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Economics of ecosystem services

 

Many decision-making processes are motivated by economic drivers, so the economic valuation of the benefits derived from biodiversity has been gaining growing attention in the scientific community. By making explicit the economic contribution of biodiversity to human welfare, scientists are hoping to build a more convincing argumentation for its long-term conservation. Recently, ecoSERVICES has worked on:

In 2004-2011, ecoSERVICES was involved and supported a number of evaluations and events on the economic valuation of ecosystem services, including:

 

Payments for Ecosystem Services

ecoSERVICES started its work on payments for ecosystem services by reviewing how the concept of payments for ecosystem services (PES) had been implemented in different applications and contexts. This knowledge base was then used in a second phase to reflect on the operationalisation of payments and reflection on a set of common global standards.

 

1. A review of the scientific foundations of Payments for Ecosystem Services programmes

PES are the monetary compensation for changes in natural resource management that increase the stocks and flows of benefits provided by ecosystems. There has been a rapid expansion of projects making use of PES as a major instrument for conservation and environmental programmes. The expansion of projects on PES has led to a rich diversity of programmes, some of which being built upon excellent scientific (social and natural) foundations and some being less well designed. Thus, the key outcomes of this review were:

  • A lack of information on the scientific principles that supported the design, implementation and monitoring of the PES projects; and
  • The degree to which scientific principles are integrated in the design, implementation and monitoring of PES.

The project assessed a global set of PES programmes in three of the most active environmental markets, i.e. carbon, water and biodiversity. It revealed that the most detailed and scientifically informed PES programmes were carbon schemes and water schemes. Overall, there was a tremendous heterogeneity in reporting styles and in the degree of available scientific information, ranging from poorly to relatively well detailed. The project concluded that the lack of scientific standards for PES programmes hinders the ability to evaluate the likely effectiveness of a PES programme and to determine the sustainability of the project. It recommended that a global science-based standard was developed for designing and reporting on PES schemes in order to help project design and project performance assessment and monitoring. Results of this study were presented at two symposium:

  • Olmsted P, Ingram JC, and Naeem S. 2011. A review of the scientific foundations of Payments for Ecosystem Services programmes. Poster. CERC Ecosystem Symposium Columbia University, 1st March (pdf)
  • Olmsted P, Ingram JC, and Naeem S. 2011. A review of the scientific foundations of Payments for Ecosystem Services programmes. Oral presentation. 17th Annual International Sustainable Development Research Conference, New York City , USA, 8-10 May

This project was supported by ecoSERVICES, USAID, Wildlife Conservation Society (WCS), and the Earth Institute Center for Environmental Sustainability (EICES; formerly the Centre for Environmental Research and Conservation) of Columbia University.

 

2. Establishing Global Science Standards for Payments for Ecosystem Services

There has been a rapid expansion of the use of PES as a major instrument for conservation and environmental programmes. This expansion has led to a rich diversity of programmes some of which are built upon excellent scientific (social and natural) foundations and some of which are less well designed. A global standard for establishing PES schemes could significantly aid project developers and help ensure that PES programmes deliver upon their intended ecological, social and economic goals.

The project on Establishing Global Science Standards for Payments for Ecosystem Services aims at developing these first global, science-based standards for PES projects over the coming years. It is a collaboration between the Earth Institute Center for Environmental Sustainability (EICES) and the Wildlife Conservation Society (WCS). The project is based on a series of workshops that bring together a mix of scientists, practitioners, policy-makers and business partners to create a broad, interdisciplinary effort that will create the standards. It is also expected that at a more advanced stage these efforts will build an open access, web-based utility for Global PES Standards.

 

Coordinator

Shahid Naeem, Columbia University, USA

 

Workshops

Workshop on A Global Standard for Payments for Ecosystem Services (PES), 20-23 May 2012, New-York, USA

This workshop aimed at starting developing the first global, science-based standards for PES projects by bringing together a mix of scientists, practitioners, policy-makers and business partners.

 

Workshop on Establishing Open Access Global Science Standards for Payment for Ecosystem Services (PES), 15-17 Jan 2013, New York, USA

This workshop aimed at further developing, based on the discussion of the previous workshop (May 2012) the science-based standards for PES projects and creating an open access, web-based tool for science standards over the coming year.

 

 

Advancing theory and policy for biodiversity conservation through the BIOECON interdisciplinary network

The BIOdiversity and Economics for CONservation (BIOECON) network brings together economists, lawyers and other scientists from leading research institutions, and prominent policy organisations, to collaborate on the design and implementation of economic incentives for biodiversity conservation. DIVERSITAS, and in particular ecoSERVICES, supported and participated in BIOECON annual conferences and the scientific dissemination of their outcomes. DIVERSITAS co-sponsored three consecutive annual conferences from 2004 to 2006. DIVERSITAS is continuing  promoting the work of BIOECON.

 

Publications

  • Bulte EH and Barbier EB. 2007. Trade and renewable resources in a second-best world: an overview. In: Kontoleon A, Pascual U and Swanson T (Eds). Biodiversity Economics. Cambridge University Press
  • Perrings C. 2007. Pests, pathogens and poverty: biological invasions and agricultural dependence. In: Kontoleon A, Pascual U and Swanson T (Eds). Biodiversity Economics. Cambridge University Press

 

Conferences

8th International BIOECON Conference on Economic Analysis of Ecology and Biodiversity, 29-30 Aug 2006, London, UK

The conference examined the management of biological resources and biological processes. Two plenary policy sessions were also on the economic analysis of policies for biodiversity conservation.

DIVERSITAS organised one of the 2 policy sessions untitled 'Biodiversity science for human well-being' chaired by U Pascual of the SC-agroBIODIVERSITY with keynote addresses by S Polasky of the SC-bioSUSTAINABILITY and A Xepapadeas of the SC-ecoSERVICES.

 

7th Annual BIOECON Conference on Economics and the Analysis of Ecology and Biodiversity, 20-21 Sep 2005, Cambridge, UK

The conference examined novel approaches to the understanding of the economics of biodiversity in relation to the causes and effects of habitat fragmentation and agro-biodiversity changes, its economic valuation, the role of uncertainty to manage bio-resources and special topics on the economics of invasive species and wildlife control. The conference also bridged the economics and ecology with policy fora that dealt with incentives for biodiversity conservation in northern and southern countries.

DIVERSITAS organised a symposium where Erwin Bulte, chair of ecoSERVICES, introduced the work of DIVERSITAS. Two of the three papers presented at the DIVERSITAS session were co-production of SC-ecoSERVICES members:

  • T Eichner and J Tschirhart, Efficient Ecosystem Services and Naturalness in an Ecological/Economic Model
  • C Mason, E Bulte and R Horan, Extinction, Expectations and Speculation

 

6th Annual BIOECON Conference on Economics and the Analysis of Biology and Biodiversity, 2-3 Sep 2004, Cambridge, UK

This conference examined the economic and policy driven forces responsible for the decline of biodiversity, and how to develop and implement tools (i.e. incentive mechanisms) that could halt if not reverse the effects of these forces.

ecoSERVICES presented three papers on the issues it addresses:

  • Resources and economic development: Institutions, conflict and 'the Curse' by Erwin Bulte (Tilburg University, The Netherlands)
  • Compensation for wildlife damage: Habitat conversion, species preservation and local welfare by Daniel Rondeau (University of Victoria, Canada)
  • The biodiversity bargaining problem by co-presenter Timothy Swanson (University College of London, UK)

 

 

Linking ecology and economy

Natural resource management, the conservation of biodiversity and changes in the delivery of ecosystem services have economic implications for human societies. Reciprocally, the economic choices made by societies are drivers of change of the natural environment. Understanding how ecology and economy are connected to one another can help identify undesirable outcomes from decisions and guide their making towards increased sustainability.

 

Publications

  • Bampfylde CJ, Bobeldyk AM, Murray JA, Keller RP and McIntosh CR. 2009. A Case Study of Rusty Crayfish: Interactions between Empiricists and Theoreticians. In: Keller Rp, Lodge Dm, Lewis Ma and Shorgen Jf (Eds). Bioeconomics of Invasive Species: Integrating Ecology, Economics, Policy, and Management. Oxford University Press USA

  • Barbier EB, Baumgärtner S, Chopra K, Costello C, Duraiappah A, Hassan R, Kinzig AP, Lehman M, Pascual U, Polasky S and Perrings C. 2009. The valuation of ecosystem services. In: Naeem S, Bunker De, Hector A, Loreau M and Perrings C (Eds). Biodiversity, Ecosystem Functioning, and Human Wellbeing: An Ecological and Economic Perspective. Oxford University Press
  • Baumgärtner S 2007. The insurance value of biodiversity in the provision of ecosystem services. Natural Resource Modeling. 20(1):87-127
  • Bradshaw CJA and Brook BW. 2007. Ecological-economic models of sustainable harvest for an endangered but exotic megaherbivore in northern Australia. Natural Resource Modeling. 20(1):129-156
  • Brock WA, Finnoff D, Kinzig AP, Pascual U, Perrings C, Tschirhart J and Xepapadeas A. 2009. Modelling biodiversity and ecosystem services in coupled ecological-economic systems. In: Naeem S, Bunker De, Hector A, Loreau M and Perrings C (Eds). Biodiversity, Ecosystem Functioning, and Human Wellbeing: An Ecological and Economic Perspective. Oxford University Press
  • Christiaans T, Eichner T and Pethig R. 2007. A micro-level 'consumer approach' to species population dynamics. Natural Resource Modeling. 20(1):7-59
  • Finnoff D and Tschirhart J. 2007. Using oligopoly theory to examine individual plant versus community optimization and evolutionary stable objectives. Natural Resource Modeling. 20(1):61-85
  • Keller RP and Drake JM. 2009. Trait based risk assessment for invasive species. In: Keller RP, Lodge DM, Lewis MA and Shorgen JF (Eds). Bioeconomics of Invasive Species: Integrating Ecology, Economics, Policy, and Management. Oxford University Press USA
  • Keller RP, Lewis MA, Lodge DM, Shogren JF and Krkosek M. 2009. Putting Bioeconomic Research into Practice. In: Keller RP, Lodge DM, Lewis MA and Shorgen JF (Eds). Bioeconomics of Invasive Species: Integrating Ecology, Economics, Policy, and Management. Oxford University Press USA
  • Perrings C, Baumgärtner S, Brock WA, Chopra K, Conte M, Costello C, Duraiappah A, Kinzig AP, Pascual U, Polasky S, Tschirhart J and Xepapadeas A. 2009. The economics of ecosystem services. In: Naeem S, Bunker De, Hector A, Loreau M and Perrings C (Eds). Biodiversity, Ecosystem Functioning, and Human Wellbeing: An Ecological and Economic Perspective. Oxford University Press
  • Perrings C, Mooney H and Williamson M. 2010. Bioinvasions and Globalization: Ecology, Economics, Management and Policy. Oxford University Press
  • Tschirhart J. 2007. Introduction to special issue: Integrated modeling of economies and ecosystems. Natural Resource Modeling. 20(1):1-6

 

Workshops and conference

Workshop: The economics and ecology of biological invasions: developing a synthesis of ecological and economic research on the biological risks of growth in world trade, 29-31 Oct 2007, Tempe, USA

Organisers: BESTNet/ecoSERVICES

This workshop had a number of objectives:

  • Identify the implications of the state of the art of the science of biological invasions for the international regulations of species introduction;
  • Increase understanding of the consequences of patterns and growth of international trade for species dispersal;
  • Create enhanced appreciation of potential of models of climate change to be used to predict changes in the distribution of species;
  • Apply Bayesian techniques to improve learning about the invasion risks associated with species introduction; and
  • Improve understanding of the conditions in which “constant” control policies are efficient.

The workshop led to the publication of a book by Perrings et al. (2010).

 

Workshop on The economics of ecosystem services, 22-23 May 2007, Paris, France

Organiser: BESTNet/ecoSERVICES

This workshop significantly helped clarify the implications of the Millennium Ecosystem Assessment (MA) for the economic analysis of biodiversity and ecosystem change, and identify the post-MA options for modelling the consequences of biodiversity-induced changes in ecosystem services.

The workshop also led to the preparation and submission, upon request from the CBD secretariat, of recommendations on payments for ecosystem services that fed in the In-depth review of the programme of work on incentive measures (UNEP/CBD/COP/9/12, 2008; pdf) of the CBD-COP9 (see COP9 meeting documents here).

Three book chapters were also prepared from this workshop's outcomes (i.e. Barbier et al. [2009], Brock et al. [2009], and Perrings et al. [2009]).

 

Workshop on Integrated Modelling of Economies and Ecosystems, 3-6 Nov 2004, Paris, France

Organiser: ecoSERVICES

Coordinator: John Tschihart

This workshop convened leaders in ecological and economic modelling to question how economic activity can move ecosystems to different states, and how ecosystems change across those states. It also responded to the need to integrate ecology and economics when formulating principles to guide policy makers. The workshop helped ecologists and economists better understand each others' systems and develop strategies for mapping them together. In particular, it addressed errors that arise when one system is oversimplified (e.g. when economists ignore spatial aspects of ecosystem processes or when ecologists fail to account for human behaviours that affect ecosystems). It also helped create an international network of modellers in economy and ecology who helped advance the objectives of ecoSERVICES.

This workshop led to a special issue in Natural Resource Modelling guest-edited by John Tschirhart (cf. Baumgärtner [2007], Bradshaw and Brook [2007], Christiaans et al. [2007], Finnoff and Tschirhart [2007], and Tschirhart [2007])

 

ISEE Eighth Biennial Conference on Challenging boundaries: Economics, ecology and governance, 11-14 Jul 2004, Montréal, Canada

The International Society for Ecological Economics (ISEE) brings together economists and ecologists to integrate a transdisciplinary approach aimed at developing a sustainable world. The Society is particularly interested in the areas of modelling, equity, indicators, limits, trade and development, valuation, and policy instruments. Their biennial conferences attract hundreds of participants from around the world.

ecoSERVICES jointly with bioSUSTAINABILITY organised a one-day symposia, on the topic "Biodiversity, biotechnology and biosafety" (14th July).

 

 

The Economics of Ecosystems & Biodiversity (TEEB)

At the meeting of G8+5 Environment Ministers in Potsdam, Germany in March 2007, the German government proposed a global study on the economic significance of the global loss of biological diversity as part of the Potsdam initiative (see also) for biodiversity. This global study was named The Economics of Ecosystems & Biodiversity (TEEB). ecoSERVICES was engaged in the early stages of the development of this study and several members of DIVERSITAS contributed to it.

 

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