Environmental fiscal reform (EFR) refers to a range of taxation and pricing measures which can raise fiscal revenues while furthering environmental goals. EFR can play an important role in pursuing the MDGs of “halving absolute poverty” and of “ reversing the loss of environmental resources by the year 2015”. This document outlines the key issues to be faced when designing environmental fiscal reform (EFR).

This paper aims to present the fundamental ideas underpinning resource rent and to give some idea of its economic importance. However, the concept of resource rent is not easy to explain simply because it depends on an understanding of some key economic concepts (such as opportunity costs and normal profits). Due to its central role in fisheries exploitation, all fisheries managers need to have some familiarity with these terms. It should be an important part of policy development to ensure a minimum training in economics for fisheries managers.

Assuming that fisheries can be managed in such a way as to generate their implicit wealth (resource rents), this paper discusses what might be done with such rents. Decisions on such usage must in practice emerge from the political process. It is not the intention of this paper to suggest that there is a right set of decisions that must be made, still less to tell countries what to do, but rather to raise issues to take into consideration.

Implementing fishery fiscal reform may be a difficult exercise. One of the reasons why economists have often rejected tax-based approaches to fisheries management is because of the apparent political difficulties that they would entail despite their undoubted attraction from a purely economic viewpoint (Munro, 1993). There are increasing signs however that countries, particularly developing ones, are managing to overcome these difficulties (e.g. Vetemaa et al, 2002). This paper considers some of the political economy aspects to fiscal reform in fisheries.

This paper is a submission from IUCN, PROFOR, and the World Bank in follow up to discussions held at the third meeting of the United Nations Forum on Forests (UNFF) on the relationship between sustainable forest management (SFM) and ecosystem approaches (EsA) - as applied to
forests. It is also a response to a decision at the 6th Conference of the Parties of the Convention on Biological Diversity (CBD) seeking clarification of the relations between the two concepts. The paper aims to:

Unmanaged and poorly managed fisheries are overexploited to the point where all resource rent has been dissipated. Since resource rent represents the wealth that the fishery can generate, and hence indicates the potential of the fishery to contribute to economic and social goals, there is a need for improved management with resource rent specifically targeted. Management authorities are faced with two broad problems. First, they must develop management instruments that enable resource rents to be generated on a sustainable basis.