Biodiversity is the variety of life on Earth and is one of the most important characteristics to have on Earth. Countless interactions among different organisms produce a balanced and healthy planet. Biodiversity serves as a source of many produces, including food, pharmaceutical products, and chemicals. However, through human actions such as deforestation and industrialization, Earth’s biodiversity has been decreasing dramatically.
Economic incentives have been proposed as a method of increasing biodiversity. These incentives increase the returns on actions that conserve, restore, or increase biodiversity. Examples include payments for environmental service schemes, such as conserving natural resources, certification of “biodiversity-friendly products,” and ecotourism. Incentive measures can be directed at those who benefit from biodiversity and conservation, those who increase biodiversity, and those who harm and decrease biodiversity. Positive incentives are targeted at the first two groups, while disincentives are mainly for the third group.
Mainly focused on biodiversity conservation, these incentives do not take into account the opportunity costs of conserving biodiversity. For instance, conserving biodiversity may mean preventing a road from being built. In order for the incentives to work, they need to be worth more to the people than the opportunity costs.
Sources:
https://www.iied.org/using-incentive-mechanisms-conserve-biodiversity
https://www.sciencedaily.com/releases/2017/08/170802120647.htm
https://www.oecd.org/env/resources/2089495.pdf
I think that you bring up an important point. In order to save biodiversity, there are a lot of opportunity costs (giving up a road from being built, buying food locally, higher prices in order to get the same goods). Since we live in an extremely modern and technology-driven world, finding the balance between ensuring there is biodiversity, yet allowing international trade to go on is very difficult. Almost every factory in the developing world (where a handful of them are located) have negative externalities, such as air pollution or water pollution. Finding ways to tax these companies or give them larger incentives to improve their methods of production is important and something that is often overlooked.
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