December 5, 2005

Value of forest ecosystem services calculated higher than extraction industries

In a new take on Canada's national accounts, a study by the Pembina Institute for Appropriate Development has calculated the value of ecosystem services such as water filtration and carbon storage to be roughly 2.5 times greater than the net market value of forestry, hydro, mining, and oil and gas extraction in Canada's boreal region. The study report argues that the degradation of natural ecosystems worldwide is at least in part because natural capital values aren't taken into account in land use decisions around the globe, noting these values are not included as part of the Gross Domestic Product (GDP, the universally acknowledged international wealth indicator).

The Pembina Institute study, carried out for the Canadian Boreal Initiative (CBI) estimates the value of the 67 billion tons of carbon stored in the trees and peatlands of Canada's Boreal region at $3.7 trillion, and the annual value of carbon sequestration by the region at $1.85 billion.

"We are only just beginning to understand the true value of these services, including flood control, water filtration, climate regulation, and even pest control," said CBI director Cathy Wilkinson. "We have the opportunity to get it right in Canada's boreal, sustaining its natural capital and ecosystem services, while building other forms of wealth and maintaining community and cultural values."

The study is part of a two-year project designed to define, inventory and measure the full economic value of the ecological goods and services provided by Canada's boreal region, which covers 58.5% of the country's land mass. Ignoring the value of Canada's boreal wealth, says the report, "is akin to Exxon-Mobil ignoring the volume of oil and gas reserves and annual production in its annual report. Yet this is how nations treat their natural capital, by disregarding its full economic value."

To calculate this value, the Institute developed the Boreal Ecosystem Wealth Accounting System (BEWAS). "Our hope is that... BEWAS becomes an international benchmark and an important tool for measuring the conditions and economic values of Canada's ecosystems, in general, and the Boreal region in particular," said the Institute's Mark Winfield.

The study determined that the ecosystem services with the highest economic value per year are: flood control and water filtering by peatlands ($77 billion); pest control services, by birds in the boreal forests ($5.4 billion); nature-related activities ($4.5 billion); flood control, water filtering and biodiversity value by non-peatland wetlands ($3.4 billion) and net carbon sequestration ($1.85 billion).

"It is indeed time to broaden our understanding of the true "value" of globally important forests such as the boreal," said Dr David Schindler, professor of ecology at the University of Alberta. "Failure to do so not only ensures continued ecosystem degradation, but the accelerating impoverishment of human societies, ours included."

The findings raise a number of critical issues to be addressed, such as:

*what level of development would be acceptable to minimize further fragmentation, loss of intact boreal ecosystems and damage to ecosystem function;

*how much of the currently intact boreal ecosystems should be protected from future development; and

*whether Canada should adopt a more precautionary and conservative approach to decision-making with respect to the boreal region, by making ecosystem integrity and optimum ecosystem service capacity the prime objectives of future land use planning and development.

The report recognizes that the BEWAS-based estimates of ecosystem service values are both incomplete and conservative, largely due to lack of data. It recommends that a comprehensive inventory of the boreal region be completed and made publicly available, including national, provincial and local boreal region accounts. This would entail partnerships involving governments, local representatives, industry, land use planners, resource managers, scientists, Aboriginal communities and conservation groups.

The specific effects of each type of human disturbance, it adds, should be described, tracked and monitored to determine any change in the economic value of the boreal region's ecosystem services. Economic values for ecosystem services should be further developed and adopted by all jurisdictions for resource and land use planning, especially at the provincial and municipal levels.

The report further calls for a policy to expand the network of protected areas in the boreal region. This, it says, would serve as an investment in the region's natural capital. Finally, resource management and land use decisions need to account for impacts on ecosystem services and the overall state of the region's natural capital. Conservation-based resource management practices should be implemented in order to minimize costs and maximize local ecological values.

"An understanding of the Boreal region's true value is essential to addressing important questions about how this natural heritage asset can continue to contribute to national and international well-being for generations to come," said Mark Anielski, ecological economist and report co-author.

More information, including the full study report, is available on the CBI Web site, www.borealcanada.ca.

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