Incentives that Promote Sustainable Production Practices
By Daniella Malin, June 4, 2008
In the course of certifying products in agriculture, forestry and tourism in countries around the world for the past few decades, staff at Rainforest Alliance started noticing a wide variety of government-led incentives for sustainable production practices, but not all of them were helpful.
Julie Baroody of Rainforest Alliance said, "We've seen some good examples of what countries can do and some examples of incentives that haven’t worked out as intended, and wanted a better understanding of how best countries and international bodies can enable certification to promote improvements in production practices, rather than impede certification activities."
The Rainforest Alliance has teamed up with the Cyrus R. Vance Center for International Justice of the New Your City Bar and the Food Lab to conduct a study of government incentives for sustainable production. The goal is an inventory of legislation that the Rainforest Alliance and others can use to promote successful incentives to governments and producers.
Around the world, collaborations between governments and private standards initiatives are on the rise in response to the growing recognition that both types of entities share many of the same public policy objectives for the environment, social justice and poverty alleviation. Governments are also increasingly recognizing the important role that business can play in sustainable management of natural resources and proposing incentives to promote sustainable practices. As these collaborations increase, so too do efforts to learn from and streamline best practices.
The International Social and Environmental Accreditation and Labeling Alliance (ISEAL) and the Trade Standards Practitioners Network (TSPN) are also collaborating on a project to map the good practice collaborations between public authorities and private standards initiative. In a project brief titled, New forms of Institutional Innovation: Linking Government Actions and Private Voluntary Standards to Achieve Public Policy Objectives, the two networks state, “drawing from the breadth and scope of these collaborations, some common themes of good practice are starting to emerge.” The goal of this project is to use a broad brush to depict the “continuum of institutional arrangements” with associated motivating factors, benefits and challenges. The project is set to culminate with a high-level conference in October, 2008.
The Rainforest Alliance-Vance Center study is focused in particular on government initiatives that promote sustainable land management through working landscapes. However,the study will dovetail with the ISEAL-TSPN initiative, as Rainforest Alliance is a member of ISEAL and conversations between the two initiatives are on-going.
Starting in Brazil as a test country, the Rainforest Alliance-Vance Center survey will be conducted by asking legal practitioners in Latin America to report on laws, regulations, governmental agencies and funding programs that encourage and facilitate the adoption of sustainable practices.
For example, some countries have started to enact payments for ecosystem services where beneficiaries contract to pay providers for such services as clean water, erosion control, biodiversity, carbon sequestration and scenic beauty.
The Rainforest Alliance survey cites two examples and asks legal practitioners if similar programs are available in their countries, how they work or if there are features of their legal system that would impede the adoption of such programs.
Article 46 of Costa Rica’s Forestry Law No. 7575 which creates Fondo Nacional de Financiamiento Forestal (FONAFIFO) which finances small and medium producers to promote environmentally responsible forestry processes, reforestation, and recovery of deforested areas. FONAFIFO’s activities are financed through, among other sources, a tax on fossil fuels, water usage fees and carbon sales.
The Payment for Hydrological Environmental Services Program was instituted by the Mexican federal government to pay forest owners for the benefits of watershed protection and aquifer recharge in areas where commercial forestry is not competitive. It seeks to complement forestry and water policy by providing economic incentives to avoid deforestation in areas where water problems are severe. Funding comes from a fee charged to federal water users.
The types of incentives that the survey aims to address include government procurement policies, government grants to support sustainable practices, banking laws or supervisory policies that encourage financing for sustainable development, conservation easements and regulatory or tax-based incentives for certification, such as permitting producers to use their certified status to establish eligibility for reduced export duties, reduced concession fees, andexemptions from audit requirements.
A team of lawyers from Shearman and Sterling LLC and Sive Paget & Riesel is conducting the study through interviews with local counsel and internet research. The Vance Center is supporting this work as a way to further its mission to advance pro-bono work in this region, expand access to justice, increase public confidence in the legal profession and develop policies that address social needs.
The survey design was completed in April. The study is expected to conclude by fall 2009 with a best practice report, tools to help countries enact successful incentives for sustainable production and recommendations for their promotion.