INVALUABLE

While the use of “market-based instruments” (MBIs) for the management of biodiversity and ecosystem services (B&ES) is currently booming (Pattanayak et al., 2010), the definition and underpinning theory of these tools are matters yet to be settled. We argue that major differences exist between these MBI-labelled modes of intervention, not only in terms of which goods and services are appropriate, but also in terms of scale of application, expected effectiveness, legitimacy, extent of state intervention and possible incorporation into public policies. This situation creates difficulties in drawing lessons from academic research and identifying the scope of applicability (Muradian et al., 2010). It is therefore necessary to advance in the definition, theory and consistent classification of these instruments. Besides, policy instruments are not a-historical. On the contrary, they are legitimized through complex trajectories in which the evolution of ideas and power relations are key elements. The recent soaring importance of MBIs for biodiversity conservation and the concept itself of ecosystem services are the outcome of the interplay between influential agents, such as governments, NGOs, scholars and multilateral organizations, at global and national levels, as well as at the locations where interventions take place. Among MBIs, Payments for Ecosystem Services (PES) and biodiversity offsetting are increasingly regarded as promising tools in supporting biodiversity conservation and rural development and in involving private actors in conservation finance (Pascual and Corbera, 2011). Yet evidence regarding the design and performance of these instruments is still scarce and far from being conclusive. Recent reviews of biodiversity offsets suggest that more research is required to understand which policy and legal frameworks are supportive to develop these instruments, and highlight the need to learn from existing initiatives and pilot projects (Crowe and ten Kate, 2010). PES reviews highlight the need to explore how the potentially multiple environmental and social outcomes of these initiatives are achieved and negotiated (Pattanayak et al. 2010; Caplow et al. 2010). There is also a need to thoroughly investigate the synergies and trade-offs involved in the provision of single or “bundled” ecosystem services (Raudsepp-Hearne et al. 2010), as well as to identify the enabling institutions, the appropriate legal and contractual frameworks, and the most effective compliance mechanisms (Chevassus-au-Louis, 2009; Smith et al., 2006). These are important questions to be addressed internationally and at EU level, since the current negotiations for the reform of the Common Agricultural Policy are contemplating the possibility of incorporating PES in the near future (or to extend if agro-environmental measures initiated in 1992 classify as PES). Public policies have an essential role to play in ensuring that the main types of ecosystem values are identified and taken into account (TEEB, 2009). To this end, economic valuations may be helpful for allocating public spending for conservation and natural capital investments purposes, for building public support to PES schemes (Smith et al., 2006), for setting guidelines and regulation in offset-schemes (Ruhl et al., 2007) as well as for setting adequate taxation levels (Pearce & Seccombe-Hett, 2000), just to name a few examples. However, research so far shows that the integration of such information into policy and legal frameworks is not satisfactory in many countries (TEEB, 2009). The common assumption that available economic valuations would be integrated in policy-making and inform decisions, following the principle of “we don’t protect what we don’t value”, has fallen short of expectations. There are reasons for such an “implementation gap” that we need to better understand in order to find the right approaches.