The campaigning NGO for greater environmental and social justice, with a focus on forests and forest peoples rights in the policies and practices of the EU Carving new commodities out of Nature: Clarifying conceptual issues & overview of initiatives Focus on ‘Ecosystems’ European Cross Networking Meeting on the Global Crises 3 May 2012, Brussels
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The campaigning NGO for greater environmental and social justice, with a focus on forests and forest peoples rights in the policies and practices of the EU
Carving new commodities out of
Nature: Clarifying conceptual
issues & overview of initiatives
Focus on ‘Ecosystems’
European Cross Networking Meeting on the Global Crises
3 May 2012, Brussels
1 Payment for Environmental Services (PES),
Ecosystem trading, habitat and species banking:
Conceptual similarities and differences
and why they are important
2 EU Habitat Banking
3 Why do these initiatives matter? Do they?
Thoughts on responses
What is a cynic?
A man who knows the price of
everything and the value of nothing.Oscar Wilde - Lady Windermere's Fan
Three different stages of commensuration & commodification of ecosystems:
(1) PES with payment mainly from public sources & with primary motive
guided by public interest [Costa Rica PES from petrol tax, CAP payments
biodiversity, NYC or Vancouver payments for protection of reservoirs
upon which cities depend for water etc];
(2) PES with payment directly from private sources => motivation for
payment not primarily public interest / derived from a public policy [Coca
Cola e.g. paying for water protection; Fiji Water conservation..]; often with
some aspect of risk to land / community in case of non-compliance; may
increases acceptance of company‟s excessive use of an ecosystem function
or product but does not yet function as compensation for destruction of
Nature/ payment in lieu of compliance with law;
(3) TRADE in ecosystem functions: objective is to replace compliance with a
law or limitation with compensation – to equate compensation with direct
compliance by the destroying agent; always involves a private party and
draws local actors into international trading regimes in a way that has thus
far never worked to their advantage;
Do conceptual similarities and differences in PES schemes indicate
different stages in the process of carving new commodities out of
Nature?
all three require some form of quantification but levels
of accuracy required from the quantification are different
All three involve contractual agreements but in contrast
to (1) and (2), local actors in (3) are almost by definition
on an unequal footing with the other parties engaging in
contract negotiation
(1) and (2) are NOT compensation mechanisms, they
cannot be used in lieu of complying with a specific law
/ regulation / use limit
that however is the key purpose and financing
mechanism for (3)
Conceptual similarities and
differences in PES schemesConceptual similarities and differences in
PES schemes (1)
(3) will lead to larger level of involvement of outside
actors, technical „experts‟ than (1) and (2)
contractual obligations will have to cover far longer time
horizons in (3), like with land-based carbon offsets
(3) is likely to fail b/c of inability to quantify in a
verifiable, comparable way the tradable „assets‟ that are
hoped to be created
these biodiversity and ecosystem markets will require
significant state backing to get off the ground
Conceptual similarities and differences in
PES schemes (2)
Ecosystem trading and EU habitat banking initiative:
Different roots but shared ideology driving the process of
replacing environmental legislation with market-based
trading instruments
=> Beginning of change in very basis of democratic
consensus that everyone is equal before the law, and violating
the law results in fine – penalty…with compensation - offset
option, those with money can buy their way out of
compliance with the law….the beginning of what Edgardo
Lander refers to as the post-democratic society
We‟re witnessing the beginning of creation of new market
in ecosystem functions, can make plausible prediction of
where this will be going if it were to take off:
Technical obstacles to be expected based on among
others, experience with carbon offsets and carbon
permits
Pollution markets like sulphur dioxide and carbon. In
both markets the thing being traded is a lot more
clearly defined and still trading did not achieve
environmental objectives: sulphur trading scheme,
EUETS
Trade in Ecosystems
Once a regulatory framework is set up, trading
goes ahead even if there is no functioning
definition of the item being traded:
Wetlands trading in California even though it is
unclear what the asset is: “Discovering Price in all
the wrong places”
Trade in Ecosystems
Many cases documented related to (1) the carbon market,
(2) payment-for-conservation schemes where payment is
linked to performance of conserving land / providing a
particular „environmental service‟
REDD-like payment-for-conservation program Cardamom
Mexico: Research documenting changes to the socio-
political fabric of the communities as a result of
engagement in these payment for compensation projects:
“[T]he project has produced social, socio-economic,
and environmental outcomes that are minimal at best,
and in some cases prove to be regressive.”
Social injustices as result of such advances
“Having created a market-based mechanism to
cut carbon a lot of people seem to expect it to
behave in a non-market way and deliver poverty
alleviation, deliver sustainable development co-
benefits. But fundamentally, you create a
market, it’s behaving the way markets do, it
chases where are the most cost effective
things, where can they make the most profits and I
think that anyone who didn‟t expect a market
instrument to behave in that way didn‟t understand
what they were doing.”
Michael Grubb (2011)
Social injustices as result of such advances
Wetlands and Species banking in the U.S.A.
Pooling of compensation projects in Germany (EIA
required that needs to attest that prevention / avoidance
have been considered before compensation was chosen
[Ausgleichsregelung, no net loss of biodiversity as option]
Environmental Services Trading Exchange Rio de Janeiro
(Pedro Moura Costa, founder of Ecosecurities)
Payment for Environmental Services Law (SISA)
Acre, Brazil
Some examples of ecosystem trading schemes
EU habitat banking initiative
History and Link to EU Biodiversity strategy• Biodiversity Banking project in 2010 (eftec report)
• EU Biodiversity strategy, target 2:
– “By 2020, ecosystems and their services are maintained and enhanced by establishing green infrastructure and restoring at least 15 % of degraded ecosystems.”
• Action 7: Ensure no net loss of biodiversity and ecosystem services
– 7a) In collaboration with the Member States, the Commission will develop a methodology for assessing the impact of EU funded projects, plans and programmes on biodiversity by 2014.
– 7b) The Commission will carry out further work with a view to proposing by 2015 an initiative to ensure there is no net loss of ecosystems and their services (e.g. through compensation or offsetting schemes).
• no net loss is a key element of environmental regulation
• has not prevented loss of biodiversity
• low threshold for avoiding damage („no project‟ almost never
considered as option)
• increasingly more financial compensation since no net loss and
pooling option introduced into regulation
• careless implementation:
– wrong measures (apples with pears)
– usually one-off measures, no monitoring of
implementation, no management
– often done after damage has been done
• “Soft instrument”
No net biodiversity loss – experience in Germany
Risk of undermining [EU‟s] achievements in environmental
protection and improving health of ecosystems by direct regulation
as used in current EU Natura 2000 and Environmental Liability
Directive
Stakes large:
Consequences from failing EU biodiversity target should be
precautionary approach, improving implementation of existing
environmental regulation and legislation and invest in enforcement
Instead, venturing into slowly replacing a working policy tool
with a new, risky one that in other contexts has already shown to be
not fit for purpose [carbon trading] and / or required public bail-out
in epic proportions. Even more risky in the case of financialising
nature because…‟nature doesn‟t do bail-out‟
EU habitat banking initiative
Social (justice) implications:
→ Geographic separation of destruction &compensation
reduces the compensation to a merely
environmental, technical undertaking
→ Ignores / erases the social dimension of the impact as
well as the social use and social, cultural & spiritual
functions that nature provides
→ Has potential to generate conflict of interest for land-
The campaigning NGO for greater environmental and social justice, with a focus on forests and forest peoples rights in the policies and practices of the EU