No Net Loss? – Payment for Environmental Sins

At first, Adam and Eve lived happily with God in the Garden of Eden. Then, one sunny day a snake appeared. Innocently, the snake told Adam and Eve how delicious the fruit looked, hanging from the close-by tree. But both knew that God had forbidden them to eat from the fruit. Well, the snake had its ways and after a while managed to tempt them into eating the fruit. After doing so, Adam and Eve became shamed of their nakedness and God expelled them from the Garden. This is how guilt came into this world. Eventually, Adam and Eve were forgiven for their sin, but they had to endure the temporal punishment of toiling in the sun.

This concept of guilt and punishment, according to the teachings of the Roman Catholic Church, is also true in everyday life: If you damage someone’s car, the owner can forgive you, but you still owe the debt of repairing the car. For Catholics –and not only for car drivers – guilt needs to be forgiven. If not, the consequence may be eternal punishment in hell. To be forgiven, Catholics can seek for indulgence, for instance in the form of a public Rosary or the Stations of the Cross.

Green Indulgence

Modern-day sins don’t necessarily come in the form of apples, but we are at risk of losing our Garden of Eden, too. Biodiversity is decreasing, ecosystems are degrading, the climate is warming. Regular reminders like Typhoon Hayan ring a bell that, just like Adam and Eve, we put our paradisiacal planet at peril. Call that an original sin!

Regrettably, there’s no confessional box big enough for the entire Earth. Yet, there are options for a green indulgence. The idea is simple: In 2013 we emitted a record 36 billion tons of CO2, which is 50% more than ocean, forests and other sinks can absorb. Since our planet has one connected atmosphere, we can reduce emissions in some part of the world to compensate for an emission made elsewhere. These so called carbon offsets are already common and traded on two global markets. On the compliance market companies, governments and others buy carbon offsets in order to comply with CO2 caps they are allowed to emit. On the voluntary market everybody can purchase carbon offsets to mitigate their own greenhouse gas emissions. For example, for your recent holiday flight, who can magically take away your emission sins? There is no carbon confession, but the so called Clean Development Mechanism. CDM offsets are typically achieved through financial support of projects that reduce the emission of greenhouse gases, most commonly renewable energy or planting of trees – a lot of trees! Three hundred of them are needed to compensate the CO2 of a single flight from Manila to New York over one year.

No Net Loss

Trees can, at the same time, contribute to biodiversity. However, it is much more complex to compensate for biodiversity loss. Unlike carbon emissions, biodiversity cannot simply be swapped elsewhere. It is hard to equate a Banyan tree in the Philippines with an Oak tree in Germany, or a jungle, or a coral reef. Apparently they don’t even have them there.

Nevertheless, there is a sinfully steep decline in our global biodiversity Garden of Eden, largely due to land use changes and destruction of habitats. And if biodiversity, with all the services it provides, does not get a price tag, who will consider this seemingly free good when building a highway or a goldmine? This is especially true in Southeast Asia where a third of worldwide coral reefs and mangrove forests are threatened, together with the livelihoods for over 500 million people. A sufficient reason for the ASEAN Centre for Biodiversity (ACB) together with the Deutsche Gesellschaft für internationale Zusammenarbeit (GIZ) to support the valuing of the services of the region’s biodiverse ecosystems. PES is one approach: While it’s not the acronym for Payment for Environmental Sins, the scheme offers Payment for Environmental Services. Such services, like cleaning water or providing food, are estimated in the billions. Why not offer incentives to farmers or landowners in exchange for managing their land to provide ecological services?

Placing financial value on biodiversity has created a marketplace for retaining and restoring habitats. Just like carbon offsets aim at carbon neutrality, biodiversity offsets want no net loss. If a biodiverse habitat is destroyed, let’s say a forest to build houses, a different site must be restored. This so called receptor sites should have the same amount, type and quality of habitat at a new location.

This is already being done in 45 programs around the world with an estimated conservation impact of 187,000 hectares annually. North America dominates with offsets worth US$ 3 billion, but also in Asia things are happening, with Japan, Mongolia and Vietnam leading. Recognizing that in forest rich Vietnam over 800 hydropower plants and over 5,000 mineral mines compete with biodiversity, the country is in the process of introducing a biodiversity offset policy. Also Carbon offset policies have reached a considerable, but stagnating size, with the compliance market worth $5.5 billion in 2006 and the voluntary market accounting for $705 million in 2008.

A peculiar example at the crossroad of carbon and biodiversity offsets, provides the Ecuadorian Yasuni National Park. Arguably the most biologically diverse spot on Earth is also home to 20% of Ecuador’s to crude oil reserves. Recognizing this explosive fact, the Yasuní-ITT Initiative promised to spare the park in exchange for compensation from the international community. If funds of at least 50% of the potential profits of the oil reserves were raised, the government would leave them and the park untouched. But despite the engagement of Leonardo DiCaprio, Al Gore and many more the funds were not sufficient.

Coldplay Forests

In addition to the lacking willingness of ‘environmental sinners’ to pay, one can pick holes in the whole concept of biodiversity and carbon confessions. There is a long history how confessions can be abused, starting in the Middle Ages. Greedy commissaries sent professional ‘pardoners’ to sell indulgences to earn the maximum amount of money for their projects. The ‘Butter Tower’ of Rouen Cathedral got its nickname because the funds to build it were raised by the sale of indulgences allowing the use of butter during Lent. This, and other misuse, was famously criticized by Luther in his Ninety-Five Theses, starting the Protestant Reformation.

Perhaps not a reformation, but a word of warning is also due here. The well-known instance of the ‘Coldplay forest’ shows why: The British band supported a tree planting project, which unfortunately resulted in a grove of dead mango trees. Indeed, it is tricky to guarantee for the permanence of tree-planting offsets. And even if the trees survive, they need decades or centuries to grow. Offsetting today’s loss with tomorrow’s benefit is known as ‘forward selling’. This is problematic for stopping biodiversity loss and climate change where every year matters.

Before selling and substituting comes measuring, however, which is as difficult as ecosystems are complex. Area alone is not a good measure of the amount of biodiversity. How many monkeys, mushrooms and maggots might live in one hectare of rainforest, let alone the estimated 10 million yet undescribed species? And how many kilograms of mushrooms are worth one kilogram of monkey, if you need to substitute them? Substituting the social, spiritual and sustenance value of biodiversity for local communities, is even harder to do. Communities can’t just simply move and live elsewhere.

Biodiversity Butter Towers

Technicalities aside, offsetting schemes are also at danger of becoming biodiversity butter towers, giving the guilty a way to pay for absolution rather than changing their behavior: Business as usual without social or political change, at a small cost, to solve two of mankind’s biggest problems. Sounds too good to be true? Perhaps it is!

To recap: We cannot manage what we do not value. It makes sense to speak out just how much our atmosphere and ecosystems are worth for us – and how much inaction could cost us. And it makes sense to finally start paying the stewards of mother nature for their hard work. To make the message heard, money might be the language of choice that everybody understands, from smallholder to big business. The biodiversity business case is a real one. But in addition to carbon confessions we owe the debt for real conservation and real CO2 reduction. Just like the driver at fault in an accident owes his debt. Thus, let’s aim for payment for environmental services, not for environmental sins.

ACB shows how real conservation can be done, promoting the cooperation of scientists, politicians, businessmen and citizens in the region. The 33 ASEAN Heritage Parks are but one example how to conserve and manage Southeast Asia’s biodiversity. On a larger scale, the World Parks Congress to be held this November in Australia will present ‘Parks, people, planet: inspiring solutions’. As a landmark global forum on protected areas it will certainly also discuss about biodiversity indulgences. What indulgences are not -also not the green ones- explains the Catholic online forum ‘Fisheaters’: ‘They are not get out of Hell free cards; they are not the forgiveness of the guilt of sin; they are not permission to commit sins in the future’.

Philipp Gassner | Oct 18, 2014 Special to the BusinessMirror

Mockumentary ‘Biodiversity offsetting, making dreams come true’ from Global Motion