Centre for Plant Bidiversity Research
Centre for Plant Bidiversity Research
CSIRO Discovery Lecture Theatre, Wednesday 20 September 2000 at 4 pm
SPEAKER: Carl Binning
(CSIRO Wildlife & Ecology)
CHAIR: Belinda Robinson (Assistant Secretary, Natural Heritage Trust and Biodiversity Policy, Environment Australia)
PANEL:
Seminar summary below by Roger Beckmann
The third seminar in CPBR’s Biodiversity seminar series took place on 20 September. Belinda Robinson, the manager of Environment Australia’s Natural Heritage Trust, introduced the theme, asking the audience to consider whether biodiversity credits were a panacea or simply a case of the emperor’s new clothes. Introducing herself as coming from a background in environmental law, and someone who likes nothing better than a good piece of legislation, she explained that getting environmental legislation through parliaments is not easy, and wondered whether the legislative approach was always the best way to achieve community uptake of desirable attitudes and behaviour. Furthermore, there may never be enough money for governments to fix our biodiversity problems and therefore the search is on for alternatives to deliver changes efficiently.
Do biodiversity credits offer such an alternative? To answer that, we need to know whether the ‘products’ of biodiversity can be measured. And should biodiversity be up for sale anyway? If aspects of it are, who will be the buyers and the sellers? And will the market deliver the ‘right’ outcomes?
The subsequent talk and discussions between the panellists and the audience cast some interesting light on these questions, while also raising some new ones.
First, CSIRO environmental economist Carl Binning delivered an interesting and fast-paced talk, which is summarised briefly here.
Summary of Biodiversity Credits - Rhetoric or Reality [see Carl's Powerpoint presentation]
Carl Binning introduced the idea of biodiversity credits, analogous to those that have been proposed for carbon trading in an effort to curb greenhouse gas emissions. He suggested that whether or not a system of biodiversity credits is ever implemented, thinking about the idea forces us to consider more precisely what we want in terms of biodiversity, and why.
He drew attention to the functional role of biodiversity in landscapes. Here and throughout his talk, he stressed that biodiversity is not merely nature conservation. It is more about landscape sustainability. With a series of diagrams he explained how modern thinking views landscapes in a more integrated fashion than in the recent past.
He felt that conservation should take an ecosystem approach and apply this across various different land uses. National Parks, he asserted, were just one place for keeping biodiversity - certainly not the only or necessarily the ‘best’ place.
Carl then considered the question of what constitutes a sustainable landscape. As most Australian landscapes involve production, how does biodiversity underpin this? And what of the need for heterogeneity in landscapes?
Farmers of the future
If biodiversity credits were implemented, a typical farmer’s balance sheet in 20 years could look quite different [table]. While still achieving at least 50% of their income from selling wool and cereals on the world market, farmers in the future might also earn money from carbon credits, from the sale of timber from agroforestry operations, from payments for water filtration services, and for salinity and biodiversity credits - the latter perhaps funded by a concerned philanthropic trust.
Such future farmers would, of course, need a range of buyers for their services just as they do for their harvests. The identity of the buyers is a key point in the entire system. Carl maintained that governments would remain important players in biodiversity. However, instrumentalities and ethical investors would be other buyers. Corporations could become buyers, either to promote their good citizenship or simply to ‘get in on the ground floor’ of a new commercial opportunity.
Creating scarcity
Buyers could be encouraged by creating scarcity. Placing limits on the use of what are already limited natural resources will create scarcity. In turn, scarcity creates value which can create demand.
But making a market is hard work. One of the first steps in doing this is improving our ability to quantify the benefits that flow from biodiversity and ecosystem services.
Counting the benefits
Until we can quantify the benefits accurately, it will be hard to secure the political will required to create targets and enforce resource use caps on biodiversity. Carl called this first step ‘learning to count’. This will need scientists to work with economists to define a sensible currency for different environmental resources, including biodiversity.
Once a type of currency is in place, it allows us to speak of equivalences and thereby enables offsets to be suggested [table]. How much tree-planting, for example, is required to offset the clearing of vegetation of strategic value?
Carl gave examples of how we could ‘count’ biodiversity. In the rangelands, for example, watering points and landscape function are important; focal species could be used for assessing fragmented systems; and intact systems would follow the BIORAP reserve selection process.
Whatever the procedure used, incentives are required and that is why a market is needed. Education alone is not enough. While it may change attitudes, it rarely changes behaviour, especially when self-interest is involved.
The talk concluded with the point that we have an ethical responsibility for nature, but that doesn't mean that we can’t be well-focussed and strategic in our approach to it. Humans are in the system, and biodiversity conservation needs to take account of this. In some places - for example, Australia’s food bowl - the main issue for the landscape is sustainable food production. This must be factored into any credit system.
PANEL DISCUSSION
Belinda Robinson, as Chair, then introduced the panel. She first asked Jim Shields how, as a public servant, he sees biodiversity credits delivering on public environmental policy in a practical sense.
Jim considered that biodiversity credits offer the best, if not the only, way to deliver on biodiversity policy. Biodiversity conservation operates at an inappropriate scale for anything other than an economic solution to be useful. If we don’t have some investment in credits to counter the scale of development that we’re currently undertaking, there’s very little chance of achieving our targets for biodiversity conservation. At present, biodiversity has no value - except in a negative or punitive way. If biodiversity on a property had value, the system would change. Currently governments are the ones bearing the cost that biodiversity conservation puts on society. Agencies managing land for nature conservation only have regulations and negative financial instruments available - no rewards are possible.
Belinda then touched on some ethical questions. She asked Jane Gilmour whether biodiversity should be put up for sale. Should it not, perhaps, be managed as a free service - a recognised public good?
In her reply, Jane referred to the point that Jim had made about biodiversity being only a cost. No-one pays for the land degradation costs of a bowl of breakfast cereal. We need to take into account these costs, but also have a mechanism for looking at the positive value of conserving biodiversity. Jane felt that, in the end, a biodiversity credit system was probably the way to go. However, she admitted that there were several problems associated with it. Markets can tend to develop a mind of their own; we may end up with situations that we don’t necessarily want - for example, too many koala sanctuaries (and koalas aren’t all that popular in parts of Victoria)!
To avoid this, we need checks and balances to regulate the market. Otherwise it is merely a market - a trade for its own sake.
Dollars not enough - the ethical issue, in Jane’s opinion, remains fundamental. You can’t ever put a value on certain aesthetic qualities - and that’s one of the problems.
Belinda then asked David Marsh, as a farmer, what would maximise the chances of a credit system being embraced by landholders.
David felt that, currently, the impediments that got in the way of achieving environmental outcomes for farmers were a lack of ‘big’ dollars, and also the problem of land managers being the passive recipients of hand-outs when money is forthcoming. He saw biodiversity credits as a way of changing people’s behaviour. The credits would compensate when land currently used for agricultural production was turned over to ecosystem services.
At the moment, David felt, people are not changing the landscape enough in order to combat, say, salinity or other problems. Biodiversity credits were broad enough to help combat these issues as well as help with biodiversity. Moreover, he made the point that it’s biodiversity that actually drives the economy of the nation. The development of Australia came from the liquidation of much natural capital which was turned into what we term income.
Belinda asked Sue Briggs, who has done a lot of work on valuing biodiversity for tradeability, how easy it was to value.
Sue felt that we need an index for biodiversity that truly reflects what we want, including landscape values and ecosystem services. She is quite optimistic that we already have enough information for creating such an index for most landscapes, although not all. Problems could arise in terms of the scale at which an index would operate. Her concern is that people could actively distort a biodiversity index. For example, if fallen logs - an important habitat measure - are valued, then landowners could chop down trees from a remnant woodland on part of their property, drag the logs into a paddock and increase the biodiversity value there.
As people seek to maximise their income or capital, these sort of distortions could arise.
FLOOR DISCUSSION
There was no shortage of penetrating and often intricate questions from the floor. These have been summarised and re-ordered below.
Do we need credits?
A member of the audience wondered why we should not consider an environmental levy without any ‘middlemen’. ‘Are we in an ideological capitalist straitjacket?’ he asked.
Carl Binning said he was not against the idea of some sort of environmental levy. He added that he thought that environmental management should become as essential an area for government activity as health or education. However, he felt that governments alone - with or without levies - could not achieve sustainability. Governments can work through taxation but also through engaging the private sector. There is a balance between these two mechanisms, which varies in different countries. Regardless of personal view, we need to look at where societies are heading - and, in general, they are not tending towards big government.
Another audience member questioned the whole basis of the environmental credits system - whether for carbon, salinity or biodiversity. Pointing out the correlation between increased fossil fuel use and decline in biodiversity, the questioner seemed to imply that there could be a cause-and-effect relationship. Why not, therefore, fiddle with the fossil fuel end, rather than the biodiversity end? He suggested that establishing markets for biodiversity was like establishing trading in scrap iron as the Titanic sank. Where does it get you?
Jim Shields said that taxing fossil fuels more would be like a levy. What we need is an incentive so that people want to invest money to solve environmental problems. There is no sign that humans have ever put long-term environmental gain ahead of short term financial gain.
Indigenous issues need more work
An audience member pointed out that soon 30-40% of the country’s land area would be controlled by indigenous people, and asked what effects this could have and how biodiversity credits might work for indigenous people.
Carl acknowledged that not enough work had been done, and regretted this. If we want traditional owners to manage their land for biodiversity, then we need to give them some incentives - but tailored to their needs.
Jane Gilmour mentioned the work of large US non-government organisations, such as Conservation International, that are well-resourced and offer large financial incentives to traditional people in Africa and South America to help with conservation.
Biodiversity and EMS
Carl Binning was asked to expand on the link between biodiversity credits and environmental management systems (EMS). In particular, how would pooling be dealt with?
Carl suggested that a basic level of accreditation in environmental management would be necessary before getting any biodiversity credits. This would help deal with the problem of a landowner ‘pillaging’ one part of a property in order to do good and gain credits in another part of the land (alluded to by Sue Briggs earlier).
To determine biodiversity values, there would need to be reference to some sort of strategic regional plan. Perhaps this could be devised by using, say, five GIS maps - each for a different value - overlain. But he acknowledged that regional planning was tricky and more work was needed.
Another questioner pointed out that biodiversity credits seemed a very specialist sort of market. And he compared this to another one - that for farms - that was failing rapidly at the moment. Are the environmental economists trying to do better that which they shouldn’t be doing at all? How would the system focus in on biodiversity?
Carl replied that it would be as easy to target areas for biodiversity as for salinity - possibly even easier at a localised scale. But the community needs to make a decision about what biodiversity end point it wants.
Geographical limits
A questioner wondered what the current thinking was on geographical limits for trading biodiversity credits. Would they be traded on a global scale - if so, then the fauna of New South Wales could be wiped out in exchange for a larger benefit elsewhere on the planet. But if trading were restricted what effect would that have on the market?
Sue Briggs agreed that this posed the biggest challenge to the idea of biodiversity credits. It was hard to choose geographical scale: bioregions were still interim; catchments varied between the States. She hoped that there would be some detailed work to consider the issue.
Jane agreed that any market was likely to become global, which posed this problem and opened up big debate.
Carl said that this is where the analogy with carbon credits breaks down. Obviously with carbon, it doesn’t matter where you suck it up or emit it; with biodiversity, you can’t readily balance preservation in one part of the planet with loss elsewhere. But at least tradeability would help deal with the distance between rural and urban Australia. For example, city-dwellers could buy into part of a catchment. The other point was to let the market decide but let governments strategically invest in the gaps.
Externalities
In response to a question about externalities, Carl replied that, in an ideal economic world, food prices would reflect the full environmental cost of producing the food. Then an accreditation system would ensure that environmental and human standards were being met in the agricultural system that grew the food.
However, food production is subsidised in many countries. In France, for example, the subsidies are now being seen as supporting tourism and the preservation of the ‘cultural landscape’ in the farming countryside. The community is prepared to pay for this. Carl was sceptical about food prices ever recovering to reflect environmental factors - although it would be good if they did. But, on the other hand, the European view also has something to commend it. Their idea is that landscapes are about much more than just food and fibre.
In Australia, with a large land mass and relatively small population, the French idea is clearly not viable. There are some big conundrums to be resolved; but in the meantime we need some pragmatic ideas so that we can move forward.
Snake oil?
Claiming he could smell a whiff of snake oil, one questioner wondered how this model of biodiversity credits would work, given that it has to operate between two political givens: the unwillingness of governments either to infringe the rights of rural landholders or to make industry and urban Australia pay.
Carl agreed that a lack of understanding of biodiversity in urban Australia is a fundamental problem. However, the idea that governments alone can do everything for the environment was wrong. Governments need to invest much more - but in partnership with the community and private sector. Sometimes the private sector can come up with quite creative solutions that a government could not devise.
Jane Gilmour felt that what is important is making people think of values in terms that the private sector (and much of the urban public) could understand. It doesn’t matter if we end up with a tradeable market or not. Either way, the process of having to put a value on biodiversity will help educate people. At the moment, the public still thinks biodiversity means endangered species. Talking of a biodiversity market is an opportunity to get people to understand the need for biodiversity conservation across the landscape.
Jim Shields agreed with the questioner that the two ‘givens’ would be operating. But he offered the idea that we are dealing in a new commodity - rather like gold - which has value only because we choose to give it one. Biodiversity can have value too if we choose to give it. But unlike gold, it is a shrinking resource. If we can convince capitalists that it has value - and is becoming rarer - then it will get more valuable. A biodiversity market could get investment flowing into nature conservation management.
Seminar summary by Roger Beckmann
