ecosystem damage.

In Pennsylvania, a distinction is made between residential and commercial customers for water and wastewater services. Residential and Commercial customers pay $1.2217 and $1.2205 respectively for the first 16,000 gallons per month, and $1.2217 and $0.9153 respectively for all in excess of 16,000 gallons per month. Read more about Wastewater Fees in Pennsylvania here.

Developer Fees / Water Infrastructure

Development or "Tap" fees are fees charged often by the water utility for new housing or industrial developments to cover the cost of infrastructure to serve the new development and can include requirements for water supply permits (in markets with water supply controls) or in lieu payments to cover the costs of acquiring additional supply permits. These one-time fees are often integrated into the building permitting process. The fee structure can be designed to influence water demand.

Storm water runoff and incentive systems

Tariffs and other financial mechanisms designed to incentivize private property owners to install measures to increase ground permeability during precipitation events in order to reduce runoff and the resulting need to build additional water treatment facilities. Some cities have been testing offset systems that allows trading of water absorption credits among urban and periurban areas operating in the same watershed.

Wastewater Fees

Wetland Use Fees

Fees and permit expenses allowing access for commercial and non-commercial use of wetlands.

Instead of instituting a Fee system, Minnesota has established a wetland banking program that includes both private and state-sponsored wetland banks which have “credits” that are used to offset (mitigate) authorized wetland impacts. More information can be found on the Minnesota wetland banking program here.

Other Water Fees and Charges

Water related fees and charges for use and management other than those described elsewhere in this catalogue.

Hunting Permits or Concessions

Includes fees for licenses to hunt or fish wildlife as well as permits for hunting selected species. Also includes permits to operate commercial hunting concessions in a certain natural area. Fee revenue may be used to support natural area management.

Throughout the United States, State Hunting licenses are required in order to legally hunt. Hunting licenses can generally be purchased at any retail outlet that deals in hunting and fishing equipment, such as sporting goods stores. The linked page contains information regarding state licenses and hunting regulations. If you’re hunting on a national wildlife refuge, some also require their own permits and/or user fees.

Entrance Fees

Fees charged to tourists for entering or the use of facilities in a park or protected area, such as a parking fee.

Entrance fees are commonly found in many national parks throughout the world. Here is an example of the various fees associated with entering the Galapagos Islands.

Fee on International Travel (Air/Cruise)

Fees charged to the consumer when buying an international air ticket or cruise package. Fees can also be charged by a country or locality for disembarking. The revenue can be directly allocated for protected area management, biodiversity conservation or carbon offset costs. Fee scales can be set to charge higher fees for business and elite travel packages.

In Europe, a recent evaluation of a directive on Airport Charges (Directive 2009/12/EC) revealed that approximately 60% of the busiest EU28+EFTA airports have implemented environmental charges. However, the fees were targeted towards local noise and/or air quality impacts and not global climate change impacts. To read more about the various environmental charges from EU28+EFTA airports, please visit here.

Climbing Fees

Fees charged for the permit of climbing in a certain site, park or protected area, with collected revenues often assigned to support protected area management or other biodiversity conservation costs.

The Nepalese government has in place individual fees relating to the climbing of various Himalayan peaks during various seasons of the year. Ranging from Mount Everest to smaller peaks, the fees differentiate between climbing from 7000 to 75000 meters, climbing up to 7999 meters, and climbing over 8000 meters. To get an idea of the various fees themselves, please visit here.

Diving Fees

Fees charged for a permit to snorkle or dive in a certain local, marine park or protected area, with collected revenues often assigned to support protected area management or other biodiversity conservation costs.

In Bonaire National Marine Park in the Caribbean, divers must obtain a Marine Park tag in order to legally dive in Bonaire’s waters. The cost of the tag is US$45.00, and proceeds help support park management and services. If not scuba diving, the fee is reduced to US$25.00. This fee is charged to those who use the National Park to kayak, snorkel, windsurf or swim. Read more about the Bonaire National Marine Park and its fee system by clicking here.

Filming and Photography Fees

Fees charged for taking commercial photos, video, or filming in certain parks or protected areas, with collected revenues often often assigned to support protected areas management or other biodiversity conservation costs.

Commercial filming and Still Photography permits are available for purchase and use throughout the US National Park network. The fees range from $0/day if 1-2 people with only a camera and a tripod to $750/day if over 50 people. To find out more about the Filming and Photography fees in the US National Park system, please click here.

Camping Fees

Fees charged for a permit to camp in a certain park or protected area, with collected revenues often assigned to support protected area management or other biodiversity conservation costs.

In many US National Parks, camping fees are applied when attempting camp in the Backcountry, or in an area that is not near any designated camping grounds. In the Everglades National Park for example, a 14 day maximum Wilderness Permit is available for a fee of $15.00 per permit plus $2.00 per person, per night. Find out more regarding camping fees at the Everglades National Park by clicking here.

Tourism, Real Estate and Commercial Concessions

Detailed guide entry

Fees charged for permission to open and operate a business in a protected area, for example a hotel, restaurant or artisanal shop. The right to open a business maybe also auctioned. The category also includes fees charged for private homes, rights of way for electrical lines, communication infrastructure, pipelines, or similar infrastructure or utility services.

In protected areas in Queensland, one must apply and be approved for a Commercial Activity Permit (CAP) to conduct activities for commercial gain. A CAP can be offered for a minimum of 3 months or less, up to a maximum of 3 years. Activities requiring a CAP include guided tours, events, motorized activities and vending (mobile food vending). More information can be found here.

Mooring Fees

Fees charged for marine vehicles to moor inside or near a protected area, with collected revenues assigned to support protected area management or other biodiversity conservation costs.

In order for a boat to use dive site moorings in Saint Maarten, a fee of USD 250 per year per boat must be paid to the Nature Foundation. Funds generated through the sales of user tags and mooring fees are being used directly towards the management and maintenance of the moorings and the marine protected area. Read more about the Mooring fees here.

Other PA and Tourism Fees

Fees and charges other than those listed in other categories

Taxes, Fees and Royalties in the Forestry Sector

Several countries around the world have put in place a system of taxes, fees and/or royalties in the forestry sector. Washington State enacted an excise tax, known as the timber tax, in 1971. In place of a property tax on tress, timber owners pay a 5 percent excise tax on the stumpage value of their timber when it is harvested. In 1982 the Forest Tax was extended to timber harvested from state and federal land, in addition to private land. Read more about the Washington State timber tax here.

Tariffs, Fees and Taxes in the Water Sector

General (local and national) taxes and special levies charged in exchange for a service, for example water and wastewater bills, property assessments, or fees/charges applied to improve the quality of the water, and developer fees which may fund water infrastructure and watershed rehabilitation.

Taxes and Fees in the Wildlife Sector

Taxes and Fees in the Tourism Sector

a. Fisheries Protection Fund: $10

b. State Government: $12.50

c. Operations of Palau International Airport: $25

d. National Treasury: $22.50

e. Protected Areas Network (PAN): $30

· To get a more detailed assessment of the PPEF, please visit here

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Tradable Resource Use Permits

Tradable resource use permits and quotas are market-based economic instruments that extend private property rights to shared resources by providing resource users with private access to a specified quantity of a given natural resource and the ability to exchange these rights through market transactions. Tradable permits are effective for managing resources historically under open access like air pollution, fisheries, and water rights. Tradable permits that can be bought and sold are similar to financial assets that can appreciate or depreciate with the health and future prospects of that resource. Therefore, tradable permits and quotas have the potential to benefit the environment by encouraging sustainable use of natural resources to help maintain the value of those permits or quotas to the benefit of whoever owns them. Furthermore, some conservation organizations and impact investors have made the purchase and sale of tradable quotas a central component of investment strategies in sustainable fishing. As an example, Encourage Capital bought quotas from a fishery in Chile without the intention of fulfilling them (i.e. catching fish) in order to reduce pressure on the fish stock and support its recovery. Ideally, those quotas could then be resold, potentially at a profit, assuming the stock has recovered and the quotas have increased in value.

Nutrient Trading

Measurable conservation outcome resulting from a trading system (or market) where nutrient reduction credits are established and traded. These credits can have a monetary value that may be paid to the seller for utilising management practices that reduce nitrogen, phosphorous, or sediment. In general, water quality trading utilizes a market-based approach that allows one source of water pollution to maintain its regulatory obligations by using pollution reductions created by another source. Trades can take place between point sources (e.g. wastewater treatment plants), between point and nonpoint sources (e.g. a wastewater treatment plant and a farming operation) or between nonpoint sources (such as agriculture and urban stormwater sites or systems). Systems can be voluntary or compliance.

Pennsylvania is working to address water quality issues across the Commonwealth and as part of the Chesapeake Bay Watershed. The Nutrient Trading Program is one part of the Bay restoration strategy being implemented. The primary purpose of the program is to provide a more cost-efficient way for National Pollutant Discharge Elimination System (NPDES) permittees in the Chesapeake Bay Watershed to meet their effluent cap load limits for nutrients. To learn more about The Pennsylvania Nutrient Trading program, visit here.

Carbon Markets

Carbon markets aim to reduce greenhouse gas (GHG) emissions cost-effectively by setting limits on emissions and enabling trading of emission units (instruments representing emission reductions). Trading enables entities that can reduce emissions at low cost to be paid to do so by high-cost emitters, thus lowering the economic cost of reducing emissions. Carbon markets can include emission allocation credits as well as emission reduction credits such as carbon offset credits. In various carbon markets, forest or agricultural based offset credits may be used to offset industrial emission

The EU Emissions Trading System (EU ETS) is one of the largest carbon trading systems in the world. This ‘cap and trade’ market was set up in 2005 and as a result of this system, projections for emissions from sectors covered by the system will be 21% lower in 2020 than in 2005. Read more about the EU ETS here.

Climate Credit Mechanisms

Climate crediting mechanisms, like other carbon market mechanisms, enable entities, for which the cost of reducing emissions is high, to pay low-cost emitters for carbon credits that they can use towards meeting their emission-reduction obligations, or for voluntary or trading purposes. These mechanisms-e.g. the Clean Development Mechanism (CDM)-put a price on carbon, helping to internalize the environmental and social costs of carbon pollution, and permit trading, which lowers the economic cost of reducing emissions.

Mikoko Pamoja, the first community-run project of its kind in the world promotes the restoration and protection of mangrove forests for local community benefit. It is validated by Plan Vivo to generate and sell mangrove carbon credits to companies and individuals, who would like to improve their green credentials. The revenue generated from the trading of carbon credits flows into a community benefit fund, which is managed by the community led Mikoko Pamoja steering group. The fund supports local development projects in education, water and sanitation, and mangrove reforestation. Read more about this program here.

Fisheries Quotas (catch limits)

To reduce total catch of a wild fishery to a biologically and economically sustainable level, authorities can introduce quotas for catches. Ideally, the cap should be set at a level that allows optimal economic yields along with conservation considerations. Quotas are specified in tons or numbers and are broken down by species and often fishing method. Some quota systems allow quotas be sold, auctioned or distributed at no cost and then quotas could also be allowed to float in a market (tradable quotas). The revenues generated from the sale of quotas can be earmarked to support sustainable fishery or marine conservation.

Ontario, Canada provides a large amount of detail on the fishing limits, size restrictions and catch and release rules within the state. Read them here.

Water Quality Markets

A range of market mechanisms based on the "cap and trade" system that are designed to reduce the cost of water quality improvement and management. These markets provide for economically flexible measures to reduce water pollution generated by point (i.e., industrial) and non-point (i.e., agricultural) sources. Impacts of reduced water quality on biodiversity typically include excess nutrients such as nitrogen and phosphorous, water temperature (for sensitive fish habitat), and sediment loads.

To view and understand some of the Water Quality Trading activities in the United States and China, read about programs run by the World Resources Institute here.

Water Markets

Water markets create the possibility of buying and selling water access and use water resources. Trading of water rights can promote a more efficient allocation of water rights among users and increase water availability in areas of increasing water scarcity and demand For example, water markets have been used to enhance available habitat for endangered salmon species in northwestern North America.

Read about California’s Water Market here.

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Fines and Penalties

Fines and penalties are included in the OECD PINE database as part of “Fees and Charges” but are separated in this taxonomy due to their importance as conservation finance tools. Fines and penalties in conservation are charges for “unplanned” damage to nature. In comparison to offsets, license fees, and other charges, fines and penalties are used to economically punish actors who have damaged nature (illegal hunting, forestry, etc.), to discourage a repeat of harmful actions (i.e. charging economic damages following an oil spill), and to collect revenue that can then be used to remediate the impacts on nature and on the economy. Because the primary goal of fines is to discourage certain illegal behaviors, the enforcement of the fines and penalties are as important as the prices or levels set for payment. One example for conservation is the use of Natural Resource Damage Assessment (NRDA) in the USA. For example, the Deepwater Horizon oil spill in the Gulf of Mexico resulted in fines and penalties of approximately $65 billion for BP (The Guardian, 2018).

Bonus Malus

Incentive mechanism that awards biodiversity friendly behavior or decisions a bonus payment and non-friendly a malus payment. Has been applied on private land owners to encourage establishment of spatially adjacent (or for certain species spatially dispersed) protected areas to existing protected areas by awarding the land owner a bonus payment (or to pay a malus) when the conservation is adjacent to existing protected areas. Oregon's Conservation Reserve Enhancement Program (CREP), used malus payments to assist the recovery of salmon and trout species through the creation of riparian buffers along stream habitat.

Penalties and other compensation for unplanned environmental damage

Compensation paid by a company and/or individual condemned for an environmental crime and/or unintentional damages to the environment. Prevalent environmental crimes include illegal wildlife trade, illegal waste, manmade disasters and spills, etc. Charges can include fixed fines, remediation costs, and economic damages. The compensation is usually determined by the law. The amount of the compensation might be determined by an assessment of economic loss and remediation costs.

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico has been described as the worst environmental disaster in the United States, releasing about 4.9 million barrels of crude oil making it the largest marine oil spill. The area of the spill impacted approximately 8,332 species, including 1,200 fish, 200 birds, 1,400 mollusks, 1500 crustaceans, 4 sea turtles, and 29 marine mammal species.

In 2016, British Petroleum, the owner of the site, agreed to settle out of court and pay more than $20 billion USD in damages. The funds were directed to restore the local area where the spill took place. Read about the restoration efforts here.

Penalties and fines for under performance

Improved fisheries equipment and associated laws and regulations

Regulations, rules, and laws including associated fines and penalties for non-compliance are a market-based policy to incentivize fisherfolk and commercial enterprises to reduce their direct and indirect impact on the fisheries and related ecosystems by directing fishing activities towards less damaging or more sustainable equipment use. Revenue collected through penalties are less important than changing the incentive structure for the fishery actors.

There are several law outfits that help guide the creation and enforcement of legal and management frameworks needed for sustainable management of wild and farmed fish and shellfish resources. The Environmental Law Institute takes an interdisciplinary approach to understanding compliance and enforcement that combines legal and enforcement expertise with quantitative analysis of fisheries surveys and enforcement data. Read about how the Environmental Law Institute is helping to ensure compliance and the development of sustainable fisheries here.

Penalties for illegal hunting and collecting

Any penalty or fine charged for illegal hunting and collecting. Well controlled hunting and collecting of valuable species can reduce uncontrolled losses (i.e. through poaching) and generate revenue for management of natural areas if adequately priced, managed and enforced. Over-exploitation can lead to species endangerment or extinction and broader ecosystem damage. revenues from penalties and fines can be allocated to habitat and biodiversity protection.

India’s Wildlife Protection Act of 1972 is a comprehensive piece of legislation that regulates sanctuaries, national parks, and zoos among other protected locations. Its primary aim is to curb the illegal trade in wildlife and the derivative parts.

Penalties for illegal hunting and collecting in India range from 7 years imprisonment and a monetary penalty of not less than Rs 10,000 to 3 years imprisonment and a fine not less than Rs 10,000 for the killing of a Schedule 1 species. Examine the Wildlife Protection Act of 1972 here.

Environmental (and Social) Impact Assessments (EIA) are conducted to evaluate the environmental and social risks of a development project including mining, hotels, and other large infrastructure projects. A range of expenditures and investment to preserve nature are associated with the EIA process including permitting fees, expenditures for implementation of the environmental and social management plans, performance bonds, insurance products, biodiversity offsets, etc. Additionally, penalties may be directly triggered by non-compliance to the EIA and its associated management plans.

Fees, Penalties and Management Expenditures for Environmental (and Social) Impact Assessment

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Compensation and Offsets

This category includes compliance related instruments to mitigate and compensate for planned impacts on nature. Compensation includes both regulatory rules and enforcement surrounding the mitigation hierarchy as well as a range of strategies to achieve what is called “no net loss” or “net positive impact (NPI).” The approach seeks to identify key natural areas or assets prior to undertaking investments and to either avoid damaging these areas during project implementation or compensate for the unavoidable damages caused. Under best practices, compensation and offsets should be used to compensate for residual impacts following the mitigation hierarchy. Compliance markets for carbon offsets are relatively rare but options for offsets are include in the California Air Resources Board cap and trade program. Most carbon offsets are voluntary and included in a separate category.

Different types of compliance and voluntary offsets provide either in-kind compensation for planned damages through on-site restoration or purchase of offset credits, or through payment of “in lieu fee” financial compensation earmarked (in theory) for investments in nature. These instruments are relatively common in the extractive industries but also used in transportation, construction, and other actions that alter natural habitats.

An especially advanced system for compensation and offsets is the USA’s wetland banking system – generally referred to as mitigation banking. Mitigation banking is an environmental market-based approach designed to offset planned adverse impacts to wetlands, species or habitats of concern. Mitigation banks are restored or permanently protected wetlands, streams, or parcels of land. The best mitigation banks have the ability to harbor, preserve, and manage the survival of endangered and threatened species, or other forms of protected habitat such as wetlands, stream corridors and forests. Mitigation banks, once established and approved, generate credits that they sell businesses and governments obligated to mitigate damages from a planned project or infrastructure development.

A range of documents and supporting information for biodiversity offsets can be found on the legacy site for the Business and Biodiversity Offsets Program.

Compensation for planned environmental damage

Financial or other compensation paid by companies, private individuals, or governments for planned environmental damage as part of infrastructure or project development. Compensation levels and forms of compensation are usually determined by law and can be fixed amounts, calculated relative to investment or company sizes, or based on remediation costs and economic damages.

The report “Environmental Compensation: Key conditions for increased and cost effective application” outlines the current use of environmental compensation in the Nordic countries together with some thoughtful recommendations on how to increase its use in a cost efficient and equitable manner. Read the paper here.

Biodiversity offsets

Measurable conservation outcomes resulting from actions designed to compensate for significant residual biodiversity loss arising from project development after appropriate prevention and mitigation measures have been taken. Offsets can, for example, deliver biodiversity benefits (e.g. reforestation) through a transaction, where offset sellers (e.g. a conservation NGO) sell offsets to developers (e.g. a mining company) who seek to compensate the residual biodiversity loss. Offsets have been established in the agriculture, forest, construction, manufacturing and mining sectors. The aggregating of offsets under a policy framework can optimise the biodiversity benefit by increasing ecosystem connectivity, preventing future habitat fragmentation and creating large contiguous sites.

The Biodiversity Banking and Offset Scheme of New South Wales was introduced on July 11 2008, with an aim to implement market-based incentives that both encouraged conservation and discouraged impacts on biodiversity. This scheme is believed to be an appropriate mechanism to ‘counterbalance’ the impacts on biodiversity due to development. It builds on previous government initiatives designed to conserve threatened species and habitat, and ecological communities under threat.

To read more about the scheme of New South Wales, visit here.

Biobanking

Measurable conservation outcome resulting from an exchange system (or market) where offset credits can be accumulated and sold to developers to compensate for their species or habitat impacts. Credits are tradable units of exchange defined by the ecological value associated with intentional changes or management of a natural habitat. Biobanking includes habitat banking and species banking and is usually focused on endangered habitats and species. Biobanking shares certain features with tradable permit schemes whereby an objective of no net loss of biodiversity is established and provides developers with flexibility to determine either to invest in their own compensation or offset or to purchase a credit that has been developed by others (environmental banks).

To read more about the scheme of New South Wales, visit here.

Wetland Banking

Measurable conservation outcome resulting from a trading system (or market) where offset credits are tradable units of exchange defined by the ecological value associated with verifiable changes and management of a natural wetland habitat. A mitigation bank is a wetland, stream, or other aquatic resource area that has been restored and preserved for the purpose of providing compensation for expected adverse impacts to similar ecosystems nearby. The value of a bank is defined in compensatory mitigation credits that can be traded or sold. Most systems are designed for no net loss of wetlands even following residual development impacts.

Wetland Banking is very prominent in the United States, with guidance from U.S. Fish and Wildlife Service (FWS) dating back to 1983 supporting the establishment of the first banks. In 2002, the United States EPA and the Corps of Engineers announced the release of a comprehensive, interagency National Wetlands Mitigation Action Plan to further achieve the goal of no net loss of wetlands. The goals and objectives of the National Mitigation Action Plan were incorporated into the 2008 Final Compensatory Mitigation Rule. Read more about the National Wetlands Mitigation Action Plan here.

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Deposit-Refund Schemes

These schemes consist of a product charge (the deposit) and a subsidy for recycling or proper disposal (the refund), with the objective to discourage illegal or improper disposal of products and increase recycling rates. These programs can be either voluntary or legally obligatory. They are typically most associated with plastic or glass bottle recycling programs, but can include any potentially harmful product that requires specific recycling or disposal procedures. One important example for this mechanism is in reducing plastic waste entering the oceans through the establishment of a deposit-refund scheme to ensure collection of plastic bottles. Norway is an example of a country that has had recent success in implementing a deposit-refund scheme, which has led to 97% of all plastic drink bottles being recycled and less than 1% of plastic bottles ending up in the environment.

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Environmentally Motivated Subsidies

This economic instrument includes subsidies with a specific environmental remit such that the subsidies are intended to (directly or indirectly) reduce uses or practices that have a “proven and specific negative impact on the environment” or encourage activities that are positive for the environment. This can include either direct payment from government to producers or actors, tax credits or other preferential tax treatments to influence activities, or preferential financing, for example lower-interest loans, to influence good behavior. Some examples for nature include biodiversity friendly subsidies for environmentally-beneficial Best Management Practices, and tax credits for environmental programs that generate new jobs or for the donation of conservation easements. Subsidies can also be in-kind such as green government procurement.

Biodiversity friendly subsidies

Government subsidies that favor biodiversity by supporting individuals and organizations acting in biodiversity friendly ways. Subsidies can take many forms including tax relief, technical support, price support, etc. This can include biodiversity friendly businesses such as ecotourism, sustainable agriculture, non-timber forest products, reduced impact forestry, fisheries, etc.

In Hong Kong, starting from 1st January 2020, travel agencies will receive HK$100 for each customer they book on designated green tours. In addition, travel agencies can receive a government subsidy of up to HK$50,000 for organizing eco-tours. The travel agencies must observe green rules by ensuring that no plastic wares are provided to participants and encourage them to take their rubbish away after visiting green spots. Read more about the Hong Kong subsidy here.

Subsidies for organic agriculture

Government subsidies that support actors in the organic agriculture industry to encourage expansion of organic production or other sustainable agricultural system. Subsidies can take many forms including tax relief, technical support, price support and can support individuals, companies and organizations.

The German federal government subsidizes organic farming via the joint federal/regional state instrument ‘Gemeinschaftsaufgabe zur Verbesserung de Agrarstruktur und des Küstenschutzes”. Of these subsidies, 60 per cent are financed by the EU and federal government, while the remainder is financed by regional states. Read more about the subsidies that exist in Germany for organic agriculture here

Conservation Easement

A conservation easement is a restriction placed on a piece of property to protect its associated resources. The easement is voluntarily donated, can generate tax credits, or can be sold by the landowner. It limits certain types of uses or prevents development from taking place on the land in perpetuity while the land remains in private hands. Easements protect land for future generations while allowing owners to retain certain private property rights. Conservation easement are traditionally incentivized with tax breaks.

The national Conservation Easement Database (NCED) is the first effort to compile and standardize information about conservation easements throughout the United States in to a single online resource. The database works to provide a comprehensive picture of the estimated 40 million acres of conservation easement lands in the US. NCED currently contains over 130,000 easements totaling 24.7 million acres. An estimated 60% of all U.S easements are mapped, and the NCED is continuously updated as more organizations and agencies choose to share their data.

Reform Subsidies Harmful to Biodiversity

Reform, green or phase out a subsidy that directly or indirectly harms biodiversity. Subsidies can take the form of direct transfers, tax credits, and regulatory advantages that generate economic or financial benefits to the recipient. A wider definition may include implicit subsidies which are defined by the failure of internalize negative externalities to the environment (e.g. pollution). Subsidies are usually set and organized within economic sectors. Subsidies harmful to biodiversity include various measures in agriculture, fisheries, transport and infrastructure, construction, land used change, forestry and energy. Reforming or reducing these harmful subsidies can result in government savings and reduced future environmental costs.

In February 2012, a report by the Strategic Analysis Centre on public subsidies harmful to biodiversity was released in France. The report follows an important decision by the Grenelle Environment, at the initiative of conservation NGOs and the IUCN French National Committee, requesting a general audit of tax measures unfavourable to biodiversity and a sturdy on the feasibility of more favourable taxation.

This work contributes to the French National Strategy for Biodiversity 2011 – 2020, adopted in May 2011 and the European Commission’s efforts. Read the report here.

Incentives for Sustainable Business

Direct or indirect public transfer or other incentive to business for the adoption of sustainable business practices that help to improve biodiversity management. Explicit subsidies, financed either on-budget or off-budget (e.g. through a State Owned Enterprises), comprise monetary transfer -including income support (producer); market price support (consumer and producer); export subsidies (producer); public procurement above the market price; foregone taxation including reduced taxation, tax breaks, tax rebates, accelerated depreciation of assets; in-kind provision of inputs and services, including extension services; in-kind provision of infrastructure; provision of capital at concessional rates.

In the United States, several tax advantages are offered to businesses that go green. This includes tax breaks, rebates and other monetary enticements. These financial incentives are offered on both the state and federal levels. Some examples include:

Tax credits and grants of 10 and 30 percent for use of alternative energy properties
Tax credits for use of alternative vehicles that meet specific fuel-efficient standards
Bonus depreciation for qualified recycling and reuse of certain equipment or machinery

Economic Instruments

Environmentally Related Taxes

Fees and Charges

Tradable Resource Use Permits

Fines and Penalties

Compensation and Offsets

Deposit-refund Schemes

Environmentally Motivated Subsidies

Return-Based Investments

Economic Instruments

Grants and Other Transfers

Business and Markets

Public Financial Management

Risk Management

Financial Efficiency

Environmentally Related Taxes

Fees and Charges

Tradable Resource Use Permits

Fines and Penalties

Compensation and Offsets

Deposit-Refund Schemes

Environmentally Motivated Subsidies

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