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Ecosystem Services : How much
your forest worth???
Dr Vishal Rasal.

What is it all about ?
The multiple benefits provided to human society by the
ecosystems
Focus shifts from resources to process and function

The forest is a peculiar organism of unlimited
kindness. It affords protection to all beings, offering
shade even to the axe who destroys it.”
- Gautama Buddha

Millennium Ecosystem Assessment
classifies four categories

Ecosystem services explicitly connect human well being with ecosystem health

Ecosystem Services of Kailadevi Wildlife Santuary
? What ecosystem services are depicted here?
? How are they related?

How are these ecosystem services valued?
? Undervalued
? Have no financial value
? Unsustained
? Overexploited (i.e. fish stock)
? Degraded faster than recovered (i.e. soil
nutrient)
? Destroyed…

Regulating services:
? Declining farmland productivity;
? Soil erosion;
? High salt accumulation in soil;
? Declining water quality…
Condition and trends of ecosystem services

Cultural services:
? Disturbing landscapes;
? Declining non-recreational cultural services …
? Increasing tourism and recreation condition

Supporting services:
? Destroying biogeochemical cycles;
? Losing wildlife habitats;
? Declining biological productivity…

Identifying drivers of climate change influencing ecosystem services and indicators

Payments for ecosystem services

What are payments for ecosystem services?
? Incentives offered to farmers or landowners in exchange for managing their
land to provide some sort of ecological service.
?They have been defined as "a transparent system for the additional provision
of environmental services through conditional payments to voluntary
providers.”
(Tacconi, L. (2012))
Payments for ecosystem services

Payments for Ecosystem Services
Four key ingredients:
Defined Ecosystem
Service or Bundle of
Services (“product”)
Buyer (one or
more people) –
willing to pay
Seller (one or
more people) –
willing to provide
Voluntary
Private
Transactions Public Schemes
(Gov’t as buyer
or intermediary)
Mixed Schemes
3 different recipes:

Markets for Ecosystem Services
Ingredients are the same, but quantity is various. Also, markets
can be voluntary or regulatory.
Defined Ecosystem
Service
Carbon Market
Buyer Seller
Voluntary
Defined Ecosystem
Service
Biodiversity Mkt
Defined Ecosystem
Service
Watershed Mkt
Seller
Seller
Seller
Seller
Buyer
Buyer
Regulatory

Different ecosystem services have
value at different scales. Scale is not
the same for all markets:
Global
(carbon sequestration)
Local
(water quantity & quality)
Markets for Ecosystem Services
Defined
Ecosystem Service
Carbon Market
Defined
Ecosystem Service
Biodiversity Mkt
Defined
Ecosystem Service
Watershed Mkt

The ecosystem services concept is an interdisciplinary concept
with an emphasis on economics
What’s the story with markets?
Valuing ecosystem services prevents internalizing
benefits without payment

? How to avoid emissions and enhance sequestration?
? What are PES/market opportunities?
Payments & markets for carbon

? How to maintain/enhance biodiversity?
? What are PES/market opportunities?
Payments & markets for biodiversity

How to maintain/enhance water quantity/quality?
What are PES/market opportunities?
Payments & markets for water

Total Payments for Forest-Based Ecosystem Services from Gov’t and Non-Gov’t
Organizations and Individuals (in 1000s of constant 2005 $). Taking Stock: Payments for
Forest Ecosystem Services in the United States. Forest Trends. 2011.
But success is not guaranteed…

Markets: Stacking vs. Bundling
A single project provides multiple benefits. These benefits may sold separately (stacked) or be
packaged together (bundled):
Plot of land
with an
Ecosystem
Services
Project
STACKING BUNDLING
Multiple
buyers
Multiple
markets
Single
buyer
Integrated
Market
$Carbon Credit
$ Water Credit
$Biodiversity Credit
$$$
Integrated
Credit

Examples of PES
NYC Watershed Program

The California Cap-and-Trade system sets a cap on GHG emissions from regulated
entities
? The Cap declines over time
? Allowances (permits to pollute) must be surrendered every 3 years to show
compliance with the cap
? Entities can achieve their required GHG reductions through:
? Increased efficiency, technology change, different fuels etc.
? Purchasing Allowances from other covered entities or brokers
? Purchasing Offsets from project developers or brokers
CURRENT EMISSIONS
REGULATORY CAP
PES ?
EXAMPLES OF MARKETS
The California Cap-and-Trade program puts a price on forest carbon (1)

EXAMPLES OF MARKETS
WHAT IS AN OFFSET?
? An offset is a reduction in GHG emissions made in one place in order to
compensate for emissions made elsewhere.
? Offsets standards must be stringent: “A Ton is a Ton”
? Offsets must meet the tests of: real, permanent, quantifiable, verifiable,
enforceable, and additional.
? Offsets are used to provide flexibility in GHG reduction programs because
they are usually less expensive than allowances or technology change, but
still provide equal carbon reductions.
? Trading markets for Allowances and Offsets allow the market to set a price
on carbon based on supply and demand.

CURRENT EMISSIONS
REGULATORY CAP
USE OF OFFSETS
Offsets can be used for 8% of
the compliance obligation of
an entity to reduce its GHGs
Offsets can be generated
from 4 protocols
? Ozone depleting substances
? Livestock methane
? Forest projects
? Urban forest projects
OFFSETS are an example of a PAYMENT FOR ENVIRONMENTAL SERVICE
= A payment to a landowner for providing a benefit to the environment.
For example: For storing more carbon in a forest than would otherwise occur, according to the
rules of the Forest Project Protocol
EXAMPLES OF MARKETS

WHAT IS A FOREST CARBON OFFSET?
The “U.S. Forest Project Protocols” set the rules for forest landowners to
create a new type of forest product, called a “Forest Carbon Offset”
www.arb.ca.gov/cc/capandtrade/protocols/usforestprojects.htm
? Each offset equals 1 metric ton of CO2.
? Each offset represents an additional ton of carbon that is stored in the forest above
what would otherwise occur under “business as usual” forest management. This
can be achieved by:
? Reforestation of sites that have been out of production at least 10 years
? Improved Forest Management (IFM) that increases the carbon storage of
stands through longer rotations and harvesting less than growth.
? Avoided Conversion: Avoiding land conversion and loss of forests that would
have otherwise occurred.
EXAMPLES OF MARKETS
The California Cap-and-Trade program puts a price on forest carbon

1. Yurok Tribe CKGG Forest Carbon Project,
Northern California.
? 7,660 acres of Douglas-fir and hardwoods
along the Klamath River
? Projected offset issuance of 815,000 offset
credits through 2018.
? Management designed to improve cultural
and ecological values while generating
income from carbon offset sales and logging,
with the aim of developing higher value and
larger trees.
EXAMPLES OF PROJECTS SELLING
COMPLIANCE-QUALITY FOREST OFFSETS
EXAMPLES OF MARKETS

EXAMPLES OF PROJECTS SELLING
COMPLIANCE-QUALITY FOREST OFFSETS
2. Moro Big Pine project, Arkansas
? IFM Project on approximately 16,000 acre tract of land in Calhoun county,
Arkansas.
? The project merges habitat conservation for the endangered red-cockaded
woodpecker, industrial timber management, and carbon yields.
? Received an initial issuance of 220,208 ARB compliance carbon offsets.
EXAMPLES OF MARKETS

PRICE OF OFFSETS
Market prices for Allowances and Offsets continue to change as the market
matures, players learn how the system works, and covered entities calculate their
best options for meeting their GHG reduction obligations.
The sales of offsets are private transactions between sellers and buyers and prices
are not publically posted. Offsets will always be priced somewhat below
Allowance price.
The price for Allowances in the first 2 years of the program has remained near the
effective price floor set by the ARB
? Allowance Price = around $10-$11 per ton of CO2 emissions (2014)
? Approx. 5.6 million forest offset credits (ARBOCs) have been issued
by the California Air Resources Board as of June, 2014.
EXAMPLES OF MARKETS

? Potential markets: carbon, watershed services
? Carbon emission reduction markets
? Heavy press but science and numbers still developing
? A climate change mitigation activity– high priority!
? Watershed services
? Locally-based; many opportunities here
? PES in Lam Dong province and beyond in Vi?t Nam and PES in Costa-Rica
Economic opportunities (markets)

? What is an ecosystem service?
? List at least 10 ecosystem services for a forested area you are aware of.
? How are ecosystem services important to humans?
? How do payments for ecosystem services and market approaches contribute
to mitigate and adapt to climate change?
Review

? What was useful?
? What is missing?
? How did you, or would you, modify the materials to make them better fit your
instructional context?
? Please share your experience and modifications here:
climatecurriculum@googlegroups.com
Instructor Review of Materials

? Tacconi, L., 2012. Redefining payments for environmental services. Ecological Economics,
73(1): 29-36
? UP, 2010, Millennium Ecosystem Assessment,
? UNEP, 2008, Payments for Ecosystem Services: Getting Started
? WB, 2013, Turndown the heat
Readings

An excellent collection of online references on ecosystem services compiled at Duke University can
be found here:
http://nicholasinstitute.duke.edu/initiatives/national-ecosystem-services-partnership/selected-
references-ecosystem-services
Butler, 2008. National Woodland Owner Survey. US Forest Service Gen Tech Report NRS-27
http://www.treesearch.fs.fed.us/pubs/15758
Millennium Ecosystem Assessment, 2005. Ecosystems and Human Well-being: Synthesis. Island
Press, Washington, DC. http://www.millenniumassessment.org/documents/document.356.aspx.pdf
References

The curriculum of USAID’s Climate-Resilient Ecosystems and Livelihoods (CREL) in Bangladesh is a free
resource of teaching materials for university professors, teachers and climate change training experts.
Reproduction of CREL’s curriculum materials for educational or other non-commercial purposes is
authorized without prior written permission from the copyright holder, provided the source is fully
acknowledged.
Suggested citation: USAID. 2016. Bangladesh Climate-Resilient Ecosystem Curriculum (BACUM). USAID‘s
Climate-Resilient Ecosystems and Livelihoods (CREL) Project. Winrock International. Dhaka, Bangladesh.
Disclaimer: The CREL’s curriculum is made possible by the support of the American People through the
United States Agency for International Development (USAID). The contents of the curriculum do not
necessarily reflect the views of USAID or the US Government.
References and Resources

USAID's Climate-Resilient Ecosystems and Livelihoods (CREL) Project
Winrock International
House 13/B, Road 54, Gulshan 2, Dhaka 1212
Bangladesh
Tel: +880-2-9848401
www.winrock.org

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