Applying an Ecosystem Approach in Scotland: a Framework for Action Introduction: Healthy ecosystems are the basis for sustaining people and biodiversity 1. An ecosystem is a dynamic complex of plant, animal and micro-organism

communities and their non-living environment interacting as a functional unit.

2. Human well-being depends on healthy ecosystems. This is an idea that in

past centuries, people who lived directly from the land and sea may have understood better. Now people feel more detached from nature but our actions have much greater impact. However people are beginning to realise that damaging the natural environment has consequences not just for nature but for human well-being, that humans are part of ecosystems. The Millennium Ecosystem Assessment recently highlighted the effects that human activities have had on the world’s ecosystems1, and on the public benefits that ecosystems provide2. A recent international report ‘The economics of ecosystems and biodiversity’3 has said, ‘Ecosystems don’t depend on economies but economies depend on ecosystems’. Further information on the background and context to an ecosystem approach is set out in Annex 1.

3. The natural environment is one of Scotland’s greatest assets. For a

country of its size, Scotland has a great diversity of landscapes, habitats and wildlife. Much of it is apparently thriving and in some areas past damage has been restored, such as previously polluted rivers in some cities or birds of prey, like the red kite. It is easy to think that damage to ecosystems is more of a problem in other parts of the world, such as where soil erosion leads to food shortage and hunger. However most of Scotland’s ecosystems are highly modified and have suffered significant losses in the range and abundance of species and habitats as human activities have intensified. Moreover continuing declines in Scotland’s biodiversity – such as some bird populations – are one symptom, or indicator, of problems that still exist, in spite of a range of environmental policies that have been developed. As Scotland seeks to increase economic growth in a sustainable way, in the face of a changing climate and other pressures, for example on land use, it is important to find ways to sustain, and where necessary restore, the health of Scotland’s ecosystems: to build a sustainable future for people and nature.

1 Millennium Ecosystem Assessment 2005 2 Through ecosystem services that are based on the processes or functions within ecosystems – see Figure?. Examples include supporting services such as nutrient cycling, provisioning services like food, fibre, fuel and water, regulation of climate and water, and cultural services like recreation. 3 The economics of ecosystems and biodiversity: An interim report. European Communities 2008.

4. This paper has been prepared to provide a framework for various initiatives that are seeking to take better account of how ecosystems work and the benefits they provide to people in a more integrated way, using the thinking that has developed worldwide on an ecosystem approach. It describes this ecosystem approach in general, and seeks to identify how it can be applied in Scotland.

What is an ecosystem approach? 5. The ecosystem approach has been described as a method, a tool, a

delivery mechanism, a framework or a strategy. It can be all of these things in different contexts, but it is essentially a set of principles to apply to any policy, plan or project that manages the natural environment, whether directly or indirectly.

6. A commonly-used definition comes from the Convention on Biological

Diversity4 (CBD) which defines the Ecosystem Approach as:

a strategy for the integrated management of land, water and living resources that promotes conservation and sustainable use in an equitable way, and which recognises that people with their cultural and varied social needs are an integral part of ecosystems.

7. A definition of the related term, ecosystem-based approach, comes from

marine management5:

the integrated management of human activities based on knowledge of ecosystem dynamics to achieve sustainable use of ecosystem goods and services and maintenance of ecosystem integrity .

8. A US Federal Government interagency policy6 describes the goal of the ecosystem approach as:

to restore and sustain the health, productivity and biological diversity of ecosystems and the overall quality of life through a natural resource management approach that is fully integrated with social and economic goals.

9. So an ecosystem approach is about integrating conservation of natural resources with social and economic needs and objectives, in a way that sustains the health of ecosystems on which they depend (see Box 1). The approach is therefore a way of delivering sustainable development (unsurprising given that the CBD arose from the 1992 Summit on Sustainable Development). It follows many sustainable development principles7. The rest of this paper refers to ‘an ecosystem approach’,

4 Convention on Biological Diversity Conference of the Parties 2000. Decision V/6 5 Seas the Opportunity, Scottish Executive 2005. This definition is close to that used in the development of the EU Marine Strategy Directive 2007, although the ecosystem approach is not defined in that Directive (See Articles 1(3) and 3(5)) 6 Memorandum of Understanding to Foster the Ecosystem Approach. December 1995. 7 See, for example, Sustainable Development and the Natural Heritage. SNH 2003.

encompassing these different elements but without referring specifically to the CBD definition of ‘The Ecosystem Approach’.

10. An ecosystem approach is achieved through applying a set of key

principles. Various sets of principles have been defined, in particular the 12 principles of the CBD8. They can be boiled down to three aspects:

a) take account of how ecosystems work, for example how species

interact through competition and predation, how species move across landscapes, and how water temperature affects fish species or nutrient levels the balance of plant species. This implies a need to consider the broad scale as well as the local, the long term as well as the immediate; recognising that change is inevitable; environmental limits – the consequences of resource use and pollution for natural processes; using up-to-date scientific information and applying adaptive management9 to deal with uncertainty.

b) take account of the services that ecosystems provide to people,

including those that underpin social and economic well-being, such as flood and climate regulation, resources for food, fibre or fuel, or for recreation, culture and quality of life. For example, the way that floods affects people’s homes depends on how the land is used in the surrounding catchment. The carbon in Scotland’s soils, if released through human activities, could affect the global climate. Everyone’s food resources depend on clean water and productive soils. Quality of life is enhanced by pleasant surroundings to live and work in.

c) involve the participation of people – those who benefit from the

ecosystem services and those involved in managing them need to be engaged in decisions that affect them, following principles of equity and environmental justice. Their knowledge will often be critical to success. Public participation should go beyond consultation and use tried and tested techniques to improve public involvement in decision-making10. Management of natural resources is often improved by decentralising decision-making which creates greater ownership and responsibility.

Box 1: What is ecosystem health?

A healthy ecosystem, like a healthy person, is one where all parts continue to work well individually and together. A related term is ecosystem resilience which is:

the ability of an ecological system to absorb disturbances while retaining the same basic structure and ways of functioning, the capacity for self-organisation, and the capacity to adapt to stress and change11.

8 See Background and Context Paper for more details. 9 Adaptive management involves learning-by-doing, with actions responsive to changing circumstances, increasing knowledge and regular reviews of methods used 10 E.g. see www.dialoguematters.co.uk

11 From the Glossary of the Fourth Assessment Report of the International Panel on Climate

Change (IPCC) Working Group II, 2007

The ability to recover after natural disturbances or impacts from human activities is only possible for impacts below a certain level or threshold. If the threshold is exceeded the structure and functions of the ecosystem change in ways that may not continue to deliver the services that they did before. These thresholds are referred to as environmental limits. For example, in some fisheries (e.g. the Grand Banks cod fishery off east coast North America) the capacity of the ecosystem to provide a harvestable surplus of fish has been exceeded and, even with no fishing, the ecosystem has not regained this capacity. Often not enough is understood about how ecosystems function to know where the environmental limits lie. In cases where there is a risk of irreversibly exceeding these thresholds and damaging ecosystem resilience, a precautionary approach should be taken to avoid this risk.

Benefits of an ecosystem approach 11. The main benefit of an ecosystem approach is in achieving a balance

between conservation and use of biodiversity. This means promoting human well-being without unsustainable loss of natural capital, and ensuring that the natural environment can continue to provide us with essential services and benefits in the long-term. In other words, truly sustainable development. Policies, programmes and projects that apply the principles of an ecosystem approach will demonstrate:

• greater collaboration between stakeholders, integration between sectors, and linkage across geographic boundaries

• a more holistic approach – not just meeting regulatory requirements

• better application of scientific and stakeholder knowledge to decision-making

• less conflict between sectors: shared benefits, and solutions that are consistent with different objectives

• restoring the functioning of ecosystems, and their associated values

Application of an ecosystem approach – improving delivery in Scotland

12. In some ways an ecosystem approach is not a new thing: many of its principles have long been recognised as important and many of the tools to apply them are already available. However an ecosystem approach involves a change of mindset to bring these principles together in a holistic way. It requires interaction between different disciplines – social and natural sciences - and amongst scientists, policy-makers and communities. The rest of this paper does not give detailed guidance in its application12 but demonstrates how it can be applied at different levels to improve delivery in Scotland, and contribute to Scottish Government strategic objectives.

13. An ecosystem approach is relevant to any situation where the natural environment is being affected or managed. It can be applied at all scales:

12 Scottish Government is funding a project to develop guidance on applying an ecosystem

approach to plans and policies, using an example from north-east Scotland.

• at a local scale, e.g. a grassland local nature reserve, a design plan for a new housing development, a windfarm, a forest design plan, a sustainable urban drainage scheme, a marine Natura site, a lobster fishery

• at a regional scale, e.g. a National Park, the Central Scotland Green Network, a river catchment, a development plan, an indicative forestry strategy

• at a national scale, e.g. the National Planning Framework, Climate Change Adaptation Framework, Agriculture Strategy, Forestry Strategy

• at an international scale, e.g. a North Sea fishery 14. The geographic boundaries of a project or plan need to be identified at an

early stage – to allow the relevant people to be involved from the start and to define the ecosystem, and therefore its functions, services, benefits and values that need to be considered. Whatever scale is chosen, the effects of the plan on neighbouring or wider ecosystems (e.g. downstream) should also be considered, and plans should be integrated with those at other levels. Box 2 provides an example of how planning for multiple-use forest ecosystems is carried out at different scales.

Box 2: Planning for multiple-use of forest ecosystems at different scales

European level: The Ministerial Conference for Protection of Forests in Europe is a high level political initiative towards the protection and sustainable management of forests throughout the region. It agrees guidelines for sustainable forest management which promote conservation and management practices which are environmentally, socially and economically sustainable, and which generate benefits for present and future generations. Sustainable forest management is recognised as being very close to the ecosystem approach in definition, and the guidelines encompass all ecosystem approach principles. National level: The Scottish Forestry Strategy The Scottish Forestry Strategy set out aims, targets and priorities for action to achieve expansion and sustainable management of forests and woodlands and provide economic, social and environmental benefits to society. The strategy is based on extensive consultation with stakeholders at national and local levels. A rolling 3 year implementation plan sets out milestones for achieving the strategy. Regional level: Indicative Forestry Strategies Many local authorities have produced local strategies to set out a spatial vision for forestry and woodlands in in their area. They vary in style but generally indicate preferred locations for woodland of various types. They take account of other land use and development objectives and sensitivities. Revised guidance on preparing these local forestry and woodland strategies is being prepared . Local Level: Forest Plans (private woods) and Forest Design Plans (National Forest Estate) Woodland managers in both the private and state sector prepare plans for the future direction of management including planting, felling and replanting intentions with a supporting map. These forest or woodland level plans set out management objectives and identify how they will be achieved in balance with sustainable forest management practice, taking account of ecological and site constraints and sensitivities. Forest plans are required if private woodland owners wish to apply for grant support through the Scottish Rural Development Programme.

All public and private woodland management is expected to meet good practice requirements set out in the UK Forestry Standard and associated guidelines. Many woodlands are also certified under the UK Woodland Assurance Standard, including all of the national forest estate.

15. Its benefits are achieved if an ecosystem approach is applied to all stages

of a project, programme or policy, including identification of objectives, options appraisal, planning of actions, implementation, monitoring and review. For example, identification of objectives should consider how the interaction between the ecosystem and human activities led to the need for the project or policy in the first instance. The objectives should address these underlying interactions which will also help define the geographic boundaries and timescale. Option appraisal should consider what effects different options will have on the ecosystem and the services it provides, and on neighbouring ecosystems. Action planning should allow for adaptive management by identifying what needs to be monitored to inform on-going action.

16. Aspects of an ecosystem approach can be seen in many policies,

programmes and projects that already take a wide view. Some examples are shown in Boxes 2, 3 and 4.

Box 3. A programme reflecting an ecosystem approach: Natural Heritage Futures

The Natural Heritage Futures Programme identifies a long term vision for the sustainable use of the natural heritage for 21 different parts of Scotland that each have similar natural heritage characteristics, as well as for six settings at the national level: Farmland, Forests and Woodland, Coasts and Seas, Settlements, and Hills and Moors. How it reflects an ecosystem approach

Take account of how ecosystems work: Uses information on the state of, and pressures upon, different components of ecosystems, particularly habitats and species, also water and soil quality. Identifies objectives to address issues at both national and local spatial scales. Sets objectives for the long term. Review after 5 years (draft Update currently out for consultation) reflects new knowledge, e.g. on climate change effects.

Take account of the services ecosystems provide to people: Recognises the use of natural resources for sustainable development, e.g. for agriculture, renewable energy, industry, health and well-being.

Involve the participation of people: Objectives and actions were developed through engagement with key stakeholders with the aim of developing a shared vision for the natural heritage.

Areas where an ecosystem approach could be applied further: Could explicitly link natural heritage objectives to the ecosystem services they underpin. Could integrate better with social and economic objectives so that prioritisation and resolving conflicts is not left to incorporation in other plans and policies. Better engagement by stakeholders in developing the vision would make it more truly shared. Box 4. A programme reflecting an ecosystem approach: River Basin Planning

River Basin Planning is a strategic decision-making process introduced by the Water Framework Directive which integrates the management of land and water within river basin districts to achieve ecological objectives (for water status) and the economic values that they underpin. How it reflects an ecosystem approach

Take account of how ecosystems work: Uses information on the state of and pressures upon freshwater ecosystems Sets long-term objectives for key elements of freshwater ecosystem health, with timescales reflecting rates of ecosystem change. Incorporates rigorous monitoring and regular review which will allow adaptive management Measures are identified at appropriate spatial scales – sub-basins nested within river basin districts.

Take account of the services ecosystems provide to people: Economic analysis identifies wide range of uses of Scottish waters and their value to Scotland, including for agriculture, industry, public water supply, renewable energy, recreation and tourism.

Involve the participation of people: Governance structures include representation of relevant interests at different levels.

Areas where an ecosystem approach could be applied further: Objectives could go beyond water body status to cover other components of freshwater ecosystems, e.g. floodplains and wetlands, so that structure and function of ecosystems is more fully considered. Could better provide for resolving conflicts between conservation and sustainable use of ecosystems Tools available to implement the objectives could better address pressures identified, e.g. through financial incentives or rewards for maintaining ecosystem services, so that insufficient

internalisation of costs and benefits of maintaining ecosystem health does not mean that pressures continue.

Box 5: A project reflecting an ecosystem approach: Loch Torridon Prawn Fishery

The project aimed to support local action to secure the long-term viability of the Nephrops (prawn) fishery stimulated by the removal of the three mile limit in 1985, and the conflicts which followed, in which creelers were competing for fishing space with trawlermen who could now fish much closer inshore causing damage to creels. In 2003 the fishery was awarded The Marine Stewardship Council's Standard for well-managed and environmentally sustainable fisheries. How it reflects an ecosystem approach

Take account of how ecosystems work: Creel design means that only the larger prawns are caught, leaving small ones to grow and mature. Egg-bearing females are returned to the sea. Voluntary limit on catch effort to prevent the carrying capacity of the loch being exceeded. Creel fishery does not damage the wider ecosystem. Ecological monitoring as well as knowledge of fishermen informed the identification of boundaries for the fishery zones, and informs ongoing management. Links to the Torridon Initiative involved with natural resource management in the wider area. Take account of the services ecosystems provide to people Legal instrument protects the high value creel-only prawn fishery important to the Torridon creelers, and to the local community, but also creates a mixed-gear zone, and a trawl-only zone, allowing for other fisheries. Certification, as well as better management leading to increased prawn sizes, have increased the value of the fishery to local people. Involve the participation of people The project was initiated by Torridon creelers and their Fishermen’s Association who raised the problems with their political representatives until the five-year trawl closure was brought in by the Scottish Executive. Ongoing management of the fishery is carried out by the prawn fishermen themselves who agree to adopt a voluntary code of practice.

Application of an ecosystem approach – a new basis for delivering sustainable development in Scotland 17. To benefit fully from an ecosystem approach in Scotland a more

fundamental change is needed to the management of impacts on ecosystems. This should reflect an overall need to maintain healthy, functioning ecosystems that underpin social and economic objectives. Figure 1 shows how the components of ecosystems – biological and physical structures of species and habitats together with the processes involving them - contribute to the functions that provide the ecosystem services that in turn are valued as benefits for people. The exploitation of these benefits through human activities is part of the pressures which impact upon ecosystems and so their functions, services, and benefits. The costs of maintaining and restoring the structure and functions of ecosystems should be seen as part of the economic value of the services and benefits that they provide – otherwise the latter will be used without safeguarding the former – a route to unsustainability. The Millennium Ecosystem Assessment and recent EU studies show that this is exactly what is happening: ecosystems are degrading as a result of human activities, and so is their capacity to provide the services on which people depend.

Figure 1: The link between the components of ecosystems (including biodiversity) and the benefits from ecosystem services 13

Service (e.g. flood protection, or harvestable products)

Benefit (value) (e.g. willingness to pay for woodland to

provide flood protection, or for harvestable products)

Biological and physical structure and process (e.g. woodland habitat or net primary productivity)

Function

(e.g. slow passage of water, or biomass)

Pressures

Adapted from Haines-Young 2006

18. Efforts to maintain healthy ecosystems in the face of pressures from

human activities can focus on two different points in the cycle in Figure 1:

a) a focus on maintaining and restoring ecosystem structures and functions (the green parts on the left of Figure 1), including the species and habitat components, and management of immediate pressures upon them;

b) a focus on developing greater understanding and appreciation of the services that society obtains from ecosystems (the brown parts on the right of Fig 1), and ensuring that the benefit of these services is reflected in public decision making, and in the regulation of and economic drivers for activities that impact on ecosystems.

19. The first of these is close to the traditional approach to delivering

biodiversity conservation, but can be made much more effective by applying the principles of an ecosystem approach. The second represents a new way of doing things, by building an ecosystem approach into the public policy and market drivers of human activities from the start, rather

13 Adapted from Haines-Young, R, Potschin, M and Cheshire, D (2006): Defining and

identifying Environmental Limits for Sustainable Development. A Scoping Study. Final Overview Report to Defra.

Sum of human activities – including use of services

than dealing with the consequences of inadequate policy-making and market failures.

20. The rest of this paper considers the implications of these two approaches

and what needs to be done in Scotland to take them forward. They are not mutually exclusive - both are needed, because many ecosystem services are difficult to define and value as benefits, and there is often insufficient knowledge of which structures and processes they depend upon, so action is also needed to conserve the components of ecosystems through the various tools available. However, reflecting the economic and political framework that underpins Scottish (and global) society, the emphasis needs to shift from the first to the second if we are to achieve truly sustainable economic and social development.

21. In this context the application of an Ecosystem Approach in Scotland

could become a basis for delivering sustainable economic growth. AN ECOSYSTEM APPROACH TO BIODIVERSITY CONSERVATION: MAINTAINING HEALTHY ECOSYSTEMS 22. Biodiversity conservation focuses on three delivery mechanisms: actions

for priority habitats and species14, cross-cutting objectives to incorporate biodiversity into decision making such as land use, and a series of sites for nature conservation. In 2007, the UK Biodiversity Partnership15 agreed a refreshed approach to biodiversity conservation that sets these three delivery mechanisms in the context of the Ecosystem Approach. This approach recognises that habitats, sites and species cannot be considered in isolation but are dependent on maintaining healthy ecosystems, and that the threats and pressures upon these parts of ecosystems need to be addressed in a co-ordinated way at appropriate levels.

23. Scotland has had a Biodiversity Strategy, setting out objectives for

conserving Scotland’s biodiversity, since 2004. It is linked to a duty on all public bodies to further the conservation of biodiversity. Scotland is now separately managing the responsibility for priority habitats and species previously co-ordinated at UK level. Application of an ecosystem approach has promoted a new approach to biodiversity conservation in Scotland, recently launched by the Environment Minister16. The new approach seeks to integrate the delivery of the Scottish Biodiversity Strategy’s Implementation Plans with action for priority habitats and species, under a set of five ecosystems overseen by the Scottish Biodiversity Forum Ecosystem Groups: upland, woodland, marine/coastal, freshwater/wetland, and lowland/farmland.

14 Priority habitats and species are identified according to conservation status, defined by

criteria such as the extent of declines in population, area or range, and condition or quality. 15 Conserving Biodiversity – The UK Approach. Department for Environment, Food and Rural

Affairs. 2007. 16 See http://www.biodiversityscotland.gov.uk/ for more details

24. The Ecosystem Groups have a strategic role and will work alongside other delivery mechanisms including:

• positive management of priority habitats

• species management, e.g. enhancing populations through reintroductions and translocations, resolving conflicts of interest involving species, promoting sustainable use of species, controlling invasive non-native species

• legal provisions for species, e.g. protection from wildlife crime

• management of special sites, protected under legislation, to maintain their favourable condition

25. Each of these activities whether at strategic or project level need to follow

the principles of an ecosystem approach. 26. Taking account of how ecosystems work will mean:

• understanding the ecosystem functions and processes that relate to species and habitats, their vulnerabilities, dependencies, and management requirements

• identifying common actions at the wider ecosystem or landscape scale that will reduce the pressures upon habitats and species, and the related ecosystem functions and processes

• identifying where action is needed to restore ecosystem function so as to improve overall ecosystem resilience, such as through improving habitat connectivity or variability within fragmented or simplified landscapes

• addressing the requirements of priority species as far as possible through effective management actions at the habitat or ecosystem level

• enhancing the role of protected areas within wider ecosystems including geodiversity, networks of habitats, populations of species, and the functioning of water catchments or coastlines, and identifying and where possible reducing external pressures upon these sites

• considering how habitats, species and protected areas are changing in response to climate change, and using monitoring to inform adaptive management, making them more resilient to change, e.g. by retaining genetic and structural diversity, and keeping options open for the future

• taking action at the right geographic scale to address the issues and integrating actions at different levels and for different ecosystem types so that they reinforce rather than conflict with each other.

27. Taking account of the services that ecosystems provide to people will

mean:

• evaluating how biodiversity underpins services such as carbon sequestration, water holding and flood alleviation, acts as a natural

resource for harvesting or recreation, and contributes to landscape value and cultural heritage

• using this evaluation of public benefits to inform action for biodiversity, whether for species, habitats, sites or wider ecosystems, including identifying management priorities, and choosing the geographic scale of action, e.g. river catchment, fishery, National Park.

28. Involving the participation of people is likely to mean:

• involving those people who benefit from the habitats, species, and sites (and the services they provide), and those involved in managing them, in decisions about biodiversity action

• making use of local knowledge and seeking a commitment from stakeholders to achieving a shared vision for the relevant area

• transferring responsibility for delivery of local targets to the local area, e.g. to local biodiversity action plan partnerships of local stakeholders

• encouraging collaboration amongst neighbouring land managers to contribute to action for local priorities, e.g. through SRDP-funded schemes.

A more holistic approach to biodiversity conservation 29. This new approach will be more effective than addressing the species,

habitats and sites in isolation. It will involve integrating the needs of habitats, species and sites, as well as the wider ecosystem structure and function, into the objectives of sectoral and spatial policies and plans for the use and management of land and water, e.g.: • national and regional priorities of The Scottish Rural Development

Programme (SRDP) • Scottish Forestry Strategy and implementing mechanisms including

Forest Design Plans, Indicative Forestry Strategies and Local Forestry Frameworks

• River Basin Management Plans and Flood Risk Plans • Shoreline management plans and integrated coastal zone

management • Marine spatial planning • National Park Plans • Development plans

30. A specific example would be to identify those species needing improved

habitat connectivity and to integrate their needs, along with management of existing sites such as reserves or parks, into habitat creation and restoration at the landscape scale, e.g. through the proposed Central Belt Green Network.

31. In some cases the principles may appear contradictory – taking account of

how ecosystems work may imply managing at a wide scale, e.g. Scotland-

level, because of the way the components of ecosystems are inter-linked, but the need to involve people in decision-making and reflect the local as well as wider benefits that ecosystems provide, may mean managing at a more local scale, e.g. local habitat network. Management will be needed at several levels – the important thing is for these to complement rather than conflict with each other.

BUILDING AN ECOSYSTEM APPROACH INTO POLICY APPRAISAL AND DECISION-MAKING 32. As paragraphs 18-20 demonstrate, an ecosystem approach implies not

just a change in focus for biodiversity conservation action, but more fundamentally, a change in the way that human activities affect ecosystems by integrating ecosystem values into the drivers of these activities. Applying an ecosystem approach to decision-making will improve delivery of public priorities through better management of natural resources, with fewer conflicts and unintended consequences. It will mean that ecosystem services are maintained alongside economic activities and provision of public services, rather than losing out in trade-offs that value measured benefits more highly. It will help to prioritise resource allocation so that actions that maintain ecosystem services receive a higher priority for resources than those that do not.

33. Improving Scotland’s ecosystem services and the natural capital that

ecosystems represent, will make a specific contribution to two Scottish Government outcomes:

• We value and enjoy our built and natural environment and protect and enhance it for future generations

• We reduce the local and global environmental impact of our consumption and production

But Scotland’s ecosystem services, and the need to look after them, are essential for a much wider range of National Outcomes as illustrated in the table below.

Scottish National Outcomes Services that ecosystems provide

We live in a Scotland that is the most attractive place for doing business in Europe

food, fresh water, wood and fibre, fuel, climate regulation, flood regulation, landscape, places for recreation

We realise our full economic potential with more and better employment opportunities for our people

productive soils, seas and freshwater, clean water, fisheries, wood, fuel, places and wildlife for harvesting, recreation and refreshment

Our young people are successful learners, confident individuals, effective contributors and responsible citizens

places for learning outdoors, for recreation and mental refreshment, and for volunteering

We live longer, healthier lives food, fuel, clean air, plants for potential new medicines, disease regulation, water

purification, places for mental refreshment and physical activity

We live our lives safe from crime, disorder and danger

flood regulation, erosion control, local and global climate regulation,

We live in well-designed sustainable places where we are able to access the amenities and services we need

flood regulation, local climate regulation, drainage control, water purification, places for social interaction, outdoor learning and sustainable travel, places and wildlife for recreation, mental and spiritual refreshment

We take pride in a strong, fair and inclusive national identity

distinctive wildlife and landscapes, productive soils, seas, and freshwaters, basis for natural and cultural heritage

34. To ensure we retain this natural capital, means integrating the value of

ecosystem services, including the costs of maintaining and restoring the underlying ecosystem structures and functions, into the drivers of economic and social development, i.e. public policy appraisal and decision-making at national and local levels, financial instruments such as incentives and taxes, and the market economy The tools to do this are already available, and there is experience to draw on from elsewhere. Nevertheless it will require concerted action in Scotland17, under six headings:

• Use of integrated assessment, financial instruments and spatial planning

• Encouraging markets for ecosystem services

• Methodologies for ecosystem service valuation

• Knowledge and information

• Communication and awareness

• Developing ownership and responsibility

Use of integrated assessment and spatial planning Better use of impact assessment within policies, plans and programmes 35. Strategic Environmental Assessments would be more comprehensive in

their analysis and better inform policies and plans, if they considered how the plan or programme affects ecosystem services and the ecosystem structure and functions that underpin them. For example coastal habitats provide a coast protection service which depends on a constant dynamic of erosion and build-up of sediments. Impacts on this natural process, by removing sediment from the system or stabilising habitats with hard

17 Action is also needed elsewhere, since many of the drivers that affect ecosystem services

are controlled outwith Scotland, e.g. UK tax regimes, EU farm subsidies, and world trade. And Scotland also depends on ecosystem services provided by other parts of the world, e.g. for food and climate regulation

engineering, may affect coast protection with the wider system. A development plan for a coastal region would need to consider the wider impacts of coastal development, and conversely the benefits for coast protection from making space for coastal habitats.

36. Cost-benefits appraisal of policy options, e.g. as part of Regulatory Impact

Assessments, could take greater account of the benefits of measures to enhance ecosystem services, and the costs to society of measures that damage ecosystem services and Scotland’s natural capital.

Internalising costs and benefits within fiscal instruments 37. The Environmental Liability legislation goes some way to internalising

costs by making operators who cause environmental damage liable to pay the costs of remedying the damage – including the loss of natural resources and services. There are other ways of placing a charge or tax on activities that impact on ecosystem services, e.g. the Landfill Tax and the Aggregates Levy. Tax regimes are reserved matters in the UK but there may be scope to explore with other parts of the UK the potential for changes that would better reflect costs on ecosystem services.

38. Incentives can be better aligned with the public benefits of ecosystems by

avoiding or removing perverse incentives that encourage activities that cause damage to ecosystem services, whilst incentivising actions that conserve ecosystem services. Cross-compliance in the Common Agricultural Policy seeks to minimise potential negative environmental impacts from payments to farmers, whilst the so-called ‘Pillar 2‘ mechanism of the Scottish Rural Development Programme provides financial incentives for enhancing the environment. However many ecosystem services, such as flood regulation, carbon sequestration, and pollination services of bees, could be better incorporated into financial instruments affecting land use, including potentially the SRDP. Alternatively there is scope to encourage markets for these services (see below).

Better mechanisms for integrated spatial planning – on land and at sea 39. The National Planning Framework 2 is an opportunity to integrate

provision of ecosystem services into land-use planning. It recognises that building environmental capital at a landscape scale can deliver important benefits for the economy and communities. The Proposed Framework identifies the value of creating ecological networks to enhance wildlife populations and provide a variety of ecosystem services, including places for recreation and sustainable travel. It highlights that improving the health and resilience of the natural environment will help it adapt to climate change. Development plans at the strategic level could apply this in additional ways. For example, they could identify key areas of coastal habitat that provide a coastal protection service, and river catchments where natural habitats could reduce flooding, so that development

management takes account of these, enhancing resilience to climate change.

40. The Land Use Study18 provides an opportunity for a fresh approach to

integrating ecosystem services into land use alongside social and economic goals. It could explore how spatial planning approaches to land use could better ensure that the wider public benefits of certain forms of land management are valued. For example how do local authorities managing flood risk to their communities, enhance the natural flood management services provided by wetlands or floodplain woodlands in the upper catchment of the river which may be in a neighbouring local authority and/or on land that is subject to agricultural use over which they have little control?

41. The new marine spatial planning regime being introduced through the Scottish Marine Bill has the potential to take an ecosystem approach to management of activities in the marine environment. For example, better integration could be achieved if the value of ecosystem services such as fisheries were reflected in decisions that protect the supporting ecosystem structures and functions, such as seabed habitats.

The use of ecosystem objectives to underpin planning and policies 42. The Scottish Marine Bill consultation describes how marine objectives for

Scotland will include Marine Ecosystem Objectives which will ‘outline strategic goals for the marine environment and translate the principles of an ecosystem-based approach into practice.’ Marine Scotland, the new body for managing Scotland’s seas, is to be given a duty and appropriate tools to deliver ecosystem management. It would be worth considering to what extent this approach could be translated to terrestrial planning and management.

Encouraging markets for ecosystem services 43. Carbon trading has been developed to put a value on the costs to climate

regulation services that are associated with greenhouse gas emissions from industry. This market also has the potential to put a value on the benefits to climate regulation from preventing losses, and in some cases enhancing sequestration, of carbon from habitats such as forests and peatlands.

44. An ecosystem service payment scheme could be implemented beyond

carbon if there is a well-defined environmental service, a buyer, a provider and with continual provision of the environmental service by the provider. Schemes involving Payments for Environmental Services are referred to as PES schemes. Agri-environment schemes are ‘PES-like’ schemes rather than pure PES schemes. The reduced emissions from deforestation and forest degradation scheme (REDD) offers PES to landowners. PES

18 http://www.scotland.gov.uk/News/Releases/2008/09/26112208

can results in leakage, i.e. the displacement of negative activity to a different location. The main problem though is that there are limited buyers for ecosystem services at present. There are currently some examples from overseas (see Box 5). Scotland could learn from these and explore their future potential.

Box 6: Examples of Payments for Environmental Services (PES) and related schemes. Government-led Costa Rican Payments for Environmental Services Programme rewards forest owners for four bundled environmental services (watershed protection, carbon sequestration, landscape beauty and biodiversity protection) that their forests provide. While the scheme relies heavily on state funds (derived from a fuel tax), it is evolving and is trying out new ways to engage the private sector. In Mexico an NGO-led scheme collects voluntary water protection fees for the protection of a neighbouring reserve (facilitated by the Mexican Fund for Nature Conservation and government programmes). Water users pay for the conservation of the Reserve and the water protection services it offers. The fee is collected with the water utility’s bill and funds are then passed on to finance the management of the reserve. Amount of contributions vary. Although only about 10% of water users are contributing, this is progressing and the amounts collected have risen fast: in the first year they amounted only to about MEX$38,000 while in 2005 they had risen to approximately MEX$310,000. A similar PES scheme has been implemented in France for Vittel to pay farmers for higher water quality. In the field of wetland and conservation protection in the USA, large mitigation banks have emerged which provide credits for an area of wetland or habitat created or restored elsewhere. They are now widely accepted as the most effective option in meeting offsetting requirements in under the Clean Water and Endangered Species Acts. Also in the US, water quality trading has developed as an innovative approach to meeting requirements under the Clean Water Act.

Methodologies for ecosystem service valuation 45. There may be a need for more standardised methods for monetary

valuation of ecosystem services19 since decision-making can often be simplified if costs and benefits can be given monetary values (e.g. as part of regulatory impact assessment). Monetary values are essential to underpin market-based mechanisms for ecosystem services. In addition, economic valuations of the benefits of ecosystems, e.g. at a national or regional scale, can be helpful in raising awareness of the value of biodiversity and therefore the costs involved in its decline. Phase 2 of the EU study The Economics of Ecosystems and Biodiversity20 aims to provide a framework for this at the global scale. However there are risks associated with applying this to individual policies, plans and projects, as the valuation methods are often open to challenge since ecosystem services are much more difficult to value than, say, jobs or revenue from development. And the links between human activities and effects on ecosystem services are not fully understood. Non-monetary methods such as SEA and EIA would continue, if appropriate alongside monetary evaluation.

Knowledge and information needs Understanding of how ecosystems underpin services 46. Application of all these tools requires an understanding of how ecosystem

structure and function underpin services and the benefits people obtain from these. There is an increasing recognition that research to improve understanding needs to be interdisciplinary, involving social and natural sciences, and economics21.

47. One project that should help demonstrate information needs for applying

an ecosystem approach at a local scale is the Model Ecosystem Framework project commissioned by Scottish Government22. It will use information about the ecology of a local area (north-east Scotland), the ecosystem services and human activities it supports, and the relationships between these.

Using environmental information to monitor ecosystem function 48. An adaptive management approach to dealing with uncertainty means that

decisions about ongoing management should be informed by the results of monitoring of the state, pressures upon and response of the environment . Identifying those elements to be monitored, i.e. indicators, will be crucial to success. Where the links between the indicators and the overall health or

19 For example, An Introduction to Valuing Ecosystem Services – Defra 2007

20 The economics of ecosystems and biodiversity: An interim report. European Communities

2008 21 See Annex 1 for examples.

22 Model Ecosystem Framework Project, part of Ecosystems Approach Project: Developing

an ecosystem approach for use in public policy planning and delivery in Scotland.

resilience of the ecosystem are understood, some of these indicators can have short or longer term targets attached, and can be used to measure progress towards the overall aim of healthy, productive and biologically-diverse ecosystems with associated social and economic benefits. Work to develop marine ecosystem objectives includes an attempt to define lower limits or thresholds which should not be exceeded, alongside more aspirational targets which can be reviewed over time.

Communication and awareness 49. If the wide application proposed in this paper is to be achieved, the

benefits of applying an ecosystem approach to public policy need to be communicated to policy makers and politicians. The key outcome is for the natural environment to be seen as enabling rather than hindering progress towards sustainable economic growth. Guidance for policy makers on applying the tools, as well as case studies and pilot projects demonstrating the benefits would all help.

Developing ownership and responsibility 50. Stakeholder involvement is already part of many decision-making

processes. For example Single Outcome Agreements being developed for local authority areas are informed by Community Planning Partnerships which involve representatives from relevant public bodies who manage public services that affect or depend upon ecosystems. To achieve the support crucial to achieving objectives at the local level, the public need to be more actively involved in decisions affecting them. Improving public understanding will help get support, for example, for natural flood management measures where the benefits to individual households may not be so clear. Public participation is not just about getting acceptance through consultation but about generating a genuine commitment to a shared vision. There are various techniques that have been used engage local communities and these can be used more imaginatively.

From framework to action plan 51. If the framework set out in this document is seen to be broadly acceptable

the next step will be to translate it into an action plan in order to mainstream an Ecosystem Approach into public and private sector procedures.

Contacts: Mary Christie Strategic Direction, Scottish Natural Heritage Greg Mudge Policy and Advice, SNH

6 March 2009

ANNEX 1. Applying an Ecosystem Approach in Scotland: Background and Context 1. This paper provides additional background and context to support the

Paper on Applying an Ecosystem Approach in Scotland (A195504). Origins and Definitions 2. 12 principles were recommended by the Conference of Parties of the

Convention on Biological Diversity (CBD) (2000) to guide signatory countries in the practical application of the Ecosystem Approach (also referred to as the Malawi Principles)23. The principles are complementary and interlinked: Principle 1: The objectives of management of land, water and living resources are a matter of societal choices. Principle 2: Management should be decentralized to the lowest appropriate level. Principle 3: Ecosystem managers should consider the effects (actual or potential) of their activities on adjacent and other ecosystems. Principle 4: Recognizing potential gains from management, there is usually a need to understand and manage the ecosystem in an economic context. Any such ecosystem-management programme should: a) Reduce those market distortions that adversely affect biological diversity; b) Align incentives to promote biodiversity conservation and sustainable use; c) Internalize costs and benefits in the given ecosystem to the extent feasible. Principle 5: Conservation of ecosystem structure and functioning, in order to maintain ecosystem services, should be a priority target of the ecosystem approach. Principle 6: Ecosystem must be managed within the limits of their functioning. Principle 7: The ecosystem approach should be undertaken at the appropriate spatial and temporal scales. Principle 8: Recognizing the varying temporal scales and lag-effects that characterize ecosystem processes, objectives for ecosystem management should be set for the long term.

23 See http://www.cbd.int/ecosystem/principles.shtml for more detail on the Principles

Principle 9: Management must recognize the change is inevitable. Principle 10: The ecosystem approach should seek the appropriate balance between, and integration of, conservation and use of biological diversity. Principle 11: The ecosystem approach should consider all forms of relevant information, including scientific and indigenous and local knowledge, innovations and practices. Principle 12: The ecosystem approach should involve all relevant sectors of society and scientific disciplines.

3. The CBD also identifies five points as operational guidance24 in applying the principles of The Ecosystem Approach:

1. Focus on the relationships and processes within ecosystem. 2. Enhance benefit-sharing. 3. Use adaptive management practices. 4. Carry out management actions at the scale appropriate for the issue being addressed, with decentralization to lowest level, as appropriate.

5. Ensure intersectoral cooperation. 4. The Millennium Ecosystem Assessment25 (2005) identified four categories

of Ecosystem services:

• Supporting services: The services that are necessary for the production of all other ecosystem services including soil formation, photosynthesis, primary production, nutrient cycling and water cycling.

• Provisioning services: The products obtained from ecosystems, including food, fibre, fuel, genetic resources, biochemicals, natural medicines, pharmaceuticals, ornamental resources and fresh water;

• Regulating services: The benefits obtained from the regulation of ecosystem processes, including air quality regulation, climate regulation, water regulation, erosion regulation, water purification, disease regulation, pest regulation, pollination, natural hazard regulation;

• Cultural services: The non-material benefits people obtain from ecosystems through spiritual enrichment, cognitive development, reflection, recreation and aesthetic experiences – thereby taking account of landscape values;

5. This diagram illustrates how these services underpin human well-being:

24 http://www.cbd.int/ecosystem/operational.shtml

25 http://www.maweb.org/en/Index.aspx

Current applications of ecosystem approaches 6. In England the Public Service Agreement framework (Comprehensive

Spending Review 2007) includes an objective:

To secure an diverse, healthy and resilient natural environment, which provides the basis for everyone’s well-being, health and prosperity now and in the future; and where the value of the services provided by the natural environment are reflected in decision-making

7. An Action Plan to help deliver this objective was published by Defra in

200726 ‘Securing a healthy natural environment: An action plan for embedding an ecosystem approach’. It is about adopting a new way of thinking and working by:

• Shifting the focus of policy-making and delivery away from looking at natural environment policies in separate silos – e.g. air, water, soil, biodiversity – and towards a more holistic or integrated approach based on whole ecosystems; and

• Seeking to ensure that the value of ecosystem services is fully reflected in policy- and decision-making in Defra and across Government at all levels.

26 http://www.defra.gov.uk/wildlife-countryside/natural-environ/eco-actionplan.htm

8. Actions in Defra’s Action Plan are based on five core principles:

• taking a more holistic approach to policy-making and delivery, with the focus on maintaining healthy ecosystems and ecosystem services

• ensuring that the value of ecosystem services is fully reflected in decision-making

• ensuring environmental limits are respected in the context of sustainable development, taking into account ecosystem functioning

• taking decisions at the appropriate spatial scale while recognising the cumulative impacts of decisions

• applying adaptive management of the natural environment to respond to changing pressures, including climate change.

9. The main priorities for action are :

i) promoting joined-up working within Defra and the Defra network to deliver

ii) identifying opportunities for mainstreaming an ecosystems approach

iii) using case studies that demonstrate the benefits of taking an ecosystems approach

iv) developing ways of valuing ecosystem services

v) developing a robust evidence base 10. To support this work Defra has also published an Introductory Guide to

Valuing Ecosystem Services [PDF] (436 KB) which builds on previous approaches to valuing the environment but takes a more systematic approach to the assessment of impacts on the natural environment.27

Action in Scotland 11. The Scottish Government (SG) has identified 15 national outcomes to

deliver its Strategic Objectives. One of these is ‘We value and enjoy our built and natural environment and protect it and enhance it for future generations’. The principles of an ecosystem approach are reflected in the reasons given for why this outcome is important28.: We must all live as part of nature. We must live within environmental limits, adapting our society to a greener approach. Fail to do so and future generations will consider us entirely negligent. We have their future in our hands. We must respect the planet's environment, resources and biodiversity. Only in this way can we achieve a sustainable economy which provides prosperity and opportunities for all, a society in which environmental costs fall on those who impose them and efficient use of natural resources is incentivised. Every generation must also value the

28 http://www.scotland.gov.uk/About/scotPerforms/outcomes/environment

best of the buildings created by previous generations and learn from what they tell us. Scotland's built and natural environment is a major asset for us to enjoy in life and business. That's why we need to protect and enhance it. Clean air and water, and uncontaminated soil, support and protect our public health and wellbeing. Good quality built environments, parks and landscapes provide places where we can enjoy ourselves and keep fit. They are the inspiration for much of Scottish art and literature. And the natural and built environment are sources of wealth and economic opportunities - especially for fishing, farming, forestry, aquaculture, renewable energy and tourism.

Nature is no respecter of national boundaries and Scotland alone cannot save the world. But by being green leaders, by managing our environmental impact and by protecting the best of our built heritage, we can serve as a good role model for other nations.

12. The People and Nature Programme Group is one of five programme groups that support the Greener Objective of the Scottish Government. The Programme Group is chaired by Peter Russell and draws membership from SG, FCS, SEPA and SNH. The Group has commissioned a project to scope the ecosystem approach to nature conservation in Scotland. The Ecosystem Approach Project has two themes:

1. Developing policies, advice and approaches to ensure that decisions

take account of the impact on ecosystem services 2. Developing an approach for ecosystem scale planning.

13. Theme 1 is being undertaken by SG and involves identifying areas of

policy and decisions affecting the environment where impacts are not fully reflected in decision making as well as identification of good practice examples. This would be followed by the development and promotion of appropriate methods in co-operation with relevant policy and decision makers.

14. Theme 2 is being taken forward through a project to develop a Model

Ecosystem Framework for north east Scotland which describes the biological and physical environment of three nested areas, the ecosystem services and human activities that it supports and the interactions between these. The intention is to produce a model of these interrelationships, taking account of the fact that the services that people benefit from may depend on ecosystem components in a different part of the area. The model will then be used to test the effects of different scenarios of change in land use. It should allow individual proposals or options for changes in land use to be considered with a fuller understanding of the impacts of any changes across a wide areas and including effects on ecosystem services. The overall aim of the project is that by demonstrating the feasibility and value of the ecosystem approach, it becomes more widely used by

decision makers and therefore leads to better outcomes for the environment.

Evidence base 15. In 2000, the United Nations Secretary-General, Kofi Annan, called for the

first comprehensive assessment of the state of the global environment – The Millennium Ecosystem Assessment. Involving over 1,300 scientists, their findings, published in 2005 and contained in five technical volumes and six synthesis reports, provided an appraisal of the state of the world’s ecosystems and ecosystem services, and policy options to restore, conserve or enhance ecosystems. Its main findings included:

• Over the past 50 years, humans have changed ecosystems more rapidly and extensively than in any comparable period of time in human history. This has contributed to substantial net gains in human wellbeing and economic development but at a growing cost in terms of the degradation of many ecosystem services. Two-thirds of ecosystem services were found to be in decline globally or managed unsustainably.

• The degradation of ecosystem services could grow significantly worse during the first half of this century and is a barrier to achieving the Millennium Development Goals.

• The challenge of reversing the degradation of ecosystems while meeting increasing demands for their services will require significant changes in policies, institutions and practices.

• The MA identified a number of steps that governments can take to address environmental degradation.

16. In June 2007, the G8+5 leaders agreed to commission a study named

'The Economics of Ecosystems & Biodiversity (TEEB)'. It is being led by Pavan Sukhdev. The study will evaluate the costs of the loss of biodiversity and the associated decline in ecosystem services worldwide, and compare them with the costs of effective conservation and sustainable use. It is intended that it will sharpen awareness of the value of biodiversity and ecosystem services and facilitate the development of cost-effective policy responses, notably by preparing a 'valuation toolkit'.

17. TEEB is being conducted in two phases. Phase 1 was published in

September 200829, in the form of an interim report which builds on the MA, in assessing current knowledge on biodiversity and ecosystem services. It proposes a general framework for evaluating the loss of biodiversity and ecosystem services that acknowledges that not all values of biodiversity can be measured in economic terms. Phase 2 will run into 2009 and 2010. The project is structured around one background report and several reports targeted towards specific groups of potential users of evaluation tools for biodiversity and ecosystem services. These reports will be

29 http://ec.europa.eu/environment/nature/biodiversity/economics/index_en.htm

compiled in a phased approach and published consecutively between autumn 2009 and autumn 2010. The final results will be presented at CBD COP-10 in 2010.

18. The Scottish Government is participating in a proposal by Defra to develop

an Ecosystem Assessment for the UK, based on the same methodology as the MA. It is expected that this would report by mid-2010. This project is part of a programme of research that Defra30 is undertaking to support an ecosystem approach. Living With Environmental Change31, is a ten year wide programmed led by the Natural Environment Research Council (NERC), which brings together a range of Research Councils and decision making bodies across the UK to provide decision makers with the best information to effectively manage and protect vital ecosystem services.

19. SNH, in partnership with others, recently published a report32 on the extent

to which sustainable use of the nation’s natural environment supports Scotland's economy. This covered some of the benefits that people derive from the natural environment, demonstrating that the natural environment supports nearly one in seven of all full time jobs in Scotland, 242,000 in total, and benefits two-thirds of existing businesses.

30 http://www.defra.gov.uk/wildlife-countryside/natural-environ/research.htm

31 http://www.nerc.ac.uk/research/programmes/lwec/

32 RPA & Cambridge Econometrics. (2008). The Economic Impact of Scotland’s

Natural Environment. Scottish Natural Heritage Commissioned Report No.304 (ROAME No. R07AA106).