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This Week In Water: What A Landscape Approach to Carbon Finance Means For Water

There are implications for water in the ‘landscapes approach’ that everyone has been talking about in that it has the potential to align climate finance with sustainable water management goals like food security and water quality. Meanwhile, the USDA and EPA announced a partnership to scale up water quality trading markets and the Chinese examine natural infrastructure investment.  

There are implications for water in the ‘landscapes approach’ that everyone has been talking about in that it has the potential to align climate finance with sustainable water management goals like food security and water quality. Meanwhile, the USDA and EPA announced a partnership to scale up water quality trading markets and the Chinese examine natural infrastructure investment.

This article was originally published in the Water Log newsletter. Click here to read the original.

19 December 2013 | You couldn’t escape it if you attended year-end climate talks in Warsaw this year. After all, Indonesian Deputy Minister Heru Prasetyo talked about it incessantly, as did World Bank Vice President Rachel Kyte. Peter Holmgren, who heads the Center for International Forestry Research (CIFOR), built the two-day Global Landscapes Forum around it, and the United States, United Kingdom, and Norway launched the Initiative for Sustainable Forest Landscapes (ISFL) to make it a reality. Even official negotiators meeting under the auspices of the under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC) held a two-day workshop on it.

 
The “it” is the “landscapes approach” to reducing greenhouse gas emissions from fields, farms, and forests.
But what exactly does that mean? And what’s it doing in a newsletter about water?
   

Several speakers described it as a “holistic” approach that aims to go beyond reducing emissions from deforestation and forest degradation (REDD) and even beyond REDD+ (which incorporates more activities) by shifting the focus beyond just capturing carbon in trees and towards a complete re-engineering of the rural economy that incorporates people, places, and culture.

 

A shift towards a landscapes approach has the potential to meaningfully align climate finance with goals for managing water quality, natural habitats, food security, and sustainable livelihoods.
 

It’s the kind of monumental aspiration the UN is great at articulating but horrible at achieving – until you stop to consider that this “shift” actually reflects what’s already happening in the voluntary carbon markets, and it’s being led by foresters, farmers, and project developers. The question is whether the landscape paradigm will simply be a guiding vision for REDD, or the foundation for a much broader unification of environmental finance.

Our headline article this month, Unpacking Warsaw: Recognizing the Landscape Reality, talks about this shift and what it could mean for integrated management of rural landscapes. We invite you to take a look.


In this month’s Water Log, we also have a number of stories on Chinese natural infrastructure investments (known in-country as “eco-compensation”), including a new initiative to protect source water supplies for China’s “mega-cities.” Water quality trading had a good month, with a new USDA-EPA partnership dedicated to scaling up markets and a lawsuit dismissed in the Chesapeake that had questioned the legality of trading mechanisms to meet Clean Water Act goals. And a just-announced $40 million grant from the World Bank’s GEF will enable the creation of watershed payment programs in coastal watersheds in Mexico.


See you in 2014!

— The Ecosystem Marketplace Team

For questions or comments, please contact newsletter@ecosystemmarketplace.com



EM Headlines

GENERAL

Unpacking Warsaw: Recognizing The Landscape Reality

Most of the viable REDD projects up and running today work in part by taking the pressure off forests, and most do that by providing alternative livelihoods for people who might otherwise be forced to chop down trees. That’s a key component of the “landscapes approach” to agriculture that dominated side events at climate talks in Warsaw last month.

 

If you survey the landscape for environmental finance, you’ll have no trouble seeing why people want to unify it. Beyond REDD, there are scores of practices designed to incentivize good land stewardship – from carbon-based payments for no-till farming to watershed payments for reduced runoff to mitigation banking that supports habitat protection and restoration. Two years ago, for example, Ecosystem Marketplace wrote about David Ongoro, who was participating in a pilot project built around soil carbon; and earlier this year, we met Chege Mwangi, who was participating in a pilot project built around payments for watershed services. Both are Kenyan farmers, and both earned payments for ecosystem services by implementing sustainable agriculture practices.

 

Experiences like these illustrate both the allure and challenge of shifting to a landscapes approach. From a scientific and economic perspective, the fields, farms, and forests are all connected, but from a regulatory perspective they are almost always in different silos. The Brazilian state of Acre has created a regulatory framework built on ecosystem services and could theoretically serve as a template for a landscapes approach, but so far it stands alone and remains unproven.

Keep reading at Ecosystem Marketplace.


Monterrey, Mexico Uses Fund Mechanism For Clean Water and Storm Protection

During the Atlantic hurricane season of 1988, Hurricane Gilbert tore through the Caribbean and the Gulf of Mexico, making landfall first on the Yucatí¡n Peninsula and then moving into mainland Mexico – vacillating all the while between Category 3 and 5 on the Saffir-Simpson Hurricane Wind Scale. Monterrey, Mexico was one of the cities in Hurricane Gilbert’s path, and it was ravaged by floods and landslides that left more than 280 people dead and 1,000 families homeless.

 

Twenty two years later, Hurricane Alex brought more floods and destruction, but since then the challenge has been drought – highlighting the fact that the 4 million people in this mountainous semi-arid city face more than just hurricanes: they face wildly-fluctuating water supplies made even less predictable by climate change and rapidly-expanding industrial activities. That fluctuation, in turn, threatens the economy that is partly driving it – and therein lies at least a partial solution.

 

Just over 3 years ago, a consortium of organizations, companies and government agencies launched the Fondo de Agua Metropolitano de Monterrey (Metropolitan Water Fund Monterrey or FAMM). It aims to ensure a healthy supply of water to Monterrey through investment in watershed ecosystems while also working to reduce the risks of flood disasters.

Learn more.


In The News

POLICY UPDATES

USDA, EPA Partnership Supports Water Quality Trading

A new partnership announced in early December between the U. S. Department of Agriculture (USDA) and the Environmental Protection Agency (EPA) will see the two teaming up to support water quality trading markets across the US. The USDA and EPA say they will seek opportunities to collaborate on outreach to stakeholders and capacity-building within agencies to support markets. They’ll also work to develop tools and resources for states and credit generators, with an eye to moving projects up the learning curve faster. “New water quality trading markets hold incredible potential to benefit rural America by providing new income opportunities and enhancing conservation of water and wildlife habitat,” Agriculture Secretary Tom Vilsack said in a press release. “Additionally, these efforts will strengthen businesses across the nation by providing a new pathway to comply with regulatory requirements.”

Read a press release here.


China to Draw a “Red Line” for the Environment

In a major meeting of the Communist Party last month in China, the Party committed to establishing a “red line” for ecological protection at a national scale, with eco-compensation and resource pricing as the key tools for policing degradation. “The red line is to limit economic development of environmentally vulnerable regions, such as river sources,” said Xia Guang, director of the Policy Research Center for Environment and Economy under the Ministry of Environmental Protection. The approach has already been used at local and provincial levels; eco-compensation mechanisms are harnessed to mitigate for impacts or influence polluters’ behavior.

Read more at the Xinhua-Global Times.


Economic Analysis of Clean Water Act Expansion Leaked

This fall, the US Environmental Protection Agency (EPA) and the Army Corps of Engineers (“the Corps”) proposed a joint rulemaking clarifying which waterbodies are considered “waters of the United States,” and thus covered by the Clean Water Act. First, the rule – currently under review by the Office of Management and Budget – was leaked, and now so has been the EPA’s economic analysis of the proposed rule. The analysis estimates the potential indirect costs and benefits from increased regulation that would likely result from an expanded definition of “waters of the US.” The rule would expand jurisdiction to waters found in places like irrigation ditches and floodplains – which has many industry and ag groups concerned.

 

What does this mean for eco-markets like nutrient trading or wetland mitigation? As far as water quality standards, the authors do not expect any increased expenditures from expanded regulation, but costs related to wetland and stream impacts under CWA section 404 could grow, including for example an additional $59.7-113.5 million in compensatory mitigation costs annually. On the other hand, predicted benefits include better protection of ecosystem services, avoided costs of no longer needing to evaluate jurisdiction on a case-by-case basis and reduced uncertainty for many regulated (or potentially regulated) parties. All this should be taken with a big pinch of salt: as the report itself notes, readers should be mindful of the “many data and methodological limitations, as well as the inherent assumptions” made, in interpreting the economic analysis.

Read the leaked analysis here (pdf).


Learning from 20 Years of PES in Costa Rica

A report from IIED explores how Costa Rica’s national payments for ecosystem services program has evolved over its 20 years of existence, and how the world of PES has changed along with it. The report digs into the program’s impacts – environmental, social, and in terms of cost-effectiveness – and offers a few recommendations for continued growth. In particular, IIED suggests sticking to simple indicators, rethinking methods for assigning social priority in contrasts, considering differentiated payment levels, and integrated data gathering to improve evaluation.

Read the report here.


Dispatches from the Policy Frontline

A new report from Royal Dutch Shell, Unilever and Xyntéo proposes eight design principles for policymaking in the water-food-energy-climate nexus. The report, Dispatches from the Policy Frontline, offers a suite of successful initiatives as case studies, along with lessons like “develop policy laboratories and encourage experimentation,” “institutionalize a long term view,” and “strengthen local capacity to deliver.” The case studies – which build on interviews with 120 policymakers in fifteen countries – are striking in their examples of creative partnerships and innovative solutions to nexus challenges.

Get coverage from the Guardian.
Read a press release and download the report.


New Roles for the Government in Water Quality Trading?

A new white paper prepared by the World Resources Institute for the USDA Office of Environmental Markets considers how governments might adapt their roles in water quality trading programs to better support growth in these markets. The authors examine a range of options, like a revolving credit bank to finance credit generation, in-lieu fees for water quality impacts, or acting as a financial clearinghouse. Risk management approaches – via endorsing specific nonpoint crediting methodologies, weather insurance, credit guarantees, or landowner assurances are also reviewed.

Read the white paper here (pdf).


GLOBAL MARKETS

Nature-Based Solutions for China’s “Mega-Cities”

A project to demonstrate nature-based solutions for protecting drinking water sources in China’s “mega-cities” launched last month in Beijing. The project, led by IUCN, includes a mix of public, NGO, and academic partners, including the Beijing Forestry Society, Research Center for Eco-Environmental Sciences, Chinese Academy of Sciences, Chinese Research Academy of Environmental Sciences, Global Water Partnership China, Guangdong Academy of Forestry, Center for Rural Drinking Water Safety and the Ministry of Water Resources. Funded by EU China, efforts will include pilots in Beijing’s Miyun Watershed and Guangzhou’s Jiaquan Watershed, assessment of 30-50 Chinese mega-cities’ water management, and investigation of long-term management and financing mechanisms to share across the partnership. Learnings will be disseminated through the Partnership for Mega-City Watershed Protection.

Read more from the Beijing Forestry Society.


A GEF Grant for Coastal Watershed Payment Mechanisms in Mexico

A $39.5 million grant from the World Bank’s Global Environment Facility will support a payment mechanism in coastal watersheds in Mexico, compensating local communities for avoiding deforestation and land degradation. The project will protect an estimated one million hectares of forest lands, according to the project organizers, who include the National Commission of Protected Areas (CONANP); the National Forestry Commission (CONAFOR); the National Institute of Ecology and Climate Change (INECC), and the Mexican Fund for the Conservation of Nature (FMCN). Funds will also support the development of watershed management plans.

Get coverage from IISD Reporting Services.
Read a press release from the World Bank.


Swire Coca-Cola Looks Beyond the Fence to Shrink Water Footprint

The third-largest independent bottler in the US, Swire Coca-Cola, is investing in watershed restoration to achieve its footprint management goals. The company has funded irrigation upgrades and the removal of fish migration barriers in Utah, restored riparian and aquatic habitats in Wyoming, and supported reconnection projects to restore stream flows in Idaho. These efforts are in addition to efficiency improvements within Swire Coca-Cola’s direct operations. The Coca-Cola Company has committed to replenishing 100% of water use by 2020.

Read more at Environmental Leader.


Chesapeake Bay Pollution Trading Suit Dropped

A District Court Judge threw out a lawsuit challenging the legality of water quality trading in the Chesapeake Bay last week. The suit, brought by Food & Water Watch and Friends of the Earth against the EPA in 2012, contended that water quality trading to achieve a Total Maximum Daily Load (e.g. a “cap” on pollution in a waterbody) violated the Clean Water Act. Judge Rudolph Contreras ruled that the groups lacked legal standing to challenge the trading programs, and that the suit was premature as the EPA hasn’t actually approved any trades, as programs are generally managed at the state level.

The Baltimore Sun has the story.


Refusing to “Eco-Compensate,” Chinese Oil Field Finds Its Accounts Frozen by Court

An oil field in China found its bank accounts frozen by a court after the company refused to compensate for water and soil losses in Shaanxi Province. The “eco-compensation” fees, amounting to 850 million yuan (US $139.7 million), were required by the Yulin government. When Changqing oil field failed to pay, the city government took the case to court. Negotiations between PetroChina (of which Changqing oil field is a subsidiary) and the Shaanxi provincial government have resulted in unfreezing of the accounts, and the matter appears on its way to being resolved.

 

But the case highlights a challenge faced by local and provincial governments attempting to enforce their eco-compensation regulations: these local rules are sometimes seen as illegal or illegitimate. A national standard on eco-compensation has been in the works for some time now. According to Zhang Yan, a sociology researcher with Shaanxi Provincial Academy of Social Sciences, the Changqing-Yulin battle underscores the need for high-level rules or guidance. “But it requires scientific and systematic assessment methods, involving the evaluation of enterprises’ profits and degrees of pollution,” she adds.

Get the full story at Xinhua News.


Veolia Launches “True Cost of Water” Tool

Veolia Water just launched a new tool to guide businesses and municipalities in assessing the “true cost” of water. The methodology accounts for water-related risks and impacts that are typically overlooked in our current pricing of water, but which have real meaning for the bottom line. The tool monetizes direct costs, indirect costs, and risk-related costs. That information can help businesses develop an internal price for water – strenghtening management decisions and increasing sustainability. The methodology appears largely restricted to grey infrastructure considerations, though it does consider catchment-scale risks like shortages, flooding, local regulatory changes, and reputation within the community.

Learn more at Eco-Business.
View the tool.


Green Infrastructure Pays Off For Commercial Property Developers

A new report from the Natural Resources Defense Council and Stratus Consulting makes the business case for green infrastructure, demonstrating how green investments can pay off for commercial property developers. The Green Edge: How Commercial Property Investment in Green Infrastructure Creates Value details benefits like increased property values, energy savings, tax or stormwater fee credits – and how these can add up to a net present value of $2 million in benefits over 40 years, for a typical office building, or as much as $24 million over the same time period for retail centers. The authors urge commercial real estate developers and property owners to consider green design in new construction and retrofits – and not just because it’s the sustainable thing to do.

Learn more and access the report at the NRDC Switchboard Blog.


Ontario Steps Up Source Water Protection Investments

Ontario awarded more than CAD $730,000 (US $689,000) to municipalities in the province for source water protection efforts earlier this month. Twelve municipalities in the Otonabee-Peterborough Source Protection Area received grants ranging from CAD $43,788-$81,772 from the Source Protection Municipal Implementation Fund, which will pay for zoning changes, risk management, amending plans, and public education.

Learn more.


EVENTS

2014 UN-Water Annual International Zaragoza Conference

The UN-Water Annual Zaragoza Conferences serve UN-Water to prepare for World Water Day. This conference is part of the road map for World Water Day 2014 focused on the nexus of water and energy. A focused dialogue would already be initiated with the UN-Water seminar on the same topic during World Water Week in Stockholm. Water and energy (W&E) are closely interlinked and interdependent. W&E inter-linkages have an important role in the post-2015 development agenda and the conceptualization of Sustainable Development Goals (SDGs). There are indeed some main challenges, interconnections and opportunities for realizing synergies and benefits from joint responses on the water and energy nexus, including for the design of climate resilience and green economies. Partnerships amongst institutions, agencies and stakeholders can help in achieving some of these benefits. 13-16 January 2014. Zaragoza, Spain.

Learn more here.


Green Infrastructure and Water Management in Growing Metropolitan Areas

Green infrastructure, at site specific and regional scales, is being promoted as an effective and efficient means of regulating the stormwater flows and pollutant loading, while providing multiple environmental and health and well-being benefits that support sustainability. Despite these added benefits, municipal leaders face significant challenges when attempting to implement green infrastructure strategies in new and existing development. The purpose of this conference is to engage researchers, engineers, planners, government policy makers, and other stakeholders in developing options and solutions that result in wider implementation of green infrastructure practices to manage stormwater in our growing metropolitan regions. Tampa FL, USA. 14-16 January 2014.

Learn more here.


Sustainable Water Management Conference

Presenting solutions for balancing the benefits of conservation with the costs, managing infrastructure, developing robust supply models and watershed management plans, water reuse, resource management, green infrastructure and more. 30 March – 2 April 2014. Denver CO, USA.

Learn more here.


2014 National Mitigation & Ecosystem Banking Conference

The only national conference that brings together key players in this industry, and offers quality hands-on training and education sessions and important regulatory updates. Learn from & network with the 400+ attendees the conference draws, offering perspectives from bankers, regulators, and users. 6-9 May 2014. Denver, Colorado.

Learn more here.


JOB LISTINGS

 


Coastal Conservation GLOBE Intern

The Nature Conservancy – Mississippi, USA

ESSENTIAL FUNCTIONS

 

  • Assist in the collection of field data for marine conservation projects designed to create subtidal and intertidal oyster reef habitat in Mississippi bays. Types of collected data include metrics associated with fish and invertebrate sampling, water quality, and oyster monitoring. Data collection will be conducted from land and from boat.
  • Manage collected data and assist in the writing and presentation of annual report.
  • Assist in the collection GIS and spatial Data.
  • Assist in the photo documentation of projects.
  • Participate in outreach associated with Marine Program, typically 2-3 events on Saturdays.
  • Although primary duties will include work with the Mississippi Chapter of TNC, there will be opportunity to work and assist the Alabama Chapter of TNC with similar coastal projects.
  • If GIS experienced, will assist in the redesign of the Mississippi Marine Program GIS database.
  • Adhere to Mississippi TNC Safety Guidelines.

 

Learn more here.




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