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4 Political economy of land-use policies
Some of the salient issues that arise in the political economy of land-use policy are similar to those characterising environmental or biodiversity policy reforms: (1) competitiveness issues, (2) distributional implications on households, (3) vested interests, and (4) political acceptability (OECD, 2017[73]). Empirical research has shown that the distribution of real or perceived costs and benefits influences policy choice and design in general and the ambition and pace of reforms in particular (OECD, 2017[73]; Zachmann, Fredriksson and Claeys, 2018[111]). In this context, analysing distributional impacts of reforms and possible mitigation or compensatory measures could speed-up the introduction of new policies or policy reforms (OECD, 2015[112]; Zachmann, Fredriksson and Claeys, 2018[111]; OECD, 2014[113]). This chapter details key distributional impacts of biodiversity reforms and of green urban policies, and solutions to adjust or avoid them. It then delves into land governance issues towards more sustainable land use.
Distributional impacts on firms and households Distributional impacts of biodiversity reforms The risk that reforms can have a negative impact on firm competitiveness is a common concern in environmental policy reforms. A country or region applying more stringent policies may affect the competitiveness of domestic firms and create an incentive to relocate in other countries or regions with less stringent regulations (the so called “pollution haven” hypothesis ) (OECD, 2017[73]). Such ‘competitiveness concerns’ may also generate a “race to the bottom”, where policy makers ease regulations in order to retain or attract firms (OECD, 2017[73]). The literature on the impact of biodiversity policy reforms on firm competitiveness is particularly limited. Most of studies on the competitiveness impact of environmental policy reforms focused on the impact of carbon pricing and find limited evidence of negative impact of more stringent emission policies on firms (OECD, 2020[30]). The OECD (2017[73]) reviewed examples of studies on competitiveness impacts of environmental policy reforms in sectors or areas related to biodiversity and found limited evidence of negative impacts. ECOTEC (2001[114]) focused on the introduction of a pesticide tax reforms in Sweden and Denmark and found no evidence of negative impacts on firms (OECD, 2017[73]). No negative competitiveness impacts were found in a study on the introduction of an Environmental User Fee System (EUFS) to address oxygen pollution in the Philippines (ECOTEC, 2001[114]; Catelo and al., 2007[115]; CBD, 2011[116]; DELTARES, n.d.[117]; GWP, n.d.[118]); as in (OECD, 2017[73])]. Similarly, studies on the impact of PES and the creation of protected areas on income have mixed results. Hegde and Bull (2011[119]) found some evidence of regressive impacts since male-headed and high-income households were being favoured as project benefit recipients of a small scale agroforestry based carbon sequestration PES project in rural Mozambique (Hegde and Bull, 2011[119]). The Mexico’s Payments for Hydrological Services Program has been found to generate small but positive poverty alleviation effects (Alix-Garcia, Sims and Yañez-Pagans, 2015[120]; Sims and Alix-Garcia, 2017[121]). Alix-
