Actionable Innovative Financial and Economic Instruments for Biodiversity Conservation in India

One of the key elements of the Strategic Plan on Biodiversity Conservation and the Aichi Targets adopted by the Conference of Parties in the Tenth Session at Aichi Nagoya has been the issue of resource mobilization for Biodiversity Conservation. Resource mobilization for biodiversity conservation calls for deployment of economic instruments that mobilize resources and /or secure corrective behavior that facilitates biodiversity conservation in mega-diversity countries such as India. The paper looks at the concept of economic incentives and its role in biodiversity conservation through creative use of economic instruments. The backdrop chosen for the analysis is India. After delving into the different types of economic incentives in relation to their biodiversity impacts, the paper looks at how different fiscal and non fiscal instruments, including taxes, cess and related imposts can be combined with price and non price incentives and dedicated funds to create conditions for promoting conservation and sustainable utilization of biodiversity resources. The main argument advanced in this paper is that, apart from dedicated environmental fiscal and non fiscal instruments, it is possible to utilize existing fiscal instruments, including conventional direct and indirect taxes, by re-orienting their focus to securing positive biodiversity outcomes. The paper summarizes its findings by linking these concepts to valuation exercises conducted under the auspices of The Economics of Ecosystems and Biodiversity (TEEB) in India and elsewhere and the proposed novel trading instruments such as Biodiversity Off sets proposed in various economic and environmental forums.

Keywords: Biodiversity conservation, biological resources, cess, economic instruments, financing mechanisms, impost, India, indirect taxes, seigniorage, sops, tax.