Can payments for ecosystem services fund climate change adaptation?
By Rebecca Runting (University of Queensland)
Markets for ecosystem services have the potential to relieve the financial burden of preserving coastal wetlands under sea level rise
We found payments for carbon sequestration alone could cover the cost of this preservation under scenarios of low sea level rise
Under high rates of sea level rise, other payment streams would be necessary
Coastal wetlands, such as mangroves, can be lost due to sea level rise. This means essential ecosystem services, such as the maintenance of fisheries, coastal protection, and carbon sequestration, could be lost along with them. However, it doesn’t have to be this way – if allowed to, these wetlands can move landward in response to sea level rise, but only if there’s no coastal development in the way.
To adapt to climate change, it’s crucial that coastal land is set aside to accommodate wetland migration. Unfortunately, this comes with an opportunity cost, as this land might otherwise have been used for urban or industrial development. For cash- strapped local planning authorities, such long-term planning decisions may be prohibitively costly. However, emerging markets for ecosystem services, such as the carbon market (voluntary or otherwise), may have the potential to offset some of these high costs. Unfortunately, we currently know little about the costs and benefits of such an approach.
To throw some light on this issue we compared the cost of expanding the reserve system in Moreton Bay (near Brisbane) with and without sea level rise. And we looked at the contribution that payments for ecosystem services might make (Figure 1).
We used the Sea-Level-Affecting-Marshes Model (SLAMM; see Decision Point #67) to simulate coastal wetland change under a range of sea level rise projections (28 cm, 55 cm, 98 cm and 128 cm). This produced maps with fine-scale resolution (to around 5 m) of changes in the distributions of wetlands for each year (2013-2100) for each sea level rise scenario
Using these wetland distributions, we modelled the provision To quantify soil carbon sequestration, we used local field measurements for the different wetland types, and applied a range of carbon prices from the voluntary carbon market.
To determine the value of nursery habitat, we linked a potential levy on the gross value of production of three mangrove- dependent and commercially important species (banana prawn, mud crab, and Barramundi) to the area of mangroves that interface with the ocean.
When combined with the simulations of wetland change, this produced an economic value in each year to 2100 for both services for all properties within the study site. We then optimised the selection of additional wetland sites under the range of sea level rise projections and compared the resulting opportunity cost under different combinations of payments for ecosystem services. This allowed us to determine the potential of payments for ecosystem services to compensate the cost of reserve expansion under sea level rise.
Sea level rise meant additional (landward) sites needed to be added to the protected area network to allow for wetland migration and to compensate for the wetlands lost at lower elevations. At all budget levels, the higher (business as usual) sea level rise projections resulted in a much higher cost of expanding the protected area network.
This highlights that mitigating climate change (by the world- wide implementation of global agreements) can go a long way to making local adaptation decisions more affordable.
Despite these high costs, payments for ecosystem services have the potential to substantially reduce the net cost of expanding the reserve network under sea level rise. We found that a carbon payment alone could be used to expand the reserve network by 60% under the lower sea level rise scenarios, but only up to 37% under the higher (business as usual) sea level rise scenarios. Stacking carbon payments with a potential nursery habitat payment provided only a modest additional expansion over carbon payments alone (up to an additional 2% increase in wetland area), as the most cost-efficient areas for nursey habitat were already selected by a payment for carbon.
It is possible that the benefits from payments for ecosystem services could be further increased under different market conditions. For example, even more wetlands could be preserved if the carbon price where higher, or if markets existed for additional ecosystem services (such as storm protection or nutrient retention).
Challenges of long-term planning
These cost reductions are possible because the costs are shifted from planning authorities to the people who benefit from the service. In the case of the voluntary carbon market, shifting the cost burden to the buyer is unlikely to be problematic, as the buyers’ participation is voluntary (such as individuals who purchase voluntary carbon offsets for air travel). In contrast, a nursery habitat payment shifts the costs to local fisheries via a compulsory levy, which is likely to be more controversial.
It is imperative that local planning authorities pre-emptively limit development in dryland areas that are likely to transition to wetlands under climate change. The primary difficulty in implementing this strategy is that the opportunity costs of purchasing properties or re-zoning land are borne immediately, whereas the benefits from ecosystem service markets may take much longer to materialise.
This delay in receiving benefit could explain why this strategy is not adopted in many vulnerable areas, despite the long-term benefits. Unfortunately, delaying the implementation of climate change adaptation policy may risk losing key areas of coastal wetlands, the species they support, and services they provide. And in that situation, short-term economic gain comes at the price of long-term environmental loss.
More info: Rebecca Runting firstname.lastname@example.org
Reference: Runting RK, Lovelock CE, Beyer HL & Rhodes JR (2016). Costs and Opportunities for Preserving Coastal Wetlands under Sea Level Rise. Conservation Letters doi: 10.1111/conl.12239