Scaling Up Biodiversity Protection-Potential Role and Challenges of Markets for Biodiversity Services

Historically, it has been the responsibility of governments to ensure biodiversity protection and provision of ecosystem services. The main instruments to achieve such objectives have been:
• direct resource ownership and management by government agencies,
• public regulation of private resource use,
• technical assistance programs to encourage improved private management, and
• targeted taxes and subsidies to modify private incentives.
But in recent decades, several factors have stimulated those concerned with biodiversity conservation services to begin exploring new market-based instruments. The model of public finance for forest and biodiversity conservation is facing a crisis as the main sources of finance have stagnated, despite the recognition that much larger areas require protection. At the same time, increasing recognition of the roles of ecosystem services that underpin poverty reduction and rural development is highlighting the importance of conservation in the 90% of land outside of protected areas. It is thus urgent to find new means to finance the provision of ecosystem services, yet under current conditions private actors lack financial incentives to do so.