Biodiversity monitoring has a vital measurement problem despite the understanding that stocktaking of biodiversity variables plays a critical part in conservation. A common approach in monitoring is using a basket of metrics as it is impossible to measure all the biodiversity variables in an ecosystem.

It goes without saying that the first step of indicator development is developing a clear and agreeable understanding of ecosystem types and subtypes for indicators. IUCN Global Ecosystem Typology is an agreed ecological classification framework that is recommended for renowned environmental accounting standards such as the System of Environmental-Economic Accounting (SEEA EA). It is a product of critical review and input from leading ecosystem scientists in the world. Furthermore, World Conservation Congress Marseille 2020, voted for a global ecosystem typology under resolution 061.

The IUCN Global Ecosystem typology is a classification system based on hierarchy. At the upper level, it defines ecosystems based on their convergent ecological functions but distinguishes ecosystems with contrasting assemblages in the lower levels.

Payment for Ecosystem Services (PES) is a market-based mechanism aimed at incentivizing the conservation and sustainable management of natural resources by compensating individuals or communities for the valuable services provided by ecosystems. The concept recognizes that ecosystems offer a wide range of benefits, known as ecosystem services, such as clean water provision, carbon sequestration, biodiversity conservation, and soil erosion prevention, among others.

Payment for Ecosystem Services (PES) has emerged as a compelling approach to address the complex challenges of environmental degradation and sustainable development. As human activities continue to exert unprecedented pressure on the Earth’s ecosystems, the need for innovative conservation strategies has become increasingly urgent. In this context, PES offers a promising framework for incentivizing the conservation and sustainable management of natural resources by recognizing and valuing the services provided by ecosystems. The concept of ecosystem services, encompassing the myriad benefits that ecosystems provide to society, underscores the fundamental importance of conserving and restoring natural habitats. From clean water provision and climate regulation to pollination and cultural heritage, ecosystem services are essential for human well-being, economic prosperity, and ecological resilience. However, the degradation of ecosystems, driven by factors such as deforestation, habitat destruction, and pollution, threatens the delivery of these vital services. In response to these challenges, PES has emerged as a market-based mechanism that seeks to internalize the externalities associated with ecosystem services and align economic incentives with environmental goals. By compensating landowners and resource managers for the services provided by ecosystems, PES aims to promote conservation, restoration, and sustainable management practices. This approach not only helps to conserve biodiversity and protect critical habitats but also supports livelihoods, enhances resilience to climate change, and fosters social equity. The theoretical foundations of PES draw upon insights from economics, environmental science, and governance theory, highlighting the importance of property rights, market failures, and institutional arrangements in shaping human behavior and resource management outcomes. Implementation mechanisms of PES involve stakeholder engagement, payment structures, monitoring systems, and institutional integration to ensure transparency, accountability, and effectiveness. While PES holds promise as a tool for promoting environmental conservation and sustainable development, it also faces challenges related to additionality, equity, transaction costs, and social acceptance. Addressing these challenges requires adaptive management, stakeholder collaboration, and policy innovation to maximize the effectiveness and equity of PES initiatives.

Brief overview of environmental externalities

Environmental externalities refer to the unintended and often unaccounted-for impacts that economic activities have on the environment, affecting parties not directly involved in those activities. These externalities can be positive or negative and encompass a wide range of environmental issues. The concept is rooted in market failures, as the costs or benefits associated with these external effects are not reflected in the prices of goods and services in the marketplace.

Key Characteristics:

1. Positive and Negative Externalities: Positive externalities result in beneficial effects on the environment, such as ecosystem restoration or biodiversity conservation. Negative externalities, on the other hand, lead to harmful consequences, including pollution, deforestation, and habitat destruction.
2. Scope of Impact: Environmental externalities can affect air, water, soil, biodiversity, and ecosystems. The scale of impact can range from local to global, with some externalities contributing to broader issues like climate change.
3. Market Failures: Traditional markets often fail to account for the environmental costs associated with production and As a result, economic agents may not fully consider the long-term consequences of their actions, leading to inefficient resource allocation.
4. Interconnectedness: Environmental externalities often manifest in interconnected and complex ways. For instance, air pollution can contribute to climate change, affecting weather patterns and ecosystems globally.

Examples of Environmental Externalities:

1. Air Pollution: Emissions from industries and vehicles contribute to air pollution, affecting human health, degrading air quality, and contributing to climate
2. Water Pollution: Agricultural runoff, industrial discharges, and improper waste disposal can contaminate water sources, leading to aquatic ecosystem degradation and risks to human health.
3. Deforestation: Clearing land for agriculture and logging can result in loss of biodiversity, disrupt ecosystems, and contribute to carbon emissions.
4. Greenhouse Gas Emissions: Burning fossil fuels releases greenhouse gases, contributing to global warming and climate change.

Mitigation Strategies:

1. Regulation and Policy: Governments implement environmental regulations, such as emission standards and pollution controls, to address externalities and promote sustainable practices.
2. Economic Instruments: Taxes, subsidies, and cap-and-trade systems provide economic incentives for businesses and individuals to internalize environmental costs and adopt greener practices.
3. Technological Innovation: Advances in technology, such as renewable energy sources and eco-friendly production methods, play a crucial role in mitigating environmental

Importance of addressing environmental externalities

Addressing environmental externalities is of paramount importance for several reasons, reflecting the interconnectedness between human activities, the economy, and the health of the planet. The significance of addressing environmental externalities can be understood through the following key points:

1. Ecosystem Health and Biodiversity:

Preservation of Ecosystems: Environmental externalities often contribute to habitat destruction, deforestation, and pollution, leading to the degradation of ecosystems. Addressing externalities is crucial for preserving biodiversity and maintaining the health of natural systems.

2. Human Health and Well-being:

Air and Water Quality: Pollution resulting from environmental externalities, such as air and water pollution, directly impacts human health. Addressing these externalities is essential for ensuring clean air and water, reducing the prevalence of respiratory diseases and waterborne illnesses.

3. Long-term Economic Sustainability:

Resource Conservation: Many environmental externalities involve the inefficient use of natural resources. Addressing these externalities promotes sustainable resource management, ensuring the availability of essential resources for future generations.

4. Climate Change Mitigation:

Reducing Greenhouse Gas Emissions: Environmental externalities, particularly those related to the burning of fossil fuels, contribute significantly to climate change. Addressing these externalities is critical for mitigating global warming and its associated impacts, such as rising sea levels, extreme weather events, and disruptions to ecosystems.

5. Social Equity and Justice:

Disproportionate Impact: Environmental externalities often impact marginalized communities and vulnerable populations more severely. Addressing externalities is essential for promoting environmental justice and ensuring that the burdens and benefits of environmental actions are equitably distributed.

6. Regulatory Compliance and Legal Frameworks:

Ensuring Compliance: Addressing environmental externalities is essential for complying with environmental regulations and legal frameworks. Businesses and individuals must internalize the costs associated with their activities to avoid legal repercussions and contribute to a sustainable future.

7. Innovation and Technological Advancement:

Stimulating Green Technologies: The need to address environmental externalities drives innovation in green technologies and sustainable practices. This, in turn, fosters economic growth, job creation, and the development of industries focused on environmental sustainability.

8. Global Cooperation and Diplomacy:

International Collaboration: Many environmental challenges, such as air and water pollution or climate change, require global cooperation. Addressing environmental externalities fosters international collaboration and diplomatic efforts to find collective solutions to shared environmental problems.

9. Public Awareness and Education:

Informed Decision-Making: Addressing environmental externalities involves raising public awareness and promoting environmental education. Informed individuals are more likely to make sustainable choices and support policies that contribute to environmental well-being.

Thesis statement outlining the scope and purpose of the paper.

This research paper seeks to comprehensively explore the concept of environmental externalities, investigating their diverse manifestations, economic implications, and the imperative of addressing them. Through an examination of case studies, economic analyses, and policy responses, the paper aims to underscore the significance of mitigating environmental externalities for the preservation of ecosystems, human health, economic sustainability, and the collective well-being of current and future generations.

Globally, the agriculture, forestry and land use change is a major net emitter of greenhouse gases. It is estimated that the sector contributes 23% of GHG. As such, forest conservation and avoided deforestation are attractive alternatives for climate change mitigation. Against this background, the UNFCCC introduced REDD+ (reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries). The Warsaw Framework provide the basic rules for REDD+ including safegurds for people and the environment, national forest monitoring systems, forest reference levels, MRVs, etc.

In theory, REDD+ is of benefit to both developed and developing countries as developed countries can reduce emissions at low cost by supporting REDD+ while developing countries receive financial incentives to reduce deforestation.

Critism of REDD+

Weakened rules

There is concerned that some of the requirements for environmental safeguards, benefit sharing process,a nd participatory approaches are not stringent enough.

Over issuance of credits

There are some reports of REDD+ projects overissuing carbon credits. An important aspect of REDD+ project is calculating the baseline which climate action can be measured.

However, most standards publicly list project information and have space for public comments. More importantly, baselines are reassessed during validation. Recently, Verra revised its baseline assessment period from 10 years to 6 years.

Furthermore, standard agencies often engage group of experts in developing standards and reviewing projects.

Concluding remarks

Scrutiny of carbon projects help to improve transparency and the effectiveness of offset projects.

Tropical forests are reducing. The fact is that projects similar to REDD+ do assist in reducing the rates of deforestation. A number of studies support this claim Malan et al (2024), Everland (2023) and Ropsind et al (2019)

More reading

https://cbmjournal.biomedcentral.com/articles/10.1186/s13021-023-00228-y

The first step for an effective benefit-sharing mechanism in the CBT is to have an identifiable membership for the CBTO. It is common for CBTO members to register with a CBTO and pay predetermined membership fees. Additionally, communities should be able to identify their stakeholders with clarity

2. Well-established institutions: Members of any community have different backgrounds and interests. It is important that they have a legitimate local community institution that is respected by the community and provides an interface for engaging with other stakeholders such as investors and local governments.  A CBTO can establish committees to deal with various issues that are pertinent to its operations.
3. Well defined property rights. The CBTO resource inventory should be documented and the members made aware of their ownership and power rights.
4. Local communities must get genuine benefits from community-based tourism activities in their localities. A sharing procedure must be defined and communicated to all stakeholders beforehand. Table 6.1 below shows how a CBTO can share benefits that accrue from hiking activities

Table 6.1: A simple benefit-sharing mechanism for a CBTO

A CBTO charges KES 1000 for a hiking experience to a local hill. The benefits are shared as follows:

• KES 300 provides local motorbike transport and water for the hiker (30%)
• KES 200 is a guiding fee for the guide (20%)
• KES 150 is given to the owner of the land where the hill is located (15%)
• KES 100 is sent to the tour operator or the referral who brought the client (10%)
• KES 250 is retained by the CBTO for administration (licenses and office space) and the rest is retained as profit that will be shared as a dividend at the end of the year.

5. If communities are denied fair and transparent benefit-sharing procedures, it is likely that conflicts will arise in the CBT.
6. Assist the community in improving their access to basic services (such as water, sanitation, education and hygiene). This can be achieved by the group undertaking activities related to corporate social responsibility.
7. Establish schemes to assist the vulnerable members of the community (e.g. disabled, orphans, widows)
8. Encourage basic training of business operations to CBT staff and owners e.g. in aspects of cash flow, budget surplus/deficit, and retaining part of the profits to reinvest

1. Develop a social policy with the community members and proactively communicate and update periodically. A CBT social policy should:

• Respect local cultures by ensuring that the activities undertaken by the CBT should not undermine their culture or the cultures of neighboring communities
• Promote gender equality by practicing equity in the distribution of roles and resources to women, youth, and men.
• Uphold dignity and respect i.e., apart from local cultures, the CBT has to make efforts to respect and treat with dignity the cultures of its visitors.
• Support child protection whereby the CBTO ensures that the social policy protects children from negative aspects of sex tourism and child labor.

2. Promote Collaboration and networking. This is consistent with principle 2 for CBT. Collaboration and networking ensure that the CBTO understands stakeholders’ need for social well-being.
3. Implement efficient marketing strategies: A CBTO needs to be market-efficient to be able to sustain its social activities. Information on effective marketing methods can be obtained from the SUS-TOUR Marketing Guidelines[1] and the SUS-TOUR DIY toolkit on Marketing.[2]
4. Promote the conservation of natural resources. Conservation of community resources needs to be one of the main characteristics of sustainable tourism development. In this subject area, conservation refers to the preservation of the culture of a local community, the heritage in the area, the environment, and nature that represents the identity of the tourist place. Ventures that promote conservation promote the social well-being of the community. More on conservation is available in principle 8.
5. Develop a code of conduct for the CBTO members. The code of conduct refers to rules that guide the social norms and practices of groups and organizations. It assists in ensuring that members understand the dos and don’ts of an organization.
6. Develop a code of conduct for tourists. CBTOS needs to have a code of conduct as visitors may have cultures and beliefs that are dissimilar to them. Each CBTO should develop a code of conduct and communicate it to the tourists during the initial briefing.
7. Develop a code of conduct for the other business activities including food and beverage, guides, accommodation, etc. A code of conduct is an important tool in improving the quality of products and experiences offered by CBT.
8. Discourage the abuse of drugs among the community members
9. Disseminate information on the contemporary social issues in the area such as HIV and AIDs, tribalism, and corruption as they relate to the CBTO.

[1] Georgina, Guillen-Hanson, Leisinger Matthias, and Deng Yang. 2017. “SUS-TOUR Marketing Guideline.” http://www.sustourkenya.org/index.php/2016-07-01-15-04-15/downloads/send/3-downloads/8-marketing-guideline.

[2]  Yang, Deng. 2018. “SUS-TOUR CBT DIY Toolkit- Module 3: Communication and Marketing.”

The bullet points below illustrate how biodiversity is shifting. Links in the bullet points redirect to articles across websites proving the statements.

• Livestock accounts for 62% of global mammalian biomass while humans account for 34%. Only 4% of the biomass represents wildlife species. The estimate is a startling reminder of the reduced biodiversity.
• Poultry accounts for 61% of the world’s birds’ biomass. Some estimates claim that poultry biomass could be as much as 80%. In contrast, 4-10% of bird species are farmed as poultry.
• Over 12% of the known species are faced with the danger of extinction. Over 30% of land and 75% of freshwater resources are utilized for food production.
• Lost over a third of tigers and elephant populations since counting began.
• Further, these wild areas are concentrated in about 20 countries. The wilderness areas are often the homes of indigenous communities.
• Wildlife populations have reduced by 68% since 1970. In Latin America and the Caribbean, the drop has been over 94%.
• Over a million species are in danger of extinction
• One of every 3 freshwater species is faced with extinction threat.
• IUCN has listed 77 animals as extinct in the wild. The organization’s Red List identifies 41,000 species as threatened, which represents 28% of the total species researchers assess.
• 3 million species in the Amazon are threatened by human-caused ecosystem collapse.
• Introduced species have significant negative impacts on the environment. The number of alien species has increased as humans move across habitats. Alien species could have dramatic impacts on the species richness of native habitats.