Archive for the ‘Ecosystem services’ Category

Has Australian biobanking lost all credibility?

Friday, February 18th, 2011

Biobanking was launched in the Australian state of New South Wales (NSW) in 2009* in order to streamline the requirement for developers to avoid, reduce and offset their impacts on biodiversity.

Biobanking is inspired by similar policy instruments in the USA and elsewhere whereby developers can purchase “credits” sold by “banks” who have created “biodiversity gains” in advance of future impacts. As such, banking schemes solve some of the difficulties of offsetting impacts : taking into account delays between impact losses and offset gains and the uncertainties of actually obtaining these gains.

On the downside, conservationists often argue that such “banks” give the false impression that all impacts can be offset, thereby giving an incentive to downplay or ignore the requirement to first avoid and reduce impacts.

A major development operation in the Hunter valley of NSW resorted to biobanking to offset its impacts but it was revealed that errors where made in sizing the required offset actions. This is a serious blow to the credibility of biobanking as an instrument for mitigating development impacts on biodiversity. An article in the Sydney Morning Herald tells us that:

The 644.4 hectares of clearing requires 37,010 credits, while the 887.0 hectares of biobank site generates 9607 credits. This results in a shortfall of 27,403 credits. The results show that between 2614.5 to 4107 hectares of additional offset is required to satisfy the offset required by the biobanking assessment.

It will be interesting to see how this particular mishap will play out on the development of biobanking in NSW but also in its spread to other Australian states.

* The scheme was set up through the Threatened Species Conservation Amendment (Biodiversity Banking) Act of 2006.

Applying the mitigation hierarchy: where is the avoidance?

Wednesday, February 16th, 2011

In her 1996 paper, Barbara Bedford mentioned that wetland mitigation policies are in effect landscape-level policies for managing and distributing wetlands. In a paper* soon to be published in the journal Wetlands Ecology and Management, Shari Clare of the University of Alberta (Canada) and her co-authors make this point further by investigating if and how the mitigation sequence of avoiding, reducing and finally offsetting or compensating is applied in the province of Alberta.

Through interviews with regulators, developers and actors of the wetland mitigation hierarchy they show that offsetting is systematically used to allow developers to get approval for their project. They argue that the requirement to avoid impacts is not well enforced in part because of:

  • the lack of guidelines on how to assess avoidance measures and alternatives while, in contrast, there are established guidelines for designing and sizing offsets)
  • the lack of a province-wide vision of where development could occur and where avoidance should be sought (i.e. land-use planning does not play its role)
  • the lack of recognized economic value of wetlands (i.e. their “use-value” is not taken into consideration in assessing equivalence)
  • the belief that wetland functions are easy to (re)create or restore (i.e. “techno-arrogance”).
  • To address these issues, the authors suggest watershed-based planning where wetlands are placed within a broader landscape context and alternative land-uses prioritized. This is consistent with the conclusions of Bedford (1996) who argued that project-centred regulation (i.e. command-and-control) is insufficient to reach the goal of no-net-loss of wetland functions. Shari Clare and her co-authors mention systematic conservation planning as one methodology for developing such watershed-level approaches. More generally, having a strategic vision for managing wetland resources at the provincial (or watershed level) is necessary for regulators to be proactive in the permitting process (rather than being reactive to developer requirements) and to effectively take into account cumulative effects (or many small impacts and wetland losses).

    The authors also add that wetland functions need to be better “valued” and suggest that social and economic values be explicitly incorporated into the assessment process. They suggest using the concept of ecosystem services to this end but not necessarily through a monetary valuation exercise. This raises complex assessment and accounting issues but is probably an effective avenue for both the public and developers to acknowledge the purpose of wetland mitigation policies and the option of avoiding impacts.

    Beyond the question of avoidance measures, the paper also gives some interesting (frightening?) insight into the design and sizing of offsets:

    In Alberta, all of the government regulators we interviewed indicated that the most common metric used for comparability or equivalency between impacted and compensatory wetlands is area, with very little consideration given to wetland functions or services.

    Having shown that the mitigation policy suffers from a lack of post-approval monitoring of offsets, the authors also argue for a stronger involvement of civil society in monitoring and control of offset actions: if public authorities are unable to follow-up on their decisions, then the easy solution is to get volunteers to do the work but perhaps that is too easy?

    To conclude, the paper is a very interesting contribution to the argument that, beyond developing adequate methodologies for assessing the equivalence between losses and gains in the context of offsets, the proper implementation of the mitigation hierarchy requires public authorities to be proactive about the goals in terms of wetlands, biodiversity, ecosystems etc. Being proactive means that a strategy must be formulated to managing these “resources” beyond each individual project.

    * Reference of the paper : Clare, S., Krogman, N., Foote, L; & Lemphers, N. (2011): Where is the avoidance in the implementation of wetland law and policy? Wetlands Ecology and Management, in press.

    Oil palm expansion in Indonesia: the case for trade-off analyses of ecosystem services

    Thursday, January 13th, 2011

    In a paper published in the Proceedings of the National Academy of Sciences of the USA (PNAS), Lian Pin Koh and Jaboury Ghazoul present a modelling framework for analysing trade-offs between palm oil production, biodiversity conservation and carbon sequestration.

    Informing policy-makers about these trade-offs is essential in the face of rapidly expanding plantations and the newly established REDD mechanisms (with a possible wildlife premium as discussed here).

    Using a scenario-based approach, the authors assessed the consequences of alternative pathways of oil palm expansion on the area of primary and secondary forests, on forest biodiversity (modelled using species-area models), carbon stocks (in biomass and peat soils) and annual rice production capacity. They show that biodiversity and forest conservation are compatible with the expansion of oil palm production, through appropriate selection of planted areas.

    Our results suggest that the environmental and land-use tradeoffs associated with oil-palm expansion can be largely avoided through the implementation of a properly planned and spatially explicit development strategy

    This rosy conclusion is tempered by the acknowledgement that striking the balance between the goals of biodiversity conservation, carbon sequestration and palm oil production will require the expansion of oil palm plantations to be capped. Are we really willing to make this “sacrifice”?

    The paper by Lian Pin Koh and Jaboury Ghazoul was critiqued by Sean Sloan and Nigel Stork (also in PNAS) for ignoring several spatial processes such as the aggregation of plantations. Lian Pin Koh and Jaboury Ghazoul downplayed the critique and argued for the usefulness of their tool for broad-based analyses of the issues in Indonesia.

    Vulnerability, resilience and sustainability

    Sunday, January 2nd, 2011

    In an interesting review paper published in Global Environmental Change, Billie L. Turner outlines the separate trajectories of vulnerability and resilience research and argues that both could “join forces” and contribute to the wider goals of sustainability science. One of his main claims is that this can be done if both fields of enquiry explicitly address trade-offs in ecosystem services.

    According to Billie Turner, vulnerability has mainly focused on the effects of abrupt, external changes, on human societies and communities. In doing so, it has generated a strong literature on human adaptation and adaptive capacity (one of the three pillars of vulnerability with exposure and sensitivity). Multiple ecosystem services, and their inherent trade-offs, are however rarely addressed.

    On the contrary, while they also investigate the capacity of socio-ecological systems to self-organize and to learn and adapt, most studies of resilience have focused more strongly on the response of ecosystem-level properties to external shocks. In doing so, trade-offs between multiple ecosystem processes and functions are investigated but rarely linked to human well-fare (security, health, material well-being, social relations etc.).

    Billie Turner tells us that because decision making actually compares alternatives in terms of human well-fare (in a broad sense), the multiple pathways between it and ecosystem properties – which operate at multiple spatial scales and with multiple underlying values – must be investigated. Trade-off analysis enables us to track such pathways.

    Within sustainability science and assisted by researchers working at the interface of research-application and open to multiple explanatory perspectives, efforts have begun that point to improved integration of vulnerability and resilience research.

    He concludes that both vulnerability and resilience research would usefully contribute to furthering our understanding of trade-offs between multiple ecosystem services in a manner conductive to decision-making and sustainability.

    Merry Christmas to the new-born IPBES!

    Tuesday, December 21st, 2010

    The Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) was officially launched on December 21 by the UN General Assembly. Check out the press release on the UNEP website.

    I’ll never use anything but New Mexico piñon in my candy!

    Wednesday, December 15th, 2010

    David D. Breshears, Laura López-Hoffman and Lisa J. Graumlich published an interesting paper in the journal AMBIO on adaptation to sudden ecosystem crashes that strongly affect the delivery of ecosystem services.

    They argue that climate change might lead to increasingly frequent events of sudden, large and patchy ecosystem crashes were ecosystems undergo important changes in their structure and functioning. Because the particular timing, location and intensity of ecosystem crashes are generally unpredictable, and that ecosystems can rarely be made resistant to crashes (by definition), stakeholders will have to adapt to the consequences of ecosystem crashe if, when and where they occur.

    The authors explore how a recent drought-induced tree die-off of piñon – juniper woodlands across the SW United States has altered the capacity of these woodlands to support human well-being. They relate scientific studies of drought impacts on the ecology of these woodlands and accounts in the media of how stakeholders are being impacted and are responding to these impacts.

    The authors suggest that increasing stakeholder resilience to sudden losses of ecosystem services varies according to how strictly the particular ecosystem services are tied to particular location. They introduce the concept of “portability” to describe the degree to which an ecosystem service is tied to a particular location.

    It is crucial to understand how dependency on certain types of ecosystem services may shape stakeholder flexibility in choice of location and in turn their adaptive capacity

    As an example, piñon nuts are a portable service (with some limits) while the view from someone’s home is not – but this also depends on how flexible people are in terms of home location. Ecosystem service portability must be analyzed in conjunction with stakeholder or beneficiary’s mobility: i.e. how location-flexible rather than location-centric they are.

    A famed Albuquerque candy makers says ‘‘I’ll never use anything but New Mexico piñon in my candy. I won’t go to the Chinese pine nut or the Nevada pine nut because it isn’t right. That would be like selling Native American jewelry that was made in Hong Kong”

    The paper introduces two concepts – ecosystem service portability and stakeholder flexibility – that are interesting to consider in analyses of vulnerability to climate change in general, and of adaptation options to specific changes in ecosystem properties in particular. Stakeholder flexibility must of course be investigated in conjunction with ecosystem service substitutability: can a cactus replace your beloved piñon in your backyard?

    Ecosystem services and the Global Land Project

    Tuesday, December 14th, 2010

    The Global Land Project (GLP) is one of the main fora for ecosystem service science.

    GLP’s 2010 Open Science Conference was held in Arizona in October and several of the presentations by key-note speakers have been put on-line and several of them are particularly interesting.

  • Bob Scholes: Thinking of linking – Biodiversity, Ecosystem Services and Human Wellbeing
  • Sandra Díaz: Incorporating functional diversity and social heterogeneity in the assessment of ecosystem services
  • Steve Polasky: Ecosystem Services: Provision, Value & Policy
  • Charles Perrings: The paper from the Apache Room (on the scope and limites of monetary valuation)
  • On commodity fetishism and the itemisation of ecosystems

    Tuesday, November 2nd, 2010

    In a remarkable paper, published in 2010 in Ecological Economics*, Nicolás Kosoy and Esteve Corbera, gave an in-depth political-science look at payments for ecosystem services (PES). They suggested that their development as a solution to nature conservation’s failures amounted to “commodity fetishism” (after Karl Marx’s use of the term for describing the nascent labour relations in Capital [1867]).

    They described the process of commodification which is prevalent in PES but more generally in all the current and up-coming “markets” for biodiversity and ecosystem services, which need precise ecological “things” to trade, sell, value or offset. Accounting frameworks such as the ones we discussed in a previous post require commodification. Concerning PES, this is how they describe commodification:

    First, it involves narrowing down an ecological function to the level of an ecosystem service, hence separating the latter from the whole ecosystem. Second, it assigns a single exchange-value to this service and, third, it links ‘providers’ and ‘consumers’ of these services in market or market-like exchanges.

    Commodification leads to complex ecosystems being compartmentalised into discrete elements or items. Ecological sciences are increasingly called upon to identify, quantify and map these “items”, and hence ignore the complex interactions between and among ecosystems (which they strive to untangle!). Because tradable items must be reliably (and cheaply) measured or counted, proxys are usually needed which further reduces the ecological complexity or realism they encompass.

    Kosoy and Corbera suggest that ecosystem services be bundled up to favour the provision of multiple ecosystem services rather than aiming for the maximum production of a unique target service. This requires additional knowledge about the interactions between ecosystem services and the synergies and trade-offs between services. These lines of research are in their infancy, and remain limited by the many gaps in our understanding of real-world ecosystem dynamics, concerning the effects of management interventions or those of external drivers such as climate change. Exchanging scientific accuracy for simplification will not help in this endeavour!

    A more general solution to the issue of itemisation that bundling services would be to set safeguards on ecosystem management, whereby market-based mechanisms would be allowed to operate within certain ecological limits that guarantee a site’s “evolutionary” and “ecological” potential. This requires mixing marked-based mechanisms with standard (command-and-control) mechanisms. Would that be an on-the-ground translation of the pluralism that Kosoy and Corbera call for?

    * Kosoy, N. & Corbera E. (2010): Payments for ecosystem services as commodity fetishism. Ecological Economics 69: 1228-1236.

    When threatening an ecosystem becomes a business

    Saturday, October 30th, 2010

    In 2007, B. Kelsey Jacka, Carolyn Kouskya and Katharine R. E. Simsa published in the Proceedings of the National Academy of Sciences of the U.S.A. a paper on the design of policies of payment for ecosystem service.

    The generally accepted definition of PES was given by Sven Wunder of CIFOR:

    A payment for environmental services scheme is:
    1. a voluntary transaction in which
    2. a well defined environmental service (ES), or a form of land use likely to secure that service,
    3. is bought by at least one ES buyer
    4. from a minimum of one ES provider,
    5. if and only if the provider continues to supply that service (conditionality)

    Jacka, Kouskya and Simsa frame the role of PES in terms of internalizing environmental externalities. The classic argument goes like this:

  • The type, quality, and quantity of services provided by an ecosystem are affected by the resource use decisions of individuals and communities
  • when the benefits of an ecosystem service flow primarily to others, such as with water purification or climate stabilization, public interests and the interests of the resource manager may be misaligned
  • This basic logic may explain much of the decline of important ecosystem services as a result of human pressures
  • Recently, ‘‘payments for ecosystem services’’ (PES) has emerged as a policy solution for realigning the private and social benefits that result from decisions related to the environment.
  • They argue that a PES policy can be evaluated against three objectives: environmental effectiveness, cost effectiveness and equity. They then go on to explore how different elements of context (environmental context, socio-economic context, political context and context dynamics) can affect the outcome of a PES scheme in relation to these objectives. Among these, the following are of particular relevance.

    The greater the heterogeneity in costs (essentially opportunity costs) for those providing ecosystem services, the greater the potential for PES to deliver.
    This is the basis for using PES to alleviate poverty as the rural poor typically have the lowest opportunity costs (they often have little capital to invest in alternative land-uses). The political legitimacy of PES was born of its potential role in alleviating rural poverty. However, targeting the rural poor involves high transaction costs (with the risk of intermediaries getting involved to their own benefit) and could result in patchy environmental outcomes. To achieve, environmental effectiveness and cost-effectiveness, PES naturally tend to favour large-scale operations with large land-holders. This is a trend that leads to big business capturing the benefits of what was initially aimed at fighting poverty while preserving ecosystems. This is an important point made by Romain Pirard, Raphaël Billé and Thomas Sembrés in their recent paper on PES.

    PES can encourage innovation to lower the costs of ES provision. With this in mind, it is better to give recipients freedom to select which methods to use to achieve the environmental goals (hence the importance of selecting appropriate proxys). Pirard and his colleagues also argue that PES should aim to stimulate innovations in management practices but not for improving cost-efficiency. Rather, they argue that PES should aim to make sustainable, ES-compatible, use of ecosystems economically viable without PES support! This is because by design, PES are dependant on external payers, who generally cannot project their involvement in the long term. Such a change in goals amounts to making PES financing tools for classic rural development initiatives. They call this “asset-building” PES, in contrast to “use-restricting” PES.

    Pirard and his colleagues suggest changing Wunder’s defintion to:

    1. a voluntary transaction in order
    2. to preserve or enhance at least one well-defined environmental service, between
    3. at least one provider,
    4. who clearly cannot be subject to the polluter pays principle
    5. and at least one buyer
    6. who offers a payment over a limited period
    7. as a means for investment in locally productive and sustainable activities.

    PES can generate ransom seeking behaviour whereby land-owners can argue for increasing opportunity costs in order to increase PES payments. This point is also raised by Pirard and his colleagues who are particularly critical of corporations who hold concessions to exploit natural resources on public lands (for example for forestry) and raise the stakes for PES. Shouldn’t sustainable management be included in the concession contract? This issue questions the compatibility of PES with the more general polluter-pay principle: The very fact of threatening an ecosystem will become a business.

    Ransom-seeking behaviour poses serious risks not only to PES through the inevitable rise in opportunity costs it will drive but also to the polluter-pay principle where it is currently applied.

    Business accounting for biodiversity

    Sunday, October 24th, 2010

    In a recent report published by the OREE organisation, Joël Houdet summarizes the findings of his PhD on the incorporation of biodiversity and ecosystem services (BES) in business accounting systems. He defended his PhD on October 18th.

    BES accounting can be used for management purposes, in companies that are heavily dependent on ecosystem services or biological resources or that operate in a heavily regulated environment concerning their impacts on BES. For the general public however, it is through Corporate Social Responsibility (CSR) reporting that BES accounting systems are best known.

    CSR reporting on BES targets external stakeholders. Joël Houdet has identified three main approaches to this reporting:

  • EFA: Environmental Financial Acounting
  • DEE: Disclosure of environmental externalities
  • EEFR: Environmental Extra-Financial Reporting
  • He discusses each one of these options in the report, and in a policy-statement that will be communicated through a side-event at the CBD conference in Nagoya. We summarize it below.

    Environmental Financial Accounting
    EFA is an extension of standard financial accounting, which follows strict reporting rules (set by regulators) for reporting on a company’s financial health or performance to investors, tax authorities etc. In EFA, BES issues are included as financial provisions and liabilities related to the environment, such as provisioning funds for paying for damages and restoration actions in the case of a pollution event. Expenses and revenues related to environmental management (e.g. wastewater treatment) can also be reported through EFA.

    The main advantage of EFA for reporting on BES is that it is included in standard financial accounting standards, that has a true impact on corporate strategies and their bottom-line. Reporting of expenses and revenues or provisions and liabilities does not however give any indication of environmental performance – on the ground. Is the company’s impact on biodiversity increasing or decreasing? Which is the most cost-efficient tool or process for decreasing it?

    Disclosing environmental externalities
    Environmental externalities are the costs or losses supported by others because of the effects or impacts of a business on biodiversity or ecosystem services. These can be assessed using a variety of economic valuation methods (reviewed in TEEB).

    Using these valuations for accounting purposes has several important flaws:

  • Many of the methods used to value externalities are not reliable (e.g. contingent valuation techniques)
  • The company does not actually pay for these externalities, making their reporting symbolic
  • Disclosing environmental externalities does not allow the company’s environmental performance to be properly assessed
  • Environmental Extra-Financial Reporting
    EEFA is not linked to legal financial accounting standards but fits into corporate CSR reporting choices and strategies. It reports on a company’s management of environmental issues, including BES. A limited number of non-financial indicators are used for this, such as progress towards the implementation of environmental management systems, changes in resource-use efficiency (e.g. water consumption in production processes) or carbon emissions.

    The Global Reporting Initiative proposes a variety of environment performance indicators for CSR reporting. These include (1) the presence of remarkable species or habitats on or near business assets (e.g. factories, land holdings or concessions), (2) impacts on these biodiversity elements and (3) the company’s actions to mitigate these impacts. The main advantage of this albeit limited approach is that it truly falls within the company’s responsibilities to avoid and reduce the impacts of its activities on biodiversity and ecosystems (and offset any residual impacts).

    The main disadvantages of the EEFR approach is that

  • There are no standardized set of indicators for BES
  • In many cases, BES impacts are only assessed for new projects but not required for on-going activities
  • Supply-chain impacts on BES are rarely accounted for
  • It has no link to financial accounting and business performance (both short and long term)
  • Image found on

    After reviewing the three approaches above, Joëll Houdet came up with a Biodiversity Accountability Framework (BAF) that aims to mix the best of EFA (bottom-line effect) and EEFR (on-the-ground environmental performance).

    Biodiversity Accountability Framework
    The aim of Houdet’s BAF is to report both on a company’s financial dependence on BES and its impacts on BES. Concerning the former, he suggests that companies assess (1) the share of their revenues that stream from material flows from biodiversity and/or the appropriation of ecosystem services, (2) the financial dependence of their expenses / revenues and assets / liabilities to these flows and (3) how ES benefits are shared with other stakeholders along these biodiversity resource and ecosystem service flows.

    In reporting a company’s impacts on BES, Joël Houdet suggests that they be assessed beyond the company’s business assets to include the indirect effects of its activities (including its supply-chain) on ecosystems and the company’s actions to mitigate these effects. Such reporting would involve assessing (1) the trends in BES used or impacted by the company, (2) the impacts of its activities and threats posed by them to BES (e.g. location of business assets relative to key BES) and (3) mitigation action by the company and its suppliers (e.g. costs incurred for restoring impacted BES) and (4) the outcome of these actions (e.g. success / failure of restoration operations).

    Developing such an accounting framework requires considerable involvement by businesses (until it becomes a legal obligation that is…) as well as close collaboration between the BES science community and business. Good luck!