In Introducing tobacco to civilization, Bob Newhart imagines a telephone conversation between Sir Walter Raleigh and his London office.
Walt explains that his latest discovery is a leaf. The guys in the office know he’s nuts, so they kindly tell him that in England they have quite a few leaves already. But Walt explains that in the American colonies, they’ve got this leaf they shove in their mouths and set fire to, or stick up their noses and sneeze out again.
The guys think this is hilarious, until Walt tells them he’s bought 80 tons of the stuff. Plus some magic beans called coffee you can boil to drink along with it.
Shortly after Raleigh’s death in 1618, Tulip Mania swept Europe, in what some economic historians call the first speculative bubble. The price of a single bulb reached 10 times the yearly wage of a skilled craftsman, before the bubble burst, which as John Kenneth Galbraith explains in A short history of financial euphoria, they always do.
Anyway, the idea of paying for what nature provides wasn’t weird, and is still the basis of trade in agricultural produce of course . So, in today’s service economy, why not pay for the services provided by biodiversity and ecosystems? Apart from food, there’s clean water, genetic resources, and climate regulation, among many others.
But how do you pay nature? And how can we reverse the worrying loss in global biodiversity?
Voluntary agreements called Payments for Ecosystem Services are one way. In a PES, a user or beneficiary of an ecosystem service pays farmers, foresters, or fishers for the additional costs of biodiversity and ecosystem service conservation and sustainable use, over and above whatever is required by any existing regulations.
There are now over 300 national PES worldwide, mainly concerning biodiversity, watershed services, carbon sequestration and landscape beauty, channelling over $6.5 billion, plus many smaller scale programmes. PES-like mechanisms are also being explored on an international scale through intitiatves like the Clean Development Mechanism and REDD+ (Reducing Emissions from Deforestation and forest Degradation).
A new OECD publication, Paying for Biodiversity, looks at the issues in detail, notably criticisms of the cost-effectiveness of PES.