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Ecosystem Marketplace, Marketplace Mitigation Mail

January 7, 2011    

From the Editors

The Ecosystem Marketplace's Mitigation Mail
Conservation and Wetland News You Can Bank On

Making the priceless valuable comes at a price

Biodiversity is the embodiment of the richness and diversity of nature, and unlike carbon, cannot be simplified into a single, fungible commodity.  Even so, there are innovative mechanisms linking economics and conservation ecology, like biodiversity offsets and habitat banking.

But in this nascent market, data are few and far between. Ecosystem Marketplace is committed to being a trusted and transparent source of information on the metrics and mechanics of existing and developing biodiversity markets.  The program has created the only centralized source of US conservation bank information (www.SpeciesBanking.com), which will soon expand to cover biodiversity markets around the world, and our State of Biodiversity Markets report surveyed existing and developing biodiversity offset, compensation, and banking programs across the globe.

For over four years, Ecosystem Marketplace - a project of the 501(c)3 non-profit organization, Forest Trends - has delivered Mitigation Mail News Briefs   to in-boxes around the world. Mitigation Mail editors scour the news from all parts of the world to bring readers the most relevant market updates and insights – all packaged for quick digestion in a monthly news brief.

These kinds of insights present significant costs in both manpower and brainpower. To continue providing these services free of charge, Ecosystem Marketplace is asking for readers’ voluntary support.  For a voluntary donation of $150/year per reader, subscribers will continue to benefit from Ecosystem Marketplace’s informed briefings and we can in turn ensure the ongoing depth and quality of our reporting, as well as expansion of both current and new services.
 
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From all of us at Ecosystem Marketplace and Mitigation Mail, we wish you a happy new year.  Read on below for a look back at 2010's top biodiversity news stories and as always, all the latest news on incentives for biodiversity conservation.
 

2010 Retrospective

Top Ecosystem Marketplace and Mitigation Mail stories impacting the biodiversity markets
________________________________________

The State of Biodiversity Markets was one of our most popular resources in 2010. Launched in March, the report documented 39 government-mandated “compensatory mitigation” schemes around the world and 25 others in the works. 80% of the schemes, however, lacked the transparency necessary to generate price signals. Of the documented programs with price data, these revealed a market of between $1.8 billion and $2.9 billion per year. Additionally, the schemes placed at least 86,000 hectares of land under some sort of conservation management or permanent legal protection each year.  That’s an area equivalent to the size of Manhattan, and the real impact is likely far greater. Click here to download the report.


The International Year of Biodiversity / the 10th Conference of Parties to the Convention on Biological Diversity (aka CBD COP10). The 'International Year of Biodiversity' began with promising talks at a key meeting of the UN's Convention on Biological Diversity   (CBD) in Nairobi and what seemed to be a real movement towards developing innovative financing mechanisms and even tethering the CBD to REDD .

But it all came to naught in October, when the CBD's Conference of the Parties in Nagoya first put financing on a sidetrack and then derailed it completely.  By the time it was over, innovative financing had been extracted from the CBD, putting the Convention at an even more distinct disadvantage to the higher profile Climate Change Convention. One bit of language that did remain in the Convention was a decision promoting business engagement , which cited efforts like the German Business and Biodiversity Initiative , international voluntary certification schemes, and the Business and Biodiversity Offsets Programme (a sister initiative to Ecosystem Marketplace).

Broader 'big ticket' issues agreed upon included a protocol to the Convention on access and benefit-sharing, a strategic plan for the treaty (through 2020), and agreement on how to mobilize financial resources for its implementation.

Implementation of US Wetland Mitigation Banking Regulation. While it doesn't sound like a particularly sexy topic, interpretation of regulations can either stimulate or quash market solutions for environmental issues. In the US world of wetland banking, mitigation bankers have been crying foul over the US Army Corps of Engineer's lack of preference for mitigation banking, which was stated in 2008 regulations. After some pushing from the NMBA (National Mitigation Banking Association), in October the Corps sent a memo requiring documentation when mitigation banking is *not* being used as the preferred method for mitigation.

Transparency of wetland mitigation information has also been an issue in 2010. In March of this year twenty leaders in the US wetlands field signed a letter to the Assistant Secretary of the Army for Civil Works with a listing of their grievances along with multiple citations of how the Corps was either required to or voluntarily promised to provide data within a specified timeframe. The USACE responded in June   to this first letter, citing the difficulty in implementation and providing a link to a 2000-page report about permit statistics. The USACE letter also claimed that RIBITS was “in use across the nation.” Which is stretching it a bit, as our count in September had only 28 of the 38 USACE districts with viewable public information. If you are interested in greater data accessibility from RIBITS, sign onto Ecosystem Marketplace's letter of support here .

TEEB. Late last year saw the release of the first reports from the Economics of Ecosystems and Biodiversity (TEEB) initiative, which aims to communicate the value of nature and stimulate governments, businesses, and the Average Joe to do something about it. The rest of the reports were released over the course of this year, putting the phrase “ecosystem services” on everybody’s lips. Instead of targeting traditional players in environmental policy TEEB took a broader approach, releasing two reports this summer for those with a huge stake in ecosystem services: local governments and businesses . Both reports gave targeted guidance and information that would allow stakeholders to appreciate, and ultimately enact, a payment for ecosystem services approach. The TEEB synthesis report was released at the Convention on Biological Diversity in Nagoya, providing an accessible document that laid out the “approach, conclusions and recommendations” from the previous reports.

While the release of the TEEB reports caused no immediate policy changes, there were signs that some people were catching on. Businesses in particular seemed turned on to the idea of biodiversity conservation as a business opportunity, with companies like Mitsubishi including guidelines specifically to promote biodiversity friendly business practices. Meanwhile, the World Bank announced a program to account for the value of biodiversity, using GDP-type measures.

Increased Number of US Wetland and Species Banks. There are now 495 active wetland mitigation banks in the US, 55 of which were officially approved in 2010. Five new conservation banks were approved in 2010, bringing the total number of active species banks in the US up to 83 (and another 19 banks sold-out of credits). It might appear that mitigation banking is a recession-proof industry, but that's not necessarily the case. On a positive note, Sheri Lewin of Environmental Resource Marketing noted that  the regulatory certainty gained with the 2008 mitigation banking regulations may still be positively affecting bank approvals after two years, and that a fall in land values may have made land purchases for banks attractive. But on a sobering note, industry players at May's National Mitigation and Ecosystem Banking Conference noted that the 'good old days' of housing development driving bank creation, like we saw during the housing bubble, may not be coming back anytime soon and may be worse in 2011.

If you're interested in a refresher course of sorts, check out our popular backgrounder papers on US Wetland Mitigation Banking and US Conservation Banking , along with our book on Conservation and Biodiversity Banking .

Increased International Interest in Biodiversity Offsets and Banking. Although Convention on Biological Diversity negotiations rejected notions of 'commodification of nature,' there remains a gaining interest in biodiversity offsets and biodiversity banking. Ecosystem Marketplace's sister initiative, the Business and Biodiversity Offsets Programme , is providing technical support to six governments (Ghana, Uganda, Namibia, Mongolia, Vietnam and the state of Sabah in Malaysia)  that requested assistance in exploring options for policies on biodiversity offsets. In the United Kingdom , the new government is lending its support to a project that aims to jump-start species banking across the country  France has a pilot biodiversity bank   in the South of the country, and the first BioBank opened in the state of New South Wales, Australia.

Other Environmental Markets. The State of Watershed Payments was another popular resource to Mitigation Mail readers. The report cataloged the use of Payments for Watershed Services (PWS), including water quality trading, across the world and quantified the amount of money being transacted. The report identified 288 programs were identified (216 PWS and 72 WQT). Far fewer programs recorded transactions, numbering about 127, yielding an estimated US$9.3 billion dollars in watershed protection activities. Click here to download the report.

For a quick rundown on 2010 top news in other environmental markets, check out these retrospectives of
Water , Voluntary Carbon , and Forest Carbon markets from Ecosystem Marketplace.

 

—The Ecosystem Marketplace Team

If you have comments or would like to submit news stories, write to us at mitmail@ecosystemmarketplace.com.


News

 
 
Mitigation News  
Building a “Reforestation Economy” in the Mata Atlântica

The non-governmental Terra Institute for Environmental Preservation (ITPA) is working to reforest a watershed that supplies Rio de Janeiro and establish a “reforestation market” to stimulate local job creation and local consumption in the environmentally damaged areas of Brazil’s Mata Atlântica forest.  Rampant deforestation has affected the quality and production of the water in the Santana River, one of the main tributaries of the Guandú River which supplies water to 80 percent of the Rio metropolitan area.  The initiative will hire local workers and reduce travel distances to worksites.  The reforestation work will prevent soil erosion and landslides, limit water sources from drying up, and improve the quality of water.  

The ITPA estimates that the amount the Rio water treatment plant spends in three months to remove impurities is enough for a year of payments to all of the rural landowners in the Guandú watershed for preserving their forests and maintaining environmental services. ITPA director Mauricio Ruiz defines the program as “a beginning of an ecological economy, a one-way journey” towards better social and economic prosperity for the region as well improved environmental services.

  – Read more here

 
BioBank Report 'Lost in Cardboard Box'

BioBanking, the Australian biodiversity banking program that went live late in 2009 in the state of New South Wales, has just received a blow in credibility from an administrative error. A development project going through development stages had been approved with a certain amount of BioBanking credits being used to offset damage from the development. "Apparently lost for some months in a cardboard box," a report has now come to light that concludes that current supply of BioBanking credits are insufficient to offset the damage of the development. The report, conducted by EcoLogical Australia, notes: "The 644.4 hectares of clearing requires 37,010 credits, while the 887.0 hectares of biobank site [being supplied by the developer] generates 9607 credits. This results in a shortfall of 27,403 credits. The results show that between 2614.5 to 4107 hectares of additional offset is required to satisfy the offset required by the biobanking assessment."

  – Read more here

 
Official Launch of IPBES

The UN, at their most recent General Assembly, officially launched the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). The initiative has been in the works for some time, and intends to emulate the IPCC with a biodiversity bent. The IPBES will "assess evidence on the causes and effects of nature degradation, and policy options."

  – Read about the launch here

 
The Meta-Site of Biodiversity Priority Area Data

UNEP-WCMC has launched a new website on important biodiversity conservation areas, called the A-Z Areas of Biodiversity Importance http://www.biodiversitya-z.org/.  The site provides clear information on more than 30 different global classifications of areas of importance for biodiversity conservation. Want to see where Biodiversity Hotspots are? Ramsar Sites? IUCN Category IV areas? They're all here, and more. It's a party of global biodiversity priority area data.

  – Read a Press Release about the A-Z Areas of Biodiversity Importance

 
UN Adopts Resolutions on Coral Reefs and Marine Biodiversity

UN General Assembly’s Second Assembly has adopted a resolution on coral reefs that will encourage member States to take the necessary actions to conserve coral reefs, including mitigating damage from ocean acidification and climate change. However, the resolution, called “Protection of Coral Reefs for Sustainable Livelihoods and Development,” is currently non-binding. The Second Assembly also drafted language on marine biodiversity, voting to pass a resolution called “Oceans and the Law of the Sea”, that promotes technology transfer and capacity building in small islands and African States, but, despite its name, also forges no laws or binding commitments.

  – Read the story here

 
Moving Palm Oil to Already-Degraded Lands Saves Biodiversity

Degraded lands in tropical countries may hold the potential to help save remaining rainforests by shifting agriculture production to such lands in order to meet growing demand while minimizing impacts on forests and biodiversity loss. Norway began a billion-dollar partnership to reduce deforestation in Indonesia. Additionally, a project by the World Resources Institute (WRI) called POTICO (palm oil, timber, carbon offsets) is helping taking the first critical step towards utilizing these lands by providing land cover mapping.  WRI is placing a large focus on the palm oil industry where it is estimated that more than half of oil palm expansion has come at the expense of forests since 1990.  

Craig Hanson, the director of the People & Ecosystems Program at WRI, and Moray McLeish, the manager of Project POTICO at WRI, discuss factors that should be considered in order to guide decisions towards the best use of a degraded area: consultation with communities living near such areas, existing land and customary use rights, the degree of agricultural expansion on deforestation, food security in the region, risks of erosion near waterways, etc. WRI is also looking into a “land swap” approach to reduce deforestation and peatland degradation. This approach involves diverting planned palm oil plantations away from natural forests towards degraded lands.
 

  – Read more here

 
U.S MITIGATION NEWS

Former Georgia Governor Gets into Mitigation Banking

Former governor of Georgia, Sonny Perdue, has purchased 157-acres of land along the Soque River outside of Atlanta, with plans to turn the area into a mitigation bank. The strategy seems strange in a state where development has fallen in response to falling real estate prices; but Perdue may have a trick up his sleeve: the area may be part of Atlanta’s plan to “drought-proof” itself, after a federal ruling limited the state’s claim to water in Lake Lanier. Drought-proofing would mean building more reservoirs, which means permits needed to impact wetlands, which means demand for wetland mitigation bank credits. While the land cost $3.7 million, it is estimated that the bank could yield $6 million from mitigation credits. 

 

Read more here  

 

Proposed Wetland Bank in Clark County, Washington

A newly proposed wetland mitigation bank aims to restore a portion of the 500 to 600 acre Fargher Lake in north Clark County, Washington.  If state and federal regulators approve the creation of the wetland mitigation bank, it will be the county’s second state-sanctioned mitigation bank, organized and operated by Habitat Bank Inc. from Woodinville, WA. The lake was originally drained for agricultural purposes 80 to 100 years ago, and restoration would include disabling the current drain tiles.

Habitat Bank partner Victor Woodward stated that the company aims to purchase conservation easements on six parcels owned by three different property owners.  The company has invested $2 million so far in developing the concept and seeking permits for its banks at Fargher Lake and another previously approved bank at the Port of Vancouver.  If approved and successful, the bank at Fargher Lake, called East Fork Lewis Wetland Mitigation Bank, would have 91 credits for sale at a market determined price, between $125,000 and $150,000 per credit. By the time it sells out Woodward expects that the bank will clear more than $8 million.  

 

Read about the wetland bank here
 

Habitat Conservation Profits Developer, Worries Rice Farmers in Yolo County, CA

Rice farmers in Yolo County, California, are concerned about the possibility of some valuable agricultural land being turned into seasonal salmon and smelt habitat. The Yolo bypass, an area of low-lying land, currently provides flood protection to nearby agricultural lands. If it is turned into a dedicated habitat, it will likely be flooded more often and for longer periods, affecting the planting calendar of the area's farmers. County officials approved a plan by a developer from Sacramento, who would turn 4,000 acres into habitat in exchange for concessions valued at $2 million. And more concessions are likely needed in order to carry out the State's Bay Delta Conservation Plan, which would require the construction of a canal around the delta, with the impact likely offset by habitat credits from areas like Yolo County. 

 

Read more here

 
EVENTS

National Conference on Ecosystem Restoration

 The National Conference on Ecosystem Restoration has put out a call for abstracts for oral or poster presentations  (deadline: January 14) at the 2011 conference to be held in August.

 

Register and read more about the conference here

 

Seminar exploring Biodiversity Offsetting in the UK

The Parliamentary Office of Science and Technology will hold a seminar later this month that will bring together experts to discuss he risks and benefits of biodiversity offsetting in the UK.

Register here

 

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