Started mid 2009, the assessment led by Robert Watson and Steve Albon, it is the first analysis of the UK’s natural environment in terms of the benefits it provides to society and continuing economic prosperity.

The key findings of the assessment were made available on June 2nd (pdf here) while specific technical chapters will be made available through June.

Until then the 87 pages of the synthesis report should keep you busy! Below are some of the main points raised by the assessment:

The authors mention the need to increase food production while at the same time decreasing its negative effects on ecosystem services. In fact, the idea is to harness ecosystem services to actually increase production. This “sustainable intensification” is what the French call “ecological intensification”.

Reversing declines in ecosystem services will require the adoption of more resilient ways of managing ecosystems, and a better balance between production and other ecosystem services – one of the major challenges is to increase food production, but with a smaller environmental footprint through sustainable intensification.

Not surprisingly, the assessment also raises the issue of ecosystem services being undervalued in decision making and the suggested solution is to take into account the monetary and non monetary values of ecosystems in every-day decision making.

Contemporary economic and participatory techniques allow us to take into account the monetary and non-monetary values of a wide range of ecosystem services.

The assessment use six contrasting scenarios to explore alternative futures for ecosystem services in the UK.

It is also worth noticing that the assessment’s conceptual framework seems to focus on the “goods” that depend (at least in part) on ecosystem services as the linkage between ecosystems and human well-being. A more in-depth look into the figure below shows that in fact, the authors have grouped under the label “goods” all use and non-use, material and non-material benefits from ecosystems that have value for people.

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.

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.

This implies strategic thinking that goes beyond project per project assessments of like-for-like replacement of lost habitats and functions. Cumulative effects must be taken into account in allowing and offsetting impacts and both zoning (= planning) and nature conservation laws must therefore accommodate future projects and future offsets.

This is made easier by the fact that the growing focus on nature conservation outside protected areas has pushed nature conservation objectives deeper into zoning laws (e.g. Natura 2000 in Europe).

Habitat banking policies are particularly adapted to this requirement, in that they can be established before impacts as part of zoning plans. In Europe, the German Eingriffsregelung policy is a good example of this where municipalities must plan areas for offsetting future urban development included in their zoning and urban planning.

In France, the recent launch of zoning requirements concerning ecological connectivities (known as Trames Verte et Bleue) has raised the question of using offset actions to enhance or restore ecological connectivities. This can be interpreted either as:

You might find the first interpretation scandalous or be proud of the second but what would the wildlife say?

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:

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.

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:

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:

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

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!

One of the key points discussed in the article is that of setting clear goals for biodiversity: “desired outcomes” that must be set at the catchment or landscape level (or whichever administrative or management unit is appropriate). Establishing such goals would be a requirement for a duty of care policy but would of course be very useful to a whole suite of existing policies (including those based on the evaluation of impacts on biodiversity).

The authors also argue that this desired outcome should probably be based on the maintenance of the ecosystem or landscape level processes that underpin biodiversity (as well as ecosystem services that are important to humans). However, they recognise that many of these are little known or hard to measure and that appropriate indicators might often rest in identifiable biodiversity components (species presence or abundance, habitat acreage…).

The framework conforms with much of the current dialogue concerning biodiversity conservation across landscapes, in seeking to articulate quantifiable and ‘‘biophysically meaningful’’ desired outcomes for biodiversity that incorporate measures of size, configuration and connectivity of habitats, as well as vegetation condition measures that collectively act as surrogates for ecological processes.

This dialogue is very much at the centre of any policy aimed at stopping biodiversity loss or improving its status, be it stewardship, duty of care, offset schemes or top-down command-and-control rules and regulations.

The two main points made by the memorandum are that:

Concerning the latter, they cite the TEEB initiative and the EU’s objective of halting biodiversity loss by 2010 (two months left…), and argue that broadening the policy mix to include market-based tools would serve this goal. One of the steps they detail concerns the establishment of markets for conservation-related services in general and of conservation banks in particular. They call these “specialized providers”.

Whoever impedes on the living conditions of plants and animals should have the opportunity to acquire newly developed natural sites from others rather than being obliged to reconstruct them themselves.

Specialised providers will be able to offer newly developed nature and ecological services more cost-effectively and at a higher quality than can the individual originator of ecological damage. Improving nature and establishing biodiversity would thus change from being an annoying obligation to a source of income.

The authors refer to the US mitigation banking as an example of such schemes and mention the fact that although the requirement for compensation of biodiversity impacts exists in German law (Ökokonten and Kompensationsflächenpools translated as “ecological accounts” and “compensatory area pools”), private land owners are not allowed to act as conservation banks.

Anyway, looks like biobanking might just be on its way to Deutschland…

Among these, TEEB and the CBD’s 2010 targets were well represented. The director general of UNEP, Dr. Steiner, made the opening statement and was active in communicating on the “Blue Carbon” initiative.

Blue carbon? As Pavan Sukhdev, director of TEEB, told the participants in a plenary : all colours of carbon are important: black, brown, green or blue…… from power generation, transport, deforestation and changes in ocean chemistry. But his most insistent words were on the urgency of stopping the rise in sea surface temperatures if we wished to save the world’s coral reefs.

Pavan Sukhdev insists: Coral reefs are especially vulnerable to global warming

The Economist magazine offers a brief synthesis of some of the central take-home messages from the conference. You can access it on their website.

A new label was suggested for global warming and associated global change in a comment by Bubbles on the New Scientist magazine’s blog: Global Procrastination…

Sounds good. Of course, other commentators suggested alternative labels such as “Global Scaremongering”.