PNG government should offer incentives for biodiversity conservation
By guest blogger Nalau Bingeding
Most people are aware that nature or ecosystems provide a range of goods and services that benefit mankind.
The provision of goods includes food, water, timber, and fiber, while the provision of services includes the regulation of climate, floods, and water quality, and the provision of recreational and aesthetic (visual) benefits.
Food crops and timber from private and communal lands can be easily priced and traded on the market. However, it is not easy for farmers and landowners to trade the ecosystem services that their properties provide to people within their vicinity or around the world. For example, a landowner gardening on his customary land knows how much to sell his bunch of bananas for at the nearest market, but the same landowner cannot place a value on the ecosystem service (aka environmental service) of climate regulation his forest land is providing to people in PNG and other parts of the world.
The trading of ecosystem services had not been part of the market system since the birth of the modern economy. It was not easy to place a price on ecosystem services and trade them, and since ecosystem services had no economic rewards there was no incentive to engage in their protection and sustainability.
About the 20th century the environmental movement was concern that although ecosystems provided goods and services to mankind, the market place did not adequately protect ecosystems in order to sustain the provision of environmental services. The money provided worldwide for conservation was inadequate and could not go so far to protect most ecosystems.
Challenges in the Old Approach
Traditionally, the method for protecting and sustaining ecosystem services was through the establishment of Protected Areas (PAs) such as National Parks and Wildlife Management Areas in individual countries. However, the protection and sustainability of ecosystem services through PAs have not been all that successful. People and economic activities have been impinging on PAs, and some PAs have already succumbed to social and economic pressures. In order to totally exclude all social and economic activities from occurring within PAs, it would be a very costly exercise. Moreover, more and more pristine environments outside of PAs are being subjected to social and economic developments, thus threatening the protection and sustainability of ecosystem services.
Under the Convention on Biodiversity, of which PNG is a signatory through the Department of Environment and Conservation, 10% of the total land area in PNG (4.6 million hectares) should have been protected for biodiversity conservation. Nevertheless, only 2.8% of the total land area in PNG (1.29 million hectares) is currently under PAs, while Yus Conservation Area in the Morobe Province was recently declared the first Conservation Area in PNG. The PNG Government has not done enough to acquire more customary lands for the protection and sustainability of ecosystem services. One of the reasons for this was that there was little economic incentive in the protection and sustainability of ecosystem services – a tree was worth more dead than alive.
A paradigm shift
Now, if we shift attention to protecting and sustaining ecosystem services on non‐fully protected areas (aka working landscapes), we will have to change our perception of environmental protection. We have to create economic incentives to manage and sustain ecosystem services. In order to do this, we will have to: (i) select the ecosystem services we would like to consider; (ii) measure the provision of the ecosystem services and their values; (iii) create a market or economic incentive for the ecosystem services; and (iv) design monitoring systems to ensure the ecosystem services are delivered.
The approach to implementing the above tasks depends on how one perceives the ecosystem services and the circumstances to which they are to be protected and sustained. This may involve designing the best method for measuring the provision of the ecosystem services in order to get the best return from the market against the cost of measuring these services.
Non-market valuation methods
Nevertheless, ecosystem services usually involve non‐use values that are neither found in the market place nor other behaviors that are commonly applied for use values. Therefore, the inclusion of ecosystem services in the market place has now given rise to what are known as non‐market valuation methods. These methods include Bioeconomic Analysis, Contingent Valuation, and Satellites which use remote sensing technology to measure the Earth’s environmental services from space.
Bioeconomic Analysis uses population biology, economic modeling, geophysical processes and ecological functions to place value on environmental services. Contingent Valuation uses questionnaires to elicit information from people on how much they would be willing to pay for a non‐use value such as the beauty of a forest land, and then the average cost of the non‐use value is derived after analysis of the results of the administered questionnaires. Remote sensing technologies are now improving in efficiency and some satellites are now used to measure and estimate the value of environmental services; for example, in 2008 Phil Shearman from the University of Papua New Guinea and others used satellite imagery to measure and estimate the amount of carbon stored and emitted into the atmosphere from forests in PNG.
Non‐market valuation methods now make it possible to place some value on ecosystem services and trade them as well‐defined environmental services or corresponding proxies (substitutes). Moreover, it is also possible to place some value on losses to valuable environmental resources when they are destroyed or degraded.
Payments for Ecosystem Services (PES) projects are now implemented in some countries around the world, with Costa Rica being the best example so far. At the international level are credits for carbon sequestration and at the national level are forest conservation projects and watershed initiatives.
PES has the potential to become an important environmental management tool, and is becoming a popular method for paying farmers and landowners for the ecosystem services their private or communal lands provide. Therefore, if we can develop more precise methods for measuring ecosystem services, we can ensure we cost‐effectively deliver payments for ecosystem services to our farmers and landowners.
Payments for Ecosystem Services and REDD+
In 2005 PNG and Costa Rica proposed to the world the concept of Reducing Emissions from Deforestation and forest Degradation (REDD+) as a mechanism for mitigating climate change. Under the REDD+ concept it was anticipated that Annex 1 countries (developed countries) would financially reward rainforest nations in the south for conserving carbon stocks in their rainforests and for sequestering excessive carbon from the atmosphere in order to alleviate climate change. In essence the REDD+ concept is an international payment for ecosystem services (i.e., payment for carbon sequestration).
The government and people of PNG have embraced the REDD+ and carbon trade concepts with open arms. However, the REDD+ concept is viewed by the timber industry and other developmental sectors as a threat to economic development, and the progress of REDD+ at the national level has been somewhat intermittent. Moreover, REDD+ is plagued with many technical, legal and policy issues, thus it requires major policy and institutional changes for the concept to be efficiently implemented in PNG.
It has been suggested that PES could be an important tool for reducing emissions from deforestation and forest degradation and could complement REDD+ to achieve climate change mitigation. And due to the general lack of understanding of the climate change phenomenon and the socio‐economic conditions under REDD+ in PNG, PES is an economic incentive that could be used to protect and sustain environmental goods and services and mitigate climate change without most of the issues faced by REDD+.
Way forward
The PES system is straight forward. The environmental service buyers in PNG or other countries pay the service providers, the customary landowners, to change the way they use their lands and forests so that their land provides the desired environmental service(s). PES is voluntary and payments are done based on the contract signed between the environmental service provider and the buyer; if the environmental service is not provided, the payment is not made. Furthermore, because the contract for the ecosystem service provision is signed between the service provider and the buyer, there is no need for a middleman (carbon cowboy).
Nalau Bingeding is a Research Fellow in the Economics and Land Research Program under the Wealth Creation Pillar at the National Research Institute.