Alternatives to Comprehensive Ecosystem
Services (ES) Markets: The Contribution of
Forest-related Programs in New Zealand
Arun P. Bhatta, Hugh Bigsby and Ross Cullen
Faculty of Commerce, Lincoln University
Research Outline:
• Introduction
• Literature Review
• Research Questions
• Methodology
• Significance of the Research
1. Introduction:
Ecosystems through natural processes and
components provide various goods and services
which we refer to as ecosystem services (ES)
Table 1: The condition of ES
Ecosystem
services
Degraded
Mixed
Enhanced
Provisioning
Capture fisheries
Wild foods
Wood fuels
Genetic resources
Biochemicals
Fresh water
Timber
Fibre
Crops
Livestocks
Aquaculture
Regulating
Air quality regulation
Regional & local climate regulation
Erosion regulation
Water purification
Pest regulation
Natural hazard regulation
Cultural
Spiritual & religious values
Aesthetic values
Source: (WRI, 2007)
Recreation &
ecotourism
The condition of ES in New Zealand
• Current land use practices have severely
degraded ES such as air, water, biodiversity,
and soils (Baskaran et al., 2009; Clark et al.,
2007; Cook, 2008; Hughey et al., 2008; MfE,
2009; Moller et al., 2008)
• Impact on economy
 Primary production exports - $25.9 billion in
2009
 Tourism - $21 billion in 2009
2. Literature Review
2.1 Why ES are degraded?
• Public/quasi-public goods and market failure
• Market systems and perverse subsidies
• Lack of incorporation of ES values into
resource allocation decisions
2.2 Approaches to ES provision
• CAC (product, input or technology standards)
• Economic (dis) incentives (subsidies and tax
reductions or levying taxes and fees)
• Legal and ethical tools – liability laws, moral
suasion
MBIs to create economic incentives
Table 1: Market mechanisms for ES
Mechanism Commodified ecosystem service
Sites of application
Markets for • Emission trading of greenhouse gases
ES
(atmospheric sink functions of CO2)
• Sulphur dioxide emission trading
(atmospheric sink functions of SO2)
• Wetland mitigation banking
• Nutrient trading around Lake Taupo
Payments • Watershed protection
for
Ecosystem • Carbon sequestration
Services
• Habitat conservation / wildlife services
(PES)
• Bio prospecting
• Agro environmental measures
• Soil conservation
• EU, United Kingdom,
Chicago, New Zealand
• USA through the US
Clean Air Act of 1990
• USA
• New Zealand
Central America, Ecuador,
Bolivia
Costa Rica, Ecuador
Bolivia, Zimbawe
Costa Rica
European Union, US
New Zealand
Source: Gómez-Baggethun et al., 2010
• Creation of ES market requires:
Measuring flows of ES and valuing them,
enforceable liability rules and property rights,
and lower transaction costs
• Other approaches to provision of ES (PES)
focus on single services
• However, in the provision of a particular ES,
there are spin-off effects
 Hence, studying those spin-off effects may
provide a simple and cost effective way of
ensuring wide range of ES
3. Research questions
 Main aim is to study the effectiveness of
alternatives to broad ecosystem services
markets in providing multiple ES
• Do limited focus programmes provide broad
ecosystem service outcomes?
• Are there differences in ecosystem service
outcomes between various policy approaches?
• Which approach is most cost effective in the
provision of ES?
4. Methodology
4.1 Valuation criteria and indicators
ES category Examples
Indicators
Provisioning Timber
ES
Roundwood harvested m3 /ha
Socio-economic
Climate
regulation
Carbon sequestration
tonnes of CO2
equiv./ha/year
Environmental
Water
purification
E. coli levels
Nitrogen &
phosphorous levels
1015 organisms/ha
kg/ha/year
Environmental
Water flow
regulation
Water yield
mm/year
Environmental
Erosion control
Sediment yield
sediment in
tonnes/ha/year
Environmental
Conservation
values
Conservation goal
Unitless
Socio-economic
Regulating
ES
Cultural ES
Unit
Indicator type
4.3 Measuring flows of ES
ES
Formula
Source
Timber
Radiata Pine calculator Ver.3
Carbon
C(t)=f(t)-Csoil_loss(t)
sequestration
MAF regional
growth curves
Water yield
WATYIELD
Fahey et al., 2004
Erosion
NZEEM
Dymond et al.,
2010
Water quality CLUES
Conservation
values
Landcare
Research
m
n
i 1
j 1
CM   Pi 
c j aij
Ai
Dymond et al.
2008
n
FT = ∑ Wi . XiT
i=1
(Modified from Zhang & Lu, 2010)
Where,
FT is the total flow of ES during period of T
XiT is the quantity of the ith normalised ES in period T
Wi is the weight assigned to the ith ES by stakeholders
n is the number of ES being evaluated
Score normalisation (Posthumus et al., 2010):
= outcome for indicator X of scenario i / the maximum value of Xi
Normalised value lies between 0 to ±1
4.4 Measuring costs of forestry program
Particulars
A. Costs for local & central government
Program costs
Administrative costs
Other costs
B. Costs for landowners
Application costs
Maintenance costs
Other costs
C. Total costs (A+B)
Costs NZ$
4.5 Study site and data collection
• Canterbury Region
 Removal of trees & shelterbelts on Canterbury
plains
 Issues with planting trees on foothills
• Lake Forsyth
 On the Ecan list potential flow sensitive catchment
 Lake pollution and algal blooms
 Important for Maori people and others
 Primary/Secondary data (AHP questionnaire &
checklists)
Drying of
eels, 1948
Algal
bloom at
Jan 2004
5. Significance of the research
• Wider in scope – approach and method
• Findings will help in future ES restoration
efforts
Comments/
Suggestions