WRI Stories Feed: Ecosystem Services Tools and Indicators

Demystifying the Role of Ecosystem Services in Impact Assessments

Florence Landsberg — Tue, 04 Jun 2013 12:59:06 -0400

Ensuring that development projects benefit both people and the planet is becoming more and more of a priority.

Environmental and social impact assessments (ESIA) have been in use for decades to consider the effects of projects such as…

Brazilian Business and Ecosystem Services Partnership Launches

Craig Hanson — Fri, 18 May 2012 11:57:32 -0400

Last week, experts from the World Resources Institute (WRI) and our colleagues from Brazilian businesses and organizations gathered at the Botanical Garden in Rio de Janeiro. While the scenery was beautiful, none of us were there to smell the…

Eco-Compensation in China: Opportunities for Payments for Watershed Services

Erin Gray — Tue, 15 May 2012 17:50:32 -0400

Water supply and availability could be the most pressing problem restricting China’s economic growth in the next 10-15 years, according to a new report by the…

Parceria viabiliza inclusão de serviços ecossistêmicos nos planos de negócios das empresas

James Anderson — Thu, 10 May 2012 14:27:43 -0400

Ver texto em Português OR Read text in English here

Um grupo de empresas líderes brasileiras deu início hoje a uma parceria para incorporar serviços ecossistêmicos em suas estratégias de negócios. A Parceria Empresarial pelos Serviços Ecossistêmicos (PESE) representa um grande esforço para incluir a biodiversidade e os serviços ecossistêmicos na estratégia de negócios das empresas e melhorar o desempenho corporativo no Brasil, país sede da Conferência das Nações Unidas sobre Desenvolvimento Sustentável (Rio+20), no próximo mês.

A ideia é desenvolver estratégias que aliem o desempenho empresarial à gestão sustentável dos ecossistemas. Empresas líderes, como Anglo American, Grupo André Maggi, PepsiCo, Vale, Votorantim e Wal-Mart, estão entre as primeiras companhias participantes desta iniciativa. A parceria é coordenada pelo Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável (CEBDS), Centro de Estudos em Sustentabilidade da Fundação Getúlio Vargas (GVces) e World Resources Institute (WRI), com apoio da Agência dos Estados Unidos para o Desenvolvimento Internacional (USAID).

“A indústria depende dos serviços ecossistêmicos, como produção de alimentos, água doce e limpa, um clima estável, e proteção contra riscos naturais como enchentes, entre outros benefícios,” explicou Craig Hanson, diretor do Programa de Pessoas e Ecossistemas do WRI. “A PESE irá capacitar as companhias brasileiras a gerenciar proativamente riscos e oportunidades nos negócios, decorrentes de suas dependências e impactos sobre os serviços ecossistêmicos.”

A parceria irá impulsionar novas soluções de negócios em meio à larga degradação dos ecossistemas através da aplicação local da Corporate Ecosystem Services Review (ESR), ou Revisão Corporativa dos Serviços Ecossistêmicos, metodologia líder de avaliação de serviços ecossistêmicos, desenvolvida pelo WRI, em cooperação com o World Business Council on Sustainable Development (WBCSD) e o Meridian Institute. Aplicando a ESR, cada empresa parceira da PESE vai desenvolver estratégias para melhor competir e ter sucesso em um mundo que cada vez mais esbarra nos limites naturais dos ecossistemas.

“As companhias que já utilizam a ESR têm sido capazes de descobrir novas estratégias rentáveis enquanto protegem e restauram os ecossistemas. Nosso objetivo é replicar esse sucesso no Brasil,” disse Marina Grossi, presidente do CEBDS (Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável).

Um exemplo de uma companhia que registrou resultados positivos a partir do gerenciamento consciente dos escossistemas em que opera é a Mondi, maior companhia europeia de papel e celulose. A Mondi conduziu a ESR em três plantações de papel na África do Sul, em 2008. A ESR ressaltou estratégias que a companhia poderia implementar para aumentar o acesso à água doce, melhorando as bacias hidrográficas regionais, estreitando relações com a comunidade local e reduzindo custos operacionais.

Aproximadamente 300 empresas no mundo já implementaram a ESR, desde 2008. Conforme essa metodologia ganha força no Brasil, WRI, CEBDS e GVces promoverão assistência técnica e consultoria às empresas parceiras, com o objetivo de assegurar a qualidade e eficiência na aplicação da ESR.

Os parceiros também têm como objetivo criar uma rede de empresas ativas na gestão de serviços ecossistêmicos no Brasil, para comunicar resultados, contribuir com estudos de casos e intensificar as estratégias de sucesso. “Assim como a chegada do GHG Protocol há cinco anos, o lançamento da PESE hoje representa um passo adicional na gestão de serviços ecossistêmicos no ambiente empresarial brasileiro” explicou Mario Monzoni, coordenador do GVces.

O evento de lançamento da PESE aconteceu no dia 10 de maio de 2012, das 17h às 18h, no Jardim Botânico no Rio de Janeiro – RJ.

Para saber mais sobre a PESE, acesse o site http://insights.wri.org/pese

A realização da PESE é possibilitada pelo apoio generoso do povo norte-americano, por meio da Agência dos Estados Unidos para o Desenvolvimento Internacional (USAID). Seu conteúdo é de responsabilidade do WRI, GVces e CEBDS, e não reflete necessariamente a posição da USAID ou do Governo dos Estados Unidos.

Contact (in English)
World Resources Institute
James Anderson; Janderson@wri.org; +1 (202) 729 7600

Contato (em português)
GWA Comunicação Integrada
Kelly Souza; kelly.souza@gwacom.com; (11) 6620-2234

Contato (CEBDS)
In Press Porter Novelli
Tatiana Wolff; tatiana.wolff@inpresspni.com.br; (21) 3723-8095
Suzana Ribeiro; suzana.ribeiro@inpresspni.com.br; (21) 3723-8117

Corporate Leaders and NGOs Form New Partnership to Protect Ecosystems in Brazil

James Anderson — Thu, 10 May 2012 12:47:01 -0400

Read in English below OR Ver texto em Português

A group of leading companies and non-governmental organizations have embarked on a new partnership in Brazil today to incorporate ecosystem services into business strategies. The Parceria Empresarial pelos Serviços Ecossistêmicos (PESE), or Brazilian Business and Ecosystem Services Partnership, represents a major effort to demonstrate how biodiversity and ecosystem services can enhance corporate performance in Brazil, home of the UN Conference on Sustainable Development (Rio +20) next month.

The goal is to develop strategies that align business performance to the sustainable management of ecosystems. Leading companies, such as Anglo American, Grupo André Maggi, PepsiCo, Vale, Votorantim and Wal-Mart, are among the first companies participating in this initiative. The partnership was organized by the Brazilian Business Council for Sustainable Development (CEBDS), the Center for Sustainability Studies at the Getulio Vargas Foundation (GVces), and the World Resources Institute, with support from the U.S. Agency for International Development (USAID).

“Industry relies on ecosystem services, such as food production, clean water, a stable climate, protection from natural hazards, and more,” explained Craig Hanson, Director of the People and Ecosystems Program at WRI. “PESE will empower Brazilian companies to manage business risks and opportunities arising from their dependence and impacts on ecosystem services.”

The partnership will drive new business solutions to ecosystem degradation largely through local application of the Corporate Ecosystem Services Review (ESR), the leading assessment methodology developed by WRI in cooperation with the World Business Council on Sustainable Development (WBCSD) and the Meridian Institute. By applying the ESR, corporate partners will develop strategies to better compete and succeed in a world that is pushing against natural limits.

“Using the ESR, companies have been able to uncover new profitable strategies while protecting and restoring ecosystems. Our goal is to replicate these successes in Brazil,” said Marina Grossi, President of CEBDS.

One example of a company that has already experienced positive results from managing the ecosystems in which it operates is Mondi, Europe’s largest paper and pulp company. In 2008, Mondi conducted an ESR in three of its paper plantations in South Africa. The ESR highlighted strategies the company could implement to increase access to freshwater while improving regional watershed health, strengthening its relationship with local communities, and reducing operational costs.

An estimated 300 companies have already implemented the ESR worldwide since 2008. As this method gains traction in Brazil, WRI, CEBDS, and GVces will provide technical assistance and advice to corporate partners in order to enhance the quality and efficiency of applying the ESR.

The partners also aim to create a network of companies active in the management of ecosystem services in Brazil, in order to communicate results, contribute new case studies, and scale up successful strategies.

“As with the arrival of the GHG Protocol five years ago, the launch of PESE today represents another step towards sustainability for Brazilian business,” explained Mario Monzoni GVces coordinator.

Editor’s Note:

The PESE launch event will take place on May 10, 2012, from 5:00pm to 6:00pm at the Botanical Garden in Rio de Janeiro.

For more information, visit: http://insights.wri.org/pese

PESE is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of WRI, GVces, and CEBDS and do not necessarily reflect the views of USAID or the United States Government.

Contact (in English)
World Resources Institute James Anderson; Janderson@wri.org; +1 (202) 729 7600

Contato (em português)
GWA Comunicação Integrada Kelly Souza; kelly.souza@gwacom.com; (11) 6620-2234

Contato (CEBDS)
In Press Porter Novelli
Tatiana Wolff; tatiana.wolff@inpresspni.com.br; (21) 3723-8095
Suzana Ribeiro; suzana.ribeiro@inpresspni.com.br; (21) 3723-8117

Ecosystem Services and the New IFC Performance Standards

Florence Landsberg — Thu, 17 Nov 2011 19:53:18 -0500

Today the World Resources Institute released Ecosystem Services Review for Impact Assessment: Introduction and Guide to Scoping, the first of…

Promoting Development, Protecting Environment

Janet Ranganathan — Wed, 17 Feb 2010 09:47:54 -0500

The World Bank and other Multilateral Development Banks (MDBs) are revising their environmental strategies for development planning. As they do so, they can and should integrate nature’s ecosystem services into their planning and decisions, says a new WRI report.

Janet Ranganathan, Vice President of Science and Research at the World Resources Institute and lead author of Banking on Natures Assets explains how economic development and a healthy environment can co-exist.

Q: What are ecosystem services?

Ecosystem services are the benefits that nature provides to people. Food, freshwater, timber and cotton for clothes are some of the most familiar services. But there are other types of services that we often take for granted, for example the ability of forests to sequester carbon and mitigate climate change and the way in which wetlands filter and purify water.

The current mindset of society is to put economic development and nature in separate boxes, separate government agencies and separate academic disciplines.

We all depend on ecosystem services for our well-being, and nature’s health increasingly depends on humanity. Every development or investment decision made around the world both depends on and has an impact on nature somewhere, or somehow. Over the past century, our relationship with nature has been increasingly destructive — degrading two thirds of ecosystem services worldwide. Our report, Banking on Nature’s Assets, explains that it doesn’t have to be that way.

Q: How can focusing on ecosystem services strengthen development?

Development and ecosystem services are intertwined. We can’t really deal with one without dealing with the other. However, the current mindset of society is to put economic development and nature in separate boxes, separate government agencies and separate academic disciplines. We think that protecting the environment is an impediment to development. We think it’s a cost. But when we consider the environment in terms of ecosystem services, that mindset can change. We can instead see and value the environment as a series of assets or benefits that development in fact depends upon.

By treating ecosystems as assets that generate benefits, development agencies can help developing countries grow economically while sustaining the environment and the livelihoods of those people who depend on ecosystems.

Q: How do development agencies currently treat ecosystem services?

Traditionally, development agencies and development planners focus on single ecosystem services, particularly those that can be marketed, such as freshwater, timber, crops and fish. They overlook ecosystem services that regulate important natural processes such as climate, disease, erosion, water flows, and pollination, as well as protection from natural hazards.

Shrimp Farms in Thailand.
Photo credit: flickr/Ben Harris-Roxa

For example, in the 1980’s the World Bank saw aquaculture as a great opportunity for economic development in Latin American and Southeast Asia. With the Bank’s support, Thailand’s government cleared the mangroves surrounding fishing communities and replaced them with shrimp aquaculture farms. By 2007, Thailand was exporting seven times more frozen shrimp than 20 years before. While it was a very beneficial strategy for a select group of shrimp farmers, no one considered the less obvious services previously provided by the mangroves—coastal protection during high tides, storms and hurricanes, and spawning grounds for fish that supported the livelihoods of local communities. As a result, the development of aquaculture farms left local communities vulnerable to increased storm damage, depleted offshore fisheries, water pollution and mosquito infestations.

Q: Don’t MDBs already consider ecosystems services through safeguards?

In the past, cost benefit analysis and safeguards such as impact assessment have not usually incorporated the full range of ecosystem services and how changes to ecosystem services in turn affect those people dependent on those services. The shrimp aquaculture example also illustrates how a development strategy can inadvertently create distributional effects when important ecosystem services are overlooked. The shrimp farm benefits primarily accrued to the few shrimp farmers and to those in export markets such as the U.S. and Europe who enjoyed “cheap” shrimp. In contrast, poor coastal communities who depended on the former mangroves for spawning grounds and for storm protection lost out. By systematically looking at the full range of ecosystem services that their strategies depend upon and impact, development planners can minimize and better manage ecosystem services trade-offs and increase the chances of development outcomes that are both sustainable and equitable.

Comparing the Economic and Social Value of Mangroves and Shrimp Farms

Q: How can Banking on Nature’s Assets help MDB’s?

Banking on Nature’s Assets identifies entry points for mainstreaming ecosystem services into MDB’s core operations. These range from country assistance strategies and environmental analysis to sector work and development policy loans. The report also presents a range of tools and policy options that MDBs can use to help country partners sustain their precious capital. It concludes with recommendations for scaling up the use of an ecosystem service approach in MDB’s core operations.

Q: What tools can development planners use to make trade-offs among multiple ecosystem services?

These tools and policies are becoming available. For example, a comprehensive list of ecosystem services is the most basic tool in moving from an approach that focuses on a single service to one that focuses on the trade-offs among multiple services. The Millennium Ecosystem Assessment used a list and a refined version is available on WRI’s website. Other tools provide frameworks to prioritize services for attention and to assess the condition and trends of those selected for attention. Mapping and valuing ecosystem services are also important tools. WRI has worked with Uganda to produce maps that overlay geo-referenced information on population and household expenses with spatial data on ecosystem services. It can now flag areas to introduce strategies that benefit both wetlands and the people depending on the services these wetlands provide. Uganda has used valuation in helping make decisions. For example, a study of the Nakivubo wetland showed that conversion of wetlands was driving up the costs of providing fresh water to 2 million residents in Kampala, Uganda. As a result, decision makers decided not to drain it for housing and industry but to make it part of the city’s greenbelt.

Q: What about policies that sustain ecosystem services?

Banking on Nature’s Assets explains how to determine the most critical ecosystem services in a particular location and then select the most effective policies for sustaining them depending on a country’s capacity and existing laws and policies. MDBs are already playing an important role in introducing some policies such as payments of ecosystems services. In the future, they can help countries develop policies that transform the ways in which landowners manage their land. Instead of income only from a single service like providing timber, for example, policies can encourage landowners to earn income from ecotourism, producing Forest Stewardship Council-certified timber, sequestering carbon to protect the climate, or maintaining a wetland’s filtration and flood prevention capacity.

Fact Sheet: Stacking Payments for Ecosystem Services

Nicholas Bianco — Thu, 12 Nov 2009 09:29:42 -0500

Payments for ecosystem services are becoming an increasingly important part of the U.S. business and regulatory landscape. As programs that provide payments for ecosystem services grow, policy makers will need to determine how these various payments should interact with each other.

Download PDF (PDF, 160 Kb)
(includes footnotes & references)
More WRI Climate Factsheets
More resources on Ecosystem Services

Introduction

Payments for ecosystem services are becoming an increasingly important part of the U.S. business and regulatory landscape. Used properly, these payments can efficiently mitigate greenhouse gases, filter pollution from runoff, protect wildlife habitat, and prevent soil erosion. Recognizing this, the American Clean Energy Security Act establishes a cap-and-trade program that allows firms to “offset” their greenhouse gas emissions through practices that reduce or sequester greenhouse gas emissions elsewhere. Some state governments are also expanding water quality trading programs that allow facilities that discharge water pollutants to avoid expensive facility upgrades by, for example, paying farmers to improve land management practices. There are also long-standing federal programs that pay farmers and forest landowners for providing a range of ecosystem services, such as protection of wildlife habitat and prevention of erosion.

As programs that provide payments for ecosystem services grow, policy makers will need to determine how these various payments should interact with each other. This interaction presents an opportunity to expand the suite of services for which an ecosystem is managed. However, it also creates the risk that multiple payments will be made for the same ecosystem services, possibly reducing the efficiency of payments or diminishing the environmental benefits they were intended to provide. This factsheet offers an initial review of these risks and opportunities. It is part of a larger effort by WRI to develop a comprehensive framework for stacking payments for ecosystem services.

For complete text, Download the PDF (PDF, 160 Kb)

Green Taxation

Mon, 09 Nov 2009 10:13:56 -0500

Ecosystem Services is playing a growing role in Brazilian environmental law.

Note: This post is a translation of the original article in Portuguese by Juliana Lopes with Ana Carolina Addario, which appeared on Ideia Socioambiental. It is posted here with permission.

The environmental legal dictionary has a new entry. The word is incentive, an economic benefit granted by the government, through taxes, to stimulate economic, social, and cultural activities. This practice is not new in traditional economic segments such as the automotive and construction industries. However, incentives to stimulate sustainable development are advancing in Brazilian environmental legislation.

Called active control, this new mechanism differs from the command and control methods traditionally adopted by governments and legislators. “Instead of discouraging certain behaviors, we seek to encourage positive attitudes. The establishment of sanctions only, adds nothing in terms of proactive behavior. It is therefore important to prioritize incentives”, says Judge Consuelo Yatsuda Moromizato, a federal judge with significant experience in environmental law.

Examples of Payments for Environmental Services (PES) in Brazil

Proambiente: Family Production Socio-environmental Development Program (Proambiente), created in 2000 by civil society and incorporated by the Ministry of Environment (MMA) in 2003, awards farmers and ranchers with up to one-third of the minimum wage when they incorporate less destructive production practices, such as not using pesticides or introducing sustainable agroforestry systems(SAF’s)
Ecological ICMS: Brazilian states give 25% of the Tax on Circulation of Goods and Services (ICMS) to cities. Some municipalities allocate 5% of these funds for environmental preservation projects
Environmental compensation: companies financially compensate for projects’ unavoidable environmental impacts (for example, testing chemicals at sea for drilling oil). States use these funds to invest in conservation projects
Reforestation: focused on timber companies, it promotes reforestation either through compliance with forest management rules (tree cutting restrictions), or paying for tree replacement, which will fund reforestation in other areas
Tax exemption for Private Reserves of Natural Heritage - RPPNs: exempts RPPN owners from paying the Rural Land Tax (ITR)
In deployment phase: some PES policies are not yet implemented, awaiting approval or regulation. This is the case, for example, of the ecological income tax (IR) scheme, which proposes a tax deduction for expenses on projects with an environmental benefit.

This new logic reflects the evolution of the guiding elements in environmental legislation. “The ‘polluter pays’ principle was initially used as a way to internalize the costs of environmental impacts, which were considered externalities,” she explains. Next, came the principle of ‘the user pays,’ which distinguishes between the polluter and the offender. “This concept envisages compensation for the use of natural resources, as occurs with the law of royalties for oil exploration,” she says.

These tax and fiscal mechanisms play an important role, especially in the transition to a low carbon economy, by encouraging the adoption of cleaner technologies. “It is essential that governments create policies through subsidized financing that encourage and enable the purchase of equipment. This public sector contribution will help promote a technological change by companies that will advance the transition toward a sustainable economy,” says Consuelo.

To Adriano Pires, president of the Center for Infrastructure (CBIE), incentive policies can be important tools for the development of new sources of renewable energy in Brazil. But in his analysis, the government still does not make proper use of these mechanisms. “The country needs policies that define what will be in the energy portfolio of the future. The implementation of these policies requires fiscal and tax mechanisms, which unfortunately are still underutilized. The government has not given any medium nor long-term signals to investors or consumers. Tax policy in relation to energy should be discussed because gasoline, diesel, and other fossil fuels cannot be a priority for the country due to their high environmental costs,” he says.

Other countries’ Payment for Environmental Services (PES) Initiatives

Mexico: The government rewards communities and owners of rural properties for preserving their forests and watersheds
Costa Rica: the government created a tax levied on the consumption of water and gasoline. The amount collected is given to forest owners for providing environmental services (about $80USD per hectare per year).

It is true though, that promoting the uptake of incentives will require a paradigm shift. According to Werner Grau Neto, managing partner at Pedro Pinheiro Lawyers, the best example of this transition is the Legal Amazon. Created in 1953 to be a hub of economic development, the region received a series of stimuli, such as preferential loan rates, designed to expand agribusiness. “Today, the paradigm has changed. The Legal Amazon is no longer an area focused purely on economic expansion; it has become an area of sustainable economic development. Instead of just developing, now it undertakes preservation to develop,” he said.

Environmental Services

Ongoing deforestation in the Amazon is a clear indication that the punitive mechanisms imposed by Brazilian law have not been sufficient to protect the environment. The integration of market instruments and self-regulation into national regulation is imperative, in order to balance long-term economic activity and ecosystem well-being.

This challenge becomes clear when the condition of environmental services is examined. According to the Millennium Ecosystem Assessment (MEA), a scientific inventory led by the United Nations, 15 of the 24 environmental services considered essential to human life are gradually disappearing or losing function. As a result of this trend, fisheries, for example, may be unsustainable by 2040 under current trends.

The pricing of these services has been discussed as an effective way to deter the indiscriminate use of natural resources. Thus, to be effective, it is essential that preservation be more profitable than destruction. Within this logic, the carbon market is one of the pioneering and most successful payment schemes for environmental services. But there are also projects and conservation reserves established on the principle of the non-polluter receiver. “The reasoning is simple: just as those who violate the law receive negative sanctions, those who abide by them should receive economic advantages,” says Consuelo.

Werner highlights the experience of the World Bank and the government of Amazonas state in the design of the JUMA Sustainable Development Reserve, in the city Apuí. “By creating a structure for selling forest carbon credits, the initiative provided the necessary resources for maintaining and monitoring the protected area,” he points out.

The same concept applies to farmers who maintain conservation reserves on their properties. “The conservation reserve is a cost to the farmer. However, with the pricing of environmental services and the possibility of developing projects to generate carbon credits, it becomes revenue. This is where the new concept of producer-receiver emerges. It establishes a paradigm shift in the principles that guide legal rules and future public policies,” he says.

In order to promote this practice, the National Water Agency (ANA), in partnership with The Nature Conservancy (TNC), initiated a program in 2007 called Water and Forest Producers that pays farmers for restoring and maintaining “standing” forests on their properties.

According to Fernando Veiga, Environmental Services Coordinator of TNC, the initiative seeks to enhance environmental stewardship by offering an environmentally friendly alternative to a society that is used to extraction. Paying conservation bonuses to producers is much more efficient, in economic terms, than having to remedy the problems caused by poor maintenance of services. When the forest and its services aren’t functioning well, the producer ends up having to pay to recover them”, he points out. In the context of local initiatives, some Brazilian cities have established an ecological Tax on Circulation of Goods and Services (ICMS), whereby 5% of the 25% of tax revenue that states pass to cities will be invested in environmental protection projects. Although laudable, some experts still have reservations about the mechanism.

According to Mauricio Chapinoti, from Pedro Pinheiro Advogados, even working as a promoter, the ecological ICMS has limitations in that it divides already limited amount of government revenues at the risk of being subject to disputes among municipalities. “For investors or consumers, this instrument does not change anything. But from the point of view of cities, it changes a lot because it increases their revenue. However, as the total collected amount does not grow, the other municipalities do not like this kind of decision,” he explains.

Also according to Chapinoti, the proposal currently in Congress to create a green income tax (PL-5974/2005) is subject to similar risk, because it will be categorized as a mechanism for tax incentives, like the Rouanet Law (a tax incentives for cultural and educational investments). “This bill proposes to deduct part of the income tax allocation for environmental projects. But, as the rule puts all these tax benefits in the same box, setting an overall 6% deduction limit, the adoption of this mechanism will make environmental projects compete with cultural projects without changing anything in the state tax waiver.”

Chapinoti claims that it would be better if each type of project respected a specific limit of deduction, as happens today with the Municipal Fund for Children and Adolescent Rights (FUMCAD).

Tax versus Incentive

Across the country, there are many initiatives in favor of laws promoting environmental preservation. In the “Manifesto in Defense of Environmental Tax Reform,” some public defenders and prosecutors endorse tax benefits that reward environmentally sound processes and products, and on the other hand, higher taxation to discourage those who choose activities with high impacts on the environment.

In the same vein, three months ago Congressman Roberto Rocha (PSDB-MA) proposed an amendment to the Constitution (PEC 353/09) that would lay down general guidelines for an “environmental tax reform.” The PEC is based on an Environmental Tax Reform (ETR), a mechanism of tax reform for environmental purposes adopted by several European countries in the 90’s. According to this notion, the degree of increase or decrease of tax burden levied on a certain business activity must be proportional to the environmental benefits or losses it generates. Ultimately, however, the total tax burden should remain the same.

The proposed Brazilian tax reform brings three major changes to the existing Constitution. It

introduces the principle of environment “extrafiscality” (possibility of using taxes as a mechanism for encouraging or discouraging activities) for the entire set of taxes in the country;
establishes tax immunity in favor of goods and services considered environmentally beneficial; and
distributes tax revenues, among the entities of the Federation, using environmental criteria.

Anticipating trends

Facing an increasing pressure for cleaner processes and products, many companies have revised their production processes. Knowing how their activities impact and depend on environmental services inspires shifts in current business models.

The task is far from simple, since conventional corporate metrics ignore externalities, such as environmental and social impacts.

Considering this, the World Business Council for Sustainable Development, in partnership with the Meridian Institute and the World Resources Institute (WRI), prepared the Corporate Ecosystem Services Review. The methodology helps companies to assess impacts and dependencies on environmental services to better understand future risks and opportunities.

According to Charles Iceland, Associate at WRI, companies are entering an era of “dual flow” [interdependence with the environment] because they rely on environmental services to produce goods and services, while the health of ecosystems depends on corporations for environmental stewardship. “Knowing the risks that will arise as a result of likely changes in government regulations is important. But knowing which environmental services the company depends on is even more urgent since they can determine business success. Identifying risks and opportunities from ecosystem change should guide every company’s decisions “, says the researcher.

MEDIA ADVISORY: Ecosystems and the Business Bottom Line: New Thinking on Nature's Assets

Camilo Ramirez — Wed, 07 Oct 2009 10:36:30 -0400

Valuing Nature’s Assets: Business Accounts for Fresh Water, Biodiversity, Forests, Coral Reefs and Wetlands for Long-Term Viability and Profit

The earth’s diminishing natural and environmental resources are getting a new look from global business leaders – and not for the sake of philanthropy. Through new analytic approaches and tools that assess and value the fragile ecosystems virtually all businesses depend on, corporate leaders are beginning to understand that natural resources are as important to future profitability as interest rates or capital depreciation schedules.

WHAT: Leaders and experts from the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) will participate in a media briefing on “Ecosystems Services” and a new eco-financial analytic discipline that creates tools for businesses to determine the role local habitats and natural resources play in their corporate bottom lines. The briefing will include a presentation of the Corporate Ecosystems Services Review (ESR), launched by WRI and WBCSD as the first tool of its kind that gives business leaders the ability to assess their own ecosystems risks and opportunities. WBCSD’s new Corporate Ecosystem Valuation Initiative (EVI), to help companies account for the benefits provided by ecosystems as well as the potential cost of their loss, will be outlined. Finally, a case study describing BC Hydro’s approach to ecosystems services, assessment and valuation will also be presented.

WHO: Jonathan Lash, President, WRI Bob Elton, President and CEO, BC Hydro Craig Hanson, Director, People and Ecosystems Program, WRI James Griffiths, Managing Director, WBCSD

WHEN: October 13, 2009, 1:00p.m. – 2:00p.m. (lunch will be available at 12:30)

WHERE: The World Resources Institute 10 G Street, NE, Washington, D.C. 20002 (Metro: Red Line to Union Station)