Trade in Ecosystem ServicesTrade in Ecosystem Services'Trade in Ecosystem Services – When 'payment for environmental services' delivers a permit to destroy'

by Jutta Kill, World Rainforest Movement, April 2014, 34 pages


Albert Einstein, as this informative report reminds us, famously observed that "Not everything that can be counted counts, and not everything that counts can be counted." A fundamental (philosophical as well as practical) question when it comes to evaluating the commercial practice described as "Trade" or "Payment" for "Environmental" or "Ecosystem" "Services (PES), therefore is "Is Nature, which certainly counts (and is no longer an 'externality' even for the most unreformed-uninformed economists), countable?

The original PES programmes used public funding to implement public conservation-related policies, but today there three more types of PES: (a) PES initiatives financed by private donations or voluntary programmes for public relations purposes (b) 'offset' PES schemes where a voluntary 'offset' payment is meant to nullify pollution considered excessive and (c) PES where the payment gives permission to destroy or pollute above a legal limit. The latter are as expected the most controversial type of PES. For example, instead of not being allowed to mine inside a National Park, a mining company can circumvent the law, by buying certificates to "offset" the destruction. In at least one occasion, as mentioned in the report, the mining company has also bought the intermediaries verifying and selling the certificates to the mining company! PES are intrinsically linked to neoliberal globalisation and the process known as the global-land-grab, with communities made landless, social exclusion, urban congestion, unemployment and migration.

Beyond the corrupt and fraudulent practices of some of those using the PES mechanism, and the perceived lack of transparency and accountability (including Tax accountability) in this sector, there are fundamental conceptual & practical problems with the mechanism itself: does Nature have a comparable monetary value (nature as a whole, as a pristine whole rather than its individual components – land, raw materials, animals) and if so can it be scientifically and accurately calculated?" Will this calculated value be sufficient to prevent its destruction under the current socioeconomic system (actually-existing-capitalism). In other words can you beat the system (which is ecocidal) by using the system? Is there a scientific way to determining what would have really happened to a forest without the payment? (offset credits have rightly been called "an imaginary commodity based on subtracting what you hope will happen from what you claim would have happened.") Is PES a benevolent or a neutral tool that may fall (has fallen) into the wrong hands, or rather is it by definition a malicious tool for dubious stakeholders, which is unfortunately also being used (in these lean times) by some of the worlds leading environmental NGOs? As you may guess, these questions are of little importance to PES traders, purveyors, intermediaries – like all traders, they are in it for the profits.

The carbon market is not really interested in whether the environmental authority, which accepts an offset certificate, is in reality unable to verify that this very certificate really represents the guarantee that the law or regulation says it would (for example if a land-owner will actually maintain a pristine habitat for the duration of the time frame of the certificate). As a leading carbon trader bluntly stated in public in 2007: "The carbon market doesn't care about sustainable development. All it cares about is the carbon price." Worse, claims the Author, Trade in Ecosystem Services needs destruction to continue because without destruction there is nothing to 'offset'. In the even more advanced stages of PES offset schemes, the 'ecosystem service' certificate can be used as a financial asset, and speculators can bet on their future value (financial derivatives).

The World Bank is one of the strongest promoters of trading of 'ecosystem services', one likely reason, the Author argues, is that "they help greenwash the destruction of Nature caused by World Bank‐financed mining, infrastructure, logging or hydropower projects". The World Business Council for Sustainable Development (WBCSD), a major lobby group which includes big mining interests has also, unsurprisingly, been a particularly enthusiastic advocate of PES.

The Travel sector is also involved through PES related to the generation of carbon offsets for major airlines (although personal air-travel carbon offsets have become much less fashionable, met by criticism and the financial crisis). This way communities whose subsistence is dependent on (sustainable) forest access and who have contributed nothing to the climate crisis are banned from using the forest. Worse, the community is often divided with some being paid (creating inequality) to join forest patrols so as to catch their fellow villagers and send them to prison. Friends of the Earth Colombia which recently analysed REDD offset project contracts has also found that involved communities bear more risk than project developers while their PES contracts include restrictions on traditional land use practices which are not explained to the community before signing.

This report convincingly concludes that saying "No to offsets" is saying "Yes" to keeping corporations within laws defined by clear limits for everyone, fines and penalties, not laws defined by fees that buy permission to destroy and pollute." The broader questions are of course if can you can really keep corporations within (environmental and other) laws, if corporations should continue to be treated as persons (corporate personhood) or if they should exist altogether.

These are rhetorical questions for the tiny minority which constitutes the global PES industry, but they are of grave importance to the "99%", and no less to communities displaced through such pseudo-green tools. This report genuinely and directly tries to answer some of these questions, providing an excellent, and convincing summary of facts and arguments based on actual case studies illustrating why Trade in Ecosystem Services is part of the problem, and not of the solution. A relevant bibliography and links to many online references for further reading are included.

The Author, Jutta Kill is a forest ecologist by training, a climate change campaigner and a Member of the international secretariat of the World Rainforest Movement, an Uruguay-based NGO established in 1986 which best known for its long-standing campaign against monoculture tree plantations and their regular briefings, bulletins and other publications made available for free at their website.

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