Sunday, October 31, 2010

Some Thoughts on the Nature of Sharing Benefits from Ecosystem-based Services

In its historic report on the state of ecosystems on our planet (Ecosystems and Human Well-being: Synthesis), the Millenium Ecosystem Assessment (MEA) links the condition of ecosystems and the services they provide to the quality of life for the world’s human population. The report goes on to project In the preface to the report, the authors provide a provisional definition of services: Ecosystem services are the benefits people obtain from ecosystems (p 5.). The report goes on to address five key, salient questions to the future of human life on this planet:

 What are the current condition and trends of ecosystems, ecosystem services, and human well-being?

 What are plausible future changes in ecosystems and their ecosystem services and the consequent changes in human well-being?

 What can be done to enhance well-being and conserve ecosystems? What are the strengths and weaknesses of response options that can be considered to realize or avoid specific futures?

 What are the key uncertainties that hinder effective decision-making concerning ecosystems?

 What tools and methodologies developed and used in the MA can strengthen capacity to assess ecosystems, the services they provide, their impacts on human well-being, and the strengths and weaknesses of response options?

Key components of the report are frameworks linking various biotic, abiotic, cultural, demographic and political processes that affect ecosystem services and how they impact human well-being.

The Millenium Assessment has triggered quite a bit of dialogue, and enhanced the argument that protected areas have saliency for all humans, for they contain the natural capital that sustains the variety of services that ecosystems provide. The Assessment identified several different kinds of services:

 provisioning services such as food, water, timber, and fiber;

 regulating services that affect climate, floods, disease, wastes, and water quality;

 cultural services that provide recreational, aesthetic, and spiritual benefits; and

 supporting services such as soil formation, photosynthesis, and nutrient cycling.

At the same time that the MEA suggested these four kinds of services, and defined benefits as services, it also provided a bit of confusion. Later in the report (specifically beginning on page 5 and in a number of instances thereafter, the MEA differentiated between services and benefits. For example, on page 7 at the bottom of Table 1 the report states: For regulating and supporting services, enhancement refers to a change in the service that leads to greater benefits for people. Later, the text returns to a definition of services as benefits.

This change in the use of terms has been, I believe, a foundation for some confusion for scientists who are interested in doing work on enhancing the quality of life for people, researching how services are impacted (positively or negatively), activists pressuring for protection of the natural capital that provides these services and local people who depend directly on their adjacent natural capital. This confusion raises a lot of questions: Are benefits and services the same things? Is an ecosystem service simply a synonym for benefit? If services are benefits, what produces the benefits? What is a benefit if it is not a service? So, I prepared this short essay to share some of the questions in my mind about the relationship between ecosystem services, the benefits they provide and how they possibly could be distributed. For me, this was a necessary exercise to clarify things, although I do not anticipate any universal consensus on what is stated here.

What are ecosystem services?

Natural capital—nature made things along with abiotic and biotic processes that interact with these—is fundamental to human life. Without such services as nutrient cycling, climatic and weather variation, interspecific and intraspecific competition, carbon storage, water cleansing and photosynthesis, there would simply be no life on this planet. These services are services only in the sense that we as humans use that word to describe them. The first figure in the MEA clearly shows that services are important to and distinct from human well-being:

The figure clearly differentiates services from human well-being. I will return the question of benefits just below.

But in my mind a service is some kind of biotic or abiotic process applied to natural capital that can be exploited for human benefit.

What is a benefit?

Benefits from ecosystem services do not just occur, with perhaps a couple of exceptions. Human capital—in the form of technology, ideas, money, institutions and leadership—is required to transform those services into benefits which can be defined as “improved condition” or “human well-being”. So, for humans to exploit the naturally occurring ecosystem service of cleansing water, they must divert that water for domestic purposes (sometimes this diversion requires just a small amount of human capital, other times, much more). Potable water is the result of the human capital applied to the service.

Other improved conditions may include production of protein, vitamins, calories and so on for human food, or the view of a beautiful scene resulting from erosional processes. They may be more indirect such as money income accruing to an entrepreneur from exploiting access to pure water in a river by selling river rafting trips. The money income may be used to purchase other benefits or access to other ecosystem-based benefits.

Here I do depart from the MEA a bit. I do not see cultural, aesthetic or recreational values as a service, but as a benefit resulting from certain ecosystem services, such as erosion, plant growth, and so on once human capital has been applied.

Incidentally, benefits may also be direct, such as potable water, or indirect, such as a guide employed by tourists interested in seeing native fauna. In fact, in my experience in dealing with tourism occurring in protected areas, benefits are almost exclusively defined in practice as money income resulting from tourist expenditures. This money income can then be used to enhance human well-being.

So, in sum benefits, in terms of improved conditions result from the application of human capital to the services any given ecosystem provides. This differentiation in no way degrades the importance of ecosystem services in providing the sustaining conditions for human life. Indeed, when such services are degraded, the investments in human capital to restore them are much higher than exploiting them sustainably. We have to invent all kinds of substitutes to ecosystem services, which are likely not so efficient as nature. For example, when water is subject to pollution, that water must be treated through the application of very expensive human capital and technology before it can be used for domestic purposes.

How are benefits from ecosystem-services accessed and distributed to humans?

When ecosystem services result in benefits, there is a question of who receives the benefits, as well as who gets to make this decision. This decision is of incredible political and economic significance. The sharing of benefits from genetic resources has been the subject of debate and discussion for nearly 20 years. An international convention on this issue was one of the primary focal points of the recent Conference of Parties to the Convention on Biological Diversity held in Nagoya, Japan. The announced agreement was contentious. The agreement was posed as one on Access and Benefit Sharing of Genetic Resources. We will see if the parties to the agreement actually ratify it. The decision on how to distribute benefits has two components: (1) one general dealing with what distribution mechanisms are appropriate and acceptable to any given society; and (2) one more specific dealing with the notion of “sharing” benefits. I will address each component in turn.

In any given society, there are mechanisms for distributing benefits among that particular population. There are always mechanisms, even if those mechanisms result in what some would criticize as being unfair. The notion of fairness underlies many contemporary discussions of benefit distribution. Of course, what is a fair distribution mechanism is often the subject of considerable, and often, acrimonious social discourse.

I believe there are four basic mechanisms. My belief is based on experience in addressing the issue of access to river recreation opportunities in the western United States. In the early 1970s, the managers of many of these rivers (e.g., the Colorado through the Grand Canyon, the Selway and Salmon Rivers in Idaho, the Green and Yampa Rivers in Utah, etc.) began to limit visitor use of those rivers to either protect their biophysical character or to provide an opportunity for certain recreational experiences. Because the demand for these experiences was significantly higher than the use limits implemented, rationing of the limited use was imposed. At the time, I started, with several graduate students, and examination of these use limit policies, rationing and allocation mechanisms, and the various consequences. Other academic colleagues, such as Rich Schreyer, David Lime and Bo Shelby were also involved in parallel lines of inquiry. We quickly found that there is no universally accepted definition of what “fair” is. One river manager may have used one type of rationing mechanism (e.g., a lottery) while another may have used a reservation system.

Our research community found that each mechanism, which in effect was a benefit or access distribution mechanism, affected various groups (the young, the old, those who could plan ahead, those who could not, those who were wealthy, those who had a lot of time) differently and thus definitions of faired varied.

It quickly came to us that there were four methods or approaches of allocation scarce resources, or in this case, benefits based on ecosystem-services. Those mechanisms may be based on equality—every member of the population receives the same portion of the benefits; they may be based on need—members of the population, the disadvantaged for example, may receive larger portions in order to assist in overcoming the disadvantages; they may be based on equity—members of the populations are apportioned benefits based on some measure of their contribution or investment in that population; or they may be based on efficiency—the willingness of members to pay money for access to the benefits (just a note, this is based on some reading I did a long time ago, and I cannot now find the reference). Now at some point, there are decisions made by someone or a group in a society as to which mechanism or set of mechanism will be used. In the case of river recreation in the US West, such decisions were generally made by individual river managers, but were subject to an enormous amount of polemical activity.

Often, we found managers using combinations: a certain portion of the use limit may be rationed through a lottery while another portion would be allocated based on need for example.

Now the same kind of question faces distribution of benefits from ecosystem-based services. Which one, or more realistically, combination, of approaches will be used? How will we make these decisions? Who will make these decisions? Why them? These are important political and social questions that a research program, in total, will need to address.

So, we need to think about the consequences of different decision-making modes, and we need to be specific about those modes. Understanding the consequences, even if it is simply descriptive, without being normative will help us all better assess the costs and benefits of various benefit-sharing approaches.

In my mind, neo-classical economics was focused principally on understanding the social efficiency, narrowly defined as market value, of various decision alternatives. That focus was a major contributor to the evolution of sustainable development as a response, because the focus on efficiency led in many cases to classes of people being marginalized in terms of their access to ecosystem-based benefits. The response developed in a number of fields, including economics, which appears to not only have broadened the its definition of efficiency, but also developed ecological economics as a way of dealing with the focus on efficiency. A focus on efficiency also led to the accumulation of capital which then led to an accumulation of political power, reinforcing the importance of efficiency as a method of distributing benefits.

What is meant by benefit-sharing?

Dominating much of the discussion about ecosystem-based benefits and their distribution has been the notion of sharing. Sharing of benefits is rarely mentioned in the MEA (at least in the synthesis). Page 126 criticizes large dams because the benefits “are rarely shared equitably” with the poor and vulnerable. But what is meant by sharing? Actually, I see two parts to this question: (1) the notion of sharing something; and (2) the notion of equitable sharing, as mentioned in the MEA.

So, lets go through the four mechanisms of distribution as a start. If people receive equal portions, then is this a synonym for “sharing”? It would be, at least for me, if two conditions are met: First, the current system of portioning benefits favors some and not others, that is, some people receive larger portions of a benefit than others. Second, the decision to share is not done coercively, that is those who currently receive larger portions voluntarily relinquish the “extra” to those who currently receive less than others.

If benefits are allocated based on need, would this qualify as sharing? I would think so, as providing assistance to people in need is an important human quality. One person is willing to give up something for those in need or who are vulnerable to shocks. We give something up because simply, this is something we do. We “share” are limited resources so other people can benefit.

If benefits are allocated based on equity, would this be sharing. Here, I think this would not be a definition of sharing, at least as I have defined equity above. The distribution is, one could argue, a return on one’s investment, if measured in terms of human capital inputs. The decision allocated based on inputs, of course, is still a political one. Now the MEA on page 126 refers to sharing as some kind of equity proposition. Perhaps, this term was not used accurately, or perhaps there is an assumption (which does often prove out) that poor and vulnerable people have more investment in ecosystem services. I don’t know which. But, it would be good to find out what is meant by an equitable distribution in the sense of benefit sharing.

If benefit distributions are based on efficiency, then I would think that this is not sharing. Efficiency is fundamentally defined as the highest and best value, as measured by the marketplace. Here, those who have the highest capability/willingness to pay, receive the benefits. This is not sharing in my mind.

These comments imply that sharing is an ethical, voluntary decision in which some people give up something without an expectation of return. Or it may be done in an altruistic belief that society will be better off by sharing benefits equally or to those in need. So, I have just purchased a slice of apple pie, but my friend cannot because there are none left. With little or no expectation that at some point in the future this will be repaid, I voluntarily suggest to him I will share the pie and give him some of the one I purchase. I do this not with an expectation that I will receive some direct return, but in a belief that this is what friends do, that our friendship will be strengthened by this sharing.

Thus, people, who would normally receive larger portions, under an equal distribution system would then be “sharing” with others who formerly did not receive the same amount if they were not coerced to do so. The same could be said about need being a basis for distribution of benefits. So, is coercion a component of the notion of sharing? In other words, if some people are forced to give up some benefits so others can receive larger portions, are they really sharing?

Coercion occurs in many forms, and the hierarchal and distributive approaches described in the Nkhata and others paper could be viewed as forms of coercion. But coercion might also be a characteristic of egalitarian approaches. So, I give up some of my income to pay taxes so others’ children can go to school. These taxes are not voluntary; they are a result of governance processes in which majority rules. People who vote against such taxes are coerced into paying them because if they do not, they will incur severe penalties. The coercion is based on an ethical framework that suggests different mechanisms of benefit distribution are needed to counterbalance the negative consequences of a focus on efficiency.

So here I am with this bit of a discourse trying to sort out in my mind what is meant by services, benefits and benefit sharing. Of course, these are important, and contested, concepts, so a full resolution is not anticipated. But a good discourse and debate on their meanings would help all of us.