Banking on Nature's Assets: How Multilateral Development Banks Can Strengthen Development by Using Ecosystem Services

Maggie Barron — Mon, 09 Nov 2009 16:57:27 -0500

Humanity depends on nature for physical and spiritual sustenance, livelihoods, and survival. Ecosystems provide numerous benefits or “ecosystem services” that underpin economic development and support human well-being. They include provisioning services such as food, freshwater, and fuel as well as an array of regulating services such as water purification, pollination, and climate regulation. Healthy ecosystems are a prerequisite to sustaining economic development and mitigating and adapting to climate change.

The UN-led Millennium Ecosystem Assessment audited the health of 24 ecosystem services globally and reported that two-thirds had been degraded over the past half century. This degradation is undermining development progress. However, by accounting for and managing ecosystem service trade-offs, multilateral development banks (MDBs) and partner countries can improve development outcomes, help address climate change, and reduce costs to people and economies. Toward this end, a growing number of tools are emerging to help factor ecosystem services into economic development decisions.

Traditionally, development planners have focused narrowly on provisioning services with a value in the market place while overlooking regulating services. Expansion of aquacultures has increased shrimp production, for example, but at the same time degraded the fish spawning ground and storm protection services provided by mangroves. Construction of dams has increased power and freshwater for irrigation while leading to downstream loss of wetlands and their purification and flood protection services.

MDBs have already begun to experiment with ecosystem service concepts in development planning and practice. This report makes the case for expanding beyond the current focus on single services and “add-on” projects. The authors recommend a more systematic approach, one that would take into account multiple ecosystem services in all development operations from the earliest stages of the planning process. Such an approach will enable MDBs to make the links among climate, environment, and development and identify risks and opportunities associated with development plans. Banking on Nature’s Assets identifies entry points for mainstreaming ecosystem services in MDBs’ core operations of strategic direction setting, advisory services, and investments and describes a portfolio of tools to help. It also presents a range of policy options that MDBs can help country partners implement to sustain critical ecosystem services.

The report concludes with five interrelated recommendations to scale up MDB and partner-country application of ecosystem services:

Incorporate into environment strategies;
Integrate into core operations;
Build capacity to implement an ecosystem services approach;
Empower local authorities, organizations, and communities; and
Strengthen policies and incentives.

Entry Points for Integrating Ecosystems Services into MDB Operations

Measuring Nature’s Benefits: A Preliminary Roadmap for Improving Ecosystem Service Indicators

Tim Herzog — Fri, 18 Sep 2009 14:35:00 -0400

Ecosystem services are the benefits that people derive from nature. Some benefits, such as crops, fish, and freshwater (provisioning services), are tangible. Others such as pollination, erosion regulation, climate regulation (regulating services) and aesthetic and spiritual fulfillment (cultural services) are less tangible. All, however, directly or indirectly underpin human economies and livelihoods.

Despite their critical importance, the capacity of ecosystems to provide these myriad services are being degraded at an alarming rate. In 2005 the Millennium Ecosystem Assessment (MA), a four-year study of the state of the world’s ecosystems involving more than 1,300 experts from 95 countries, reported that over 60 percent of ecosystem services were already degraded. This negative trend, they concluded, was set to continue at an accelerating pace over the next half century.

The ecosystem services conceptual framework provided by the MA has proven effective for communicating how ecosystems underlie human well-being. Early efforts to apply ecosystem services concepts and information have strengthened both public and private sector development strategies and improved environmental outcomes.

However, mainstreaming ecosystem services concepts more broadly will require information designed for policy-makers, including data, decision support tools, and “indicators”—information that condenses complexity to a manageable level and informs decisions and actions (Bossel, 1999). Knowing where indicators and data are already sufficient to inform policy-makers’ understanding of ecosystem services, and where they fall short, will help inform such mainstreaming efforts in international and national arenas. This paper compiles and assesses current ecosystems services indicators in order to inform and advance such efforts.

Key Findings

The analysis found significant limitations in the capacity of the indicators assessed to support policy-makers’ use of ecosystem service concepts, specifically:

The ability of indicators to convey information about ecosystem services is low overall, although it varies widely among services;
The indicators available for most ecosystem services are not comprehensive and are often inadequate to characterize the diversity and complexity of the benefits they provide;
Data are often insufficient to support the use of these indicators; and
Indicators for regulating and cultural services lag behind provisioning services in each of the limitations identified above.

WRI Publications Feed: Ecosystem Services Indicators

Banking on Nature's Assets: How Multilateral Development Banks Can Strengthen Development by Using Ecosystem Services

Measuring Nature’s Benefits: A Preliminary Roadmap for Improving Ecosystem Service Indicators

Key Findings