From valuing ecosystem services to embracing ‘net gain’

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Biodiversity loss is posing a fundamental threat to society across all corners of the globe. As part of a special report on the sorts of risk stemming from this loss, The AXA Research Fund brought together scientists and experts to discuss the interdependencies between nature, climate change, the economy and security. Wetlands International Head of Business and Ecosystems Ward Hagemeijer was part of the line-up.

In this article with Dr Kelvin Peh, Lecturer in Conservation Science, Principal Investigator Conservation Ecology and Ecosystem Services at Southhampton University, he discusses how current approaches to valuing ecosystem services need to go beyond reducing biodiversity loss to embracing ‘net gain’ – the idea that development should leave landscapes in a better state for people and nature.

Ward Hagemeijer

Ward Hagemeijer


It is known that ecosystems provide countless benefits – from food, clean water and climate regulation to habitats for species and protection against natural disasters. The terms ‘natural capital’ and ‘environmental services’ were first coined in the 1970s. However, putting a value on these services is difficult. Can we really put a price tag on nature? If we do, will it help us protect ecosystems? And what about the cultural aspects – the sense of belonging and beauty we derive from the natural world?  

Dr Kelvin Peh 

There are two types of tools to assess ecosystem services: one is written – basically, a step-by-step guide and very site-specific. The other is based on computer models and used for much larger areas – regional or national. A computer-based model will require specialist skills. The idea behind TESSA, the tool I have been involved in developing, is that is provides a very simple cost-benefit analysis: it compares the ecosystem with alternative ‘states’, such as the building of a hotel. TESSA is designed for non-experts and local communities are involved throughout the process. Their involvement is crucial and, often, they are the ones producing the data. 

Ward Hagemeijer

Development decisions are made along economic lines and it is hard to be heard without using economic terms. We may want to look for a measure that is not so biased towards economic value but that does not exist at the moment, and putting a fair value on these ecosystems is very complex. My research on concerns the conservation and restoration of wetlands. People and nature depend on wetlands for their survival – they underpin so many of the UN Sustainable Development Goals and store a lot of water and carbon. However, there have been very significant losses, with some estimates going up to as much as 75% of wetland lost or degraded. A wetland itself has value, but it only exists because it is connected to the world around it – it is part of the water infrastructure and it may also be cultural, intrinsic. It is difficult to put a value on the survival of a species for instance, but it makes perfect sense to factor in such a measure. 

Dr Kelvin Peh 

We have been developing TESSA with that goals in mind since 2010. For our second version, we have developed a specific module dedicated to cultural services provided by ecosystems representing sense of place, heritage and other intangibles that require a different methodology. These should be valued qualitatively, rather than quantitatively. In terms of data for water and carbon, current tools are reasonably appropriate but with other services, such as pollination, there are still issues, and collecting data on pollination is very hard work. It is sometimes easier to convey the economic argument to governments. This can fight the idea that there is a choice somehow between economic prosperity and environmental protection. With TESSA, the objective is to provide evidence and, instead of relying on ethical or legal considerations, to be able to speak to governments or local communities and say it is in your economic interest to protect this biodiversity or this environment. 

Ward Hagemeijer 

Attitudes have changed. There is more recognition of the value wetlands bring – draining is no longer the automatic response and a lot of work has been done in this respect through the Ramsar Convention. In many places though, there is still no overall vision on how to deal with landscapes that have multiple functions. In most countries, governments’ over-riding vision is economic development: they are open to conserving nature and to recognizing ecosystem services as a basis for development, but that is not their starting point. It is often about compensating for damage rather than taking a more strategic approach. Ecosystems van be quite resilient, but if you change a landscape to such an extent that the ecosystems are no longer able to perform their functions, then you will lose many services that the ecosystem was providing. If you look at tar sands mining in Canada, entire square kilometres of the surface were dug up to a depth of several hundred meters, changing the landscape dramatically with no way for the wetlands to be restored. What is frustrating is that the mining could have been done in a different way. If river courses were left in place, for example, or the gradient in the soil systems, then restoration would have been possible. At this point, we are able to provide a green landscape after mining, but that landscape does not provide the same services, functions or biodiversity. 

Dr Kelvin Peh 

Valuing biodiversity is useful to business as they often depend on ecosystems or have an impact on them. Putting a value on nature could help business identify risk, target their management more effectively, and understand the conflict between different environmental issues. For the insurance industry, once value has been established, it is easier to assess risk and to create a product that will mitigate that risk. These assessments on their own are not enough, of course, and it is important to still bring in the more traditional, intangible arguments. We can identify the costs and benefits but, in protecting biodiversity, an ecosystem services assessment is just one tool, not a magic bullet. 

Ward Hagemeijer 

Assessments happen in a broader context. There is the idea of ‘net gain’ – a commitment to return the landscape to a better state of repair, in terms of value for nature and people, once a project is finished. There is a responsibility for both regulators and companies. Ideally, regulators are well enough informed to protect ecosystems and allow for effective planning – that is not always the case. Sometimes, within governments, two essential ministries, oil and environment for instance, do not speak to each other. It is the companies’ responsibility to use the knowledge they have – or develop that knowledge, if they do not have it – and not just take advantage of low standards. This is also where lenders can make a difference by applying conditions on lending money. 


NOTES

The AXA Research Fund launched “Biodiversity at Risk: Preserving the natural world for our future” in December 2019. This is a collection of interviews, articles and desk research that discuss the critical nature of biodiversity, the interdependencies between nature, climate change, the economy and security, based on insights from AXA Research Fund supported scientists and biodiversity and climate change experts. The report also provides an overview of AXA’s commitments in the area of biodiversity loss mitigation and resilience strategies. Read the guide in full here.