Global Mechanism: Incentives and Market based Mechanisms

Scaling-up sustainable land
Tools to enable responsible private sector
investments in land
Siv Øystese, Global Mechanism
Windhoek 24 September 2013
SLM Business Forum at UNCCD COP11
Private sector:
• a major user of and investor in land that can and
should play a key role in managing land resources
• A diverse group from a range of sectors: agriculture,
energy, forest, water, tourism, extractive industries...
How to unlock the potential for
private sector investments in
sustainable land management?
How to scale up good practices?
The science of valuing ecosystem services (ES)
can inform private sector decision making by:
– making the business case for SLM investment
options by providing the total value of land
– recognising and measuring the value of ES,
create markets for ES that gives economic
incentives for investments and adoption of SLM
• Often a mismatch between stakeholders paying the
costs of maintaining land resources (e.g. opportunity
cost of not converting a forest to cropland) and
beneficiaries (e.g. downstream water users benefiting
from the regulation of water flows).
• There are a range of incentives and market-based
mechanisms that can:
– encourage companies, communities and other
private land users to adopt and invest in SLM; and
– enable the land users to cover the cost of adopting
sustainable practices
Framework and score card tool
developed by GM and CATIE on
incentive & market based
Studies at national and sub-regional
level: including Cambodia, Cameroon,
Dominican Republic, Guatemala,
Mozambique, Panama, Tanzania,
Zambia & South East Asia
Best practices and case studies
Framework: 14 incentive and market based mechanisms
1. Public payment schemes
A. Permanent conservation easements
B. Contract farmland set-asides
C. Co finance investments
D. Payment for proven investments in SLM
E. Subsidies
F. Tax, tax breaks, environmental fees
2. Open trading under
regulatory cap or floor
G. Conservation banks
H. Tradable development rights
I. Trading of emission reductions
3. Self organized private deals
J. Purchase of development rights
K. Direct payments for ecosystem services
L. Conservation concessions
4. Eco-labeling of products and M. Marketing labels
N. Certification schemes
example 2:
Payments for ecosystem services in Tanzania
 Objective: Decrease soil erosion and overall land
degradation lowering the quality of the water of the
Ruvu River
 Coca Cola and public water
company – willing to pay
upstream farmers for
implementing SLM practices
because it reduces their
water treatment costs
 CARE responsible for training
and monitoring
example 3:
Grandis Timber teak plantation & Forest Stewardship
Council® certification
• Study on land use change in Cambodia
for Ministry of Agriculture:
1. Making the case for sustainable land
management: CBA of land use
- Ecosystem valuation methods
2. Potential for using incentive and
market based mechanisms
- FSC labelling & Grandis Timber teak
cont. example 3:
Grandis Timber teak plantation & Forest Stewardship
Council® label
10,000 ha Economic Land Concession
Degraded land (previously clear cut)
Land restoration and biodiversity area
– Reduced production (20% set aside for
biodiversity and land restoration)
– Initial accreditation (US$ 50k) + annual
audit (US$  30k)
• Benefits:
– No price premium, but access to bigger
– Investor demand - the FSC label has
attracted finance that would otherwise
not be accessible
Scaling up –
what does it take?
• Raise awareness on
• Value ecosystem services and
natural capital
• Monitor to demonstrate
returns on investment and
make the business case for
• Clear and reliable policies and
regulations establishing a level
playing field and conducive
business and investment
• Champions are needed!
Thank you!
Siv Øystese
Coordinator, Economic Instruments and Innovative Finance
Global Mechanism of the UNCCD
[email protected]
example 1:
Eco-labeling of products and services in Zambia
 COMACO: Community Markets for Conservation
 Objective: reduce poverty and hunger whilst conserving
 Poor, food insecure farmers are organized into producer
groups, trained in quality, legal and income-generating
skills focused on sustainable agriculture
 Sustainable land use practices qualify the farmer for
conservation dividends
 COMACO purchases surplus crops and resells them as
processed, value-added, organic products under the
brand IT`S WILD!

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