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1 October 2010 Conserving and Valuing Ecosystem Services and Biodiversity: Economic, Institutional and Social Challenges.
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Societies around the world are increasingly reminded of the links among ecosystem function, ecosystem health, and social welfare. In the Central Valley of California, almond farmers are exploring ways to revitalize local populations of native honeybees to ensure pollination in the face of widespread colony collapse disorder among managed bees. Along the Yellow River in China, issues of nutrient loading and sedimentation confront rural and urban populations regularly. Payments for ecosystem services (PES) programs, including the Grain-to-Green program, have been recently instituted in China to help improve water quality and decrease erosion. In the Maldives, an archipelago whose maximum elevation is less than three meters above sea level, the government is very aware that carbon sequestration and storage provided by the world's forests might help prevent sea-level rise associated with climate change. To ensure desired levels of different ecosystem services, governments must better understand the biophysical processes that underlie their provision, the policy mechanisms available to promote provision by private landowners, and the institutions required to ensure the successful implementation of these policies.

In economic terms, efficient natural-resource-use decisions occur when the marginal benefits from additional intensive resource use are equal to its marginal costs. The reckoning of those costs should, naturally, include the forgone benefits associated with the provision of ecosystem services by extant marine or terrestrial habitat. Challenges to efficient resource use include assessing such external costs; accounting for the public nature of several often-used ecosystem services, insecure property rights, and insufficient institutions. Conserving and Valuing Ecosystem Services and Biodiversity: Economic, Institutional, and Social Challenges demonstrates the challenges posed by these characteristics, the need to overcome them, and the outcomes of different approaches being implemented in communities around the globe to address them.

The book is organized into five sections, each focusing on key economic and social issues. The first three sections introduce vital components in the design and successful implementation of policies to ensure biodiversity and the provision of different ecosystem services: the valuation and use of biodiversity and ecosystem services, policy mechanism design and incentives, and governance. The final two sections touch on indigenous knowledge and adaptation to climate change, respectively.

The social values of biodiversity and ecosystem services are useful in identifying the level of provision at which the marginal benefits are just equal to the marginal costs, which is defined as the optimal level of service provision. The policy design choices and the challenges resulting from the characteristics listed above determine whether the targeted level of provision is optimal. The private cost of service provision, which should be based on the opportunity cost of forgone intensive land use, is useful in determining the pattern and amount of service provision under market-based policy mechanisms or PES programs. Furthermore, it is essential to understand the trade-offs between the value of intensive land use and land's value for the provision of biodiversity and ecosystem services, given how these values are distributed across different segments of society.

Within the framework described above, the first section of this volume includes pieces that demonstrate the importance of ecosystem services to impoverished communities around the world, and offers methodological insights into estimating the social value of different ecosystem services. A case study from Laos by Lucy Emerton introduces the concept of joint conservation and development programs to account for the reliance of rural communities on goods and services from the surrounding vegetation. Notable within this section is the contribution of Randall Kramer and colleagues, which describes methods to explore the willingness to pay for integrated conservation and development projects in Sumatra and Nusa Tenggara Timur, Indonesia. This case study is based on explicit acknowledgement of the trade-offs that exist between resource use and conservation, which should influence the design of future conservation efforts.

Ecosystem services and biodiversity have several features that should theoretically lead to inefficient production and consumption outcomes in the absence of regulation, including external costs, underprovision of public goods, and information asymmetry. Several policy mechanisms have been designed to improve efficiency. The second section of the book explores policy mechanisms that have been applied to these problems in practice and reinforces the theoretical motivation for different mechanisms. The chapter by Unai Pascual and Charles Perrings, although focused on agricultural landscapes, provides a general overview of theoretically viable policy mechanisms in addition to examples of their implementation.

Clem Tisdell's chapter explores how fundraising needs might affect the conservation choices of nongovernmental organizations (NGOs) and potential optimal organizational forms for such an enterprise, noting how competition between NGOs may have an impact on conservation outcomes. This chapter, influenced by the work of Oliver Williamson, is provocative and theoretically intriguing. Conserving and Valuing Ecosystem Services and Biodiversity could also have benefited from a section based on work by Elinor Ostrom, who shared the Nobel Memorial Prize in Economics with Williamson in 2009. Ostrom's research has provided insights into the community and resource characteristics that allow for efficient resource use in systems that lack well-defined property rights or regulation. These conditions are found in many areas of the world currently confronting the trade-offs between intensive land use and ecosystem service provision.

The chapters in the third section of the volume address real-world conditions that must be accounted for to achieve successful regulation of habitat. At the heart of this section is the idea of incentive compatibility. Policies can diverge from their intended outcomes in myriad ways if stakeholders do not participate in their design, if there are insufficient funds for enforcement and monitoring of a chosen policy, or if regulatory bodies act to achieve self-preservation instead of positive ecosystem outcomes. Detailed house-hold surveys from Indonesia, analyzed in a chapter by Regina Birner and Marhawati Mappatoba, highlight the importance of community involvement in the development of regulations that result in limited access to land or that modify property rights. In areas with imperfect enforcement and monitoring, the implementation of conservation programs that fail to acknowledge existing areas of use or de facto property rights may be ineffective.

Indigenous knowledge about the characteristics of local flora and fauna has accrued over centuries, and this information is often of value to pharmaceutical firms in their research and development of commercial drugs. Krystyna Swiderska discusses traditional knowledge and resource use, focusing more on the impacts of conservation planning on the access afforded to indigenous peoples than on intellectual property rights and traditional knowledge. Though not explicitly mentioned in the book, this issue is of direct relevance to REDD (reduced emissions from deforestation and degradation) projects, jane Kabubo-Mariara and Ernest L. Molua discuss in separate chapters the difficulty of adapting to climate change in ecosystems that are highly sensitive to physical conditions, such as estuaries, and in social systems in which the resources necessary for adaptation may be limited.

Although the potential development of payment programs for carbon sequestration and storage by forests is not explicitly covered, the importance of institutions and stakeholder involvement in the policymaking process, as described in the chapters in the first three sections of the book, should be acknowledged in the design of these programs. Reduced emissions from REDD projects and other successes are creating significant excitement among stakeholders. However, these programs can lead to undesirable outcomes, resulting from information asymmetry, a lack of required enforcement and monitoring infrastructure, insufficient stakeholder involvement, or an absence of institutions to ensure that national agreements provide incentives for behavioral change.

The chapters that K. N. Ninan has assembled from well-known economists serve as a solid introduction to the socioeconomic concepts fundamental to the valuation and provision of biodiversity and ecosystem services. The theoretical discussions provide nice summaries of the necessary background on many of these issues. The case studies help transform economic theory into meaningful application, allowing policymakers and readers from other disciplines to learn from the experience of others.

Marc N. Conte "Conserving and Valuing Ecosystem Services and Biodiversity: Economic, Institutional and Social Challenges.," BioScience 60(9), 760-762, (1 October 2010).
Published: 1 October 2010

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