Archive for the ‘Payment for Ecosystem Services’ Category

Sharing nature’s bounty or managing the services provided by natural capital?

Tuesday, August 7th, 2012

In an article in the Guardian, a UK newspaper, George Monbiot, takes a hit on ecosystem services and natural capital.

He finds the current shift in vocabulary very worrying:

  • Nature has become natural capital
  • Natural processes have become ecosystem services, as they exist only to serve us.
  • Ecosystems (hills, forests, river catchments, etc.) are now green infrastructure
  • Biodiversity and habitats are now asset classes within an ecosystem market
  • He basically argues that all the hype around these new terms and concepts carries with it the privatization of nature. He uses private ownership of land, exemplified by the enclosure of the commons, as an illustration of that privatization process.

    Enclosure Act for Shifnal, 1793

    Land ownership (…) has involved the gradual accumulation of exclusive rights, which were seized from commoners. Payments for ecosystem services extend this encroachment by appointing the landlord as the owner and instigator of the wildlife, the water flow, the carbon cycle, the natural processes that were previously deemed to belong to everyone and no one.

    His message is clearly stated, but it is not new. In fact, this has been a constant worry of all those involved in the growing incorporation of biodiversity, ecosystems, and ecosystem services into decisions affecting our environment. This includes both public bodies such as local governments involved in land planning, and private entities such as NGOs looking for extra funding or businesses trying to manage their dependency or impacts on natural resources and ecological processes.

    His critique focuses on the idea that only by giving a monetary value to the ecosystem services provided by natural capital can we internalize them into our decisions. This is one way forward, but because it assumes that natural capital is thus interchangeable with human or financial capital, it carries the risks outlined by the article. Another approach is to identify which bits of our natural capital are not exchangeable (fungible), and adopt a no net loss approach to their management.

    Managing our natural capital: No Net Loss vs. Monetization

    No net loss of natural capital has been one of the guiding principles of environmental legislation and is generally translated into regulations – such as the European Habitats Directive – than impose a sequence of steps aimed at avoiding, reducing, and offsetting impacts on natural capital.

    Concerning offsets, George Monbiot clearly does not trust environmental authorities to give priority to avoiding over reduction and offsetting of impacts.

    The government warns that these offsets should be used only to compensate for “genuinely unavoidable damage” and “must not become a licence to destroy”. But once the principle is established and the market is functioning, for how long do you reckon that line will hold? Nature, under this system, will become as fungible as everything else.

    He is probably right. Would impacts have been avoided if offsets had not been possible through this pilot scheme? Probably. Is that a good enough reason to give in? Maybe.

    George Monbiot takes the creation of the UK’s Natural Capital Commitee as a symbol of the worrying trend towards a gradual monetization, and thus privatization, of nature and natural processes. Let’s hope we can get a bit of no net loss principles in there…

    Biodiversity offsets: the most promising nature-based opportunity for UK businesses?!

    Monday, July 9th, 2012

    DEFRA (the UK government department responsible for policy and regulations on the environment, food and rural affairs) recently published a report on opportunities for UK business that value and/or protect nature’s services. What does it say?

    Well, the authors identified 12 promising opportunities for UK business to help protect and value nature. First among them is the development of biodiversity offsets and habitat banking. The report suggest they move from their current voluntary status to a mandatory regime.

    Rank 1=: BIODIVERSITY OFFSETS, INCLUDING THROUGH CONSERVATION BANKING – an opportunity to stimulate creation of new companies and new business models for existing companies to provide biodiversity offsets in the UK, by moving from the current voluntary approach to a (soft regulation) mandatory regime.

    The report mentions “soft regulation”, and describes (section 2.1, 1 of the final report) this as:

    regulation or unambiguous policy interpretation by government that clarifies that biodiversity offsets are necessary in defined circumstances, and that establishes a framework for implementation to a particular standard, including through conservation banks.

    The report also mentions the need to :

    support for a brokering system which can provide national, regional and local choice against desired spatial delivery, and can provide transparency and ease of purchase of credits and management of contracts with those providing offset sites, all of which would reduce risk

    To learn more about the business side of the report’s conclusions, dive in and read Attachment 1.

    Grasslands: are they all equivalent?

    Although the report’s overall outlook is positive, it doesn’t mean creating a market for biodiversity offsets will be straightforward. There are still many technical and institutional difficulties to overcome

  • how will the avoidance and reduction steps of the mitigation hierarchy be enforced?
  • how are “credits” constructed?
  • how will their prices be set?
  • how are liabilities defined?
  • who is in charge of controls and sanctions?
  • (…)
  • These questions are not new, but they deserve some detailed thinking, and transparent debates.

    The metrics debate: habitat for middle-aged great blue herons who don’t like shrimp?

    Sunday, April 22nd, 2012

    Whenever discussions on biodiversity offsets get technical, they either focus on legal and cost issues (if you’re paying) or on their underlying ecological reality (if you’re the regulator). Concerning the latter, the question is how you actually assess equivalence between what is lost on the one hand, and what is generated by the offset on the other? So it’s all about what and how you measure to assess those gains and losses – hence the metrics debate.

    In his blog, Morgan Robertson exposes this issue as a “paradox”.

    I’ve been thinking about this for a long time — in fact it seems like everything I’ve ever written boils down to “defining environmental commodities is HARD because ecology is complex and commodities need to be abstract”.

    The paradox is that the metrics must strike a difficult balance between their ecological precision and their ability to foster exchanges on a market for offsets.

    Too much precision (i.e. the habitat for middle-aged great blue herons who don’t like shrimp of Robertson fame since 2004) might better reflect the complexities, or rather the ecological uniqueness, of each location (and time), being assessed. It would however make any market completely useless… At the other extreme, a metric that hardly encompasses these complexities (try wetland area) would make the market highly fungible.

    This paradox should be on the mind of anyone developing metrics or methods for assessing ecological equivalence or credit-debit systems, or using them to actually design an offset scheme. The same applies to any type of ecosystem service market off course (PES or otherwise).

    It is interesting to note that in their pilot schemes for testing habitat banking, France and the United Kingdom have made very different choices in terms of metrics. More on this later…