Social and economic strategies have become increasingly prominent in biodiversity planning. However, many of these approaches are new to conservationists and there is little experience in applying them to the sustainable use and conservation of biodiversity.

Economic incentives

Economic biodiversity incentives should make biodiversity an asset rather than a liability to concerned agents. They aim to increase returns on activities that conserve or restore valuable biological habitats as well as increasing the cost or lowering the return to activities that damage habitat.

Economic incentives comprise of a subset of all possible incentives for biodiversity conservation. Economic incentives tend to use market mechanisms to influence decision making. The focus is directly or indirectly on prices. There are few types of economic incentives:

• Positive incentives: any monetary (direct payments, cost sharing, tax advantages) or non monetary (such as recognition and awards for outstanding performance) inducement, which incites or motivates governments, local people, and international organisations to conserve biodiversity.
• Disincentives: any mechanism that internalises the cost of use and/or damage to biological resources in order to discourage activities that deplete biodiversity.
• Indirect incentives: any mechanism that creates or improves upon markets and price signals for biological resources encouraging the conservation and sustainable use of biodi-versity.
• Perverse incentives: an incentive which induces behaviour leading to the reduction in biodiversity. Perverse incentives are the result of government intervention failure. Most "perverse" incentives are designed to achieve other policy objectives and the perversity is thus an external factor, or an un-anticipated side effect of the policy.

Examples of economic strategies are:

• Private reserves and private land leasing
• Managing impacts of tourism on biodiversity
• Ecotourism
• Financial incentives
• Covenants
• Easements
• Management agreements

Social strategies

Two important types of social strategies are:

1. the use of indigenous knowledge; and
2. strategies for local participation.

Example: Karst Ecosystem Conservation (KEC) - Croatia

The Karst Ecosystems Conservation (KEC) project aims to protect biological and landscape diversity of karst ecosystems in Croatia, taking into account the needs of the local population. KEC is being prepared on the basis of the National Strategy and Action Plan for Biodiversity Protection, and in line with Croatia's socio-economic goals. In December 2001, the Global Environment Facility (GEF) granted 5.07 million USD for the Karst Ecosystems Conservation project, while the contribution of the Republic of Croatia corresponded to an equivalent of 3.30 million USD.

Project preparation was completed by the end of 2000. The project will be implemented over five years, with grant funds being available by the end of 2007. During the project preparation, basic studies on social and rural development, biodiversity, legal and institutional frameworks for the protection of biodiversity, land-use plans and natural resources management plans, and studies on the public opinion, education and public participation, have been expanded. The concept and formulation of the project have been performed through a number of workshops organised at local and national levels.

Project funds will be allocated for carrying out of the following components:

• strengthening the national capacity to ensure biodiversity conservation and support of the natural resource management;
• establishing community-based mechanisms for biodiversity conservation and sustainable resource use in the karst region; and
• project management and monitoring.

In order to provide incentives to include the local population in the biodiversity conservation, small grants will be given out in the area. Private entrepreneurs, NGOs and institutions in the region will be able to apply for 2,000, 10,000 or 25,000 USD in grants for traditional activities and crafts, which contribute to biodiversity conservation and help reduce environmental pressures.