From the rivers to Gulf of Mexico, Towards an ecosystem management approach
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From the rivers to Gulf of Mexico, Towards an ecosystem management approach
- 1. The Benefits of Ecosystem Services, Environmental Economics and Eco-Compensation Schemes Christian Susan UNIDO Water Management Unit
- 2. Ecosystem Services Provisioning Services • • • • • food (including seafood and game), fibre, crops fresh water genetic resources, bio-chemicals natural medicines energy (hydropower, biomass) Regulating Services • • • • • • • climate regulation, carbon sequestration air quality regulation water regulation and purification erosion regulation disease regulation hazard regulation pollination, pest regulation
- 3. Ecosystem Services Cultural Services • • • • spiritual enrichment cognitive development reflection recreation, amenity and aesthetic experiences Supporting Services • • • • • • • soil formation photosynthesis primary production nutrient cycling water cycling provision of habitat soil formation and retention
- 4. • efficiency • growth • stability Sustainable Development •i nt ra • e •e gen m qu era pl it ti oy y on m al en t ECONOMIC •i •v nt al er ua na t i liz on at io n ENVIRON MENTAL SOCIAL • poverty • consultation/empowerment • culture/heritage • inter-generational equity • popular participation • biodiversity/resilience • natural resources • pollution
- 5. Quantification of Total Economic Value
- 6. Quantification of Total Economic Value Quantification of WTP/WTA through markets • market price determined by supply and demand • direct use value and to certain degree the indirect use value • private goods Quantification of WTP/WTA where markets fail • • • • most ecosystem services have public goods character no markets exists, not traded in markets “market failure” environmental valuation techniques to derive option and non-use value
- 7. Quantification of Total Economic Value Environmental Valuation Methodologies
- 8. Quantification of Total Economic Value Environmental Valuation Methodologies
- 9. Quantification of Total Economic Value Environmental Valuation Methodologies
- 10. Eco-compensation, offsets, no net loss, net gain Eco-compensation • economic development => environmental damages, reduction of natural capital stock • sustainable development: minimize detrimental environmental impacts, offset residual damage by eco-compensation No net loss • countries with abundant natural resources, natural capital stock still +/- intact, application of no net-loss => sustainable development Net gain • countries, where natural capital drastically reduced, application of net-gain principle => ‘re-balance’ accounts, sustainable development, net gain principle legally binding and transparent rules
- 11. Eco-compensation, offsets, no net loss, net gain Eco-compensation • economic development => environmental damages, reduction of natural capital stock • sustainable development: minimize detrimental environmental impacts, offset residual damage by eco-compensation No net loss • countries with abundant natural resources, natural capital stock still +/- intact, application of no net-loss => sustainable development Net gain • countries, where natural capital drastically reduced, application of net-gain principle => ‘re-balance’ accounts, sustainable development, net gain principle legally binding and transparent rules
- 12. Habitat Hectare Assessment • environmental proxy, value of habitats in non monetary units • “currency” used: habitat hectare habitat area [ha] x habitat score = habitat hectare • habitat score: comparing habitat and landscape component with a benchmark • benchmark: average characteristics of mature and apparently long undisturbed biodiversity and native vegetation • benchmarks for each Ecological Vegetation class (EVC) max habitat score = 1 or 100%
- 13. Eco-compensation, offsets, no net loss, net gain species composition to assure no net loss • fores t s = c om plex ec os ys tems , s ocially and ec onomic ally valued goods and environmental servic es • age + s pec ies c om pos it ion = c ruc ial determinants of habit at quality • to as s ure no net -los s t o overall habit at quality, ec o-c ompensat ion has to maint ain s pecies c om pos ition • affores t ation wit h fas t growing c oniferous s pecies c an res tore t he com merc ial t im ber value but not t he habitat qualit y • affores t ation wit h c oniferous s pec ies in Great Britain, increas e in fores t area, los s in biodivers it y and negative im pac t on real es tat e prices (revealed preference, Hedonic pric ing) ! !! c ruc ial t o as sure no net-los s of overall habitat qualit y: us e t he s pec ies felled for refores tat ion/affores tat ion!! !
- 14. Eco-compensation, offsets, no net loss, net gain Eco-compensation ratio to assure no net loss • forests take several decades to centuries to develop their full range of habitat functions • value of habitat (habitat score) increases over time habitat score habitat score hshs (t) (t) hs (tb)=1 hs (tb) hshs a) a) (t (t hshs x) x) (t (t tx tx ta ta tb tb age forest t age ofof forest t
- 15. Eco-compensation, offsets, no net loss, net gain Eco-compensation ratio to assure no net loss • equivalence: 0,8 ha*0, 5 habitat s c ore=0,4 habit at hec tares=0,4 ha*1, 0 habitat sc ore • habit at sc ore/value increas e over t ime !! ! t ime plays a cruc ial role in order to ass ure no net-los s in habit at value !! ! • if a party c aus ing des truc t ion of forest habitat is c ommit ted to t ake care of ref ores tation/aff ores tation unt il habit at s core of area c leared c an be achieved => compens ation rat io of 1:1 guarantees no net -loss • if a party c aus ing des truc t ion of forest habitat is only committ ed t o take c are of ref ores tation/aff ores tation for a shorter period => c ompens at ion ratio has t o be inc reas ed to guarant ee no net -loss • if habit at sc ore aft er 20 years (t20) is 0, 2; to c ompensate for a habitat des troyed (1ha) with a habitat s core of 0,8 => c ompensation rat io of 4:1 required for equivalenc e => 4 ha need to aff orest ed and looked af ter for 20 years
- 16. Eco-compensation, practical application Baku-Tbilisi-Ceyhan (BTC) Pipeline • BTC/SCP pipelines 248 km lengt h, average width of 53 m on Georgian t errit ory • route c haract eriz ed by very diverse ec ological condit ions and abundant biodivers ity • ESIA ac cepted on c onditional bas is only; impac ts on forest ecos ys tems have to be evaluated and off-set by adequate ec o-compens ation meas ures • Goal: res tore t he equivalent fores t habitat, no net loss • 141,8 ha fores t aff ec ted, t ot al value 80, 51 habitat hec tares • eco-c ompens ation ratio f or 20, 30,40 years c are taking period calc ulated • c ompens at ion ratio bet ween 1:2, 5 up t o 1:6, 8
- 17. Eco-compensation, policy application • logical extension of polluter pays principle • healthy ecosystems have become scarce • inclusion in regulatory framework = pre-requisite for sustainable development • EU Natura 2000 areas, Austria, Australia • obligation for developers to internalize cost of externalities in Cost-Benefit Analysis, reflection of true costs • precondition for future generations to benefit from extremely valuable ecosystem services
- 18. gracias, thank you !!!
Editor's Notes
- Provisioning services are: The products obtained from ecosystems Regulating services: The benefits obtained from the regulation of ecosystem processes
- Cultural services are: The non-material benefits people obtain from ecosystems Supporting services are: Ecosystem services that are necessary for the production of all other ecosystem services.
- The economic approach to sustainability is based on the concept of maximizing the flow of income that can be generated while at least maintaining the stock of assets which yield these benefits. There is an underlying concept of optimality and economic efficiency The social concept of sustainability is people oriented and seeks to maintain the stability of social and cultural systems. Equity is an important aspect of this approach. The environmental view focuses on the stability of biological and physical systems. Of particular importance is to maintain the viability of subsystems to provide the ecosystem services that are critical to the global stability of the overall ecosystem.
- Direct Use value – those values supported by ecosystems that have a direct impact to welfare through market transactions, e.g. value of timber extracted from a forest Indirect Use value– those values supported by ecosystems that have an indirect impact to welfare through market transactions Option value –is based on how much individuals are willing to pay today for the option of preserving the asset for future (personal) direct and indirect use. For example, people may be willing to pay for preserving biodiversity or genetic materials to ensure the option of having these goods in the future. This value component is a controversial element of the total value. There is no consensus even among environmental economists as to the exact placement of option value among use and non-use components. Bequest value - while excluding the individual’s own use values, is the value that people derive from knowing that others (perhaps their own offspring), will be able to benefit from the resource in the future. For example, many of us are concerned with future damages from global warming and would be willing to pay to reduce them, despite the fact that the vast majority of the damages is expected to affect the earth long after our generation is gone. Policies associated with either a long-term or irreversible impacts can lead to losses that consist primarily of bequest value. Existence value - is the perceived value of the environmental asset unrelated either to current or optional use, i.e. simply because it exists. For example, some people derive satisfaction from the fact that many endangered species are protected against extinction. Many people are willing to pay for protection of these species’ habitats, even those located in remote, hard to access areas. Although those placing the value will most likely never travel to these places, or see the species, they nonetheless value the knowledge that such species exist. individuals’ willingness to pay (WTP) and willingness to accept compensation (WTA)
- non-rivalrous - consumption of the good by one individual does not reduce availability of the good for consumption by others non-excludable - no one can be effectively excluded from using the good
- There are many techniques which can be applied to assign a monetary value to environmental services and quality. All have their uses and limitations, and the analyst has to take account of these when choosing to apply a technique in a particular case.
- There are many techniques which can be applied to assign a monetary value to environmental services and quality. All have their uses and limitations, and the analyst has to take account of these when choosing to apply a technique in a particular case.
- There are many techniques which can be applied to assign a monetary value to environmental services and quality. All have their uses and limitations, and the analyst has to take account of these when choosing to apply a technique in a particular case.