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The Economics of Restoration:
Costs, benefits, scale and
spatial aspects

Bernardo BN Strassburg
Agnieszka E Latawiec

Glo...
Structure
Introduction

The Pact for the Restoration of the Atlantic Rainforest

Developing a Restoration Economy

Large S...
Structure
Introduction

The Pact for the Restoration of the Atlantic Rainforest

Developing a Restoration Economy

Large S...
The Atlantic Rainforest Biome

115 million hectares
The Atlantic Rainforest Biome
Less than 14% of original forest remains
Less than 8%, if only fragments > 100 ha.
45% of sp...
The Atlantic Rainforest Biome

(William F. Laurence, 2009)
Structure
Introduction

The Pact for the Restoration of the Atlantic Rainforest

Developing a Restoration Economy

Large S...
The Atlantic Forest Restoration Pact

Our goal, our challenge:
Restoration of 15 million
hectares by 2050

Through:
Protec...
Our strategy
To articulate public and private
institutions, governments, NGO,
researches, corporations, landowners, etc......
Members

257 members
Government: 47
Private Sector: 66
Third Sector: 127

Labs and universities: 17
The Pact´s impact
Thinking at large-scale, or the
challenge to upscaling more
and more.
An approach based on landscape
eco...
Governance
Members
Board of Coordination

Steering Committée
Executive Secretary
Task Forces
Technical and scientific issu...
IIS- PACTO – Agenda Economics Working Group

1. Financial analysis of the
reforestation models

2. Spatial prioritization ...
IIS - PACTO – Agenda Economics Working Group

1. Financial analysis
of the reforestation
models
2. Spatial
prioritization
...
IIS - PACTO – Agenda Economics Working Group

4. Development of
financial mechanisms

• Development of financial models (i...
Structure
Introduction

The Pact for the Restoration of the Atlantic Rainforest

Developing a Restoration Economy

Large S...
Paradigm shift - Current Prevalent Paradigm
Paradigm shift - Current Prevalent Paradigm
Paradigm shift
Current Prevalent Paradigm

New Paradigm

Restoration involves very high costs per
hectare…

R&D and extens...
One word of caution
• Natural Capital, Ecosystems Services and similar approaches have a
tremendous potential to help soci...
Challenges

Time

• Very long time horizon (esp. for small-holder farmer)

Costs

• Current cost per hectare is very hingh...
Some possible solutions

Time

• Non-timber products, consorcium with the species of fast
growth, PES

Costs

• R&D, disse...
Developing commercially viable systems

Tropical forest restoration: show us the money
P.H.S. Brancalion, R.A.G. Viani, B....
Level the playing field
Low-productive
Cattle Ranching

Restored
Ecosystem

Perceived Value
Not Perceived Value
Subsidies
To further level the playing field
Low-productive
Cattle Ranching

Restored
Ecosystem

Perceived Value
Not Perceived Value...
The current playing field
Structure
Introduction

The Pact for the Restoration of the Atlantic Rainforest

Developing a Restoration Economy

Large S...
The Economies of Scale and Spatial Prioritization of Restoration
Ecological value

Economic and Social values

connectivit...
Addressing fragmentation

New study showing effects of isolation on mammal communities
Although the study is based on isla...
Competition for land

• Lambin and Meyfroidt, 2011 Global land use change, economic globalization,
and the looming land sc...
Competition for land, leakage
Forests Elsewhere

Pasturelands
The “Land Neutral Ecological Restoration” Mechanism

After

Before

In-Farm Mitigation
Multiple Uses
Single Use +
(Crop-Li...
Reducing competition for land and sparing land for
reforestation

Latawiec AE, Strassburg BBN, Brancallion P, Rodrigues R....
Avoiding the “Conflict for land”

• Current productivity : 118 million Animal Units;
• Potential sustainable carrying capa...
Take home messages

• The Atlantic Rainforest has lost 88% of its area, and is
under risk from climate change;
• A movemen...
Thank you
b.strassburg@iis-rio.org
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The Economics of Restoration: Costs, benefits, scale and spatial aspects

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This presentation by Bernardo Strassburg, IIS, discusses the pact for the restoration of the atlantic rainforest, how to develop a restoration economy and also large scale restoration & the landscape.

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Transcript of "The Economics of Restoration: Costs, benefits, scale and spatial aspects"

  1. 1. The Economics of Restoration: Costs, benefits, scale and spatial aspects Bernardo BN Strassburg Agnieszka E Latawiec Global Landscape Forum, 2013
  2. 2. Structure Introduction The Pact for the Restoration of the Atlantic Rainforest Developing a Restoration Economy Large Scale restoration and the Landscape
  3. 3. Structure Introduction The Pact for the Restoration of the Atlantic Rainforest Developing a Restoration Economy Large Scale restoration and the Landscape
  4. 4. The Atlantic Rainforest Biome 115 million hectares
  5. 5. The Atlantic Rainforest Biome Less than 14% of original forest remains Less than 8%, if only fragments > 100 ha. 45% of species under risk of extinction due to Climate Change 70% of Brazilian GDP 2/3 of Brazilian Population 250 mammals (22% endemic) 340 amphibians (26% endemic) 197 reptiles (30% endemic) 1,023 birds (18% endemic) More than 20,000 vascular plants World record of tree species per hectare (458, ac. NYBG) About 7% of global biodiversity Source: Conservation International
  6. 6. The Atlantic Rainforest Biome (William F. Laurence, 2009)
  7. 7. Structure Introduction The Pact for the Restoration of the Atlantic Rainforest Developing a Restoration Economy Large Scale restoration and the Landscape
  8. 8. The Atlantic Forest Restoration Pact Our goal, our challenge: Restoration of 15 million hectares by 2050 Through: Protection and restoration of ecosystem services • Legal compliance of agribusiness and food production • Job and income generation for local communities •
  9. 9. Our strategy To articulate public and private institutions, governments, NGO, researches, corporations, landowners, etc... ...To integrate knowledges, efforts and resources... ...To promote large-scale restoration and conservation of biodiversity... ...At the most critical areas in the Atlantic Forest.
  10. 10. Members 257 members Government: 47 Private Sector: 66 Third Sector: 127 Labs and universities: 17
  11. 11. The Pact´s impact Thinking at large-scale, or the challenge to upscaling more and more. An approach based on landscape ecology and environmental services. The concept of forest restoration supply chain. Matching and applying science and economic incentives to legal compliance.
  12. 12. Governance Members Board of Coordination Steering Committée Executive Secretary Task Forces Technical and scientific issues Knowledge and information Communications Forest restoration economy
  13. 13. IIS- PACTO – Agenda Economics Working Group 1. Financial analysis of the reforestation models 2. Spatial prioritization analysis 3. Socioeconomic impacts of reforestation models 4. Development of financial mechanisms •Phase 0: Define the models and structure the questionnaire •Phase 1 : Costs and revenues •Phase 2: Risks, market and business case •Phase 1: Prioritization for carbon, water, biodiversity, costs and opportunities, pasture productivity, legal deficit •Phase 2: Incorporation of the spatial aspects of restoation models (inc. relation com infrastructure and markets) •Phase 3: Optimized multiobjective spatial prioritizaion •Phase 1: Jobs and income •Phase 2: Poverty and inequality reduction •Development of financial models (in function of the models) •Survey of the potencial financing sources 5. Estimate of environmental benefits of large-scale reforestation (e.g. Pacto) •Ompacts on biodiversity •Impacts on climate mitigation •Impacts on water resources •Impacts on other ecosystem services 6. Estimate of socio-economic benefits of large-scale reforestation (e.g. Pacto) •Estimate of the potencial job screation (direct and indirect within the entire chain), income, poverty and inequality reduction following large-scale reforestation
  14. 14. IIS - PACTO – Agenda Economics Working Group 1. Financial analysis of the reforestation models 2. Spatial prioritization analysis 3. Socioeconomic impacts of reforestation models • Phase 0: Define the models and structure the questionnaire • Phase 1 : Costs and revenues • Phase 2: Risks, market and business case • Phase 1: Prioritization for carbon, water, biodiversity, costs and opportunities, pasture productivity, legal deficit • Phase 2: Incorporation of the spatial aspects of restoation models (inc. relation com infrastructure and markets) • Phase 3: Optimized multiobjective spatial prioritizaion • Phase 1: Jobs and income • Phase 2: Poverty and inequality reduction
  15. 15. IIS - PACTO – Agenda Economics Working Group 4. Development of financial mechanisms • Development of financial models (in function of the models) • Survey of the potencial financing sources 5. Estimate of environmental benefits of large-scale reforestation (e.g. Pacto) • Ompacts on biodiversity • Impacts on climate mitigation • Impacts on water resources • Impacts on other ecosystem services 6. Estimate of socioeconomic benefits of large-scale reforestation (e.g. Pacto) • Estimate of the potencial job screation (direct and indirect within the entire chain), income, poverty and inequality reduction following large-scale reforestation
  16. 16. Structure Introduction The Pact for the Restoration of the Atlantic Rainforest Developing a Restoration Economy Large Scale restoration and the Landscape
  17. 17. Paradigm shift - Current Prevalent Paradigm
  18. 18. Paradigm shift - Current Prevalent Paradigm
  19. 19. Paradigm shift Current Prevalent Paradigm New Paradigm Restoration involves very high costs per hectare… R&D and extension help to reduce costs… … with no financial return for the land owner… … and, in some cases, increase revenues… … only has environmental benefits… Restoration is an industry that create jobs, contributes to the general economy… … and these environmental benefits are poorly perceived… … and the resulting Natural Capital provides goods and services to humanity, including spiritual services and existence value of biodiversity … and not internalised … and should be at least partially internalised
  20. 20. One word of caution • Natural Capital, Ecosystems Services and similar approaches have a tremendous potential to help society realize the value Nature provides for humans; • Included in these are spiritual and existence values (recognizing that biodiversity have value for us even if there are not direct or indirect benefits); • These might be enough to justify “Ecocentric” restoration for wild habitat; • But these approaches do not include a potential intrinsic value of nature, an ethical perception that other living beings have value in themselves;
  21. 21. Challenges Time • Very long time horizon (esp. for small-holder farmer) Costs • Current cost per hectare is very hingh, perception of opportunity costs, costs of transition Returns Risks Incomplete information Extension Incomplete market • Uncertainty com future prices • Of production, of the market, legal aspects • Farmer and the society do not recognize the value of forests • Even if the the will exists, there is a lack of extension for forest restoration • Externatilites are still not internalized, high costs of the transition in incipient markets
  22. 22. Some possible solutions Time • Non-timber products, consorcium with the species of fast growth, PES Costs • R&D, dissemination, experience, scale Returns Risks Incomplete information Extension Incomplete market • Consolidation of the markets, warranty for the demand/prices, consorcium with the leading species • R&D, consolidation of the market, simple and clear legal frame • Roboust research and research-based dissemination • Better extension from public sector, incentives for private extension • Internalization of the benefits, PES
  23. 23. Developing commercially viable systems Tropical forest restoration: show us the money P.H.S. Brancalion, R.A.G. Viani, B.B.N. Strassburg & R.R. Rodrigues
  24. 24. Level the playing field Low-productive Cattle Ranching Restored Ecosystem Perceived Value Not Perceived Value Subsidies
  25. 25. To further level the playing field Low-productive Cattle Ranching Restored Ecosystem Perceived Value Not Perceived Value Subsidies Partial PES
  26. 26. The current playing field
  27. 27. Structure Introduction The Pact for the Restoration of the Atlantic Rainforest Developing a Restoration Economy Large Scale restoration and the Landscape
  28. 28. The Economies of Scale and Spatial Prioritization of Restoration Ecological value Economic and Social values connectivity Economies of scale due to reduced costs potential habitat higher resiliency water lower border effects carbon reduced conflicts and opportunity costs border effects increased value of services conflict with other land-uses
  29. 29. Addressing fragmentation New study showing effects of isolation on mammal communities Although the study is based on islands the authors hihglight “ a dire need to maintain large intact forest blocks to sustain tropical biodiversity"
  30. 30. Competition for land • Lambin and Meyfroidt, 2011 Global land use change, economic globalization, and the looming land scarcity, PNAS; Smith et al., 2010 Competition for Land, PTRS • In Brazil – competition with agriculture (in all biomes) • Atlantic Rainforest – extensive pasturelands, no ongoing deforestation (around 90% already gone) • Espirito Santo State – plans to both increase agricultural productivity and forest cover • Difficult without produtivity increase (except in abandoned areas)
  31. 31. Competition for land, leakage Forests Elsewhere Pasturelands
  32. 32. The “Land Neutral Ecological Restoration” Mechanism After Before In-Farm Mitigation Multiple Uses Single Use + (Crop-Livestock) Intensification Consortium Compensation
  33. 33. Reducing competition for land and sparing land for reforestation Latawiec AE, Strassburg BBN, Brancallion P, Rodrigues R., in prep
  34. 34. Avoiding the “Conflict for land” • Current productivity : 118 million Animal Units; • Potential sustainable carrying capacity: 367 mi Animal Units;  Current productivity only 32-34% of potential Current Productivity Potential Productivity All 2040 production targets + 36 million hectares restored Restored Areas Strassburg, Latawiec et al. (submitted)
  35. 35. Take home messages • The Atlantic Rainforest has lost 88% of its area, and is under risk from climate change; • A movement with significant representation from Brazilian society is pushing for large scale restoration; • A paradigm shift is need in terms of financing landscape restoration; • Restoration systems delivering goods and services can be financially attractive; • Special attention to landscape benefits and risks are needed when designing large scale restoration;
  36. 36. Thank you b.strassburg@iis-rio.org
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