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Dr Camille Bann, 8 June 2012

The Role of Ecosystem Valuation in Decision Making & Policy development UNDP/GEF Main Streams of Life – Wetland PA System Strengthening for Biodiversity Conservation Programme. Dr Camille Bann, 8 June 2012 . Overview of presentation . Why value ecosystem ? Some examples

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Dr Camille Bann, 8 June 2012

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  1. The Role of Ecosystem Valuation in Decision Making & Policy developmentUNDP/GEF Main Streams of Life – Wetland PA System Strengthening for Biodiversity Conservation Programme. Dr Camille Bann, 8 June 2012

  2. Overview of presentation • Why value ecosystem ? • Some examples • Economic inputs to the project document

  3. Why is valuation of ecosystem services important ? Forest Trends, 2010

  4. Uses of Ecosystem Valuation / Economic Analysis • Raise awareness • Improve decision making (policies, planning, projects) • Requires understanding, measuring and quantifying the trade-offs • Facilitate effective management including sustainable financing options • Valuation underpins the design of eco-compensation mechanisms such as PES

  5. Ecosystems, PAs & ecosystem services • Protected Areas are the cornerstone of conservation policy and provide multiple benefits’ (TEEB for Policy Makers) • PAs provide the best continuous natural habitats for ecosystems to be able to function and continue to deliver these services

  6. Mainstreaming ecosystem services • Understanding the provision of ecosystem services (Quantification) • Understanding the benefits to human well-being from ecosystem services (Valuation) • Creating incentives for sustainable provision of ecosystem services (Policy/Governance)

  7. Typology of Potential Ecosystem Services

  8. Integrating Economic Valuation into Wetland Decision Making (Bann et al, 2010)

  9. Six Steps for including ecosystem services in local/regional policy (TEEB, 2010) 1. Specify & agree the policy issue with stakeholders 2. Identify which services are most relevant 3.Define information needs and select appropriate methods 4. Have ecosystem services assessed 5. Identify and appraise policy options 6. Assess distributional impacts

  10. What is the decision making context ?

  11. Overview of valuation methods

  12. Examples of Wetland Ecosystem Values and Economic Appraisal Approaches Key regulating services CBA Sector Scenario Approach

  13. Water Regulation (Flood Protection)

  14. Water Purification and Waste Treatment

  15. The Value of Wetland Ecosystem Services

  16. Scenario Analysis (Cost Benefit Analysis) • of Ecosystems Net Present Value ($/ha) 3.6x 3.8 x

  17. Sector Scenario Analysis Approach • Based on an Ecosystem Services Approach • Scenario Analysis (BAU /SEM) • Recognises the importance of temporal aspects • Cost Benefit Analysis ++ (recommends reporting of key indicators) • Analysis is at the sector level

  18. Contribution of ecosystems of PAs to growth (Source: Marlon Flores) Sector Scenario Analysis (SSA)

  19. Overview of Pressures Facing Wetlands & Sectors Responsible

  20. SSA OVERVIEW Source: Marlon Flores Value • employment • income trends • fiscal impacts (tax revenues, subsidies and green taxes) • foreign exchange (foreign investments, exports) • access to green markets/income & innovation • opinion polls /surveys • avoided damage costs • returns on investment • production (volume, value) • net revenue • productivity (return to labor, land, capital) • changes in natural capital • equity impact on the poor / distribution of benefits

  21. Valuation of Ecosystem Services, Phewa Lake Nepal • Total Gross Annual value is US$ 45.41 million (US$ 104, 392/ha of the lake) • 87.8% is from Tourism and Recreation • 3.2% from Provisioning services (food, irrigation and hydro) • Management of the lake is key to the Tourism Sector. • About 40% international tourists or 200,000 tourists visit Pokhara in a year • Similar number of Nepali tourists also visit • Foreign Exchange earning from International Tourism is Nrs 29 billion in 2009 or 3% of GDP

  22. Demonstrating value for money (1) In New York, Catskills (Perrot-Maitre and Davis 2001). • Payments to maintain water purification services in the Catskills watershed (US$ 1-1.5 billion) • This is significantly less than the estimated cost of a filtration plant (US$ 6-8 billion plus US$ 300-500 million/year operating costs). • Taxpayers’ water bills went up by 9% instead of doubling

  23. Demonstrating value for money (2) • Venezuela -the national protected area system prevents sedimentation that if left unattended could reduce farm earnings by around US$ 3.5 million/year (Pabon-Zamora et al. 2008) • Mangroves in Vietnam. Restoring & protecting nearly 12,000 hectares of mangroves cost US$ 1.1 million but saved annual expenditures on dyke maintenance of US$ 7.3 million. (Tallis et al. 2008)

  24. Assessing the benefits of not converting a floodplain in Delhi • Around 3,250 ha of floodplain between the Yamuna River and the landmass in Delhi offer benefits such as provision of water, fodder, fisheries, and recreation. • Pressures to convert the floodplain for housing & industry, • A range of ecosystem services estimated at US$ 843/ha/year (2007 prices) (Kumar 2001), • Higher than the opportunity costs of conservation, justifying the maintenance of the floodplain. • The Delhi Government halted the embankment plan of Yamuna

  25. The Wetlands Reserve Program, USA • A voluntary program offering landowners an opportunity to establish long-term conservation and wildlife protection in exchange for retiring eligible land from cultivation. • The USDA Natural Resources Conservation Service (NRCS) goal is to achieve the greatest wetland functions and values, along with optimum wildlife habitat, on every acre enrolled in the program. • There were 229 contracts in 1992 and 485 contracts in 2008. • Funding for the WRP program was fairly steady between 2002 and 2008, averaging roughly US$246 million per year.

  26. Key messages ! • Wetland Protected Areas represent natural capital • If they are properly managed they provide a flow of vital services – water, flood control and recreation • If they are badly managed these benefits are reduced or lost at an economic cost to society • Sustainable management requires the integration of ecosystem services into planning to ensure trade-offs are properly evaluated • Ecosystem services valuation underpins the design of eco-compensation mechanisms

  27. Economics Component F Forest Trends, 2010

  28. Valuation • Review of existing wetland valuation studies in China • Priority gaps • Evidence of value added of well functioning wetlands • Evidence of rates of return investment wetland conservation • Identify successful international experiences of internalising wetland values into national planning process • Assess potential for adopting and institutionalising existing valuation tools & methodologies by the project • Assess most cost-effective way of using economic tools under the programme and sub-projects

  29. Wetland Valuation studies – China • Constructed wetland in Hangzhou botanical gardens, China (2008) • Jiuduansha Wetland, Shanghai – a typical estuarine tidal flat of 42,020 ha located at the junction of the Yangtze River and East China Sea • Mangroves, Dongzhai Harbour, Hainan Island • Linghe Rover Estuarine wetland ecosystems • Nature’s value in Qinghai Province (2010) • Others?

  30. Eco-compensation mechanisms shengtaibuchangjizhi • Review China’s eco-compensation programme, existing examples of local/provincial schemes, and scheme development process • Explore opportunities for channelling eco-compensation funds in support of wetland conservation • Develop plans for establishing eco-compensation schemes in target provinces and landscape under the program for inclusion in the project document

  31. Eco-compensation mechanisms - Review by Forest Trends, 2010 • Domestically driven • Geographically concentrated in the richer coastal regions • Sector focus and innovation on water related issues • Involvement of private sector has been small but opportunities for growth exist • High degree of local variation in design • Benefits for Property and Equity Rights

  32. Provincial GDP & PES/MES Programs (Forest Trends, 2010)

  33. Overview of Programs Involving Payments and Markets for Ecosystem Services (Forest Trends, 2010)

  34. Inputs to Project Documents • Design National Level approaches of proposed policy options & economic tools for inclusion in National level-economic proposal • Design the economic component of sub-projects • Generic methodology • Tailored for each site (province) based on priorities, data etc

  35. Data to inform economics at provincial level • Socio-economic data • Current policy, legal, institutional set up (regarding valuation, eco-compensation and financing of PAs) • Scientific overview • Scientific studies of regulating services ? • Current uses of wetlands • Threats • Qualitative description of ecosystem services • Management arrangements • Existing valuation studies • Existing eco-compensation mechanisms and policy at provincial level

  36. Thank you Camille.bann@envecconsulting.com The Nature Conservancy, 2012

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