New green business opportunities

“We have reached substantial net gains in human well-being and economic development, but these gains are at growing cost of

degradation to many ecosystem services” (Millenium Ecosystem Assessment, 2005c)

Management of the world’s ecosystems is now clearly recognised as un- sustainable, already causing damage to some people and, unless efforts are taken to turn the tide, it will substantially diminish the long-term benefits obtained from ecosystems. Te profit earned from nature can be characterized under the term of ecosystems services, defined as the beneficial outcomes, for the natural environment or people, that result from ecosystem functions. Some examples of ecosystem services are 1.) support of the food chain, 2.) harvesting of animals or plants, and 3.) the provision of clean water or scenic views. Tese services have been divid- ed into four categories, from provisioning to supporting services (Box 2).

One of the primary objectives of this study is to highlight the numer- ous ecosystem services that orangutan habitat in Sumatra provides,

Box 2: Ecosystem Services

Each ecosystem is a dynamic complex of plant, animal and microorganism communities and the non-living environ- ment interacting as a functional unit.

Ecosystem services are the benefits people obtain from eco- systems. The human species is fundamentally dependent on the flow of ecosystem services. While many of the services are strongly interlinked, they can be separated into four main categories: provisioning, regulating, cultural and supporting.

Provisioning services are products obtained from ecosys- tems, including food, fibre, energy sources, genetic resourc- es, natural medicines, fresh water and ornamental resources.

Regulating services are the benefits obtained from the regu- lation of ecosystem processes, including air quality regula- tion, climate regulation both locally (i.e. temperature and precipitation) and globally (i.e. sequestering or emitting greenhouse gases), water regulation, erosion regulation, wa- ter purification, disease regulation, pest regulation, pollina- tion and natural hazard regulation.

Cultural services are the non-material benefits people obtain from ecosystems through spiritual enrichment, cognitive de- velopment, reflection, recreation and aesthetic experiences.

Supporting services are those that are necessary for the pro- duction of all other ecosystem services. These services differ from those above in that their impacts on people are often indirect, or occur over a very long time, whilst the others tend to have relatively direct and short-term impacts on people. They include such things as soil formation, photosynthesis, nutrient cycling and water cycling.

Millennium Ecosystem Assessment (MEA 2005a, b, c)

showing the relationships that exist between economic development, human well-being and the maintenance of these services. In this context, the alarming loss of biodi- versity that is occurring in the region can be considered a huge threat to the ecosystem’s capacity to provide essential services. Tis decrease in diversity tends to reduce overall ecosystem production and stability, and there is increasing evidence that the maintenance of multiple ecosystem pro- cesses requires a very large number of species (Naeem et al. 2009). Tus it is important to protect flora and fauna not only for their intrinsic value, but also for the many support- ing services they offer.

Te current economic system, which is based on the assump- tion that most of what is taken from the environment is a public good, or, in other words, that it is “free”, is leading humanity to either overexploit what nature provides or to destroy it completely. Tis has created an economic system in which one service has been maximized (usually produc- tivity) at the expense of others (usually ecosystem services). Under this economic paradigm, ecosystem services are not attributed their true value, which subsequently has led to un- sustainable use and the progressive depletion of ecosystems.

While the Millennium Ecosystem Assessment (MEA) high- lights the pressing concern that ecological degradation is leading to permanent reduction or loss of critical ecosystem services and to subsequent reductions in human well-being, recent efforts have focused on how the services that ecosystems provides should be properly evaluated and their true value in- tegrated into decision-making processes (TEEB 2008, 2009).

“You cannot manage what you do not measure.” Pavan Sukhdev (TEEB 2008)

Te Economics of Ecosystems and Biodiversity (TEEB) initiative strongly highlights the urgent need to include ecosystem services and especially forest carbon into na- tional accounts. Because tools for valuing biodiversity and ecosystem services are rapidly being developed and govern- ments all over the world are using these, it is becoming clear that there are transformational opportunities for economic growth to the benefit of the world’s degraded ecosystems.

Tis chapter aims to demonstrate the pathways towards a Green Economy for Indonesia and in particular for land use planners and policymakers in Northern Sumatra. Results from a 2010 Great Apes Survival Partnership (GRASP)- UNEP funded research project on carbon valuation of for- ests in Tripa and Batang Toru are combined here with out- puts from several economic studies in the Leuser National Park area over the past decade. Tis work shows that, by in- tegrating ecosystem services values, and especially avoided carbon emissions from deforestation, it is possible to offset the revenue projections under business as usual scenarios for many land uses, and for forests on peatlands more sus- tainable forms of revenue generation appear to surpass rev- enue projections for even the oil palm industry.

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