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Paying for ecosystem services? Not yet, but biodiversity offsets are a start

Guest Post by Heleen van Soest

To get an idea of climate, energy and biodiversity policies in the US, Heleen van Soest visited Washington DC, in January and February 2014. She attended the 3 days conference Building Climate Solutions, and had interviews at a number of institutions and think tanks. In a couple of guest posts, she shares her thoughts.

Post 4: Paying for ecosystem services? Not yet, but biodiversity offsets are a start

What’s new on the biodiversity front? With that question in mind, I contacted Resources for the Future (RFF) and WWF, a.o.

WWF entrance, Washington DC

WWF entrance, Washington DC

Resources for the Future works on, among many other things, the valuation of natural resources and ecosystems. Basically: what does nature give us, in terms of money or otherwise? Recreation is one thing, but there are also ecosystem services like providing fresh water and pollination. Such services are often threatened in many ways, so what areas should we protect? RFF and other organisations, I was told, look at so-called biodiversity hotspots to set priorities for conservation, protection, and restoration. You could also look at ecoregions, which WWF uses to set priorities for their conservation investments. These investments are further informed by the high conservation value approach. In addition to informing investments, high conservation values can also tell you, for example, what areas you should not deforest. More generally, it can be used in land use planning. But what if conservation is not possible? If a business cannot avoid damaging some nature for their activities, can the loss of biodiversity be compensated for somewhere else? Yes, it can. De Gemeynt is working on ideas like no net loss and habitat banking, for example (see e.g. this report). A habitat bank would collect money for the damage done and invest that money in some other biodiversity compensation area. When I asked Allard Blom (WWF Washington) about these ideas, it turned out they are working on a similar method. It boiles down to a national bank for biodiversity offsets (but it should be noted: such offsets really are the final option, after everything else has been done…). A company pays the bank for the damage they have done. When multiple companies pay this one bank, a larger amount of money can be collected to protect a larger area. What area deserves priority can be determined by looking at the earlier mentioned high conservation values. Such ideas are attractive to companies as well, because their reputation is at stake. Compensating for the damage you do could help avoid some social problems.

Paying 10% more for paracetamol

So paying for the loss of biodiversity is taking shape. But what about paying for the positive things: ecosystem services or the use of biodiversity? After all, they bring us huge economic benefits (check The Economics of Ecosystems & Biodiversity). However, both RFF and WWF confirmed that paying for them is mainly an area of research; it does not (yet) exist in practice. Except for the construction of dams, maybe, where payments can protect forests that help us fight erosion. But it remains difficult, as it concerns access to the commons. Why should I, in the Netherlands, pay for some tree in the Amazon rainforest? Or why should I pay 10% more for my paracetamol? Biodiversity enables the development of drugs like paracetamol, but it is difficult to set up a system that makes people pay for that service. And we may not be willing to pay the true price. So, according to Allard, it should be made more attractive financially to ‘go green’. Making installing solar panels on your roof fiscally more attractive, for example, is a more realistic option than the still rather theoretical payment for ecosystem services.

Smithsonian Environmental Research Centre, Edgewater: “Understanding Ecosystems for a Sustainable Future”.

What else is going on at WWF? Measurements and monitoring. Together with the World Resources Institute where I was the other day, WWF monitors deforestation rates and its causes. Forests take up a part of the CO2 we put into the atmosphere, so the carbon content of these forests (‘standing carbon’) and the carbon in the soil are being measured and their changes tracked. Biodiversity is also under surveillance. In Congo, for instance, all protected areas are being inventoried: what areas still have biodiversity, and where can we do something to protect or improve it? One option is community based common resource management. That was done in Namibia, where the local population instead of government now manages wildlife. As a result, poaching ended, populations of large animals grew, and the incomes of conservancies rose (mainly from hunting and tourism). Another option is a joint venture with international tourism operators. In that case, tourist lodges either pay rent to the community or are jointly owned. The lodges could also be managed by the community itself, but these communities often lack capacity (e.g. for commercial outreach). Good resource management is not just a matter of politics, though. Technology can help as well. Computers and lasers now make it possible to get as much wood from one tree as possible, reducing the losses. WWF cooperates with industry and businesses. The work with industry resulted in labels such as FSC (timber products) and MSC (fish), and a roundtable on sustainable palm oil. It should be noted, though, that FSC is not necessarily sustainable; it is low-impact. But of course, good forest management is better than none at all. The work with businesses like Google and Coca-Cola helps to make supply chains more sustainable. Partnerships between businesses and NGOs are indeed a nice way to go forward, as the role of business for a sustainable world is growing (see also this book by Peter Senge and others: The Necessary Revolution – How Individuals and Organizations Are Working Together to Create a Sustainable World). I then asked Allard Blom about the role of other players. Governments can still help, of course, by supporting business and industry fiscally and otherwise. And scientists? They can monitor progress, develop standards, do independent assessments, and inform policy. So what is new on the biodiversity front? Ideas like ecoregions and biodiversity hotspots are not that new anymore, but a national bank for biodiversity offsets is.

Heleen van Soest is an independent researcher at HvS Earth System Research. On Twitter: @Hel1vs

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