Forests and Provision of Ecosystem Services
A new paradigm is emerging in the world of environmental conservation. Conservationists have traditionally spoken of conserving the building blocks of nature−genes, species, and ecosystems, along with the air, water, and land with which these interact. But this approach has not captured the interest of those who influence the activities that degrade these building blocks (Mainka et al. 2008).
In an effort to fill this connecting gap, conservationists have been seeking language that will make the importance of a healthy environment more obvious and relevant to all stakeholders who make decisions upon which nature’s future depends (e.g. politicians, economists, business people, and development specialists). One such concept is embodied in the idea of ecosystem services as the benefits that nature provides to people.
Colloquially, ecosystem services are “the benefits of natural ecosystems to households, communities, and economies.” More formally, ecosystem functions refer variously to the habitat, biological or system properties, or processes of ecosystems. Ecosystem goods (such as food) and services (such as waste assimilation) represent the benefits human populations derive, directly or indirectly, from ecosystem functions (Costanza et al. 1997).
Forests provide an array of ecosystem services by sequestering carbon, maintaining habitat and biodiversity, stabilizing hydrological flows, mitigating soil erosion, and improving microclimates (Pattanayak and Butry 2005). According to Pagiola and Platais (2002), the environmental services derived from forest ecosystems, typically include (but are not limited to): hydrological benefits, reduced sedimentation, disaster prevention, biodiversity conservation and carbon sequestration. De Groot et al. (2002) recognize four groups of functions: (1) regulating functions that maintain essential ecological processes and life support systems, (2) habitat functions that provide a suitable living space for wild plant and animal species, (3) production functions that provide goods such as timber and non-timber products, and (4) information functions that provide opportunities for cognitive development.
These forest goods and services may include commodities or ecosystems values and environmental services. The terms ecosystem services and environmental services are often used interchangeably. The former term implies a more narrow view of biological services, usually at a local or regional scale; the latter may apply to a host of benefits, including both ecosystem services and broader values such as recreation or global health and welfare.
Ecosystem Services and Deforestation
Humanity's relationship with nature is rapidly changing now. Human actors, operating at scales that are local, regional, and increasingly, global, have a substantial influence on the availability and quality of ecosystem services. In fact, human action is changing the climate, land cover, oceans, and the biogeochemistry of the fundamental cycles that sustain life, and the diversity of life itself, and although people are buffered from the natural environment by culture and technology, ultimately our livelihoods, health, and even survival are completely dependent on ecosystem services (Carpenter et al. 2006). More than ever before, increasingly, human actions have remote effects, including on other people who are effectively invisible, far by distance, culture, and socioeconomic position (Butler and Olouch-Kosura 2006).
Tropical rainforests disappear due to illegal logging and extensive slash-and-burn practices, river basins are polluted by agrochemicals and mountain watersheds are degraded by non-sustainable management practices (Ahlheim and Neef 2006). Deforestation and forest degradation can irreversibly and substantively impair the ecosystem functions of forests. This concern is aligned now with the new paradigm in environmental conservation and the evolving human relationship with nature. Therefore, efforts to support the long-term sustainable supply of forest ecosystem services are as important to human well-being and survival as they are for nature itself which have created a new and renovated influx of concerns about forest conservation and deforestation.
Payments for Ecosystem Services
In explaining the loss of forest ecosystems, economists contend that unreliable information regarding the value of environmental services from these ecosystems is one reason for their loss (Pattanayak 2004). Although forest goods and services benefit both local and global communities not all forest uses generate financial returns commensurate with their “true” economic value. This is because several forest benefits, notably environmental services, are not traded in markets and have no observable price (Landell-Mills and Porras 2002). The lack of payments for these services results in under-investment in the protection, management and establishment of forests. In general, provision of ecosystem services will be sub-optimal because ecosystem services are public goods, ecosystem management involves externalities, and ecosystems are often the only capital of the poor who have no money or political voice (Pattanayak and Wendland 2007).
In recognition of the market failure and the connectivity between forest resources and provision of ecosystem services, the responsibility for the provision of environmental services has relied on a combination of regulation and market-based approaches, though the latter have become more prominent in recent years (Landel-Mills and Porras 2002). Incentives for maintaining the provision of ecosystem services (Pagiola et al. 2004, Newburn et al. 2005) include many components. Among them are regulatory systems of payments for ecosystem services (PES), such as those currently operating in countries such as Australia, Costa Rica, and Mexico (Sánchez-Azofeifa et al. 2007). These payment schemes differ from traditional approaches (e.g. Integrated Conservation and Development Projects and Community-Based Natural Resource Management) in three critical ways: emphasis on human-dominated landscapes, focus on ecosystem services, and use of innovative finance mechanisms (Sánchez-Azofeifa et al. 2007).
According with Wunder (2005) a PES is a voluntary transaction where a well-defined environmental service is being bought by an environmental service buyer from an environmental service provider if and only if the provider secures provision. Mayrand and Paquin (2004) say that PES are relatively new schemes seeking to support positive environmental externalities through the transfer of financial resources from beneficiaries of certain environmental services to those who provide these services or are fiduciaries of environmental resources.
Figure 1 (see attachment below) shows the flow of economic benefits between buyers and sellers in the context of PES. Sellers receive payments for their provision of environmental services and buyers receive some economic welfare externalities due to the delivery of environmental services.
Welfare impacts on sellers are easy to measure, however measures of welfare externalities on buyers will be affected depending on the particular PES scheme. In this case is when it is important to understand the science and the economics behind PES. In the case of biodiversity conservation for example it is more difficult to measure the welfare impact on buyers. This could make unreliable or even invalid some measures of welfare change.
In general, PES best suits intermediate and/or projected threat scenarios, often in marginal lands with moderate conservation opportunity costs. People facing credible but medium-sized environmental degradation are more likely to become PES recipients than those living in relative harmony with nature (Wunder 2005). PES systems work best when services are visible and beneficiaries are well organized, and when land user communities are well structured, have clear and secure property rights, strong legal frameworks, and are relatively wealthy or have access to resources (Mayrand and Paquin 2004). The successful application of PES depends on various factors such as the proper identification of suppliers and users, as well as the relation between land use and service supply (FAO 2004). Figure 2 (see attachment below) shows the simple logic of payments for environmental services.
It is important to understand that PES schemes aim to promote a continuous flow of environmental services by giving payments to those who provide these services. However, PES schemes do not imply necessarily “untouched resources” where suppliers are prohibited from managing their resources. In that sense PES can take many forms that can imply a sustainable forest management.
Scaling up Payments for Environmental Services
A number of PES schemes are currently operating around the world involving governments, business, government aid agencies, and non-governmental organizations. To date, the four main environmental services that have been addressed by PES are watershed services, carbon sequestration, landscape beauty, and biodiversity conservation. These approaches have emerged largely by what is driving the scheme: conservation goals, social goals, market goals, or government goals. Table 1 shows PES national initiatives being implemented around the world.
Although most schemes are still in their infancy, there is already an emerging consensus on several key constraints and opportunities to the provision of poverty reduction and sustainable management of natural resources through PES (WWF 2006). According with the report ‘Institutionalizing Payments for Ecosystem Services’, published in 2005 by United Nations Development Program, challenges faced by efforts to scale up PES can be grouped as follows:
• A shortage of willing and able buyers.
• Difficulties creating connection between buyers and sellers.
• Difficulties negotiating and structuring deals and markets.
• Difficulties mainstreaming PES into existing institutions and programs.
• Revenues received from PES are not always sufficient to induce behavior change.
• Lack of clear property rights for buying or selling ecosystems service stewardship services.
Conclusion
Payments for ecosystem services are perceived as a promising means for recognizing values that forests provide that are not compensated in traditional commodity, land, or recreation markets. As such, these payments might help forest owners receive funds for the nonmarket services that they do provide. This should encourage the retention and provision of these relevant services. Furthermore, payments for environmental services are promoted as an important new means to retain forests in the face of pressure from other land uses, which often have other high value competing uses for the land. Whether there will be adequate public and private funds for these payments remains moot, but realizing this promise of payments will be important for forests, communities, and society in the future.
References
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Sánchez-Azofeifa, G.A. Pfaff, A. Robalino, J. and J. Boomhowerb. (2007). Costa Rica’s Payment for Environmental Services. Program: Intention, Implementation, and Impact. Conservation Biology 21(5): 1165-1173.
UNDP. (2006). Institutionalizing payments for ecosystem services. In: http://www.gefonline.org/projectDetails.cfm?projID=2589. Accessed on 26 July 2006.
Wunder, S. (2005). Payments for environmental services: some nuts and bolts. CIFOR Occasional Paper No. 42. 24p. Center for International Forestry Research. Jakarta, Indonesia.
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Attachments:
Attachment (1)
File By Size Attached Ver. PES_Figures.doc [1]
Updated 1 July 2008
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