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PricewaterhouseCoopers gets into the ecosystem services game

I've noticed a rise lately in the frequency of times I see the name PricewaterhouseCoopers pop up in research about ecosystem services and economics. Most recently they have produced a series of reports with the United Nations Development Program on habitat banking in Latin America and the Carribean. Habitat banking is an ecosystem service market in which habitat "developers" protect or restore ecosystems to generate credits that can be bought by other developers as part of a requirement to mitigate damage caused by construction projects. PwC's reports evaluate the benefits of such systems and barriers to to implementation in eight countries. They should be required reading for anyone getting involved in such schemes in Latin America.

That's not all PwC has been up to, though....

More here

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Comment by Noam Ross on November 16, 2010 at 19:04
Yup, the Community Reinvestment Act of 1977. I do like the social fuel seal idea in theory, though I'm fairly skeptical of biofuels in general.
Comment by Andrew Gordon-Maclean on November 15, 2010 at 12:42
I agree with you on the knee jerk reaction - big companies are often labelled as the bogeyman before they have done anything. They have to be in the mix if the restoration of ecosystems is going to get to anywhere the scale we need things to be. The idea of companies having to reinvest in local communities in the form of loans - for example in micro-finance could have huge benefits.

Another point about PES, which you pick up on, is the fact that people are paid NOT to do something. It creates strange incentives and the implications of which need to be understood. The Tropical Conservation Science article was interesting in this regard - money should be going into productive activities which at the same time reduces impact on the environment.

But going back to the issue of loans earmarked for a local community - do you mean the US Reinvestment Act of 1977?

Something else that has some relevance is Brazil's social fuel seal - This provides tax incentives for biodiesel producers to purchase feedstocks from small family farms in poorer regions of the country. Could a system be set up along these principles for larger scale PES systems?
Comment by Noam Ross on November 14, 2010 at 19:51

Interesting thoughts. I think it's critical that big companies get involved in PES, as I write about here: A lot of people in biodiversity have a knee-jerk reaction to big companies getting involved, but they're the best source of capital for scaling up ecosystem restoration projects.

I think that we need something along the lines of the U.S.'s Reinvestment Act, which requires banks doing retail business in a neighborhood to earmark a certain amount of capital for loans within that community. I'm not sure how something like this would work in the context of PES - I'm interested in hearing more about examples out there.
Comment by Andrew Gordon-Maclean on November 14, 2010 at 17:51
Thanks for the interesting article Noam.

I agree with you that overall this is a good sign - people are starting to take ecosystem services seriously. Biodiversity and other forms of natural capital are starting to be accounted for. I came across a few consultants working for Mckinsey working on climate change adaptation in Tanzania last year. I think its good to have that professional expertise working on these issues.

A word of caution though - and it would be interesting to get more comments on this.

At the time when Forest Stewardship Certification labels were set up in the 90s, one of the aims was that indigenous people living in developing countries could benefit from it financially. Although a few have, the vast majority of FSC projects are owned by large forestry companies. This is not necessarily a bad thing, however a key question is how can the money reach local people who continue to preserve high value ecosystems such as water catchment areas? Will most money from Payment for Ecosystem Services (PES) end up going to private companies? Can PES financially benefit the rural people who live in those areas? Can business play a role in this?


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