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Payment for Ecosystem Services – Principles for the Road Ahead

The environmental crisis faced by every country around the world has brought the focus back on designing an economy with business creativity and solutions that protects the natural environment. This is extremely important towards the development of economy and the society. Leaders in the field of development, conservation, business and government are of the opinion that there is an immediate need to identify and design cost-effective methods that would not only protect the nature but also meet the demand of the growing global population.

Payment for ecosystem services (PES) is definitely the road ahead that would help in protection of the environment. PES can be designed by noprofits, businesses, individuals and even governments. It is estimated that the ecosystem services are speculated to grow over $100 trilliion dollar over the next one year. People would have to pay for nature’s services where nature would deliver its benefits to our society effectivelyy and at lower cost. However, with the increase in investments on nature, it is extrmely important that the buyer’s interests are protected. Buyers should be delivered what they pay for and at the same time nature should not be exploited. In order to achieve this, all the stakeholders (buyers, sellers and even the intermediaries) should understand how exactly the natural world works and delivers its benefits to individuals, businesses, communities and governments.

Here are six principles that can actually guide the payment for nature’s services:

  1. Get complete knowledge about the dynamics running the ecosystem – For instance, when it is the farming practice that has greater impact on water quantity or quality than the climate then payments should be made to encourage those practices. However, if the climate has a bigger impact then no such incentives are needed.
  2. Prior to making investments, documentation of the existing condition is imperative. This would help in assessing whether the payment is able to generate any benefit from nature or not.
  3. Monitoring the changes in ecosystem during the investment period. This would help in identifying the factors affecting the ecosystem, thus helping in understanding where to make the investments.
  4. Metrics should be established to support all future investment decisions.
  5. Identify each and every component within the ecosystem. For instance, planting trees will increase the carbon stocks but it can even decrease the availability of water. Itis imperative to find out the linkage among the components.
  6. The sustainability of every investment should be assessed vis-a-vis the changes in the ecosystem over a period of time.

The aforementioned principles help in balancing the scientific rigor by adopting a pragmatic approach while guiding a range of transactions in the ecosystem services. Future investments will be less risk and would also help negate the environmental crisis.

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