Editing IPCC:AR6/SRCCL/Chapter-1 (section)

=== 1.4.3 Policy instruments ===

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Policy instruments enable governance actors to respond to environmental and societal challenges through policy action. Examples of the range of policy instruments available to public policymakers are discussed below based on four categories of instruments: (i) legal and regulatory instruments, (ii) rights-based instruments and customary norms, (iii) economic and financial instruments, and (iv) social and cultural instruments.

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==== 1.4.3.1 Legal and regulatory instruments ====

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Legal and regulatory instruments deal with all aspects of intervention by public policy organisations to correct market failures, expand market reach, or intervene in socially relevant areas with inexistent markets. Such instruments can include legislation to limit the impacts of intensive land management, for example, protecting areas that are susceptible to nitrate pollution or soil erosion. Such instruments can also set standards or threshold values, for example, mandated water quality limits, organic production standards, or geographically defined regional food products. Legal and regulatory instruments may also define liability rules, for example, where environmental standards are not met, as well as establishing long-term agreements for land resource protection with land owners and land users.

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==== 1.4.3.2 Economic and financial instruments ====

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Economic (such as taxes, subsidies) and financial (weather-index insurance) instruments deal with the many ways in which public policy organisations can intervene in markets. A number of instruments are available to support climate mitigation actions including public provision, environmental regulations, creating property rights and markets (Sterner 2003 <sup>[[#fn:r896|896]]</sup> ). Market-based policies such as carbon taxes, fuel taxes, cap and trade systems or green payments have been promoted (mostly in industrial economies) to encourage markets and businesses to contribute to climate mitigation, but their effectiveness to date has not always matched expectations (Grolleau et al. 2016 <sup>[[#fn:r897|897]]</sup> ) (Section 7.4.4). Market-based instruments in ecosystem services generate both positive (incentives for conservation), but also negative environmental impacts, and also push food prices up or increase price instability (Gómez-Baggethun and Muradian 2015 <sup>[[#fn:r898|898]]</sup> ; Farley and Voinov 2016 <sup>[[#fn:r899|899]]</sup> ). Footprint labels can be an effective means of shifting consumer behaviour. However, private labels focusing on a single metric (e.g., carbon) may give misleading signals if they target a portion of the life cycle (e.g., transport) (Appleton 2009 <sup>[[#fn:r900|900]]</sup> ) or ignore other ecological indicators (water, nutrients, biodiversity) (van Noordwijk and Brussaard 2014 <sup>[[#fn:r901|901]]</sup> ).

Effective and durable, market-led responses for climate mitigation depend on business models that internalise the cost of emissions into economic calculations. Such ‘business transformation’ would itself require integrated policies and strategies that aim to account for emissions in economic activities (Biagini and Miller 2013 <sup>[[#fn:r902|902]]</sup> ; Weitzman 2014 <sup>[[#fn:r903|903]]</sup> ; Eidelwein et al. 2018 <sup>[[#fn:r904|904]]</sup> ). International initiatives such as REDD+ and agricultural commodity roundtables (beef, soybeans, palm oil, sugar) are expanding the scope of private sector participation in climate mitigation (Nepstad et al. 2013 <sup>[[#fn:r905|905]]</sup> ), but their impacts have not always been effective (Denis et al. 2014 <sup>[[#fn:r906|906]]</sup> ). Payments for environmental services (PES) defined as “voluntary transactions between service users and service providers that are conditional on agreed rules of natural resource management for generating offsite services” (Wunder 2015 <sup>[[#fn:r907|907]]</sup> ) have not been widely adopted and have not yet been demonstrated to deliver as effectively as originally hoped (Börner et al. 2017 <sup>[[#fn:r908|908]]</sup> ) (Sections 7.4 and 7.5). PES in forestry were shown to be effective only when coupled with appropriate regulatory measures (Alix-Garcia and Wolff 2014 <sup>[[#fn:r909|909]]</sup> ). Better designed and expanded PES schemes would encourage integrated soil–water–nutrient management packages (Stavi et al. 2016 <sup>[[#fn:r910|910]]</sup> ), services for pollinator protection (Nicole 2015 <sup>[[#fn:r911|911]]</sup> ), water use governance under scarcity, and engage both public and private actors (Loch et al. 2013 <sup>[[#fn:r912|912]]</sup> ). Effective PES also requires better economic metrics to account for human- directed losses in terrestrial ecosystems and to food potential, and to address market failures or externalities unaccounted for in market valuation of ecosystem services.

Resilient strategies for climate adaptation can rely on the construction of markets through social networks as in the case of livestock systems (Denis et al. 2014 <sup>[[#fn:r913|913]]</sup> ) or when market signals encourage adaptation through land markets or supply chain incentives for sustainable land management practices (Anderson et al. 2018 <sup>[[#fn:r914|914]]</sup> ). Adequate policy (through regulations, investments in research and development or support to social capabilities) can support private initiatives for effective solutions to restore degraded lands (Reed and Stringer 2015 <sup>[[#fn:r915|915]]</sup> ), or mitigate against risk and to avoid shifting risks to the public (Biagini and Miller 2013 <sup>[[#fn:r916|916]]</sup> ). Governments, private business, and community groups could also partner to develop sustainable production codes (Chartres and Noble 2015 <sup>[[#fn:r917|917]]</sup> ), and in co-managing land-based resources (Baker and Chapin 2018 <sup>[[#fn:r918|918]]</sup> ), while public-private partnerships can be effective mechanisms in deploying infrastructure to cope with climatic events (floods) and for climate-indexed insurance (Kunreuther 2015 <sup>[[#fn:r919|919]]</sup> ). Private initiatives that depend on trade for climate adaptation and mitigation require reliable trading systems that do not impede climate mitigation objectives (Elbehri et al. 2015 <sup>[[#fn:r920|920]]</sup> ; Mathews 2017 <sup>[[#fn:r921|921]]</sup> ).

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==== 1.4.3.3 Rights-based instruments and customary norms ====

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Rights-based instruments and customary norms deal with the equitable and fair management of land resources for all people (IPBES 2018a <sup>[[#fn:r922|922]]</sup> ). These instruments emphasise the rights in particular of indigenous peoples and local communities, including for example, recognition of the rights embedded in the access to, and use of, common land. Common land includes situations without legal ownership (e.g., hunter-gathering communities in South America or Africa, and bushmeat), where the legal ownership is distinct from usage rights (Mediterranean transhumance grazing systems), or mixed ownership-common grazing systems (e.g., crofting in Scotland). A lack of formal (legal) ownership has often led to the loss of access rights to land, where these rights were also not formally enshrined in law, which especially effects indigenous communities, for example, deforestation in the Amazon basin. Overcoming the constraints associated with common-pool resources (forestry, fisheries, water) are often of economic and institutional nature (Hinkel et al. 2014 <sup>[[#fn:r923|923]]</sup> ) and require tackling the absence or poor functioning of institutions and the structural constraints that they engender through access and control levers using policies and markets and other mechanisms (Schut et al. 2016 <sup>[[#fn:r924|924]]</sup> ). Other examples of rights-based instruments include the protection of heritage sites, sacred sites and peace parks (IPBES 2018a <sup>[[#fn:r925|925]]</sup> ). Rights-based instruments and customary norms are consistent with the aims of international and national human rights, and the critical issue of liability in the climate change problem.

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==== 1.4.3.4 Social and cultural norms ====

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Social and cultural instruments are concerned with the communication of knowledge about conscious consumption patterns and resource-effective ways of life through awareness raising, education and communication of the quality and the provenance of land-based products. Examples of the latter include consumption choices aided by ecolabelling (Section 1.4.3.2) and certification. Cultural indicators (such as social capital, cooperation, gender equity, women’s knowledge, socio-ecological mobility) contribute to the resilience of social-ecological systems (Sterling et al. 2017 <sup>[[#fn:r926|926]]</sup> ). Indigenous communities (such as the Inuit and Tsleil Waututh Nation in Canada) that continue to maintain traditional foods exhibit greater dietary quality and adequacy (Sheehy et al. 2015 <sup>[[#fn:r927|927]]</sup> ). Social and cultural instruments also include approaches to self-regulation and voluntary agreements, especially with respect to environmental management and land resource use. This is becoming especially irrelevant for the increasingly important domain of corporate social responsibility (Halkos and Skouloudis 2016 <sup>[[#fn:r928|928]]</sup> ).

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