Functional Value of Biodiversity Project Overview September 2002

1. Functional Value of Biodiversity ProjectOverviewSeptember 2002 The Bank - Netherlands Partnership Program

2. Outline • Goals • Results to date • Phase II plans • Current and expected impacts

3. Motivation • Can biodiversity conservation ‘pay for itself’ by providing functional values? – such as flood prevention, climate mitigation, forest products, etc. • If so, can poor people benefit: • As providers of these functional values? • As beneficiaries? • Hydrological services appear to be potentially among the most ‘saleable’ -- but most poorly understood -- forest values.

4. Assertions • Upland-dwelling poor people are the agents of deforestation that results in upland biodiversity loss and downslope flooding, sedimentation, drought, landslides. • If downslope populations pay upland dwellers to alter behavior, the result can be higher economic output, poverty reduction, and biodiversity conservation. • Is this assertion valid? Where? To what extent?

5. General Objective Provide a sound basis for identifying and designing policies and projects that use forest conservation as a tool for maintaining the level, quality, and regularity of water flows. “Conventional wisdom” can result in both missed opportunities and inappropriate policies

6. Goals for mainstreaming: influence… • …Bankwide priority-setting, agenda-setting: Where are forest conservation/hydrology connections important? • …CAS, PRSP for selected countries: What kindsof connections are important? For what subregions? Is there a poverty link? • …Environmental services project design

7. Guatemala City • Basins > 5,000km2 • Deforestation • Habitat loss • Increased water yield • controversial • Lowland flooding • Sedimentation • Watershed < 200km2 Spatial arrangement of trees and crops locally affects: • Erosion • Sedimentation • Flooding • Landslides • Habitat connectivity Agriculture Forest Water Urban Shrub Bare rock Southern Guatemala 0 20 40 km Vertical Exaggeration x5 At what scale does land use change affect hydrological functions?

8. Erosion Landslide Risk Saturation Overland Flow, no Erosion No Surface Runoff 0.01 0.1 1 0 tan(Slope) Predicting local impacts of land use change based on topography 5 4.5 4 3.5 3 2.5 log (Topographic index) 2 1.5 1 0.5

9. Global significance of forest-hydrology-biodiversity interface • Where is the interface* between agriculture and forested slopes? – the place where deforestation might affect water flows. • Who lives there, worldwide? 20 million people? 100 million? 200 million? • Where is the interface crucial to biodiversity?

10. 165 million in developing countries at the forested-slope interface* * Restrictive definition

11. 165 million in developing countries at the forested-slope interface* * Restrictive definition

12. Interface zones: Overwhelmingly In areas of high Biological Distinctiveness (based on WWF Global 200) Note: data missing for China Buffer zones falling within areas of High Biological Distinctiveness (km2) Indonesia Mexico Colombia Peru India Philippines Malaysia Myanmar Brazil Algeria Morocco Papua New Guinea Thailand Venezuela Bolivia Nepal Honduras Madagascar Ecuador Ethiopia Area of high BDI Zaire Non-BDI Guatemala Tanzania - 50,000 100,000 150,000 200,000

13. F o c u s a r e a D i v i d i n g l i n e b e t w e e n h u m i d a n d s u b h u m i d t r o p i c s A S B s i t e l o c a t i o n s Extent of basins includingtropical forests Source: Hydro1k – USGS EDC 2001; Terrain type: A. Nelson – World Bank (2001). Note: The shading differentiates between the upper and lower catchments of the basins.

14. Regional studies

15. Central America:combine data on forests and slopes…

16. ..with info on population…

17. …poverty…

18. ...and watersheds

19. Guatemala: critical watershedswhere the ‘interface’ > 20% of area

20. Guatemala: poor people/km2by watershed

21. Guatemala: poverty rateby watershed

22. Guatemala: poverty ratewith critical watersheds highlighted

23. Nicaragua: few ‘critical’ watersheds (at this scale and definition) Lambert Equal Area Projection Centered at 85 W and 13 N

24. Panama: few ‘critical’ watersheds (at this scale and definition) Lambert Equal Area Projection Centered at 85 W and 13 N

25. 20 18 16 14 12 10 Hilliness rank (1=highest proportion) 8 6 4 2 0 0 2 4 6 8 10 12 14 16 18 20 Poverty rank (1= poorest) Laos: High-poverty provinces have the most rugged terrain.

26. Impacts to date: inputs to • WDR 2003 • Millennium Ecosystem assessment • RUPES – IFAD-funded project on environment services payments for upland poor of Asia • World Bank Poverty-environment study for SE Asia and Laos PRSP process

27. Expected impacts by project end • Inputs into PRSP’s and CAS’s • Inputs into forest policy implementation • Inputs into design of possible environmental services projects • Analytic tools and policy conclusions: resources for future policy and project design

28. Phase II plans • Detailed hydrological modeling at three scales: • Global • Regional (Central America, SE Asia) • Watershed (Thailand, Indonesia; possible Central America) • Providing info on hydrological ‘hotspots’ and affected areas and populations • Link to micro-level understanding of land use options