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291x Tipe PDF Ukuran file 0.25 MB Source: 2007 Can the Value of Ecosystem Services Pay for the Conservation of the World
SESSION: DEMAND FOR FORESTS AND FOREST PRODUCTS TO
2020
Can the Value of Ecosystem
Services Pay for the Conservation of
the World’s Remaining Tropical
Rainforests?
DAVID BRAND
New Forests Pty Limited
PO Box 5334, West Chatswood 1515, Australia
Email: dbrand@newforests.com.au
Deforestation continues at a significant rate, Introduction
especially in developing tropical countries. The While the recent Millenium Ecosystem
1
process is a consequence of pressures to realise Assessment indicated that the extent of forest
the commercial value of the timber and/or the land, cover in developed countries has largely stablised,
the latter typically for either agriculture or there is a continuing significant loss in both the
settlement. Forests are integral to a variety of extent and ecological integrity of forests in
increasingly valuable environmental systems — developing countries, particularly in tropical
carbon, water and biodiversity. Measures such as regions. The stabilization of forest cover in
stopping illegal logging, and labelling logs from developed countries is a result of the completion of
sustainably-managed forests, are important the process of clearing most arable forest land for
palliatives. However, the real need is to develop agriculture, and even the abandonment of marginal
price signals that reflect the substantial value of agricultural land back to forest in some regions. In
environmental services, and to integrate these into manytropical regions the conversion of arable land
the international commodity economy. to agriculture, including grazing, palm oil,
soybeans and other commodities, is still occurring
at the expense of forests.
DRDAVID BRAND is Managing Director of Sydney- The economics of land use are not particularly
based New Forests Pty Limited, a business difficult to understand. Most landowners seek to
offering asset management and advisory generate commercial returns from their land assets.
services to forestry investors. New Forests In the case of forests this may initially be by
specializes in designing investments that will logging of existing timber resources. The owner
encompass both traditional forest management may then abandon the land once its value has been
and new environmental markets such as extracted, undertake commercial reforestation,
carbon sequestration, watershed management convert the land to some form of agriculture or
and biodiversity enhancement. Previously he
was director of the New Forests Program with develop the land for human settlement (e.g.
the Hancock Natural Resource Group (HNRG), housing). The decision is usually affected by a
responsible for the design and oversight of desire to maximize, at best, the net present value of
forest investment programs. Prior to joining the succeeding land use or, at worst, the short-term
HNRG, David was Executive General Manager profits. At present, converting land to satisfy the
of State Forests of NSW. In that position, he high demand for agricultural commodities and
supported the development of carbon trading in sprawling urban development tends to provide
NSW. From 1985 to 1995 he worked with the higher returns to land use in many areas,
Canadian Forest Service as a scientist, director particularly when cast against the long time frames
of scientific programs and ultimately as national and uncertainty of growing timber crops.
Director-General of Science and Sustainable
Development. He has a PhD from the
University of British Columbia and a BSc
Forestry from the University of Toronto. 1 See www.milleniumassessment.org
FORESTS, WOOD AND LIVELIHOODS PAGE 1
With the next 50 years likely to see a quadrupling approximately equal to the Gross Global Product,
of Gross Global Product, and demands for meat, and underscored the degree to which our economy
paper, energy and grain likely to grow at similar or relies on free services provided by nature. The
greater rates, there is some concern that we may paper, however, was also criticized as trying to put
see the ‘endgame’ for the natural environment in a price on ‘God’ or suggesting that the priceless
2
the coming decades . Certainly in any ‘business as and irreplaceable (e.g. nature) could be somehow
usual’ world we can see a large-scale and replaced if we had enough money and technology.
continuing loss of forest cover in the Amazon, Despite criticism, however, the idea of valuing
Southeast Asia and Central Africa for agribusiness
3 nature has taken hold, as most people understand
commodity production . Yet at the same time there
are a host of government agencies, UN bodies and that as long as the environment is unpriced, it will
non-governmental organisations focused on not be effectively conserved. In response, a slightly
conserving the world’s remaining forests because different approach to the idea has emerged, arguing
of their important contributions to global climate for the value of these things to be priced because it
stability, land and water conservation, and is a more efficient approach to supporting human
biodiversity. This competition between health and well-being. The classic case of the New
conservation and development is being won York City watershed is often used as an example.
handily by development at the moment, simply In this instance, the city found that investment in
because it has the weight of economics and the health of its watershed had benefits equivalent
associated market forces behind it. If conservation to secondary water treatment, and at far lower cost.
is to prevail it has to become a higher economic
6
land use, and we need to see emerge a new Other examples have been highlighted recently .
commercial base for forests, related to valuing This approach argues for a re-distributive model,
their ecosystem services. This paper will review where environmental impacts must be reduced or
this idea and consider whether new markets for offset, ultimately to achieve a no-net impact
ecosystem services may ultimately contribute to position on the environment.
the conservation of forests.
This will not happen overnight because of the
Ecosystem services and forests substantial short-term economic adjustments
— is there a commercial value to necessary. However, as can be seen in Figure 1,
substantial human impact has already occurred,
exploit? and is likely to expand in coming years. So
Many books and articles in recent years have whether the argument is one of moral or ethical
4 imperative, or simply commercial good sense,
discussed the idea of ecosystem services .The
5 there is an expectation that natural systems,
concept was initially put forward by Costanza ,
who published a paper quantifying the value of including the atmosphere, hydrosphere and
global ecosystem services at between $US17 and biosphere, will become increasingly valuable in
$US50 trillion per annum. At the time this was their own right, and that there will be a market
2 See Speth, G. 2004. Red Sky at Morning. Yale University price to use them. Then, like any other commodity,
Press. as scarcity emerges or competition rises for the use
3 See for example recent WWF study forecasting that 22 of the ecosystem services, the prices should go up.
million ha of forest and savannah in South America will be Forests are somewhat unique in this whole
converted to soybean cultivation by 2020, available at: equation, because they are integrated into the
http://www.panda.org/about_wwf/what_we_do/forests/new major environmental systems steadily being priced.
s/news.cfm?uNewsID=14910, and
Linden, E., Lovejoy, T. and Phillips, J.D. 2004. Seeing the
forest. Foreign Affairs 83(4), 8–962B.
4 See for example Daily, G. and Ellison, K. 2002. The New
Economy of Nature. Island Press/Shearwater Books,
Washington, DC, or Pagiola, S., Bishop, J. and Landell-
Mills, N. (eds) 2003. Selling Forest Environmental
Services: Market-based Mechanisms for Conservation.
Earthscan Books, London
5 Costanza, R., d’Arge, R., de Groot, R. et al. 1997. The
value of the world’s ecosystem services and natural capital.
Nature 387, 253-260. 6 See www.ecosystemmarketplace.com
PAGE 2 FORESTS, WOOD AND LIVELIHOODS
Figure 1. Degree of human influence on the earth’s ecosystems. (Source: Columbia University
Center for International Earth Sciences, www.ciesin.org.)
For example, forests are a key part of the global carbon dioxide as they grow), or installing
carbon cycle, act as a regulator to soils and renewable energy systems that do not emit
freshwater quality, and play host to a substantial greenhouse gases (such as windpower, solarpower
proportion of global biodiversity. Thus, as these or biomass energy). These markets are both
things rise in value, forests will increasingly be compliance driven (e.g. based on government
seen as a kind of natural infrastructure that may be regulatory requirements) or voluntary (e.g. based
managed as much for ecosystem services as for on corporate or personal commitments to reducing
timber or energy products. greenhouse emissions). The total market for
greenhouse gas emissions is rising steadily year by
Status of environmental and year (Fig. 2).
ecosystem markets — an early With the greenhouse gas market now at 250
focus on carbon? million t per annum and with a total value of $US5
billion in 2005, this is a significant economic
The history of using market-based or price-based activity and provides some insight into how
mechanisms for controlling pollution and markets for other ecosystem services may operate
environmental impact has been reviewed in future.
elsewhere. However, the use of market-based .
) 300
t
mechanisms to control acid rain in the United
n
o
States in the 1990s has generally been seen as a i
l 250
l
i
key initial example of the approach. Flowing on m
(
from the perceived success of the sulphur dioxide e 200
markets, the United States argued that the use of a 2-
O 150
market-based approach should be at the centre of et C
k
global efforts to reduce greenhouse gas emissions. r 100
The Kyoto Protocol is now operating with a range a
m
l 50
of market-based mechanisms, but somewhat a
b
ironically, without the participation of the United o
Gl 0
States. 2001 2002 2003 2004 2005
As political pressure mounts to reduce greenhouse Year
gas emissions, there have emerged a number of Figure 2. Total size of the global greenhouse gas
markets for greenhouse gas emissions or emission market by year. (Source: World Bank data
offsets. Emission offset credits are created from provided by Natsource, updated by New Forests
activities that reduce emissions, such as flaring Advisory Pty Ltd 2005.)
methane emissions, planting forests (which absorb
FORESTS, WOOD AND LIVELIHOODS PAGE 3
First, it should be noted that the major trade in or community groups. In fact many NGOs and
carbon credits or emission allowances is driven by scientists have argued that payments to reduce
government regulation and emission reduction deforestation could be one of the most important
compliance requirements, or the implicit tools necessary to reduce the loss of the remaining
expectation that such regulation is emerging. tropical rainforests.
Voluntary or retail carbon trade is only about 5% How the international carbon market will evolve
of the total market. Next, we can also see that the remains highly uncertain. The decision of the
market quickly determines a cost-curve for offsets United States and Australia to withdraw from the
and exploits the low-hanging fruit first. In this case Kyoto Protocol has led to the emergence of two
carbon markets have quickly identified that the camps on how to address climate change.
destruction of industrial gases such as sulphur Somewhat strangely the EU-led group is seeking
hexaflouride or nitrous oxide are very-low-cost an extension of the Kyoto Protocol framework
strategies to generate emission reductions, relative with a continued strengthening of greenhouse
to say wind farm development. Third, we can see emission reduction targets and a continued
that these markets, being largely the creation of emphasis on market-based mechanisms. The US
government regulation, are very risky and and Australia on the other hand are leading a
potentially volatile as governments change, process to focus on direct government support for
political will increases or decreases, or public research and technology development, which
interest in climate change increases or diminishes. seems to be the reverse of the normal political
Loss and degradation of forests has been orientation of the respective governments.
responsible for about 20% of the greenhouse gas Nevertheless there is mounting pressure for action,
emissions in the past 150 years. This is a sizable and a large range of political positions within
contribution, and the ongoing loss of forests in Australia and the United States on climate change
tropical areas will continue to contribute to carbon policy. This may lead to shifts in position over
dioxide emissions. It has been argued, therefore, time.
that the protection of forests or the regeneration of With regards to the outlook for forests as part of
forests cleared in the past could be an important the global carbon market, it appears that the
part of the overall action on climate change. following will be key considerations in coming
However, the use of forests as an offset has been years:
controversial, with many parties demanding a
focus on reducing emissions, rather than offsetting • Forests will likely be only a small part (e.g.
them. The parties opposed to integration of forests less than 10%) of an international carbon
into emissions trading largely prevailed in the market, owing to complexity in monitoring,
Kyoto protocol negotiations, and there is a very the costs to bring forestry offsets into a market,
limited role for forestry offsets created via and requirements related to additionality and
reforestation. permanence.
There was a shift in attitude, however, at the recent • Despite the above comment, technology and
Climate Change negotiations in Montreal monitoring systems, as well as legal and
(December 2005, the Conference of the Parties to accounting systems, will evolve and improve
the UN Framework Convention on Climate in the coming years, allowing effective
Change), and a group of tropical countries led by commercial systems to be overlain on forest
Papua New Guinea and Costa Rica successfully carbon management.
raised debate on the potential to credit countries • It appears likely that avoided deforestation,
who reduce deforestation as a way of reducing alongside reforestation, will be included in
greenhouse gas emissions. Research indicates that future schemes, but how the rules will be
a carbon price applied to intact tropical forest designed is highly uncertain.
would substantially slow the rate of deforestation, • Some jurisdictions such as that of California
as even a small price per tonne of carbon dioxide are also allowing ‘improved forest
emission substantially affects the economics of management’ or a reduction in harvest
converting land to soybean, palm oil or other intensity to qualify for credits.
agricultural crops. Creation of carbon pools at a • As carbon price signals expand, look to see
regional or even national scale would also create wood products begin to substitute for higher-
effective mechanisms to monitor carbon stocks, to embodied-energy materials, and look to see an
address natural disturbances like wildfire, and to expansion of wood-based energy systems.
support payment schemes to individual landowners
PAGE 4 FORESTS, WOOD AND LIVELIHOODS
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