Summary of key points

1. JNCC supports the use of market-based instruments (MBIs) as part of the overall policy package required to protect the natural environment and sustain the European Union (EU) economy.  MBIs that place an appropriate and transparent price on environmental externalities should be a fundamental element of Member State and EU policies in order to correct market failures, and to encourage sustainable behaviour.
2. MBIs are cost-effective, and support the EU’s growth, competitiveness and employment goals under the Lisbon Strategy. MBIs are also desirable on social equity grounds.
3. MBIs need to be designed carefully and combined with other instruments to achieve environmental objectives.
4. The use of MBIs in the EU must be undertaken in the context of the aims of the Habitats Directive, and other relevant Directives.
5. We support the Commission facilitating information exchange through an EU Forum on MBIs to allow Member States to learn from best practice.
6. We encourage the Commission to support future work on MBIs with appropriate assessments of environmental values.
7. We strongly support the reform of perverse, environmentally-harmful subsidies in the EU.
8. We encourage the Commission to investigate the potential for and limitations of introducing systems of biodiversity offsets and habitat banking at EU level. We encourage the Commission to explore opportunities for greater use of payments for ecosystem services at the national, EU and international scales.
9. The use of a cross-border emissions trading scheme to address air pollution would require a full assessment of the implications for biodiversity, including long-range effects.