Impasse in Biodiversity Conservation Policy: An Institutional Analysis

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Impasse in Biodiversity Conservation Policy An
Institutional Analysis

• by
• Arild Vatn
• Department of Environment and Development,
• Norwegian University of Life Sciences
• Lecture at the international workshop Making
  Sense of Ecosystem Services Ecosocial and
  Institutional Perspectives
• Koli, Finland, August 25-27

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The structure of the presentation

• What is an institutional analysis
• Why is protecting biodiversity so hard?
• From traditional conservation to payments for
  ecological services the new trend
• The Nordic experience

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1. What is an institutional analysis?

• An institutional analysis contains an evaluation
  of how (alternative) institutions
• influence distribution of access to resources
  (power and interest configurations)
• influence the form of and capacity to
  communicate, coordinate and transact
  specifically the level of transaction costs
• influence motivational structures and behavior
• In the relation to these issues Which values and
  interests are protected and which interests are
  formed plays a crucial role

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What is an institutional analysis? (cont.)Forms
of institutions

• Structural and functional aspects
• Conventions
• S Categories of objects or situations
• F Coordinating behavior (small c coordination)
• Norms
• S Behavioral prescriptions (should/should not
  etc.)
• F Creating common values/negotiating or avoiding
  conflict (large C coordination)
• Formal rules
• S Legal structures, formal controls and
  punishments
• F Regulating conflicts (large C coordination)
• Institutions influence
• Access to resources (rights)
• Levels of coordination/transaction costs
• Perception
• Rationality and preferences

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What is an institutional analysis?
(cont.)Institutions as rationality contexts

• Following from the above The institutional
  structure influences the logic (or meaning) of
  contexts or situations
• Plural rationality
• Individual rationality I rationality
• What is best for the individual egoism
• Fostered by structures like markets and firms
• Social rationality We rationality
• What is best for the group may imply personal
  sacrifice. Solidarity vs. altruism
• How the group is defined is crucial here.
  Solidarity turning into us and them

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2. Why is biodiversity protection so hard?

• The international society has produced a series
  of conventions and treaties concerning
  biodiversity conservation, e.g.,
• The Ramsar Convention (1975)
• Bonn Convention (1979)
• Bern Convention (1979)
• The Convention on Biodiversity (1992)
• The Cartagena protocol (2000)
• Losses of species in the order of 100 1000
  times the normal
• The EU (and Norway) has decided to halt
  biodiversity loss by 2010. That is by no way
  going to happen

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2. Why is biodiversity protection so hard?
(cont.)What is causing the losses?

• A difficult problem
• Institutions ? the interest structures vs.
• the characteristics of the natural system
  dynamics
• Interest structure
• Institutional separation Individualized rights ?
  atomizing
• Free rider problems
• The characteristics of the problem
• Interrelated resources/interconnected processes
• Complexity The resilience irreversibility
  threshold nexus
• Demands integrative institutions

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2. Why is biodiversity protection so hard?
(cont.)What is causing the losses? (cont.)

• No single explanation. Complementary and
  competing explanations
• A difficult problem!
• Undefined or unclear property rights
• Population growth
• Economic growth
• High alternative value
• Pollution
• Weak protection policies
• Lacking capacity/willingness to pay
• Weak ability to find solutions that make it
  possible to combine use and protection better

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2. Why is biodiversity protection so hard?
(cont.)From state regulations to market
solutions?

• The dominant solution has been state regulations
  mainly in the form of reserves and national
  parks. Some counter forces
• General reduced legitimacy for state action -
  neo-liberalism
• Increased conflicts over set aside protection
• Reduced funding
• Many of the easy objects are already protected
• We observe a move towards Payments for
  Environmental Services (PES). From state to
  market? The present ideology Subsidies are bad
  while payments are good.
• The tendency to shift from one Solution to
  another Solution the ideology of the time
  and lack of ability to adapt to local conditions

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3. Payments for ecological services (PES)

• Some e.g., Engel et al. (2008) see PES as a
  Coasean solution i.e., as a transaction between
  individual parties. It is a market solution to
  the problem of externalities
• As such it is opposed to the standard Pigovian
  solution where the state secures internalization
  through taxes (negative) or subsidies (positive)
  external effects
• Wide variety of applications Local biological
  and water resources to global climate change
  (e.g., the CDM)
• It is said to be more efficient as
• Buyers and sellers directly decide the price
  (defines the value)
• One avoids state bureaucracies
• Attracts more resources

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3. Payments for ecological services (PES)
(cont.)Criteria for PES

• Along the above Wunder (2005) sets up the
  following criteria for a PES system
• a voluntary transaction
• a well-defined environmental service (ES)
• is being bought by a (minimum one) ES buyer
• from a (minimum one) ES provider
• if and only if the ES provider secures ES
  provision (conditionality)
• What we observe is that
• the state is the dominant buyer on behalf of
  e.g., tax payers. Hence, voluntariliness is not a
  distinct feature
• The role of an intermediary between the buyer and
  provider (state, NGOs). Not well-defined goods
  and actors involved
• So it seems not to be Coase vs. Pigou
• The distinction between MES (markets for
  environmental services) and PES, with PES as the
  broader concept including MES

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3. Payments for ecological services (PES)
(cont.)Evaluating PES Rights and transaction
costs

• Distribution of rights
• PES seems to accept the right to present
  practices. Pays for investing in protection
  activities beyond that base line. A tendency to
  favor poor rural people. Still, not necessarily a
  way to reduce poverty. Moreover, the effect of
  PES could be shifted rights/access to land
• Transaction costs (TCs)
• TCs may consume all potential gains from trade
  Wunder et al. (2008) document especially high set
  up costs
• Therefore we observe intermediaries to be the
  dominant actor not the buyers/providers
• Therefore we often see that collectives (tax
  payers) pay collectives (communities) with the
  state as intermediary. Not standard markets. Less
  efficient? No (not neces-sarily) Often rather
  low precision, but also lowered TCs

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3. Payments for ecological services (PES)
(cont.)Evaluating PES Existing institutions

• The role of existing institutional structures
• Existing institutions and values are important.
  Interferences may already be regulated by
  specific rules e.g., the Andean water vision.
  Monetary payments may in some contexts not fit at
  all
• The role of local power structures
• Those already having interests in protection
  activities are (dominantly) the ones
  participating in PES schemes

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3. Payments for ecological services (PES)
(cont.)Evaluating PES Motivational aspects

• Monetary payments may mean different things
• Measures the value of an ES
• Is an incentive to produce ES
• Is a compensation for efforts to produce ES
  (reciprocity)
• Payments not necessarily commodification. The
  format of the payment influences how it is
  perceived.
• The incentive problem ? pay for one service, you
  must pay for all?
• Introducing money may sometimes reduce effort ?
  induces a move from social to individual
  rationality
• Experience form experiments
• The Greek Case of water management the
  difference of within and between group payments
• The potential payment impasse

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4. The Nordic experience

• Results from a comparative study in Finland,
  Norway and Sweden trying to explain the variation
  in conflict level observed. Data mainly from 2004
• The study developed by a team at UMB (Ås/Norway)
  in cooperation with researchers from Joensuu and
  Umeå/Alnarp
• Sample 345 forest owners that had been
  participating in protection processes where land
  was set aside for full protection
• Data collected by master students

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4. The Nordic experience (cont.) General
attitudes towards protection
A Protection important to secure future economic
values B Unethical to make species go extinct C
All species have a right to exist D Species
extinction is not a serious environmental
problem E Protecting biodiversity is important
for future generations I Important to protect
biological diversity in forests
1 Fully disagree 5
Fully agree
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4. The Nordic experience (cont.) Attitudes
towards other values in the forest

• Here the picture is less clear
• Traditional forest/use values (jobs, income,
  use of a renewable resource) has still a rather
  strong position
• More important for Finnish and Norwegain than
  Swedish forest owners

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4. The Nordic experience (cont.) Attitudes
towards protection of own forest
O Accept protection on own property if fully
compensted P Do not accept protection on own
property because it will reduce the value for
future generations Q Do not accept protection
because it is not a good way to utilize a
renewable resource  
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4. The Nordic experience (cont.) Attitudes
towards the protection process
Distribution in percent 1very satisfied 5very
dissatisfied

• Differences in processes
• Norway the process run by the environmental
  authorities, while in Finland and Sweden the
  forest administration dominantly made the front
  line
• More flexible solutions in Finland and Sweden

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4. The Nordic experience (cont.) What explains
the different conflict levels

• Data analyzed using multipple logit with
  attitude to protection in own forest as dependent
  variable
• Significant variables
• Country ? Norwegian forest owners lower
  acceptance
• Attitudes to protection ? The more positive to
  protection in general, the more positive to
  protection on own property
• Societal values related to use (job creation )
  ? more positive to protection in own forest!!?
• Future use ? less positive to protection in own
  forest
• Prosess ? the more negative to the process the
  more negative to protection on own poperty
• Insignificant variables Characteristics of the
  owner (age, education, sex etc.) income from the
  forest size of property perception of who owns
  the biodiversity

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4. The Nordic experience (cont.) Process
influences attitudes to protection

• 1The process resulted in much increased
  understanding
• 5 The process resulted in much reduced
  understanding

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4. The Nordic experience (cont.) Challenges

• The relationships between an acceptable process,
  a legitimate rights definition and the necessary
  capacity to protect biodiversity
• Forced vs. voluntary solution
• Conflict level ? voluntary
• Costs ? voluntary (??)
• Who pays ? The Degrader (Polluter) Pays or
  Provider gets
• Quality and quantity of the protection forced
• Is there space for combining participation and
  state forced solutions?