Towards a Global Portfolio of Marine and Coastal Payment for Ecosystem Services

Winnie Lau, Marine Ecosystem Services (MARES) Program, Forest Trends

Depending on the definition of payment for environmental services (PES), some would say that there is already a good number of marine and coastal PES examples, while others would say that there is  still no true example of marine or coastal PES. Definitions aside, this dialogue reflects the fact that marine PES exploration has already begun.

The success of PES in the terrestrial setting as both a management and financing strategy, e.g., carbon payments and payment for watershed services, has prompted marine and coastal resource managers and conservation practitioners to examine the applicability of PES in marine and coastal settings.  Marine and coastal environments continue to be degraded despite increasing awareness and efforts while the funding gap between what is needed and what is actually being invested continues to grow. PES shows promise to be an innovative tool that can complement conventional coastal and marine resource management strategies and also serve as a source of sustainable long-term financing.

The biggest hurdle for developing marine and coastal PES and other incentive-based mechanisms has long been thought to be the open access, or lack of tenure, issue for marine and coastal resources. However, recent innovations in resource management and resource rights allocation are helping redefine “tenure” in marine and coastal ecosystems. For example, community-based natural resource management regimes, public-private co-management arrangements (e.g., concession agreements), resource use rights allocation (e.g., Territorial User Right Fisheries or TURFs), and marine spatial planning/ocean zoning are beginning to codify the use and access rights to these “public” goods that will allow for PES to develop.

At the same time, our understanding of marine and coastal ecosystems and the services they provide have reached a point where the science is sufficient for designing PES. There is a growing body of scientific knowledge on the ecosystem services provided by critical habitats, such as mangroves, coral reefs, sea grass beds, and salt marshes, and the flow of services among connected habitats. Accordingly, there is also a growing body of knowledge around the economic values of these services. The Marine Ecosystem Services Partnership (www.marineecosystmemservices.org), a newly launched collaboration of over a dozen partners, will be a one-stop resource for accessing economic valuation information.

Services that are particularly ripe for testing of PES design and development include: “blue” carbon (carbon in coastal and marine environments) storage and sequestration, fish nursery habitats, marine biodiversity, coastal protection, beach maintenance and production, and coastal water quality. There is great potential for the existing terrestrial carbon market mechanisms, such as the voluntary carbon markets and REDD, to be applied in coastal habitats, such as mangroves that appear to store as much as or more carbon in the trees and soil than Amazonia rainforest (on a per area basis). There is also great potential to develop incentives, e.g., insurance premium discounts, to conserve habitats that protect coastal areas from storms and floods, which are predicted to be more frequent and more intense due to climate change. Examples of the tourism industry involved in PES and PES-like schemes for the protection of marine biodiversity and the habitats that contribute to beach formation already exist, and pilots that couple the tourism industry with the fishing community are emerging. Using the model of payment for watershed services, water quality trading in estuarine and coastal waters is being looked at as a mechanism to protect human health and seafood safety as well as a mechanism to implement the “ridge-to-reef" approach to managing the connections between land and sea.

Various groups in Latin America are already embarking on developing marine PES pilots; three examples by colleagues in Mexico and Colombia are featured in this newsletter. Others organizations in Panama, Costa Rica, Ecuador, and Brazil, are also starting to explore marine PES. These experiences from Latin America together with pilot projects being designed in other regions of the world will compose a global portfolio of marine and coastal PES projects. The eventual goal is to build from these smaller, one-off projects and scale up to bona fide environmental markets for marine and coastal ecosystem services. It is an exciting time to be working at the forefront of this emerging field.