5.4. Valuation as a prerequisite for institution building?
Economic valuation can indeed be considered as a step toward institutional innovation, such as Payment for Ecosystem Service (PES) schemes [16] and possibly of new property rights.
5.4.1. Designing policy instruments
Schemes of Payment for ecosystem services (PES) have mostly appeared in Latin America, namely Costa Rica [103],as a practical way to raise money for conservation. They have further sometimes be seen a universal policy instrument [104]. There is, indeed, no direct link between the value of ecosystems and the prices the PES mechanisms can create as an incentive for ecosystem services preservation or enhancement. As in the case of cost-efficient policies, the
price in a PES mechanism is supposed to reflect the opportunity costs of the farmers or any other social category that become beneficiary of such a mechanism in exchange of fulfilling some ecological target or implementing some constraint in terms of ecosystem use. There is a gap between the optimistic liberal approach that dominates the design of PES in the economic literature and what can be practically implemented [105]. According to their analysis, PES must, on the contrary, be analysed taking into account complexities related to uncertainty,
distributional issues, social embeddedness, and power relations in order to understand the variety of contexts and institutional settings in which PES operate. Even if the reality of PES is usually very far from an efficient market,implementing PES schemes implies to some extent
designing new property rights.
5.4.2. Designing new property rights?
Can it be both possible and appropriate to go beyond the implementation of incentives policy instruments and to use economic valuation for defining new property rights? This way was followed by several authors [106–109], who explore the potential and pitfalls of managing
biodiversity by bundling it with marketable assets like agricultural products, pharmaceutical bio-prospecting contracts or eco-tourism. New property rights potentially are expected to emerge
when benefits in appropriation are greater than transaction costs for their implementation [110]. New property rights may even create new responsibilities and appropriate incentives. However, some basic principles shape their potential. Demsetz clearly distinguishes between the
goods and the related rights that ‘‘When a transaction is concluded in the marketplace, two bundles of property rights are exchanged. A bundle of rights often attaches to a physical
commodity or service, but it is the value of the rights that determines the value of what is exchanged’’ [110]. Faced with the complexity and uncertainty attached to biodiversity and ecosystem functioning, it seems unlikely that a comprehensive system of rights should never be able to cover all issues. Even if efficiency gains can be expected from the definition of new rights expanding the social management of the benefits that humans obtain from ecosystems, some aspect of these benefits will not be supported appropriately by these mechanisms, and public
policies relying on a broader and shared understanding of issues will remain necessary.
5.4. Valuation as a prerequisite for institution building?
Economic valuation can indeed be considered as a step toward institutional innovation, such as Payment for Ecosystem Service (PES) schemes [16] and possibly of new property rights.
5.4.1. Designing policy instruments
Schemes of Payment for ecosystem services (PES) have mostly appeared in Latin America, namely Costa Rica [103],as a practical way to raise money for conservation. They have further sometimes be seen a universal policy instrument [104]. There is, indeed, no direct link between the value of ecosystems and the prices the PES mechanisms can create as an incentive for ecosystem services preservation or enhancement. As in the case of cost-efficient policies, the
price in a PES mechanism is supposed to reflect the opportunity costs of the farmers or any other social category that become beneficiary of such a mechanism in exchange of fulfilling some ecological target or implementing some constraint in terms of ecosystem use. There is a gap between the optimistic liberal approach that dominates the design of PES in the economic literature and what can be practically implemented [105]. According to their analysis, PES must, on the contrary, be analysed taking into account complexities related to uncertainty,
distributional issues, social embeddedness, and power relations in order to understand the variety of contexts and institutional settings in which PES operate. Even if the reality of PES is usually very far from an efficient market,implementing PES schemes implies to some extent
designing new property rights.
5.4.2. Designing new property rights?
Can it be both possible and appropriate to go beyond the implementation of incentives policy instruments and to use economic valuation for defining new property rights? This way was followed by several authors [106–109], who explore the potential and pitfalls of managing
biodiversity by bundling it with marketable assets like agricultural products, pharmaceutical bio-prospecting contracts or eco-tourism. New property rights potentially are expected to emerge
when benefits in appropriation are greater than transaction costs for their implementation [110]. New property rights may even create new responsibilities and appropriate incentives. However, some basic principles shape their potential. Demsetz clearly distinguishes between the
goods and the related rights that ‘‘When a transaction is concluded in the marketplace, two bundles of property rights are exchanged. A bundle of rights often attaches to a physical
commodity or service, but it is the value of the rights that determines the value of what is exchanged’’ [110]. Faced with the complexity and uncertainty attached to biodiversity and ecosystem functioning, it seems unlikely that a comprehensive system of rights should never be able to cover all issues. Even if efficiency gains can be expected from the definition of new rights expanding the social management of the benefits that humans obtain from ecosystems, some aspect of these benefits will not be supported appropriately by these mechanisms, and public
policies relying on a broader and shared understanding of issues will remain necessary.
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