26 March 2014 — A growing number of countries including China are working out how to measure and price natural capital, a report from not-for-profit organisation Business for Social Responsibility shows, though Australia is lagging behind.

Global Public Sector Trends in Ecosystem Services 2009-2013 tracks the public sector’s uptake of the ecosystem services approach around the world.

In China, a state level eco-compensation program resulted in Henan Province transferring US$648,824 to Anhui Province for remediation after polluted water from Anhui reached the downstream city of Bozhoua, the report says.

In Colombia, the Ministry of Environment established new regulations in 2013 that included a scheme of payments to individuals who own land in key areas for watershed protection. The payments are based on the opportunity cost of ceasing crop growing and grazing, and the funds are generated by payments from municipal and departmental entities, which are now required to spend at least one per cent of their income on acquiring land for water conservation.

But Australia is lagging.

In terms of progressive mechanisms, none are detailed for Australia. The only work to date mentioned by the BSR team was an Australian Bureau of Statistics Information Paper: Towards the Australian Economic Environmental Accounts, which outlines the range of ABS environmental accounts including waste, water and energy, and explains how environmental accounts could inform public policy.

The report says:

“Our research shows that public sector exploration of ecosystem services concepts is on the rise globally… It is not surprising, therefore, that public sector funds are increasingly available to define, measure and map ecosystem services, as well as apply the concepts in decision-making processes. We anticipate that such activity will continue to expand in the coming years.

“In 2013, ecosystem services activity expanded to new countries, such as on the African continent, and there was growing engagement around payments for ecosystem services and a deepening of efforts in Europe and North America.”

The BSR research group’s definition of ecosystem services is based on the 2005 Millennium Ecosystem Assessment, which divides these into four types:

  • Provisioning services – such as wood, fresh water and food
  • Regulating services – natural processes which regulate ecosystem services such as natural water purification, climate regulation, disease management
  • Cultural services – non-material benefits such as recreational, spiritual, aesthetic and educational benefits
  • Supporting services – functions which maintain all others including nutrient cycling, soil creation and primary production

See the full report here.