Integrating Nature Conservation into Intergovernmental Fiscal Transfers


Ongoing research


Nature conservation belongs to those public functions that often are characterised by a considerable lack of financial resources. Therefore, this project aims at investigating intergovernmental fiscal transfers as a potential new instrument to integrate nature conservation issues.

The concept of sustainability requires the acknowledgement and appropriate financing of ecological, economic, and social public functions at all levels of government. Whereas the significance of socio-economic functions has a comparably long tradition in federal systems, the respective consideration of ecological functions is still waiting to be fully realised. The aim of this project is to analyse the roles fiscal federalism and fiscal instruments can play in addressing ecological public functions assigned to decentralised jurisdictions in federal systems. For this purpose, an investigation of intergovernmental fiscal relations in their significance for the local level is carried out using the Federal Republic of Germany as an example. An empirical analysis of the various German fiscal equalisation laws at the local level shows that end-of-the-pipe and infrastructure-related ecological functions are already strongly integrated by way of conditional grants. However, precautionary functions such as resource, nature, and biodiversity conservation issues are still largely absent. Therefore, a comprehensive consideration of ecological public functions in Germany calls for the integration of nature conservation issues and respective indicators into the system of intergovernmental fiscal relations.

Further investigations focus on Brazil where in the 1990s, several states started to introduce the Ecological ICMS. A certain share of this value-added tax is redistributed from the state to the local level based on ecological indicators, thereby rewarding municipalities for conservation-related spillover benefits. The first European country to incorporate the consideration of Natura-2000 and other nature conservation areas into its new local finances law (in force since January 2007), taking them as indicators for financial transfer to the local level, is Portugal.

The aims of the research are

  1. to justify the need for integrating nature conservation issues into intergovernmental fiscal transfers,
  2. to give an idea about starting points for such an integration,
  3. to develop and suggest indicators for this integration,
  4. to illustrate its consequences by way of example for the fiscal equalisation law at the local level of Saxony, a federal state ("Bundesland") in Germany,
  5. to investigate the status quo, implementation and effects of ecological fiscal transfers to the local level in Brazil, examining also their transfer potential to other federal states, and
  6. to investigate the status quo, implementation and effects of the consideration of nature conservation issues in Portuguese intergovernmental fiscal transfers, especially regarding the future development and improvement of this instrument in Portugal and its potential introduction in other member states of the European Union (in cooperation with Cense, New University Lisbon).


Borie, M., Mathevet, R., Letourneau, A., Ring, I., Thompson, J.D., Marty, P. (2014): Exploring the Contribution of Fiscal Transfers to Protected Area Policy. Ecology and Society 19 (1): 9.

Irawan, S., Tacconi, L., Ring, I. (2014): Designing Intergovernmental Fiscal Transfers for Conservation: The case of REDD+ revenue distribution to local governments in Indonesia. Land Use Policy 36: 47-59

Irawan, S., Tacconi, L., Ring, I. (2013): Stakeholders’ incentives for land-use change and REDD+: The case of Indonesia. Ecological Economics 87: 75-83.

Ring, I., Mewes, M. (2013): Ausgewählte Finanzmechanismen: Zahlungen für Ökosystemdienstleistungen und ökologischer Finanzausgleich. In: Grunewald, K., Bastian, O. (Hrsg.): Ökosystemdienstleistungen – Konzept, Methoden und Fallbeispiele. Springer Spektrum, Berlin, Heidelberg, 156-166.

Schröter-Schlaack, C., Mewes, M., Ring, I. (2013): Instrumente des Biodiversitätsschutzes im Policy Mix. In: Wirth, C., Hansjürgens, B., Dormann, C., Mewes, M., Möckel, S., Pfaff, C.-T., Ring, I., Schröter-Schlaack, C. Weigelt, A., Winter, M. (2013): Inwertsetzung von Biodiversität: Wissenschaftliche Grundlagen und politische Perspektiven. Gutachten an den Deutschen Bundestag, Büro für Technikfolgen-Abschätzung (TAB). Universität Leipzig, Deutsches Zentrum für integrative Biodiversitätsforschung (iDIV), Leipzig, S. 93-147.

Schröter-Schlaack, C., Ring, I., Möckel, S., Schulz-Zunkel, C., Lienhoop, N., Klenke, R., Lenk, T. (2013): Assessment of existing and proposed policy instruments for biodiversity conservation in Germany: The role of ecological fiscal transfers. POLICYMIX Report No. 1/2013. Helmholtz Centre for Environmental Research – UFZ, Leipzig, 95 pp. Available at

Santos, R., Ring, I., Antunes, P., Clemente, P. (2012): Fiscal transfers for biodiversity conservation: the Portuguese Local Finances Law. Land use policy 29(2), 261-273.

Mumbunan, S., Ring, I., Lenk, T. (2012): Ecological fiscal transfers at the provincial level in Indonesia, UFZ Discussion Papers No. 06/2012. Helmholtz Centre for Environmental Research – UFZ, Leipzig

Ring, I. (2011): Economic Instruments for Conservation Policies in Federal Systems. UFZ Habilitation Nr. 1/2011; Wirtschaftswissenschaftliche Fakultät der Universität Leipzig, Leipzig, 219 pp.

Ring, I., May, P., Loureiro, W., Santos, R., Antunes, P., Clemente, P. (2011): Ecological fiscal transfers. In: Ring, I., Schröter-Schlaack, C. (Hg.): Instrument Mixes for Biodiversity Policies. POLICYMIX Report No. 2/2011. Helmholtz-Zentrum für Umweltforschung – UFZ, Leipzig, 98-118.

Ring, I., Drechsler, M., van Teeffelen, A.J., Irawan, S., Venter, O. (2010): Biodiversity conservation and climate mitigation: what role can economic instruments play? Current Opinion in Environmental Sustainability 2, 50-58

Ring, I. (2008): Compensating Municipalities for Protected Areas. Fiscal Transfers for Biodiversity Conservation in Saxony, Germany. GAIA 17/S1, 143-151

Ring, I. (2008): Integrating local ecological services into intergovernmental fiscal transfers: the case of the ecological ICMS in Brazil. Land use policy 25(4), 485-497

Ring, I. (2008): Biodiversity governance: Adjusting local costs and global benefits. In: Sikor, T. (Ed.): Public and Private in Natural Resource Governance: A False Dichotomy? Earthscan, London, 107-126

Ring, I. (2007): Fiscal transfers for compensating local ecological services in Germany. In: Erickson, J.D., Messner, F., Ring, I. (Eds.): Ecological Economics of Sustainable Watershed Management. Advances in the Economics of Environmental Resources, Volume 7. Elsevier, Amsterdam, 329-346

Schröter, C., Ring, I. (2006): Internationale Erfahrungen zu ökologischem Finanzausgleich und handelbaren Zertifikaten. In: Meyer, C., Schweppe-Kraft, B. (Bearb.): Integration ökologischer Aspekte in die Finanzpolitik. BfN-Skripten 167, 64-80
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Ring, I. (2004): Naturschutz in der föderalen Aufgabenteilung: Zur Notwendigkeit einer Bundeskompetenz aus ökonomischer Perspektive. Natur und Landschaft 79(11), 494-500

Ring, I. (2002): Ecological public functions and fiscal equalisation at the local level in Germany. Ecological Economics 42, 415-427

Ring, I. (2001): Ökologische Aufgaben und ihre Berücksichtigung im kommunalen Finanzausgleich. Zeitschrift für angewandte Umweltforschung, Sonderheft 13, 236-249

Ring, I. (2001): Nachhaltige Entwicklung und kommunaler Finanzausgleich: Status quo und Entwicklungsoptionen. In: Horsch, H., Ring, I., Herzog, F. (Eds.): Nachhaltige Wasserbewirtschaftung und Landnutzung – Methoden und Instrumente der Entscheidungsfindung und -umsetzung. Metropolis, Marburg, 387-408