Chains can restrict or they can connect

Humans harvest a nearly incalculable amount of goods from natural resources. Every one of these commodities is available—for a price. But what about the services nature supplies?

Conservation efforts are increasingly aligning themselves with the concept of placing monetary values on the benefits we get from ecosystems. The dominance of this line of thought can be seen through the rising interest in carbon offset schemes.

Frank Hajek is the executive director of Nature Services Peru, an organization that pursues the implementation of sustainable management programs. Much of his life’s work has been focused on the particulars of how these value schemes are being constructed, including his presentation at this year’s 2015 Global Landscapes Forum Social Reporting Bootcamp.

We already have the infrastructure to determine prices for the tangible products we get from nature. But this emerging desire to quantify the more intangible processes, such as carbon sequestration, present development programs with an amazing opportunity to address how benefits are being distributed. The most important thing to now, explained Hajek at the Social Reporting Boot Camp, is to understand precisely how, “current ecosystem value chains look.”

Take, for example, an apple as a product. The soil, tree, pollinators, water tables, and other natural processes can provide the product for free. To distribute the product, however, the landowner must provide access to the tree, and workers must collect and distribute them to market. Each participant in the supply chain is factored into the ultimate market cost of the apple.

But what about services that are already distributed for us by nature? Take, for example, carbon sequestration or flood prevention. A standing forest provides these services naturally, and the benefits are already distributed to local and global populations. Theoretically, this implies a huge savings in costs, but can lead the market to encourage ecosystem service-damaging actions like deforestation.

Because Nature Services Peru focuses on capacity building with the communities they work with, Hajek advocates for greater returns to be delivered out of this savings to the holders of the ecosystem-service assets themselves—the people maintaining these wildly important landscapes. Discussions about the importance of these efforts are present in programs like REDD+, but they tend to revolve around constructing a legal framework to guarantee that the money circles back.

Hajek’s point is that we need to pay special attention to “the way the value [chain] is being set up,” because the format, “will determine how much money can go to the base of the pyramid: the forest owners.” There are so many intermediary actors involved in the carbon credit value exchange. If we can’t address this, says Hajek, “it is unlikely that a high percentage of the benefits from forest carbon credit markets will reach the base of the pyramid.”

So when considering form and function in climate change mitigation and development programs, this insight reveals just how powerful structure is. It also reminds the actors trying to connect carbon offsetting benefits with local communities equitably to first count on the links in their chains to reveal just how strong, and effective, those ties will be.