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Investing in Nature, for People’s Sake

Ecosystem services provide the link between nature and economic development. How can this approach guide more sustainable decisions?

The following has been adapted from Janet Ranganathan’s speech at the opening plenary of the ACES (A Community on Ecosystem Services) Conference at Gila River Indian Community, AZ on December 7, 2010.

Ecosystem services is still jostling to find its place in the crowded landscape of conceptual frameworks that seek to define sustainable development. Many, particularly international policymakers, conflate ecosystem services with payments or markets for ecosystem services. While payments and markets have their place, the real power of ecosystem services lies in its ability to provide an overarching framework for both ecosystems and economic development. In systematically making these links, an ecosystem services framing can inform decisions that are more likely to be sustainable for people and nature. Here are three broad applications:

1. Making the case for investing in ecosystems

Society has traditionally focused on how economic development impacts ecosystems. An ecosystem services framing enables decision-makers to understand how economic development goals depend on ecosystems – more specifically, on the 24 ecosystem services identified by the Millennium Ecosystem Assessment. In other words, it expands the focus from how to protect nature from economic development to how to invest in nature for development.

Decision-makers may not make the link between ecosystems and their economic development goals or they may take for granted the ecosystem services on which they depend. This is especially true for the less visible regulating ecosystem services that control natural processes such as climate, erosion, water flows, and natural hazards such as shoreline protection. (I am using “regulating” in this context to describe a biological phenomenon, not government policies or regulations.)

For example, the World Resources Institute and our partners in Belize conservatively estimated the value of coral reef and mangrove ecosystem services. We found that reef-driven tourism alone contributed 12 to 15 percent of Belize's GDP. Their shoreline protection services were equivalent to another 20 percent of GDP in avoided damages. Our finding that ecosystem services underpinned a significant portion of the Belize's GDP led the Prime Minister to approve new fishing restrictions. Furthermore, when the cargo ship Westerhaven ran aground on the Belize reef in January 2009, the government sued for damage. The suit was premised on the forgone economic contribution of the damaged reef’s ecosystem services to GDP. The ecosystem services damage suit was a first for Belize. In a landmark decision, the Belizean Supreme Court ruled in April 2010 that the ship’s owners must pay the government an unprecedented US$6 million in damages.

2. Improving management of trade-offs

Decision makers often unwittingly make ecosystem services trade-offs. When a farmer drains a wetland to increase crops, he decreases the water filtration and flood control services. The ecosystem services framing provides a systematic approach for identifying these kinds of tradeoffs and reaching agreements with all parties on how to best manage them.

In the 1990's BC Hydro, a hydroelectric utility in British Columbia, found itself at odds with regulators and others who relied on the waterways for fishing, recreation, spiritual and cultural values, and as a source of freshwater. In response to growing tensions among users, BC Hydro launched a participatory water-use planning process to agree the operating parameters of its dam. The planning process was organized around ecosystem services even though they were not referred to in this way. A series of model-generated scenarios were developed to illustrate how each user of the ecosystem would be affected as the company altered two operating variables: reservoir level and river flow rate. One scenario might yield more power generation but fewer recreational opportunities and fewer fish. Another might yield the opposite. After several iterations of the model, the participants finally agreed on an option they could all accept. It became the operating plan for the dam, one that provided operational clarity and regulatory certainty. And it enabled BC Hydro to transcend the traditional regulatory silos that focus on single ecosystem services to forge an agreement on how to optimize multiple services.

3. Aligning policies and incentives to sustain ecosystem services

Traditionally ecosystems and their services have been carved up in separate academic disciplines (e.g., schools of agriculture, biology, fisheries and forestry), separate government agencies (e.g., Department of Agriculture, Fish and Wildlife, NOAA, Forest Service, Bureau of Reclamation) and separate laws and policies (Farm Bill, Clean Water Act, Endangered Species Act). The resulting silos of information, institutions, and policies and incentives hinder our ability to manage ecosystems whose services transcend political and regulatory boundaries.

An ecosystem services framing helps us see beyond these silos by identifying the ecosystem services dependencies and impacts of a given action or goal. It also provides a framework to think more systematically about the range of policies, incentives, institutions, and coordination mechanisms needed to sustain these services. These go beyond the often-cited payments for ecosystem services or economic valuation to include best management practices, land use zoning, establishment of areas to protect specific ecosystem services, and limits on practices that degrade services. Also important are markets and fiscal incentives—payments, taxes, subsidies and fees – that encourage actions that sustain ecosystem services.

The Future of Ecosystem Services

Let me end by highlighting where I think the action on ecosystem services may be in the years ahead.

  • Climate adaptation planning. An ecosystem services approach can bring rigor to climate adaptation planning. The physical impacts of climate change manifest themselves through alterations to the quantity, quality and timing of ecosystem services.

  • Strengthening the science-policy interface. The creation of a new Intergovernmental Panel on Biodiversity and Ecosystem Services (IPBES) - the so called "IPCC for Nature" will improve the links between emerging scientific knowledge and policy action at the appropriate scales.

  • Integrating ecosystem services into existing decision support tools and regulatory/policies. Examples include: ISO 14001, Environmental Impact Assessment, Strategic Environmental Assessments, national economic indicators and NEPA analysis.

  • Restoration. In the last 50 years humans have degraded the majority of ecosystem services globally. Efforts to restore ecosystems have been limited and typically focus on restoring habitats for endangered species. An ecosystem service framing can help make the case for scaled up restoration of ecosystems to provide critical ecosystem services for people, while preserving the underlying biodiversity on which all ecosystem services depend.

  • Reconciling the tension between the biodiversity and ecosystem services focused communities. Biodiversity underpins ecosystem services. Both focuses are essential. They serve different audiences and objectives and must continue to play a critical role in influencing ecosystem management decisions.

The majority of ecosystem services are in decline around the globe. Demand for them is growing. We can no longer take their availability for granted. We need to urgently integrate considerations of ecosystem health in a systematic manner into the myriad of public and private decisions that depend upon or affect them. Ecosystem services provide an overarching framework for reconciling development and nature, and sustaining both. And in doing so, it helps us make a quantum leap forward on pursuing the elusive goal of sustainable development.

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