Citola Blog
Economics of Ecosystem Services
Biodiversity is defined by the Convention on Biological Diversity as “the variability among living organisms from all sources including, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems”.
A report by TEEB titled ‘The Economics of Ecosystems & Biodiversity’, states that the concepts of ecosystem services and natural capital reveal the many benefits that nature provides. From an economic standpoint, the value provided by ecosystem services can be seen as the ‘dividend’ that society receives from natural capital. And maintaining stocks of natural capital allows for the sustained provision of future flows of ecosystem services.
As we stated in a post yesterday about the 10th Conference of Parties (COP 10) to the Convention on Biological Diversity (CBD), the value of ecosystem services are becoming more mainstream from the realisation of their importance from an environmental, commercial and humanitarian standpoint.
The Millennium Ecosystem Assessment defined four categories of ecosystem services each underpinned by biodiversity:
- Provisioning services: for example wild foods, crops, fresh water and plant-derived medicines;
- Regulating services: for example filtration of pollutants by wetlands, climate regulation through carbon storage and water cycling, pollination and protection from disasters;
- Cultural services: for example recreation, spiritual and aesthetic values, education; and
- Supporting services: for example soil formation, photosynthesis and nutrient cycling.
Despite the fact that few ecosystem services have explicit prices or are traded in an open market, the report reveals some interesting statistics:
Conserving forests avoids greenhouse gas emissions worth US$ 3.7 trillion
- Reducing deforestation rates by 50% by 2030 would reduce global greenhouse gas emissions by 1.5 to 2.7 GT CO2 per year, thereby avoiding collateral damage from climate change estimated at more than US$ 3.7 trillion (NPV - not including the many co-benefits of forest ecosystems)
Global fisheries underperform by US$ 50 billion annually
- Competition, subsidies, poor regulation and weak enforcement of existing rules has led to over-fishing, reducing the income from global marine fisheries by US$ 50 billion annually (compared to a more sustainable fishing scenario).
Green products and services represent a new market opportunity
- Global sales of organic products have been increasing by over US$ 5 billion a year reaching US $46 billion in 2007; the LOHAS market (Lifestyle of Health and Sustainability) where LOHAS consumers assess the impact the products and services that they buy have on the environment is worth ￡388 billion annually; and ecotourism is the fastest-growing area of the tourism industry with an estimated increase of global spending of 20% annually.
At Citola, we define Ecosystem Services as the services, products and tangible benefits derived from natural ecosystems. And we look to develop and commercialise projects that generate environmental-based commodities and their derivatives from natural resources.
An emerging market with
An emerging market with positive environmental (and commercial) outcomes...
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