WRI Stories Feed: Ecosystem Services Approach for the Public Sector

Q&A: Sustainable Land Management Specialist Chris Reij Discusses Re-greening in Africa

Sarah Parsons — Thu, 12 Jul 2012 11:59:02 -0400

African farmers currently face a crisis. Droughts and unpredictable weather, in combination with decreasing soil fertility and pests, have caused crop failure on many of the…

MEDIA ADVISORY: Hope or Hype? WRI Experts Host Press Call on Rio+20 Summit

James Anderson — Wed, 16 May 2012 13:28:05 -0400

As leaders in government, business and civil society prepare to head to Rio de Janeiro for the UN Sustainable Development Summit, known as Rio+20, experts from the World Resources Institute will host a press call to discuss issues and expectations for the meeting.

WRI experts will discuss issues, including the green economy, governance, climate change, role of business, and more. WRI will provide an update on the state of play and on possible outcomes for the global summit.

Listen to the audio recording of WRI’s press call below:

WHAT:

Press call to discuss expectations for the Rio+20 Summit.

WHO:

Manish Bapna, Interim President, WRI

Craig Hanson, Director, People & Ecosystems Program, WRI

Lalanath de Silva, Director, The Access Initiative

Jennifer Morgan, Director, Climate & Energy Program, WRI

Followed by a Q&A session

WHEN:

Tuesday, May 22, 10:00a.m. EDT // 11:00a.m. BRT

CALL-IN:

United States (Toll free): (866) 803-2143

Brazil (Toll Free): 0800-8911992

Other international locations (Toll): +1 (210)795-1098

Passcode: Callers should ask for “RIO”

You can read more about WRI’s work at Rio +20 at: http://insights.wri.org/topic/rio20.

MEDIA CONTACT:

Michael Oko: Tel. + 1 (202) 729-7684; email: moko@wri.org; or

James Anderson: Tel. +1 (202) 729 7608; email: JAnderson@wri.org

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…

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)

Online Resource Puts Ecosystem Services Experts at Fingertips

Jessica Forres — Tue, 15 Sep 2009 10:55:48 -0400

The World Resources Institute (WRI) and other leading international environmental organizations today launched the Ecosystem Services Experts Directory, a public online directory that allows journalists, business leaders, and governments to locate and contact specialists in ecosystem services.

“Businesses realize that they face material risks and opportunities related to ecosystem degradation,” said Craig Hanson, director of the People and Ecosystems Program at the World Resources Institute.

“Now, for the first time, policy makers and companies have a single place where they can quickly find people who can help them make informed decisions about the environment,” added Nigel Winser of the Earthwatch Institute.

The free, easy-to-use directory enables users to search for country-specific experts in a wide range of ecosystem disciplines. It includes hundreds of expert profiles from environmental organizations around the world, including the International Union for Conservation of Nature (IUCN), the Ecological Society of America, and the Millennium Ecosystem Assessment’s Sub-Global Working Groups.

“With this resource, a policy maker in Mexico, for example, can contact local natural resource economists to assess the value of a nature reserve,” said James Griffiths, managing director of Ecosystems, Water and Sustainable Forest Products Industry at the World Business Council for Sustainable Development. “Likewise, an agriculture company in India can find water, biodiversity, and agriculture experts to learn about the immediate ecological challenges facing its products.”

“The directory provides an opportunity for experts to share their work and improves scientific communication to decision makers,” said Enrique Lahmann of IUCN.

The Ecosystem Services Experts Directory is a joint venture between WRI, IUCN, WBCSD, and the Earthwatch Institute.

Report: Beijing’s Water and Waste Performance at Olympics Earns Gold

Paul Mackie — Tue, 09 Jun 2009 12:23:41 -0400

Beijing achieved and largely exceeded the drinking water and waste-management goals it set as part of its bid for last summer’s Olympics, according to a new report.

“Beijing prepared impressively in these areas for the Olympic games. In the end, the city improved its drinking water, as well as its waste-disposal and recycling systems,” said Cy Jones, a senior associate at the World Resources Institute (WRI) and lead author of two chapters within the report, which was produced by the United Nations Environment Programme (UNEP) in collaboration with several partners.

WRI’s research - covering the water and waste chapters - found that the city’s drinking water treatment plants met China’s new water quality standards and guidelines set by the World Health Organization. Beijing also expanded its wastewater collection and treatment systems, enabling the city to treat 92 percent of its wastewater during the games.

“Though many more actions are needed to ensure the long-term sustainability of its water supply, Beijing’s aggressive efforts before the Olympics show that it’s possible for cities to minimize water consumption, maximize the use of available rainwater and treated wastewater, and protect critical surface-water resources,” Jones added. “Beijing’s efforts and our recommendations can act as a guide for future Olympic host cities.”

In addition to improving water quality, Beijing surpassed its goal of sorting 50 percent and recycling 30 percent of all solid waste produced within the city by 2008. Upgrades to the city’s waste disposal system allowed 52 percent of waste to be sorted and 35 percent to be recycled by 2007.

Further, Beijing greatly expanded its ability to properly dispose of hazardous waste in specially designated landfills. In 2001, four plants could properly dispose of 2,000 tons of hazardous waste per day combined. In 2008, the city increased that capacity to 30,000 tons and recycled an additional 10,000 tons.

“A big step-forward has been made by the Beijing municipality in terms of waste disposal and recycling,” said Hanqian Zhang, a WRI researcher and report co-author based in Beijing. “Olympic bid commitments were achieved through effective infrastructure investment, wise urban planning, technology research, and education programs.”

The authors found that Beijing’s water management leading up to the Olympic Games serves as an example to other cities of how to achieve maximum efficiency in the use and management of scarce water resources. Beijing should continue its efforts. Further, the International Olympic Committee should promote the development and implementation of environmentally sound water and waste management in all cities being considered for future games.

The report, Independent Environmental Assessment: Beijing 2008 Olympics Games, was produced by UNEP. Data was provided by the Beijing Municipal Government, the Beijing Environmental Protection Bureau, and the Beijing Olympic Organizing Committee. WRI provided expertise and analysis on both the water quality and solid waste chapters.

MEDIA ADVISORY; Land Management for Corporations on Agenda at Upcoming Conference

Jessica Forres — Thu, 04 Jun 2009 13:29:13 -0400

WHAT:

Wildlife Habitat Council (WHC) and the World Resources Institute (WRI) will host the first annual Ecosystem Services on Corporate Lands conference. Representatives of government, industry, conservation, and community groups will host panel discussions and workshops. These will explore how companies can reduce their costs, generate new revenue, and improve their reputation by managing ecosystems on lands they own. Other areas of discussion will include ecosystem services markets - such as water quality trading - that companies can take part in and regulatory information on habitat management.

WHEN:

Thursday, June 11, 2009
8:00 a.m. to 8:30 p.m.

Friday, June 12, 2009
8:00 a.m. to 2:30 p.m.

WHERE:

Crowne Plaza Hotel
8777 Georgia Ave., Silver Spring, MD 20910
(Red line to Silver Spring Metro Stop)

WHO:

Lafarge North America, U.S. Department of Agriculture, World Business Council for Sustainable Development, Constellation Energy, Business and Biodiversity Offsets Program, Ducks Unlimited, U.S. Fish and Wildlife Service, Environmental Banc & Exchange, Exxon Mobil, Rio Tinto, ENTRIX Inc., NOAA, BP, Virginia Department of Forestry, US Forest Service, Defenders of Wildlife, Kinder Morgan, Inc.

RSVP:

Jessica Forres, WRI media officer, +1(202) 729-7736, jforres@wri.org

Belize’s Reefs and Mangroves Tagged with High Economic Value

Paul Mackie — Fri, 14 Nov 2008 00:00:00 -0500

Three key services provided by coral reefs and mangroves in Belize are worth an estimated US$395 million to US$559 million per year, according to a report released today by the World Resources Institute and the World Wildlife Fund.

Annual Economic Contribution of Coral Reefs and Mangroves in Belize”Putting a dollar value on the goods and services provided by reefs and mangroves helps to translate them into a language that everyone speaks,” said Lauretta Burke, a senior associate at WRI. “Hopefully, these findings will contribute to well-informed decisions regarding the management of these critical resources.”

The report, Coastal Capital: Belize, estimates the annual economic value of coral reef- and mangrove-associated tourism in Belize at between US$150 million and US$196 million, accounting for between 12 and 15 percent of the Caribbean nation’s GDP. Benefits from reef- and mangrove-dependent fisheries contribute a further US$14 million to US$16 million to the economy.

Reefs and mangroves also protect coastal properties from erosion and wave-induced damage. WRI estimates that Belize’s coral reefs provide an estimated US$120 million to US$180 million in avoided damages per year. Mangroves protect the coastline from both waves and storm surge, providing an additional US$111 million to US$167 million in protection annually.

Despite growing recognition of the economic importance of coastal resources, reefs and mangroves face growing threats from unchecked coastal development, over-fishing, and pressures from tourism. Climate-related changes such as warming seas and fiercer storms will compound these impacts in the future.

“The goods and services offered by coral reefs and mangroves are frequently overlooked or underappreciated in coastal investment and policy decisions,” said Emily Cooper, a research associate at WRI and lead author of the study. “The amount currently invested in protecting Belize’s coral reefs and mangroves is very small when compared to the contribution of these resources to the national economy.”

Belize’s Marine Protected Area (MPA) system is widely hailed as an example of forward-thinking in marine conservation. Consisting of 18 protected areas managed primarily by the country’s fisheries and forestry departments in collaboration with local NGOs, the MPAs are an important draw for divers, snorkelers and sport fishermen, and contain no-fishing areas that help to maintain stocks of key commercial species. The system, however, is under-funded, and staff, fuel, and equipment limitations make it difficult to curb illegal fishing and monitor visitation in most of the reserves.

“Belize’s reefs and mangroves offer crucial socio-economic benefits but are already threatened by overuse, degradation and fragmentation. Climate change will undoubtedly compound these through increased frequency of impacts from mass bleaching and storm occurrences, as well as coastal erosion and sedimentation,” said Nadia Bood, Mesoamerican reef scientist and climate change officer for WWF Central America. “This makes urgent the need to act now to alleviate human threats and increase the resilience potential of these very important ecosystems.”

WRI’s Coastal Capital project receives key financial support from the Oak Foundation, the Netherlands Ministry of Foreign Affairs, SwedBio, the Campbell Foundation, and the MacArthur Foundation. The full report can be accessed on WRI’s website at http://www.wri.org/publication/coastal-capital-belize .