Links between science and policy - Why do we need to adopt a

multiple outcomes approach?

Lessons learnt from projects contributing to multiple

environmental benefits and outcomes, including

environmental economics

Steven Cork, CSIRO/ DEH

Economics and ecosystem services

• Origins of ecosystem services– Ecology and economics; 1970’s – 1990’s

• Language/ terminology– Ecology, Human Ecology– Economics, Environmental Economics,

Ecological Economics, externalities– Ecosystem Services, Environmental Services,

Nature’s Services, Nature’s Benefits …

Policy issues• Conservation of biodiversity• Climate change, drought policy, pests, weeds• International trade related issues • Sustainable use of natural resources • New institutional models for better NRM• Translating complex social-ecological systems

into simple messages for decision makers• Establishing consistent approaches to multiple

environmental benefits across jurisdictions (including valuation systems and markets)

Why we need a multiple outcomes approach and what we need from it• A new framework

– From single issues to an integrated approach – Characterising the full range of services/ benefits– Clarity about the role(s) of biodiversity

• Incentives– Different value perspectives (market/ non-market, use/ non-use) – Dynamic tensions between policy and political agendas – Drivers of behavioural change– Market-based mechanisms

• Setting targets and measuring progress– What mix of services is needed/ wanted?– Non-linear and discontinuous change across gradients and time– Spatial scales– Simple and clear measurement and reporting

Lessons: Frameworks

• Lack of clarity (even confusion) about the role(s) of biodiversity

ECOSYSTEM SERVICESCork and Shelton (2000), modified from Daily (1999)

Production of goodse.g. food, pharmaceuticals, genetic resources

Regeneration servicese.g., maintenance of soil fertility, purification of water and air, pollination,

dispersal of seeds and spores

Stabilisation servicese.g., pest control, flood mitigation, protection from temperature and wind,

resilience, waste assimilation, climate stabilisation

Life-fulfilling servicese.g., provision of aesthetic, cultural and spiritual values, existence of

biodiversity

Provision of options for the futuree.g. genetic material, new forms of resource use

Three types of Ecosystem Service

Natural assets (capital)(e.g. soil, living organisms,water and waterways, atmosphere)

Goods and other products(e.g. food and fibre, clean water, liveable climates, safety, life fulfilment)

3. Maintainingnatural assets

1. “Production”

2. Assimilation ofby-products

Natural assets (capital)(e.g. soil, living organisms,water and waterways, atmosphere)

Natural assets (capital)(e.g. soil, living organisms,water and waterways, atmosphere)

Goods and other products(e.g. food and fibre, clean water, liveable climates, safety, life fulfilment)

Goods and other products(e.g. food and fibre, clean water, liveable climates, safety, life fulfilment)

3. Maintainingnatural assets

3. Maintainingnatural assets

1. “Production” 1. “Production” 1. “Production”

2. Assimilation ofby-products

2. Assimilation ofby-products

Focus: Ecosystem Services The benefits people obtain from ecosystems

MA Framework

Two views of biodiversityBIODIVERSITY IS IMPORTANT TO PRODUCE ECOSYSTEM SERVICES

• Functional diversity is of overarching importance

• Not all functions/ species necessary at all times and places

• Genetic/ species/ ecosystem diversity provides insurance/ option value

• Utilitarian value - related to contribution to land-use objectives

BIODIVERSITY IS IMPORTANT IN ITS OWN RIGHT

• The maintenance of genes, species etc. is a service

• Comprehensive, adequate, representative protection fundamental

• Genetic/ species/ ecosystem diversity is valuable in its own right

• Intrinsic value - related to rarity of genes/ species/ ecosystems

Two views of biodiversityBIODIVERSITY IS IMPORTANT TO PRODUCE ECOSYSTEM SERVICES

Research:• Diversity in relation to function• Responses along gradients,

thresholds, resiliencePolicy:• Defining critical functions• Managing sets of functions

across landscapes to meet multiple needs

• Investment based on costs, benefits, suitability of policy mechanisms in relation to multiple objectives, thresholds and reversibility of impacts

BIODIVERSITY IS IMPORTANT IN ITS OWN RIGHT

Research: • Habitat requirements• Viability of small or declining

populationsPolicy:• Protecting threatened species• Focus on protecting native

vegetation in reserves and private remnants

• Investment largely related to ideological arguments and perceptions about the relative value of conservation and other land uses

Lessons: Incentives• Valuation

– There are method for non-market valuation (DEH/ LWA, 2003)

– The challenges include poor public understanding, inadequate information (e.g. about marginal change)

– It comes down to real or perceived rarity

• Market-based instruments– Clarifying/ creating rights and responsibilities– Purchase, cap and trade (creating rarity), removing

obstacles to trade – MBI program; CSIRO; BushTender (Vic); PVP (NSW);

Productivity Commission; Katoomba Group

FINAL (ORANGE) VERSUS INITIAL (RED)RANKINGS (Wendy Proctor, CSIRO)

Lessons: Incentives• Valuation

– There are method for non-market valuation (DEH/ LWA, 2003)

– The challenges include poor public understanding, inadequate information (e.g. about marginal change)

– It comes down to real or perceived rarity

• Market-based instruments– Clarifying/ creating rights and responsibilities– Purchase, cap and trade (creating rarity), removing

obstacles to trade – MBI program; CSIRO; BushTender (Vic); PVP (NSW);

Productivity Commission; Katoomba Group

Lessons: Targets and measurement

• Early attempts focused on single services (eg. carbon or biodiversity)

• More recently, attempts to develop policy for multiple values, for example:– EcoTender, Victoria (habitat, groundwater recharge, stream flow,

water quality, carbon)– Property Vegetation Planner, NSW (water quality, soils, salinity,

biodiversity)• Need to be underpinned by measurement that considers:

– implications for human welfare (what services we need) – non-linear and/or discontinuous change– spatial issues

•what mix of services we need •change across gradients and time•spatial issues

Eco

syst

em s

ervi

ce

Ecosystem transformation

S C I E N C E F O R D E C I S I O N M A K E R S

Ecosystem Services and States

Focus: Consequences of Ecosystem Change for Human Well-being

GOODS SERVICES

GS Econ Prod

GS Knowledge Formation

GS Built Capital Formation

GS Social Capital Formation

GS Personal Consumption

w Exp

•Total Factor Productivity

•SC Exp

•S Rate Knowledge

•S Rate BC

•S Rate SC

Consumption Rate

GWP

GS Natural Capital Formation

•S Rate NC

•IC Goods and services

Social Cap price

GWP

WASTE

•Waste Exp

Prod reduction

•Economic Prod intercept

Boumans et al. (2000)

Conservation Joins Capitalism to Set Aside Wetland Habitat

Katherine Ellison, The Washington Post, January 25, 2002

• Allegheny Energy Inc. sold 12,000 acres of Canaan Valley land to the U.S. Fish and Wildlife Service for $16 million

• Ecosystem services were estimated to be worth another $16 million

• Allegheny Energy Inc. claimed a charitable contribution of roughly $16 million and, therefore, a tax write-off

CSIRO, The Myer Foundation, Land & Water Australia, The GoulburnBroken Catchment Management Authority

Dai

ry

Frui

t and

gra

pes

Veg

etab

les

Gra

zing

Cro

ps

Inte

nsiv

e an

imal

s

Fore

stry

Food

pro

cess

ing

Hou

sing

Wat

er p

rodu

ctio

n

Rec

reat

ion

Cul

ture

/ bio

dive

rs

Pollination

Life-fulfillment

Climate regulation

Pest control

Genetic resources

Habitat regeneration

Shade and shelter

Soil health

Healthy waterways

Water filtration

River regulation

Waste absorption

SE

RV

ICE

SLAND-USES

CSIRO (Binning et al, 2000)

Scen

ario

s &

Stra

tegi

esB

ioph

ysic

al c

ompo

nent

Val

ue o

f se

rvic

esStrategies and

Scenarios

Land Use

ExpectedCropping Returns

Expected GrazingReturns

Actual Flooding

Tree andShrub

Regeneration

Tree andShrub

Germination

Logs andLitter

LivestockProduction

CropProduction

HerbageProduction

Land use Options(Crop, Graze, Conserve)

ExpectedFlooding

Landscape Effects-Neighbourhood Effects

Scen

ario

s &

Stra

tegi

esB

ioph

ysic

al c

ompo

nent

Val

ue o

f se

rvic

esStrategies and

Scenarios

Land Use

ExpectedCropping Returns

Expected GrazingReturns

Actual Flooding

Tree andShrub

Regeneration

Tree andShrub

Germination

Logs andLitter

LivestockProduction

CropProduction

HerbageProduction

Land use Options(Crop, Graze, Conserve)

ExpectedFlooding

Landscape Effects-Neighbourhood Effects

CarbonSequestration

Habitat Water FiltrationFinancial Returns

Scen

ario

s &

Stra

tegi

esB

ioph

ysic

al c

ompo

nent

Val

ue o

f se

rvic

esStrategies and

Scenarios

Land Use

ExpectedCropping Returns

Expected GrazingReturns

Actual Flooding

Tree andShrub

Regeneration

Tree andShrub

Germination

Logs andLitter

LivestockProduction

CropProduction

HerbageProduction

Land use Options(Crop, Graze, Conserve)

ExpectedFlooding

Landscape Effects-Neighbourhood Effects

Scen

ario

s &

Stra

tegi

esB

ioph

ysic

al c

ompo

nent

Val

ue o

f se

rvic

esStrategies and

Scenarios

Land Use

ExpectedCropping Returns

Expected GrazingReturns

Actual Flooding

Tree andShrub

Regeneration

Tree andShrub

Germination

Logs andLitter

LivestockProduction

CropProduction

HerbageProduction

Land use Options(Crop, Graze, Conserve)

ExpectedFlooding

Landscape Effects-Neighbourhood Effects

CarbonSequestration

Habitat Water FiltrationFinancial Returns

FLOODPLAIN MODEL

Management Options

Ecosystem Services

FUTURE VEGETATION OPTIONS

REGULATION OF GROUND WATER

MAINTENANCE OF SOIL HEALTH

Maintenance of habitat – Goulburn Broken

Art Langston, CSIRO

Landscape Function Analysis (David Tongway, CSIRO)

Natural asset(e.g. vegetation)

Ecos

yste

m s

ervi

ce

‘Leaky’ LandscapeHighly Dysfunctional

‘Retentive’ LandscapeHighly Functional

S C I E N C E F O R D E C I S I O N M A K E R S

VAST framework

VIVIVIIIIII0

Native vegetationcover

Non-native vegetationcover

Vegetation States

Increasing vegetation modification

Transitions = trend

Vegetation thresholds

Ass

ets

S C I E N C E F O R D E C I S I O N M A K E R S

VAST III: TRANSFORMED

NATIVE

S C I E N C E F O R D E C I S I O N M A K E R S

VAST IV: REPLACED (ADVENTIVE )

S C I E N C E F O R D E C I S I O N M A K E R S

Accounting System Using VAST and Ecosystem Goods and Services

0 I II III IV V VI

Carbon

Biodiversity

Water -Nutrient mitigation

Prodn- Food Food and fibre

Water -Base Base stream stream flowflow

Salinity mitigation

Ecos

yste

m g

ood s

an d

se r

vice

s

S C I E N C E F O R D E C I S I O N M A K E R S

Hypothetical Trade-offs

– landscape futures

VAST VIe.g. wheat paddock

Production e.g. food and fibre

Carbon

Biodiversity e.g. Species

richness

Water e.g. base

stream flow

Water e.g. Soil

nutrients

VAST VIe.g. 15 yr old

hardwood plantation

Productione.g. food and fibre

Carbon

Biodiversity e.g. species richness

Watere.g. base stream

flow

Watere.g. Soil

nutrients

VAST VIe.g. Lucerne

and wheat rotation

Productione.g. food and fibre

Carbon

Biodiversity e.g. species richness

Watere.g. base stream

flow

Watere.g. Soil

nutrients

Focus: Consequences of Ecosystem Change for Human Well-being

Number of species

Ecos

yste

m s

ervi

ces

prov

ided

Resilient

Brittle e.g. population regulation by top predators; cultural services

e.g. nutrient cycling and water cleansing

1 2 34

5

POSTULATED ORDER OF BIODIVERSITY/ SERVICE LOSS

Higher trophic levels (e.g. top predators, vertebrate herbivores)

Cultural servicesMid-trophic levels (e.g. plants)

Regulating services

Lowest trophic levels (e.g. nematodes, mites, beetles, fungi, bacteria)

Support services

Why we need a multiple outcomes approach and what we need from it• A new framework

– From single issues to an integrated approach – Characterising the full range of services/ benefits– Clarity about the role(s) of biodiversity

• Incentives– Different value perspectives (market/ non-market, use/ non-use) – Dynamic tensions between policy and political agendas– Drivers of behavioural change– Market-based mechanisms

• Setting targets and measuring progress– What mix of services is needed/ wanted?– Non-linear and discontinuous change across gradients and time– Spatial scales– Simple and clear measurement and reporting

Degradation of ecosystem services often causes significant harm to human well-being

Degradation tends to lead to the loss of non-marketed benefits from ecosystems

The economic value of these benefits is often high and sometimes higher than the marketed benefits

Timber and fuelwood generally accounted for less than a third

of total economic value of forests in eight Mediterranean

countries.

Improvements in services can be achieved by 2050

Three of the four scenarios show that significant changes in policy can partially mitigate the negative consequences of growing pressures on ecosystems, although the changes required are large and not currently under way