If a multilateral environmental agreement (MEA) requires member countries to meet specific environmental targets or to fund the provision of a global public good, then environmental indicators become necessary. An environmental indicator measures environmental quality, whether as a measure of the physical quantity itself or of the monetary impact of that quantity. For agriculture, in particular, indicators generally include measures of land-use changes between agriculture and other land uses, both on-farm and off-farm impacts of soil erosion, total agricultural water use, nutrient balances, pesticide use, and water quality (Organization for Economic Cooperation and Development [OECD], 2000). Obviously, some decision on the choice of indicators is necessary if one is to make inter-regional comparisons of the environmental benefits from the MEA.

The OECD has developed a "core set . . . of commonly agreed indicators for OECD countries and for international use, . . ." (OECD, 2001). According to the OECD, the purpose for developing this set of core indicators is to:

• Allow countries to track environmental progress.

• Ensure integration of environmental concerns into sectoral policies (e.g., agriculture).

• Ensure integration of environmental concerns into economic policies.

• Measure environmental performance.

• Determine whether countries are on track towards sustainable development.

Among the criteria for selecting a core set of indicators are that the indicators are policy relevant, analytically sound, measurable, and easily interpreted (OECD, 2000).

This set of OECD indicators could be used to assess whether or not countries are meeting environmental commitments specified under an MEA. Environmental indicators can also be used to determine a

15 Of course, environmental indicators can be important in the domestic policy setting as well. For example, in the United States, the Environmental Benefits Index (EBI) uses environmental indicators to help prioritize land for inclusion into the Conservation Reserve Program.

country's funding obligations to an ME A, as well as disbursements from an MEA to member countries, say, for conservation efforts. With respect to the agricultural sector, the OECD is seeking to develop indicators to better integrate environmental and economic policies with the goal of sustainable agriculture in mind. While developing such indicators may be a relatively easy task for an MEA seeking to address some fairly concrete externality, such as loss of forest cover, as pointed out earlier, it is not as easy in the case of conserving agricultural genetic resources.

- From an economic standpoint, it seems reasonable to tie a country's contribution to the benefit-sharing fund to the benefits it receives from its use of PGRFAs. Unfortunately, as discussed in this chapter, these benefits cannot be quantified, except perhaps in limited case studies. Hence, an alternative can be to appeal to indicators that take equity and development considerations into account in determining contributions. Furthermore, to ease the process of multilateral negotiations, these indicators must be available for all (or almost all) the countries participating in the negotiations. Among indicators satisfying these conditions, the VAO and AGDP appear to be the most applicable. Both are progressive in the sense countries with higher values pay more. A potential advantage of VAO over AGDP in multilateral negotiations is that the former is explicitly focused on agricultural interests. Use of the latter in the negotiations is appropriate if the benefits of PGRFAs to consumers are to be accounted for in setting country contributions to the Fund. Furthermore, the latter is somewhat more equitable (in terms of income distribution) than VAO. For all practical purposes, given that these two indicators are highly correlated, the choice between the two will not have much impact on the relative size of each country's contributions. Indicators such as the value of commercial seed production focus better on stakeholders most dependent on access to PGRFAs, but in addition to data limitations, their downside is that they ignore downstream benefits to farmers, food processors, and consumers.

It is worth mentioning in closing that no indicator exists that will be more than an imprecise guide for how to distribute the cost of any benefit sharing fund in an economically efficient fashion. Obviously, the ideal indicator relies on fully observable environmental and economic benefits, and thus increases the possibilities for efficient and equitable distribution of any and all benefit sharing funds. However, at least having some reasonable indicators available as a guide may reduce the potential for the funds being distributed through an opaque process.

Finally, as is discussed in the "Components of value" section, how the funds are to be distributed has some bearing on what is included in the valuation of the PGRFAs. However, some proponents of benefit-sharing assert that since PGRFA suppliers are due compensation in return for utilization of their genetic resources by others, they should not be restricted to what use they put the compensation to. In fact, it is the political considerations regarding this view that are the primary reason why multilateral negotiations have not simultaneously discussed contributions to, and distributions from, the fund. However, data limitations aside, the often-blurred distinction between users and suppliers of PGRFAs, as well as other complications, make explicit compensation impossible. Hence, unrestricted distribution from a benefit-sharing fund would appear to be a simple income transfer. To help ensure that a benefit-sharing fund is maintainable over time, the major contributors must perceive that the funds are being redistributed in a constructive fashion. Earmarking the fund for conservation and sustainable use of PGRFAs or related food security activities will help the fund distinguish itself from other forms of development aid.

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