External stressors: Overlooked threats to PES schemes

by Hannah Watson

 A fire rages, not only clearing large swathes of forest, but also threatening a protected area nearby. Managers are largely powerless to control the fires outside their site boundaries.

A new dam is constructed on a river, starving a downstream protected wetland of the sediment and nutrients it needs to survive, so that it is less able to contribute to local fisheries.

These cases exemplify a set of ‘hidden’ threats that many conservationists face: Events that occur outside the borders of their immediate control. Even when an individual site is protected and well managed, outside activities can have profound effects on its maintenance and permanence. External stressors like forest fires, pollution, sea-level rise, ocean acidification and invasive species, can have profound environmental impacts on a protected site over the short to long term.

A recent paper, led by the National University of Singapore and Center for International Forestry Research (CIFOR) argues that project-level conservation activities must do more to contend with these types of external events.  In particular, the authors highlight the importance of these external stressors on the design and functioning of Payment for Ecosystem Services (PES) schemes.

PES schemes at risk

PES schemes seek to identify and eliminate threats to ecosystems by providing new incentives for conservation. However, external stressors can put these projects at risk. Although little attention has been paid to these types of threats in the past, Friess et al. explain why it is imperative that they are evaluated, and where possible, avoided, mitigated or accommodated.

External stressors, the authors argue, introduce new types of risk for PES beneficiaries, recipients and managers that have been largely overlooked in policy and scheme design.

PES generally requires sustaining a target ecosystem service over time. In their article, the authors explain through a number of case studies how external stressors may affect an ecosystem service targeted by a PES scheme. In the case of forest fires, an external fire that starts on adjacent agricultural land may sweep through a REDD+ forest carbon project, putting carbon stocks – and the money invested in protecting them – at risk.

PES also generally requires the clear identification of scheme participants (e.g. service providers and buyers), which can be complicated by external stressors. When the stressor is diffuse for example in catchment-scale agricultural pollution, it can be challenging to identify who should be paid to reduce a stressor affecting the target ecosystem service. These issues can vastly complicate the administration and implementation of a PES project, so costs may be drastically underestimated if risks posed by external stressors are not taken into account at the onset.

Author Daniel Friess explains that, because there are often financial exchanges involved in PES, the risks associated with external stressors can have implications for both conservation and financing. Where external stressors impact the provision of ecosystem services, they thus also impact any schemes that seek to pay for those services. “This raises questions about financial liability. Who should be paid, and how can PES schemes be optimally designed under such conditions,” he says.

Types of stressors

External stressors impact ecosystem services in terms of three variables: origin, spatial scale and temporal scale. Origin refers to the original source of the stressor. While it is relatively simple to identify point-source origins such as a local sewage outflow, it can be challenging (or impossible) to determine exact sources of more diffuse stressors such as agricultural pollution or ocean acidification. The spatial scale of stressor impacts can also vary; events such as fires may be comparatively localized and restricted, while stressors such as air pollution are less likely to be limited by geographic boundaries.

Finally, the impacts of stressors become evident over different time scales. Although some impacts, such as those caused by sea level rise, are experienced at a slow rate others manifest themselves immediately (e.g. fire or extreme weather events) and are potentially of more pressing concern to managers.

South Africa’s fynbos scrubland is a biodiversity hotspot and provides a number of ecosystem services, including water provision and erosion prevention for the surrounding communities. However, the area is increasingly threatened by a number of invasive species that are altering the local vegetation and affecting the flow of valuable ecosystem services.

Here it is challenging to identify the precise stressor origin, as invasive species – including fast-growing trees for timber, hedgerow shrubs, and ornamental plants – are being introduced at numerous locations and at different points in time. The spatial scale of this particular stressor is wide-ranging; invasive species have affected over 10 million hectares and continue to spread, although the temporal scale of this spread and its impacts varies among species. This combination of stressor characteristics makes fynbos management decisions challenging, and requires an understanding of how invasive species are likely to proliferate in future.

Integrating external stressors into conservation planning

The introduction of invasive species and the occurrence of fires are often beyond the control of individual site managers, including those managing PES schemes. Yet, the authors suggest that external stressors must be better evaluated and, when possible, mitigated or accommodated.

Strategies such as Environmental Impact Assessments and Stressor Evaluation Models could help implementers to identify appropriate sites for PES schemes and anticipate potential external threats to those areas in advance. These tools can help to identify how fires or invasive species are likely to impact ecosystem services targeted through PES.  Risks can then be mitigated by means of broader, landscape-level evaluation and national-level planning to better account for external impacts.

In addition to this, financial instruments such as third party insurance, Special Purpose Underwriting Vehicles and credit buffers can be used to accommodate the impacts of stressors that cannot be mitigated. Some of these options are being utilized in isolation, though a combined evaluation-mitigation-accommodation framework may be needed in high-risk environmental settings.

Also see Payments for environmental services: some nuts and bolts