Ecosystem Services

What is an ecosystem service? Pollination is just one type of ecosystem service. Humankind benefits in a multitude of ways from ecosystems. Collectively, these benefits are becoming known as ecosystem services.  Ecosystem services are regularly involved in the provisioning of clean drinking water and the decomposition of wastes.

Ecosystem Services https://www.youtube.com/watch?v=wMIUglBligI

Ecosystem Services

Ecosystems products and services Food Fuel wood Non-timber forest products Fisheries products Marine products Wetlands products Medicinal and biomedical products Forage and agricultural products Water Reeds Building material Functions/Services Hydrological services Purification of water Capture, storage and release of surface and groundwater Mitigation of floods and droughts Biodiversity Maintenance of biodiversity (plants and animals) Climate Partial stabilization of climate through carbon sequestration Moderation of temperature extremes and the force of winds and waves Source: Adapted from Simpson (2001)

USE VALUES NON-USE VALUES Direct values Outputs that can be consumed or processed directly, such as timber, fodder, fuel, non-timber forest products, meat, medicines, wild foods, etc. Indirect values Ecological services, such as flood control, regulation of water flows and supplies, nutrient retention, climate regulation, etc. Option values Premium placed on maintaining resources and landscapes for future possible direct and indirect uses, some of which may not be known now. USE VALUES NON-USE VALUES Existence values Intrinsic value of resources and landscapes, irrespective of its use such as cultural, aesthetic, bequest significance, etc.

9min https://www.youtube.com/watch?v=BCH1Gre3Mg0

Why value? Understand how much an ecosystem contributes to economic activity or society. For example, on average forests benefits in the Med region amount to about 1% of GDP. Indirect use value such as watershed protection contributes about 35% of total estimated value. Understand what are the benefits and costs of an intervention that alters the ecosystem (conservation investment, development project, regulation or incentive) and make ecosystem gods and services comparable with other investments How are costs and benefits of a change in ecosystem distributed? How to make conservation financially sustainable?

https://www. youtube. com/watch https://www.youtube.com/watch?v=q8AZHtF2f50 Value of Ecosystem services

Stated Preference Methods Cost- Based Methods Revealed Preference Methods Stated Preference Methods Contingent Valuation Conjoint Analysis Choice Experiments Replacement Costs Cost of providing substitute services Damage cost avoided Effect on Production Productivity Approach Surrogate Market Approaches Travel Costs Hedonic Pricing Market Price Method Market Prices

Productivity & cost-based approaches Direct values Goods and products Indirect values Ecosystem services Option values Existence values Nature tourism Market Prices Effect on Production Replacement Costs Cost of Providing Substitutes Cost of Avoided Damage Productivity & cost-based approaches Travel Costs Contingent Valuation Surrogate market & stated preference approaches

Revealed Preference Methods Stated Preference Methods Cost- Based Methods Revealed Preference Methods Stated Preference Methods Contingent Valuation Conjoint Analysis Choice Experiments Replacement Costs Cost pf providing substitute Services Damage Cost Avoided Effect on Production Production Function Approaches Surrogate Market Approaches Travel Costs Hedonic Pricing Market Prices

REPLACEMENT COSTS E.g. Ream National Park, Cambodia: Value of mangrove ecological services (flood barriers, upstream erosion control) Storm protection $60,000 Silt trapping $220,000 TOTAL VALUE $280,000 The costs of replacing an environmental good or service A minimum estimate of money saved

People’s actual willingness to pay MARKET PRICES E.g. Nam Et & Phou Loei NBCA, Lao PDR: Value of NTFP use for Viengthong District villages Cash income $634,000 Plant foods $45,000 Wild meats $476,000 Fuel and housing $480,000 Crop consumption $241,000 TOTAL VALUE $1,876,000 What it costs to buy or sell a good or product People’s actual willingness to pay

Watershed services: supply and demand Supply of services: Upstream land uses affect the Quantity, Quality, and Timing of water flows Demand for services: Possible downstream beneficiaries: Domestic water use Irrigated agriculture Hydroelectric power Fisheries Recreation Downstream ecosystems Source: World Bank 2003

Applying ecosystem valuation to payment for ecosystem service: simple in theory Conservation without payment Conventional resource use: no conservation Minimum payment willing to receive to change damaging behaviour to ecosystem Conservation with payment for service Payment Benefits to producers Costs to offsite populations Maximum payment willing to pay to reduce environmental damage Source: Adapted from World Bank 2002

In practice, not so simple…

In practice not so simple… Complex biophysical linkages (Brand 2003)

Ecosystems Services and Natural Capital https://www.youtube.com/watch?v=i1OTQvNV1lo

In practice still not so simple…valuing effects of change in ecosystem conditions on agricultural production

Use-and non use- of economic valuation to design payments for ecosystem services Public payments Costa Rica: $20-44/ha/yr for forest conservation- based on old subsidy based on opportunity cost of land use change USA (Conservation Reserve Program): $50/ha/yr. Opportunity cost and cost of conservation measures Ecuador: municipal water and electrical utility companies each donate 1% of total revenues for watershed protaction (oroginally 5% had been proposed by TNC) Brazil – a water utility in the city of Sao Paulo pays 1% of total revenues ($2,500 per month) for the restoration and conservation of the Corumbatai watershed. Funds are used to establish tree nurseries and for reforestation along riverbanks. Payment is outcoem of political negotiation.

Use-and non use- of economic valuation to design payments for ecosystem services Private payments France: US$320/ha/year for 7 years, equivalent to 75% of farm income Opportunity cost and actual cost of switching agricultural technology Costa Rica: a hydropower company pays US$10 per ha/year to a local conservation NGO for hydrological services in the Peñas Blancas watershed Australia: Since 1999, farmers in the Murray Darling watershed pay $AUD 85/ha/yr for forest conservation for 10 years or $AUD 17 per million liters of transpired water. Based on increase in marginal benefits due to reduced soil salinity resulting of 100 ha of reforested area.