In 2011 the world population reached an unprecedented 7 billion; a number that is still rising. Humans depend on the environment to provide them with food, fuel, fresh water, temperate climate and a host of other benefits, i.e. the things we think of as being free. These natural processes are referred to as ‘Ecosytem Services,’ but as the demand on the environment rises due to the ever increasing population size, so does the severity of ecosystem degradation and biodiversity loss.
In 2001, the Millennium Ecosystem Assessment brought together over 1360 scientific and sociology experts from around the world, in order to assess the state of the world’s ecosystems with human well-being in mind. One of the main findings, according to the United Nations Environmental Program (UNEP), was that more than 60% of the assessed ecosystems worldwide are degraded, and that degradation has happened more rapidly over the past 50 years than in any other period of human existence. Although these results make for a bleak forecast, this study produced the first ever large scale audit of earth’s ecosystems, which highlights the services provided by ecosystems and the costs thereof to the environment [1].
In a financially driven world, measurement of these services as benefits allows for economic quantification of the value of ecosystems. According to the World Bank, the existing benefits of land use can have significant costs for downstream land users. A hypothetical scenario is where the use of fast-growing introduced species to curb land erosion caused by farming, have a negative impact on native fauna and flora or result in increased water usage that can harm downstream land users. In order to mitigate these downstream costs, and ensure sustainability of natural resources, several approaches, mostly remedial, must be adopted. One of the more promising approaches developed over the past decade is the Payment for Ecosystem Services (PES) framework, which offers monetary incentives for land-users to restore, maintain, and manage ecosystem services as well as use natural resources in a sustainable manner [2]. In general these frameworks account for market failures under two distinct categories: “Steward-Earns” schemes or “Polluter-Pays” schemes. These agendas, whether voluntary or mandated by law (e. g. carbon tax), have resulted in investments toward preserving natural resources by industries, governments, NGOs, and private land users, and are currently widely implemented worldwide.
The PES approach has become prominent in restoration of ecosystems and conservation of biodiversity, and is therefore increasingly important in environmental policy [3]. Biodiversity acts as a regulator of ecosystems (i.e. microorganisms for decomposition), as a service (pollination of crops) and as a good (conservation of wild life or maintenance of national parks)[4]. Most PES schemes focus on water quality, reforestation especially with regards to carbon sequestration, and biodiversity restoration. One of the first global PES schemes forms an important part of the international Reducing Emissions from Deforestation and Forest Degradation (REDD) agreement. The best documented example of a reforestation PES scheme was implemented in 1997 in Costa Rica. Farmers and landowners are paid to protect forests, reduce land usage and establish plantations. In return, carbon offsets can be traded as a commodity, and have indeed been sold to countries such as Norway. Although this is viewed as one of the PES success stories, several studies have shown small-scale decreases in deforestation and very limited ecological restoration [5]. Reforestation increases canopy cover which is good, but often occurs through the establishment of plantations which commonly involves fast-growing exotic species and does not necessarily translate into conservation of any aspect of native biodiversity.
Similarly, other reforestation projects, such as the Grain to Green Project (GTGP) in China, has resulted in the conversion of more than 8 million hectares of cropland into forest land that significantly decreased soil erosion, but also often made use of non-native tree species that increased water usage. The GTGP project also incurred several socio-economic disadvantages, such as an increased the gap between rich and poor (more land equals bigger income), and financial loss due to lowered grain production. Almost 20% of the reforested land has been reconverted for farming purposes [6].
In many cases, biodiversity conservation is not the main target, and in an aim to equally distribute funding for poverty alleviation, low-risk areas are often included. In many third world countries, property rights are also a major issue that confuses the eligibility of payment for ecosystem services. Furthermore, very few PES studies have been designed to truly evaluate their effectiveness compared to other conservation initiatives [7]. Together with both a socio-economic and a scientific issues that still needs to be overcome, the biggest challenge that PES projects face is a lack of universal measurement parameters with which to determine the successful outcome and sustainability of such projects. Though the PES concept works in theory and brings the natural world into an economic context, better management and understanding of such frameworks will be necessary if they are to succeed in the future.
References:
http://www.unep.org/pdf/PaymentsForEcosystemServices_en.pdf
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/EXTEEI/0,,contentMDK:21010580~menuPK:1187844~pagePK:210058~piPK:210062~theSitePK:408050~isCURL:Y,00.html
Bullock JM, Aronson J, Newton Ac, Pywell RF, Rey-Benayas JM. (2011) Restoration of ecosystem services and biodiversity: conflicts and opportunities. Trends in Ecology and Evolution, 26, 541-549
Mace GM, Norris K, Fitter AH. (2012) Biodiversity and ecosystem services: a multilayered relationship. Trends in Ecology and Evolution, 27, 19-26
Daniels AE, Bagstad K, Esposito V, Moulaert A, Rodriguez CM. (2010) Understanding the impact of Costa Rica’s PES: Are we asking the right questions? Ecological Economics, 69, 2116-2126
Chen X, Lupi F, He G, Ouyang Z, Lui J. (2009) Factors affecting land reconversion plans following a payment for ecosystem service program. Biological Conservation, 142, 1740-1747
Pattanayak SK, Wunder S, Ferraro PJ. (2010) Show me the money: Do payments supply environmental services in developing countries? Review of Environmental Economics and Policy, 4, 254-274
In 2001, the Millennium Ecosystem Assessment brought together over 1360 scientific and sociology experts from around the world, in order to assess the state of the world’s ecosystems with human well-being in mind. One of the main findings, according to the United Nations Environmental Program (UNEP), was that more than 60% of the assessed ecosystems worldwide are degraded, and that degradation has happened more rapidly over the past 50 years than in any other period of human existence. Although these results make for a bleak forecast, this study produced the first ever large scale audit of earth’s ecosystems, which highlights the services provided by ecosystems and the costs thereof to the environment [1].
In a financially driven world, measurement of these services as benefits allows for economic quantification of the value of ecosystems. According to the World Bank, the existing benefits of land use can have significant costs for downstream land users. A hypothetical scenario is where the use of fast-growing introduced species to curb land erosion caused by farming, have a negative impact on native fauna and flora or result in increased water usage that can harm downstream land users. In order to mitigate these downstream costs, and ensure sustainability of natural resources, several approaches, mostly remedial, must be adopted. One of the more promising approaches developed over the past decade is the Payment for Ecosystem Services (PES) framework, which offers monetary incentives for land-users to restore, maintain, and manage ecosystem services as well as use natural resources in a sustainable manner [2]. In general these frameworks account for market failures under two distinct categories: “Steward-Earns” schemes or “Polluter-Pays” schemes. These agendas, whether voluntary or mandated by law (e. g. carbon tax), have resulted in investments toward preserving natural resources by industries, governments, NGOs, and private land users, and are currently widely implemented worldwide.
The PES approach has become prominent in restoration of ecosystems and conservation of biodiversity, and is therefore increasingly important in environmental policy [3]. Biodiversity acts as a regulator of ecosystems (i.e. microorganisms for decomposition), as a service (pollination of crops) and as a good (conservation of wild life or maintenance of national parks)[4]. Most PES schemes focus on water quality, reforestation especially with regards to carbon sequestration, and biodiversity restoration. One of the first global PES schemes forms an important part of the international Reducing Emissions from Deforestation and Forest Degradation (REDD) agreement. The best documented example of a reforestation PES scheme was implemented in 1997 in Costa Rica. Farmers and landowners are paid to protect forests, reduce land usage and establish plantations. In return, carbon offsets can be traded as a commodity, and have indeed been sold to countries such as Norway. Although this is viewed as one of the PES success stories, several studies have shown small-scale decreases in deforestation and very limited ecological restoration [5]. Reforestation increases canopy cover which is good, but often occurs through the establishment of plantations which commonly involves fast-growing exotic species and does not necessarily translate into conservation of any aspect of native biodiversity.
Similarly, other reforestation projects, such as the Grain to Green Project (GTGP) in China, has resulted in the conversion of more than 8 million hectares of cropland into forest land that significantly decreased soil erosion, but also often made use of non-native tree species that increased water usage. The GTGP project also incurred several socio-economic disadvantages, such as an increased the gap between rich and poor (more land equals bigger income), and financial loss due to lowered grain production. Almost 20% of the reforested land has been reconverted for farming purposes [6].
In many cases, biodiversity conservation is not the main target, and in an aim to equally distribute funding for poverty alleviation, low-risk areas are often included. In many third world countries, property rights are also a major issue that confuses the eligibility of payment for ecosystem services. Furthermore, very few PES studies have been designed to truly evaluate their effectiveness compared to other conservation initiatives [7]. Together with both a socio-economic and a scientific issues that still needs to be overcome, the biggest challenge that PES projects face is a lack of universal measurement parameters with which to determine the successful outcome and sustainability of such projects. Though the PES concept works in theory and brings the natural world into an economic context, better management and understanding of such frameworks will be necessary if they are to succeed in the future.
References:
http://www.unep.org/pdf/PaymentsForEcosystemServices_en.pdf
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/EXTEEI/0,,contentMDK:21010580~menuPK:1187844~pagePK:210058~piPK:210062~theSitePK:408050~isCURL:Y,00.html
Bullock JM, Aronson J, Newton Ac, Pywell RF, Rey-Benayas JM. (2011) Restoration of ecosystem services and biodiversity: conflicts and opportunities. Trends in Ecology and Evolution, 26, 541-549
Mace GM, Norris K, Fitter AH. (2012) Biodiversity and ecosystem services: a multilayered relationship. Trends in Ecology and Evolution, 27, 19-26
Daniels AE, Bagstad K, Esposito V, Moulaert A, Rodriguez CM. (2010) Understanding the impact of Costa Rica’s PES: Are we asking the right questions? Ecological Economics, 69, 2116-2126
Chen X, Lupi F, He G, Ouyang Z, Lui J. (2009) Factors affecting land reconversion plans following a payment for ecosystem service program. Biological Conservation, 142, 1740-1747
Pattanayak SK, Wunder S, Ferraro PJ. (2010) Show me the money: Do payments supply environmental services in developing countries? Review of Environmental Economics and Policy, 4, 254-274
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