Cost Sharing for Biodiversity Conservation: A Conceptual Framework

„h Many resource users undertake actions that conserve biodiversity. If, however, there were public demand for more conservation than would be provided voluntarily by the private sector alone, there are two broad principles for determining who should bear the costs ¡X ¡¥impacter pays¡¦ or ¡¥beneficiary pays¡¦. The two principles have different efficiency and distributional effects. „h A fundamental step in determining which cost sharing principle to apply is the clarification of the rights and responsibilities implied by existing property rights. This is an important issue that requires further work. „h If property rights effectively require resource users to meet an environmental standard, resource users who fail to achieve this may be considered to generate external costs. In these circumstances, on efficiency grounds, the impacter pays principle should generally be adopted to internalise external costs. This effectively amounts to enforcement of an individual¡¦s existing legal responsibilities. However, if the costs of implementing the impacter pays principle were to outweigh its efficiency advantages, the beneficiary pays principle may be considered.