Policy Instruments

Policy instruments may take the shape, among others, of environmental standards and regulation, economic incentives to correct resource allocation failures, education, capacity building and awareness raising activities, monitoring mechanisms, diverse cultural arrangements and holistic approaches taking account of ILK systems.

Policy instruments are generally used in combination, as a policy mix, which “has evolved to influence the quantity and quality of biodiversity conservation and ecosystem service provision in public and private sectors” (Ring & Schröter-Schlaack, 2011). For example, economic incentives are based on laws; laws are implemented with the support of information instruments and monitoring is frequently needed to guarantee compliance with other instruments. Enforcement mechanisms are also part of the policy toolkit that ought to fit the social and cultural context. Finally, those instruments can be selected, designed, evaluated, implemented, monitored and reviewed through the use of policy support tools and methodologies.

While policy instruments are often referred to as being designed and implemented by public authorities only, IPBES explicitly embraces a broader understanding of policy instruments as well as policy support tools and methodologies: Relevant decision-making institutions include public authorities, but also groups, organizations, Indigenous people and local communities, entities and stakeholders that undertake activities relevant to biodiversity and ecosystem services.

Policy instruments can be viewed according to various contexts and worldviews. The IPBES conceptual framework highlights the central role of institutions and governance as they influence all aspects of relationships between people and nature and thus the different focus and types of values people assign to nature, nature’s contributions to people and a good quality of life. Both formal and informal institutions determine the types and levels of values and how responsibilities, costs and benefits of biodiversity conservation are distributed across society (see IPBES Del. 3d). Examples of formal institutions include laws and policies e.g., macroeconomic, fiscal, monetary or agricultural policies, markets and property rights. These are typically based on various legal instruments, treaties and customary laws. Informal institutions in turn include social norms and rules, such as those related to collective action. Lastly, organizations are also a form of institutions.

Policy instruments can be categorized into four main categories that are generally used in combination, as a policy mix. The categories, which are further described in the tabs below, are the following:

Legal and Regulatory Instruments;
Rights-Based Instruments and Customary Norms;
Economic and Financial Instruments; and
Social and Cultural Instruments.

These categories need to be considered independently or within the context of a policy mix, reflecting different circumstances and priorities across administrative scales, e.g., subnational, national and international. These different categories are applied in concordance with people’s worldviews and socio-cultural contexts. It may be noted that certain economic instruments, for instance, can contradict some rights-based approaches. The choice of policy instruments necessarily implies altering the distribution of responsibilities, costs and benefits from the conservation and use of biodiversity. Any policy instrument can only be effective if the supporting formal and informal institutions are in place.

Legal and Regulatory Instruments Implementing and articulating laws and regulations at different levels can foster positive relationships between the protection of environmental functions, the development of sustainable production systems, and peoples’ wellbeing. A balance between flexibility and legal certainty in the design and implementation of these instruments can foster socio-ecological resilience and contribute to address unexpected risks. Social and environmental standards and principles can inform substantive and procedural dimensions of policy instruments in order to continuously improve environmental performance.

Rights-Based Instruments and Customary Norms Synergizing rights and norms for the conservation and protection of systems of Mother Earth can foster complementarity with human wellbeing. International and national human rights instruments whether binding or non-binding can be creatively interpreted to fit socio-ecological systems and foster resilience. Strengthening of collective rights, customary norms and institutions of Indigenous peoples and local communities, can promote adaptive governance including the equitable and fair management of natural resources.

Economic and Financial Instruments Economic and financial instruments can be used to change people’s behaviour towards desired policy objectives. Instruments typically encompass a wide range of designs and implementation approaches. They include traditional fiscal instruments, including for example subsidies, taxes, charges and fiscal transfers. Additionally, instruments such as tradable pollution permits or tradable land development rights rely on the creation of new markets. Further instruments represent conditional and voluntary incentive schemes such as payments for ecosystem services. All these can in principle be used to correct for policy or/and market failures and reinstate full-cost pricing. They aim at reflecting social costs or benefits of the conservation and use of biodiversity and ecosystem services of a public good nature (“getting the price right”). Financial instruments, in contrast, are often extra-budgetary and can be financed from domestic sources or foreign aid, external borrowing, debt for nature swaps, etc. It should be noted that economic instruments do not necessarily imply that commodification of environmental functions is promoted. Generally, they are meant to change behavior of individuals (e.g., consumers and producers) and public actors (e.g., local and regional governments). Examples of Instruments:

Non-Timber Forest Products Exchange Programme (NTFP-EP)
Payments for Ecosystem Services (PES)

Social and Cultural Instruments Social and cultural instruments include instruments with an emphasis on the intertwined relationships between ecosystems and sociocultural dynamics for the management of natural and cultural assets, including for instance heritage sites such as sacred sites, peace parks, Indigenous and community conserved areas. Depending on the instrument, the applicable territorial jurisdiction varies (e.g. bi-national, national and local). Social instruments are beyond economic and financial instruments. Awareness based voluntary interventions may include for example (i) information-related instruments like environmental education, eco-labelling, pollutant release and transfer registers, biodiversity registers, awareness raising (including award schemes), information dissemination, community right to know; (ii) self-regulation, voluntary agreements, corporate social responsibility, buyer-supplier relations; (iii) participation (social pressure, worshipping etc. and (iv) enhancement of collective action of Indigenous peoples, local communities, and local resource users, etc.