Ecosystem Services in plantations: from economic valuations to market-based instruments
-
Upload
center-for-international-forestry-research-cifor -
Category
Science
-
view
242 -
download
4
Transcript of Ecosystem Services in plantations: from economic valuations to market-based instruments
![Page 1: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/1.jpg)
Ecosystem Services in plantations: from economic valuations to market-based instruments
New Generation Plantations Annual Summit, Cape Town 18-19 June
Himlal Baral & Romain Pirard
![Page 2: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/2.jpg)
Economic evaluation of ecosystem goods and services under different landscape management scenarios
![Page 3: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/3.jpg)
Study landscape background
Australian landscapes are changing due to changing demands of society and climate change and variability
Land use has gone through many cycles of land clearance, investment, abandonment
Since European settlement of Victoria in the1830s, ~66% of native vegetation has been cleared
Key NRM issues – declining water quality and quantity, salinity (irrigation and dryland), deterioration of soils, declining biodiversity, degradation of rivers and wetlands, increasing weeds and pest infestations
![Page 4: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/4.jpg)
Background – policy context
Bold, strategic and landscape-scale initiatives are required to reverse the land degradation
The Australian Government and regional NRM agencies have adopted a wide range of sustainability approaches
Range of market-based instruments for NRM are being operated in Australia – e.g., bush tender, eco-tender
Carbon farming initiative – as a new economic opportunities for farmers and land managers
![Page 5: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/5.jpg)
Study aims Identify and define the plausible future land use scenarios
Identify and assess the key ecosystem services such as, carbon sequestration, agriculture production, water, biodiversity and timber in heavily modified and fragmented landscape
Assess the projected changes in ecosystem goods and services under plausible future land use scenarios
Analyse trade-offs and synergies
![Page 6: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/6.jpg)
Study area and major land use categories
• Largely degraded from clearing of native vegetation for agriculture as well as over allocation of irrigation water
• Rainfall ~350 mm, 70 m asl
• Size: 30,000 ha
• High conservation value
![Page 7: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/7.jpg)
Timber
Methods: key research steps
Step I
• Collate spatial and attribute data • Land use and land cover classification• Identify and define ES for assessment
Step II
• 3 cost based scenarios, and assumptions• Estimation of ES flow• Value per ha
Step III
• Develop and define 5 future land use scenarios • Identify proposed land use change under each scenarios• Ecosystem services under each scenario
Step IV• Spatial assessment – tradeoffs, synergies and interactions• Policy implications
Carbon
Water
Biodiversity
![Page 8: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/8.jpg)
Plausible future land use scenarios Business-as-usual
• current farming and management systems continue with no significant changes in land use and land cover in the future
Mosaic farming landscapes• reconfiguration of irrigated farming landscapes to more sustainable use,
such as improved farming, low rainfall forestry and biodiversity plantings
Eco-centric or environmental plantings• growing environmental concern and growth of new environmental
commodities such as carbon and biodiversity credits, there will be substantial increase in environmental plantings
Agro-centric or production oriented• higher demand of food/livestock production due to continued population
growth in Australia and globally
Abandoned land use• land abandonment due to the depopulation in rural areas, and significant
uncertainly due to changing climate
![Page 9: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/9.jpg)
Timber
Methods: tools and resources
Water
Bush tender payments
![Page 10: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/10.jpg)
Calculation - example
NPV is the net present value ($/ha)P is the price of carbon, Qt is the quantity of CO2e sequestrated in year t, EC is the establishment cost, MC is the annual management cost, andr is the rate of discount
![Page 11: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/11.jpg)
Returns from Carbon under various scenarios
-$50 $0 $50 $100 $150 $200 $250
1%
3%
5%
7%
10%
NPV $/ha
Disc
ount
rate
Conservative
Optimistic
Central
![Page 12: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/12.jpg)
Returns from carbon +environmental payments
-$50 $0 $50 $100 $150 $200 $250
1%
3%
5%
7%
10%
NPV $/ha
Disc
ount
rate
Conservative
Optimistic
Central
![Page 13: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/13.jpg)
Returns from Timber Plantations
-$6,000 -$4,000 -$2,000 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000
1%
3%
5%
7%
10%
NPV $/ha
Disc
ount
rate
Conservative
Optimistic
Central
![Page 14: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/14.jpg)
EGS trend under various scenarios
Land use scenarios
Ecosystem Services
Carbon Agri prodn Water Biodiversity Timber
Business-as-usual = =
Future farminglandscapes
=
Eco-centric =
Agro-centric =
Land abandonment ? =
For $ value see Baral et al. 2014, Land Use Policy
![Page 15: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/15.jpg)
Conclusions
Against any realistic investment criteria returns from carbon alone may not be commercially attractive in the study region
Additional payments via the Victorian Government’s market based instruments such as, bush tender makes some scenarios attractive but they are nowhere close to current expected return from agriculture
Planting for timber is not commercially attractive as it delivers only negative or very low returns under all except the most optimistic scenario (low cost with low discount rate)
![Page 16: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/16.jpg)
Conclusions
Business-as-Usual and Abandoned Land Use are not a sustainable solutions the for future as they lead to a decline in ecosystem services
Abandoned Land Use potentially threatens native biodiversity and produces ecosystem dis-services due to potential growth of weeds and pest animals
Although Agro-centric is commercially attractive but produces poor environmental outcome, there is also a growing uncertainty due to declining rural populations, volatile commodity market, and climate variability
Mosaic Farming Landscapes and Eco-centric produces better environmental outcomes. However, Eco-centric is not commercially attractive due to harsh environmental condition and associated low carbon and timber productivity
Supplemental payments are required to reverse the declining environmental situation and restore fragmented natural capital
![Page 17: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/17.jpg)
Acknowledgements
Contributors • Dr. S Kasel, Melbourne School of Land and Environment • Prof. RJ Keenan, Melbourne School of Land and Environment• Prof. NE Stork, Griffith University • Dr. SK Sharma, Carbon Planet
Data and support• Kilter Pty Ltd• Bureau of Rural Sciences• North Central Catchment Management Authority• Victorian Department of Sustainability and Environment • Dr. R Benyon, CSIRO/ Uni of Melb
Financial support • University of Melbourne • CRC For Forestry
Himlal Baral © University of Melbourne 2012
![Page 18: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/18.jpg)
Another economic approach to plantations:
Market-based instruments for ES
![Page 19: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/19.jpg)
THE ‘DISCOVERY’ OF A NEW GALAXY
![Page 20: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/20.jpg)
With assumed strengths…
Economic signals more effective and flexible
Better resource allocation and efficiency
Filling the funding gap for ES provision
![Page 21: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/21.jpg)
… but also lots of confusion
Inconsistent use of terms
Mis-information of policy-makers
An impediment to policy evaluation
![Page 22: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/22.jpg)
1. Direct markets (e.g. NTFPs for conservation)
2. Tradable permits (e.g. transferable development rights, carbonmarkets)
3. Regulatory price changes (e.g. eco-taxes or subsidies)
4. Voluntary price signals (e.g. FSC certification)
5. Coasean-type agreements (some PES, conservation concessions)
A rough guide to the literature jungle
![Page 23: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/23.jpg)
Broad range of analytical approaches:
0%
10%
20%
30%
40%
50%
Local case-study (ex-post)
Case-study onnational
mechanism(ex-post)
Theory &discourse
Comparativeanalysis
Advocacy Linkage marketand
biodiversity
Modelling orsimulation (ex-ante analysis)
![Page 24: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/24.jpg)
Broad range of evaluation criteria:
0% 10% 20% 30% 40% 50% 60%
Efficiency
Environmental effectiveness
Equity
Feasibility
Food security
Freedom of choice
Legitimacy
Participation
Pro-poor
Welfare
Governance
Development
![Page 25: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/25.jpg)
Payments for Ecosystem Services
2.3%7%
4.7%
34.9%
20.9%
0%
30.2%
0%
10%
20%
30%
40%
![Page 26: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/26.jpg)
Do PES improve governance of reforestation?
Two Indonesian cases
![Page 27: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/27.jpg)
General implications of relying on PES
Establishment of multi-stakeholder agencies as intermediary bodiesbetween funder and planters to manage funds / distribute incentives
Specific contracts assign objectives to planters with conditionalpayments
![Page 28: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/28.jpg)
Results from case studies
Evaluation procedures for the internal governance of farmer groups are necessary
Multi-stakeholder bodies do not guarantee equal power in decision making
The effectiveness is affected by political purposes
… but is this specific to ‘PES’?
![Page 29: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/29.jpg)
Converging results from previous researches
Governance needs to complement economic tools to achieve outcomes
- Impacts of P&P expansion depend on corporate governance and political will;
- Impacts of plantations on forest conservation depend on public support policies;
- Economic valuations in response to demand by policy makers;
- MBIs require proper regulatory frameworks.
![Page 30: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/30.jpg)
CIFOR Planted forests initiative
- Stakeholders’ perceptions and expectations;
- Labor issues;
- Conflict mediation;
- Community forestry / company-community partnerships;
- Mapping of planted forests.
![Page 31: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/31.jpg)
Further reading
Pirard R., de Buren, and R. Lapeyre, 2014, Do PES improve governance of forest restoration?, Forests, 5 (3), pp. 404-24.
Pirard, R., 2012, Payments for Environmental Services (PES) in the public policy landscape: “Mandatory” spices in the Indonesian recipe, Forest Policy and Economics, 18, pp. 23-29.
Pirard, R., 2012, Market-based instruments for biodiversity and ecosystem services: A lexicon, Environmental Science & Policy, 19-20, pp. 59-68.
![Page 32: Ecosystem Services in plantations: from economic valuations to market-based instruments](https://reader031.fdocuments.net/reader031/viewer/2022030316/58726a801a28ab31498b5827/html5/thumbnails/32.jpg)