Economic Focus

Overview

The root of natural resource degradation is human behavior. To change these behaviors, integrated land use practitioners need to understand the economic incentives that lead to degradation and find ways to improve the livelihoods of the people who depend on these resources, by developing robust mechanisms that reward communities for contributing to sustainability and conservation. This can only be achieved with a strong participatory mechanism that allows stakeholder engagement in the decision-making process about incentives and their distribution.

Key Elements

Economic key elements

Best Practices

THOROUGH ASSESSMENT OF ECONOMIC AND FINANCIAL FEASIBILITY: Conduct thorough cost-benefit analyses and simulations, ideally in consultation with stakeholders, to determine if an integrated land use initiative is the best course of action, and what kinds of incentives are necessary to minimize the costs to communities.

PERFORMANCE-BASED, INCLUSIVE INCENTIVES: Stakeholders should receive incentives for participating in the program, to help minimize opportunity costs from changes in land use. Incentives should be context-dependent and developed in consultation with stakeholders.

STAKEHOLDER ENGAGEMENT: Stakeholders should be involved in designing and distributing incentives. MSPs should be as inclusive and equitable as possible to mitigate risks of elite capture.

DEVELOP A BENEFIT SHARING MECHANISM: Practitioners should work with a representative group of stakeholders to collaboratively develop an equitable benefit sharing mechanism.

STRONG PERFORMANCE MONITORING MECHANISMS: Stakeholders should be involved in monitoring the performance of the initiative to allow for timely distribution of incentives. Technology can help make this process more efficient and transparent.

Resources

Designing Benefit Sharing Arrangements: A Resource for Countries
This platform, developed by the Forest Carbon Partnership Facility (FCPF) and BioCF ISFL, helps countries design and implement benefit-sharing arrangements for results-based land use initiatives. The platform breaks the process down into steps and provides a comprehensive set of tools, resources, and case studies.
Available at: https://www.forestcarbonpartnership.org/bio-carbon/en/index.html

Designing Incentive Agreements for Conservation: An Innovative Approach
This conceptual approach to developing effective and equitable community agreements can be used for defining and organizing the information necessary for creating incentive agreements. It guides practitioners in: 1) defining, together with households, “baseline scenarios’” regarding individual households’ past, present, and future natural resource use and farming activities; 2) developing a shared vision for “acceptable changes” from these baseline scenarios; and 3) uncovering and agreeing on the “support and incentives” needed to put these changes into effect. Authors: Renaud Lapeyre, Herlina Hartanto, and Romain Pirard
Available at: https://www.cifor.org/publications/pdf_files/Books/BPirard1501.pdf