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

Mountains, Cambodia & Carbon Forestry Project Chiapas,

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-

owning conservation organisations providing habitat

banks between public interest and conservation interest

EU habitat banking initiative

The unreformable shortcomings of offsets (1)

Offsets do not reduce [...].

Biodiversity offsets / Habitat banking does not reduce loss

of biodiversity...they allow displacing the regulated

protection / prohibition of destruction from the site of a

destructive acticity to some other, distant place where the

destroyed biodiversity / ecosystem function is supposedly

recreated

“Once commodified, an object, an idea, or part of nature takes on a

new life. […]. The forms and extents of what will change in

entangled webs of social and socio-natural relations are not pre-

determined. Which configurations will become normalized? These

periods […] do for history what borders do for territories: they

create temporal or spatial zones of ambiguity, compromise and

change.”

“Something, some institution or configuration of historical forces

needs to bring them into marketable being, and the new relations

created in that process are critical. Relational, situated histories of

nature and „natural resources‟ (an early term used to label

commodifiable natures) help us understand the contemporary

politics” Nancy Peluso

3 Why do these initiatives matter? Do they?

Require significant state intervention: regulation creates these

markets (carbon market…failures exposed)

Ecosystem functions are impossible to measure and quantify

with sufficient accuracy! Or are they? => Role of the state to

enable commodification despite these „difficulties‟ …. Previous

„new‟ fictitious commodities had been unimaginable as

commodities in early stages of the commodification process:

land, labour, money…lessons for NGO responses today?

Not a process that magically happens…recurring set of names &

and motivations among key actors already involved in e.g. carbon

Won‟t achieve objectives of financing socially just biodiversity

protection; need to explore & make visible other options for

responses to biodiversity crisis that are desirable from social

justice point of view

3 Predictable Weaknesses:

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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