N ECOSYSTEM IS a dynamic complex of plants, animals, micro-organisms and their non-living
environment, of which people are an integral part. Te ben- efits that we derive from nature and rely on every day, from timber and food to water and climate regulation, are all eco- system services’, IUCN Commission for Ecosystem Manage- ment (IUCN-CEM).
Human life and activity depend directly on the health of ecosystems and the services they provide. For urban dwell- ers these services may seem remote, oſten taken for granted in day-to-day life. For rural populations, ecosystem services yield more visible benefits while for the poor in rural areas they oſten represent a vital lifeline for subsistence. In fact, eco- system services form the basis of all life on planet Earth and are fundamental to human well-being.
In this publication we look at the 23 ecosystem services as described by the World Resources Institute (2011) and the United Nations Millennium Ecosystem Assessment (MA, 2005). Five specific market segments relating to Payment for Ecosystem Services (PES) – carbon sequestration, watershed management, biodiversity, landscape beauty, and bundled services – are illustrated, drawing on case studies, graphics and photographs. An additional section explores the role PES could play in alleviating poverty.
Ecosystems Under Threat As the global population expands and uses up resources at an ever increasing rate, the planet’s ecosystems continue to degrade and lose biodiversity, ecosystem resilience and natu- ral capital.
In 2005 the Millennium Ecosystem Assessment identified 15 services provided by ecosystems around the world as having
6 VITAL GRAPHICS ON PAYMENT FOR ECOSYSTEM SERVICES
been degraded or used unsustainably over the past 50 years. Te root causes of this trend can be seen in our inability to fully to recognize the services ecosystems provide, and our failure to understand that our well-being depends on living in balance with nature. But awareness of the importance of ecosystem services is growing and new mechanisms are now being put in place to facilitate payment for such services.
From Ecosystem Services to Economic Value Nature provides ecosystem services to both humankind and to individuals, free of cost. However, conserving ecosystem serv- ices may come at a cost through the loss of revenue derived from another use. In particular these costs are incurred by individuals who own ecosystems such as, for example, a forest in a river catchment area. Conserving the forest provides a range of services, whether it means the supply of clean water or the prevention of soil erosion. But these services are largely unrecognized or ‘invisible’ values. On the other hand, con- verting the forest to cropland would provide direct benefits to the landowner and beyond. Tese benefits may be smaller than the costs of losing the ecosystem services; but they are more visible and positively accounted for in prevailing eco- nomic models. Further, the individual landowner derives rel- atively little benefit from conserving the services. PES can be a mechanism for overcoming this problem. In this publication we have worked with a broad understanding of PES in the sense that we have sought examples which illustrate the use of different systems of economic valuation for specific ecosys- tem services contributing to conservation.
Exploring Payment for Ecosystem Services PES can be applied to the full range of ecosystem services. Te primary objective of a PES scheme is not to generate money but to recognise the value of ecosystem services and support their sustainable use. PES schemes incentivise ‘sell- ers’, or ‘service providers’ to change behaviour and encourage them to continue to provide the services, usually by compen- sating for losses or ‘opportunity costs.’ Te ‘buyer’, or ‘service beneficiary’, may be private (a company selling bottled drink- ing water), public (a city supplying drinking water) or other organisations, such as an environmental group involved in the conservation of forest biodiversity.
PES is not a straightforward process; the pricing of ecosystem services can be open to widely differing interpretations. Not only might the various parties concerned have very different ideas about what value to put on a given resource, but also it