Stack them? Bundle them? Just get the investment for ecosystem services – as many as possible

“Additionality”, referring to the relationship between payments for ecosystem services and their direct cause in improving an ecosystem service, was a common discussion thread at a recent workshop on stacking and bundling. The question was whether sellers/providers already receiving payments can/should receive payments for additional services without any change in management.

There are several reasons why additionality is a concern:

  1. Cost-effectiveness: conservation dollars are limited, so they should go to as many places as possible.
  2. Pricing: too many conservation credits can drive the price down decreasing incentives to resource “owners.”
  3. Offsets: they are meant to compensate for environmental damage at another location; if no new activities occur, then no offsetting actually takes place.
  4. Double counting: businesses don’t want to pay double for something.

I challenge the community to flip this discussion around. Rather than focusing on the supply of ecosystem services and restrictions on payments, what if we instead focus more on creating demand? Afterall, we tout the multiple (currently non-market) values ecosystems services provide. We should put this into practice and capture as much of these values as possible, starting by allowing for multiple payments with or without additional activities, especially if companies are willing.

The key is to design frameworks that would allow for such multiple payments and put into place safeguards for the special case of offsets. The more demand there is, the higher the price and the payments, and the more likely we can tip the balance towards healthy ecosystems.

Author bio: 
Winnie is the Program Manager for the Marine Ecosystem Services Program (MARES) at the non-profit Forest Trends. Her main focus is to develop innovative financing mechanisms to protect critical marine and coastal habitats and their ecosystem services. She believes in that solutions to our environmental problems depend on the collaboration across multiple disciplines and multiple stakeholders to come up with transformative ideas.

Comments

Tim Gieseke

Very good point, Winnie - "we

Very good point, Winnie - "we tout the multiple values ecosystems provide" - so why don't we capture them in our valuation process?  I think if we view ecosystem services in the broad definition (provisional, regulating, supporting, cultural) your point even makes more sense.  As an agro-ecologist I produce provisional and regulating ecoservices depending on markets and how I manage the land.  For example, if on an acre of land I produce three types of provisional ecoservices (food, fiber, fuel) and four types of regulating ecoservices (habitat, carbon sq, WQ, soil health), I could theoritically market seven types of ecoservices.  In our current ecosystem valuation process I am compensated for the three types of provisional ecoservices and one type of regulating ecoservice (if we do not allow stacking).  So rather than have four buyers for the regulating ecoservice I have one and that one now has to pay the full amount (rent, labor, profit) of the one ecosystem service rather than a portion (perhaps 1/4) of the value.   Demand lessens as price increases and "sustainable" becomes too expensive for that particular buyer.  With additionality, it creates a broader demand base for regulating ecoservices, which lowers the price for each buyer while maintaining the combined value (to the agro-ecologist) for the four regulating ecoservices.   Your statement, "especially if companies are willing" would seem to work since companies would rather pay 1/4 the cost of any ecoservice (provisional or regulating) if the opportunity arose.

Site Admin 2

on Behalf of Gabriel Thoumi -

on Behalf of Gabriel Thoumi - http://www.ecosystemcommons.org/users/gabriel-thoumi

Winnie and Tim, my challenge to you is to publish a version of this article in a financial magazine. Can we do this as a community?? I can assist with contacts - Thanks, Gabriel

 

Tim Gieseke

Gabriel - I think that is a

Gabriel - I think that is a very good idea.  Lead the way and I will follow.

Tim

Winnie Lau

Tim - Thanks for your

Tim - Thanks for your comment. You're absolutely right about the number of ecosystem services any piece of land (or habitat) can "produce" especially when we look at all four broad categories. Your prespective about the relationship between number of buyers and the price is an interesting one and a slight variation form what I was thinking about. I was thinking about creating demand for the other services that currently don't have markets and thereby increasing the payments that a piece of land (or habitat) may receive. It is just as interesting to think about how some of your buyers may already be paying for these different services (in a bundle), but don't even know it since the services are connected afterall. Their "price" would definitely be lower if "users" of the other services chip in, or, in other words, they are paying for these positive externalities that others enjoy. It would be great to explore this some more.

Winnie Lau

Gabriel - What a great

Gabriel - What a great suggestion!

Tim & Gabriel - Let's talk and see what we can come up with. We have to speak directly to the private sector folks for sure. Look forward to it! 

Tim Gieseke

Winnie - Our different

Winnie - Our different perspectives on facilitating demand do seem compatable and perhaps reinforcing.   I presented ths co-called Symbiotic Demand model at NatureServe conference in Portland a couple of weeks ago.  The model is based on findings related to a MN agriculture and water quality project I managed, but it could be applicable to a broader suite of ecosystem services.  https://prezi.com/tpfaewgz1jie/apportioning-ecological-values-and-costs-through-symbiotic-demand/