Examples of Economic Measures for Biodiversity Conservation

Conservation of biodiversity and sustainable use through market mechanisms	Economic incentives	Payment for ecosystem services (PES)	From parties receiving the benefits of ecosystem services to parties managing resources
Taxation	Applied to actions that affect biodiversity
Subsidies	Paid for actions that contribute to the preservation of biodiversity; subsidies that have a negative effect on preservation of biodiversity are eliminated.
Trading of rights	Assigns rights for using the environment as certificates, and solves environmental problems by negotiations among parties making transactions in the market
Certification system	Certifies the raw materials from living organisms appropriately take into consideration of the ecosystem and biodiversity of the source, regional society, and the people who live there; represents a unified certification mark on products to consumers
Mitigation	In order to reduce negative effects on biodiversity caused by development projects, efforts are made to avoid portions or all of such projects, minimize project scale, and consider correction or reduction in the scope of the natural environments that incur such effects. Rather than compensation measures, priority consideration is given to avoidance and reduction of the effects themselves.
Biodiversity offset	For negative effects caused by development projects, appropriate reduction measures are implemented. By taking compensatory action to target the negative effects that remain even after such measures are taken, the quality and quantity of biodiversity as a whole is maintained in the same state. Banks that are expert organizations on restoration and creation for conservation (compensatory mitigation banks) receive fixed amounts of credit and accurately restore and create environments on behalf of parties conducting development projects. The mechanism whereby parties conducting development projects are deemed to have taken compensation measures is referred to as mitigation banking.

Source: Partial Abridgment of Annual Report on the Environment, the Sound Material-Cycle Society, and Biodiversity 2011

by region suggests that forests are typically found in South America, North America, and Europe (including Russia).

In terms of the application of these forests, about 30% of the world's forests are used as production forests, while about 20% are designated as protected areas for soil, water resources, and biodiversity. Looking at the detailed applications of forests suggests the importance of establishing governance in South American and African countries, since these countries have a significant number of forests with unknown use or no data, despite the fact that fewer forests are used for production. In contrast, forests are used primarily for production in Europe and Asia. Management approaches for the sustainable utilization of forests should be considered taking into account the many functions of forests, the economic situation of countries and regions, and climate conditions.

## b) Development of agricultural land and deforestation

The following explains the relationship between forest and agricultural land in terms of human socioeconomic activities and land use changes. Since the 1990s, the global forest area has been declining followed by an increase in the area of agricultural land, particularly in Africa, South America, and Southeast Asia (Figure 1-3-12). This suggests drastic deforestation in tropical areas, although the forest area in East Asia, Europe, and North America remained flat or slightly increased.

The agricultural land area increased in Africa, South America, and Southeast Asia, while forests decreased in these same regions, a trend which is significantly affected by regional socioeconomic conditions. In particular, forests in countries that suffered from starvation in the 1990s have been severely affected by the development of cultivated land in the last two decades. Figure 1-3-13 shows a scatterplot of the rate of forest and cultivated land alteration (1990-2009) in major countries where over 20% of the population suffered from malnutrition in the early 1990s. This figure suggests that a significant portion of countries that once suffered from starvation have experienced a reduction in forest area over the past twenty years. In particular, since many African countries demonstrate a mixed situation of an increase in the area of cultivated land and decreasing forest area, it can be estimated that deforestation due to the development of cultivated land is advancing against a backdrop of food deficiency.

Many (though not all) Asian countries in the vicinity of Japan, which have close relations with Japan and that have tropical forests, are showing an increase in the area of cultivated land and decreased forest area. In recent years, the production area of palm trees, especially in Indonesia and Malaysia is increasing due to global growth in palm oil.

Unknown application or no available data

Other (services, multiple applications, etc.)

Protection and conservation of soil, water, biodiversity

Production forests

Rate of production forests against forest area (right axis)

Source: Ministry of the Environment, FAO Global Forest Resources Assessment 2010

Figure 1-3-12 Trends in Agricultural/Forest Land Area (By Region)

Source: Ministry of the Environment, FAO statistics (1993-2008, measured every 5 years)

Figure 1-3-13 Change in Forest/Arable Area in Countries Suffered from Starvation in the 1990s (1990/2009)

Figure 1-3-14 Change of Forest Area in Countries in the Vicinity of Japan

Source: Ministry of the Environment based on FAO statistics

Figure 1-3-15 Production Amount of Palm Oil and Production Area

Source: Ministry of the Environment based on FAO statistics (March 2011)