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  • Valuing Nature


Successful conservation projects have targeted low opportunity cost areas in remote areas mostly. Conservation has entered a new phase by competing with humans needs. IWS tools might become crucial to their success.

According to Joppa and Pfaff 2009, most protected areas are more likely to be found in high, steep locations fare from cities and roads. There is an economic reason behind this fact: by doing so we don’t lose other opportunities to utilize the lands for agriculture, forest extraction, or any other use. These are the low hanging fruits as most of those places are “unlikely to face land conversion pressures even in the absence of protection”. Of course, this has already the benefit of protecting part of the biodiversity in the world and is found to be quite successful to do so.

However, human demographic expansion and our increased use of resources to satisfy our life standards enter in conflict with biodiversity in most of the unprotected places (see environmental footprint concept and my article about a case study in Switzerland).

When speaking about conflict or competition on the use of resources, one comes to consider trade-off for decision making. Currently, most of the decisions we do are based on financial considerations, while forgetting the value we get from nature. As Prof. Edward Barbier (a member of TEEBs Advisory Board) puts it, “we use nature because it is valuable, we lose nature because it is free”.

Analysing trade-off and accounting for the value of nature requires new methods and tools that are provided by the fast developing field of natural capital accounting and ecosystem services valuation. Besides the importance of getting measures and metrics to manage nature, new tools and institutions are needed to manage and conserve biodiversity once its value has been recognized.

Investment in watershed services (IWS) is a key set of institutions, mechanisms and solutions to conserve biodiversity through the recognition of ecosystem services and benefits it provides to our society. The basic principles around the IWS are based on the common interest of two or more stakeholders, at least one downstream stakeholder that perceive the benefit from the watershed (for example clear water provision) and an upstream owner, which owns lands on which the ecosystem providing services is located (for example a forest, which provides this clean water).

Based on this simple example, different solutions might be used, for example:

  • Bilateral agreements (payments or compensations in nature)

  • Funds publicly or privately regulated

  • Trading & offsets

  • Etc.

IWS is particularly useful in a context where we need to ensure the cohabitation of our society, our built capital and the nature. In situation where trade-offs need to be analyzed, due to a competition over natural resources, IWS provides efficient tools to ensure that all stakeholders benefits form the solutions put in place. A good source of information about existing case studies is the Ecosystem Market Place created by Forest Trends.

IWS solutions has not been widely used by the private sector, apart from a few exceptions. Given the context of stakeholders pressures, increased needs of transparency and increased existence of external risks related to sustainability across the value chains of companies, it is very likely that the private sector will invest more in IWS tools as a key part of their sustainability strategy.

It will have a direct benefit for them to ensure reduced costs through security of supply of raw materials, license to operate, reduced risks and increased access to markets through increased reputation and sustainability related communications (annual reports, targeted marketing and labeling among others). New types of collaboration will be needed with for example the NGOs having experience in such initiatives (such as Forest Trends).

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