Natural capital can be described as both renewable and non-renewable stocks of natural resources and the services they provide – basically it is everything nature offers for “free”. Markets do not take into account the ‘free’ services provided by nature, therefore a variety of initiatives have emerged to value natural capital.
Valuation is key element if better decision making and accounting are to begin to value our planet’s assets. Both ‘polluter pays’ and ‘beneficiary pays’ examples have appeared.
Payment for ecosystem services (PES)
Payments for ecosystems are voluntary payments made by the beneficiary of an ecosystem service to the steward of that service. The payment mostly aims to secure the future continuity of the ecosystem service or to enhance the quality of the service. Both countries and companies have used payment for ecosystem services to recognise the benefits of ecosystem services and protect them.
The Payment for Ecosystem Services Scheme used in Costa Rica is an example of the successful application of the beneficiary pays model. Costa Rica is one of the leading countries when it comes to nature conservation. It pioneered the payment of land owners to protect its forests and its different ecosystem services including wildlife habitat and carbon storage. Costa Rica’s PES has enabled the country’s forest cover to increase from as little as 20% in the 1980s to over 50% today.
A similar approach was used by Nestlé, which used PES to encourage farmers surrounding the Vittel water catchment to change their farming practices. Cash payments were made to reduce ground water pollution through changes in animal feeding, reducing stocking rates per hectare and lowering agrochemical use. The PES was used to ensure future continuity of the business in the area.
Biodiversity offsetting aspires to compensate for biodiversity losses caused in development projects. The process aims to achieve conservation in order to keep the impact of a new project to a minimum whilst achieving zero net loss through the creation or enhancement of nature sites elsewhere.
Biodiversity offsetting can be achieved either through the payment of offsetting fees or the purchase of biodiversity credits. Both methods are used to counterbalance and compensate for the impact of a project on biodiversity when the initial loss cannot be avoided or mitigated. However, offsetting is controversial with some questioning whether the impact of the offset is positive, and if the initiative genuinely provides an alternative to no action at all. The question remains whether it is possible to ‘swap’ nature and whether potentially unique biodiversity destruction can ever be offset?
The ‘polluter pays’ principle is another way to value natural capital and translates in taxes on environmental damage. Carbon taxes and the landfill tax are two examples.
In Europe, the Emissions Trading Scheme was implemented in 2005 as a cap and trade system, in which emission allowances were allocated to companies. It now covers 12,000 installations, representing approximately 45% of EU emissions. If emissions exceed authorisations to pollute, allowances can be traded. So far the initiative has not proven successful as carbon prices have plummeted and a tonne of CO2 trades at less than five euros17. In addition, some countries have set their own carbon taxes or carbon price floor. Sweden, which set a price back in 1991, has today the highest carbon price in the world amounting to approximately $160 per tonne. This has contributed to efficient decoupling of GDP growth from emissions. Between 1990 and 2014, GDP grew by 58% while CO2 equivalent emissions were reduced by 23%18.
The landfill tax is another initiative that makes the polluter pay for the negative impact on the environment. The landfill tax was introduced in the UK following the EU landfill directive. In the UK the current standard tax per tonne of waste diverted to landfill is £84.40/tonne. As a result, municipal waste diverted to landfill was reduced by 49% between 1995 and 2013.
Like our Facebook Page
The Pros and Cons of Fixed Prices for Sustainable Energy
How to Plan an Unforgettable Eco-Friendly Trip to Europe
Is Decarbonizing The Shipping Industry an Achievable Goal?
Designing Eco-Systems Sustainable Exhibits: Strategies for Reducing Environmental Impact
Green Living, Education and Awareness Are Keys to Preventing Mesothelioma
Canada Can Take New Steps to Make Healthcare Greener
Roy Bartholomew Shares Basics of Ecosystem Engineering
Understanding the Evolving Science of Environmental Health
Is Eco-Friendly Composite Decking Really Good for the Planet?
Eco-Friendly Composting Tips that All Gardeneners Should Follow
6 Home Improvements You Can Make to Help the Environment
Reduce, Reuse, Recycle: Eco-Friendly Party Favors Made for the Garden
One of the Most Unique Eco-Friendly Travel Tips: Try Rollerblading
Humane Pigeons Pest Control Tips Environmentalists Can Follow
Environmental Impact of Artificial Grass for Your Lawn
Choosing The Best Eco-Friendly Furniture Set for your Living Room
Planning an Eco-Friendly Bus Trip to Singapore with Friends
How to Travel More Sustainably While Saving Money
The Truth About The Environmental Impact of Dogs
6 Major Luxury Residential Projects Responding to Climate Change
- Energy10 months ago
How To Choose the Right Solar Inverter for Your Home?
- Energy11 months ago
How to Choose the Best Solar Panel for Your Home
- Environment11 months ago
Reduce Industry Footprints with Sustainable Material Swaps
- Environment10 months ago
Is Smart Building Technology the Future of Sustainability?