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The integration of economics into Pakistan's biodiversity action plan: a case study

27 / 12 / 2014, Eldis Biodiversity

An important economic reason behind the erosion of biodiversity is the underlying disparity between private versus social costs and benefits. Such divergence can arise because of intervention and market failures, which can be both biodiversity-specific and biodiversity-related and have relevance at the sector as well as project level. The term market failure also includes missing markets. This is the case with global warming, ozone layer depletion or species loss where global imperatives are not reflected in national policies. Conversely, as in the case of biopiracy (‘neem’, ‘basmati’ rice) multinationals present threats to indigenous biodiversity.

The focus of this paper is on the integration of economics into national biodiversity strategies. There are two related aspects to such integration. First, biodiversity needs to be valued explicitly to alert decision makers to the importance of sustainable resource use and to ensure that protection and conservation efforts are undertaken. Second, economic policies and measures are a key component of such efforts. Not only are they a logical consequence of valuation exercises but also their market linkages assure conservation gains in a relatively efficient manner.

An important corollary is that such policies and measures need not be restricted only to the biodiversity specific sectors, such as forestry, agriculture and rangelands. In some cases, such as in degraded water habitats (freshwater, marine), remedial measures can be sourced in sectors such as industry, households and energy, where the biodiversity linkages are indirect but equally important.

Pricing environmental goods and bads is politically unpopular because it cuts into rents enjoyed by powerful groups. Thus policy and pricing initiatives require strong institutional support. Key to this are environmental protection laws, regulatory and implementation measures, which focus both on innovation and equity. Legal and regulatory measures should define property rights and espouse participatory management principles, aimed at empowering communities. A precondition for instituting such rights and principles are consultative processes to ensure that they are enshrined adequately in the laws.
It is obvious that a holistic approach to biodiversity conservation needs to be adopted. However, there are limits to what can be attempted or accomplished, in view of the inherent complexity of the problem and the associated funding and information constraints. Essentially, a phased approach should be adopted in establishing biodiversity-economic linkages. 

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