Environmental Engineering Reference
In-Depth Information
re-insurance companies have begun to look at how degraded ecosystem services
are going to affect their bottom line (MunichRE 2010).
In this context, emission trading schemes give credits for emission reduction to
be sold to companies who exceed their emission targets, as an effort towards the
fight against climate change. Such trading schemes could be extended to ecosys-
tem services for developmental activities and modelled on an improved version of
the Clean Development Mechanism (CDM) as a method of fighting climate
change. Projects towards CDM can provide tradable credit certificates that could
be sold in the market to encourage development of ecosystem services. There are
numerous emerging markets that can be considered as potential targets, including:
•
Credit market for carbon sequestration e.g. for forest or crop development;
•
Water quality credit market for interested purchasers to buy water quality cred-
its e.g. on the basis of promotion of forest watershed protection or develop-
ment; development of water supply watershed or as compensation for landown-
ers who maintaining watershed cover on their property,
•
Wetlands and species conservation banking, i.e. projects that create and en-
hance wetlands or habitats for endangered species. The credits then become
saleable to developers to satisfy their permit requirements.
•
Also there are many other derivative markets that could be drawn from ecosys-
tem services development and preservation.
Unlike carbon markets which can be global, most of the markets for ecosystem
services are regionally limited because they are locally or regionally driven by
specific operations which require the determination of a Total Maximum Daily
Load (TMDL), except for the cultural services that depend on personal value
judgement. For example water quality markets are usually driven by local or re-
gional issues such as the needs of a wastewater treatment operating in a specific
watershed and are impaired when they exceed their determined TMDL. The room
for potential combinations of various ecosystem service markets may also be con-
sidered under defined circumstances, for example TMDL plans for some pollut-
ants may allow forest practices to mitigate and address the impairment caused by
pollutants. This shows how the market for ecosystem services could be inter-
linked. Therefore, these markets need to be organized as a one basket market,
where it is easy to inter-trade for permits for type of ecosystem services with an-
other. But while built on a regional scale, they could be scaled-up and vertically
integrated to involve a continental or global scale. This offers the advantage that
other regions which do not have the financial means to develop ecosystem ser-
vices, especially poorer countries might benefit from funds that might be diverted
to their countries by richer nations to invest in ecosystem restoration activities in
need of acquiring credit certificates. It also allows for reductions in areas of lower
costs. This will provide a global market for less tangible ecosystem services and
spearhead the maintenance of them within a win-win situation. The investors in
ecosystem services will get financial reward; the consumers of ecosystem services
will be assured of services; and the natural ecosystem will be conserved; and an
added approach to global fight against climate change in a way that will bring in-
Search WWH ::
Custom Search