Integrating ecosystem services into environmental decision‐making

Natural capital describes the stock of renewable and non-renewable natural resources available to society. From this flows ecosystem services, which are the societal benefits derived from natural capital. These highly influential ways of thinking about environmental management have been the subject of much debate among practitioners and academic ecologists. However, they have gained significant traction in key national environmental policy documents, including the Natural Environment White Paper and the 25 Year Environment Plan, policies in the devolved administrations, such as the Environment Wales Act (2016), and the establishment of the Natural Capital Committee. The UK is the first country (and still one of the few) to produce a national ecosystem assessment (UKNEA, 2011), in response to the global Millennium Ecosystem Assessment (MEA, 2005). The original classification proposed in the MEA (of supporting, provisioning, regulating, and cultural services) has been extended by the hierarchical classification of the Common International Classification of Ecosystem Services (CICES, 2018). The UKNEA placed a strong emphasis on creating instrumental knowledge - this is the knowledge that can be used immediately by policy makers. However, the take-up of such knowledge has been in institutions and organisations that have had existing concern for the environment, and there is little evidence that the UKNEA has provided significant operational support for decision-making. Major practical challenges remain for the implementation of an ecosystem services approach to environmental decision-making in the UK. Therefore, this paper is aimed at practitioners and academic ecologists who face challenges (Box 1) in developing an ecosystem services approach to decision-making. We use freshwater environments to illustrate these challenges. It highlights where collective research and action by the ecological research community and practitioners could lead to significantly enhanced ecological and societal outcomes. We define decision makers not just as public officials, but also those with a strategic role in other organisations that own or manage land or environmental resources including environmental NGOs, water companies, and other utilities. The paper is informed by discussions held at the British Ecological Society Annual Meeting1 held in Edinburgh, U.K. Following on from the MEA and UKNEA, a number of pilot projects have been undertaken that demonstrate how the messages from national and international assessments can be operationalised into decision-making. These are generally characterised by a strong focus on partnerships among private companies, public sector bodies, landowners, and communities to safeguard and enhance the delivery of ecosystem services. Many of these can be found in freshwater management where they have been adopted to help mitigate against the multiple pressures facing freshwater environments (e.g. habitat loss, climate change, and water quality). Innovation has been particularly evident in the water sector where privatised water companies, aiming to manage financial pressures and regulatory requirements, have implemented sensitive catchment management projects (e.g. Upstream Thinking and SCaMP; see Supporting Information for details) that have benefited the natural environment and the business practices of the water companies. The water industry regulator Ofwat has been involved in both projects, allowing investment to be made into land management practices. This represents a shift from a “polluter pays” to a “protector paid” approach. Ongoing monitoring to demonstrate the success of the first phases of the projects has been important in leveraging further funding for Upstream Thinking and SCaMP. The ways in which ecosystem services knowledge is integrated into decision-making is complex. Doing so requires an approach that differs from the typically top-down, technocratic, and linear processes that arguably characterises much UK policy making. A top-down approach is not well suited to the complexities and multiple definitions inherent in the ecosystem services concept, which benefits from more iterative decision-making and flows of knowledge among stakeholders (Ruckelshaus et al., 2015). The UKNEA was expected by decision makers to provide a robust framework for implementing an ecosystem services approach, but this potential was limited because it was not targeted towards specific groups of stakeholders (Waylen & Young, 2014). Stakeholders often exist in separate silos of policy and practice. Silos accommodate particular institutional, political, or structural norms within them, which define the activities of organisations and may make interaction between them difficult (Serageldin, 1995). Integrating ecosystem services into decision-making requires effective working between and within silos. In government agencies, silos may also arise because of separate career tracks existing at local and national levels, meaning that integration between high-level policy makers and local-level decision makers can be difficult to achieve. Planners in local government have little exposure to decision-making in the Department for Communities and Local Government, making it difficult to feed the professional experience gained through “on-the-ground” activities into strategic decision-making. Efforts to take an ecosystem services led approach to decision-making must therefore overcome a variety of ideological, structural, and organisational issues. Ecosystem services arise through combinations of abiotic and biotic factors, and are therefore defined by the geography of land use, soil properties, water availability, and species distribution. These patterns are typically not aligned with administrative boundaries or districts that are the spatial units of decision-making. The beneficiaries of some services may be geographically distant, and some ecosystems (such as river and wetland systems) may span different jurisdictions. However, the ecosystem service concept encourages decision makers to accrue specific benefits to defined geographic areas. A hallmark of successful ecosystem services projects is ensuring that the nature and purpose of boundaries (geopolitical, of ownership, or management) are understood and then successfully overcome. Decision-making should be done on scales comparable with the ecosystem service. Hauk, Görg, Varjopuro, Ratamäki, and Jax (2013) argue that ecosystem service benefits are oversimplified at high levels, but regional and local implementation is more complex. Services from which global society benefits (carbon storage, biodiversity conservation) are best safeguarded by decision-making at an international level with effective local implementation. Where benefits are accrued primarily to local populations, decision-making on a more localised spatial scale (local authority, neighbourhood) is more appropriate. A local wetland nature reserve may be managed to deliver high biodiversity services in line with national government priorities, but if the public are excluded from the site in order to manage species and habitats more effectively, the public benefits of the ecosystem services are reduced. Practitioners would therefore benefit from better ways to engage with regional or national strategic policy making, to enable local trade-offs to be made that do not compromise wider ecosystem service strategies. Land-use configuration can also alter the supply of and demand for ecosystem services. Demand for recreational, amenity, and flood alleviation services is often higher around towns and cities. Focussing urban developments on land adjacent to existing settlements at the expense of ecosystem service provision can meet demands for housing and industry. However, allowing a degree of land sharing (deriving multiple uses from land parcels) is a more effective way of aligning service supply with service beneficiaries (Stott, Soga, Inger, & Gatson, 2015). There is also evidence that the spatial configuration of habitat types can alter ecosystem service provision. Some ecosystem services are best delivered by patchworks of semi-natural habitats (pollination), yet other services (biodiversity conservation) are maximised by landscape-scale networks (Chan, Shaw, Cameron, Underwood, & Daily, 2006). The extent to which these principles can be used to inform decision-making may be limited as land-use configuration is, in part, dependent on the legacy of previous development, shaped by designating protected areas or existing development permissions. There is an opportunity to enhance urban biodiversity through strategies that do not materially alter business practices or land use, such as through widespread uptake of small scale “greening” features (Frantzeskaki & Tilie, 2014). One factor contributing to the success of Upstream Thinking and SCaMP is that uplands are owned by fewer landowners (sometimes also including the water companies) making consensus on land management strategies easier to reach. However, at the catchment scale, and particularly in lowland areas, it is likely that more landowners have a stake in ecosystem service strategies. The use and provision of ecosystem services varies over time as well as space. Provisioning services tend to become less valuable as countries develop and greater value is placed on regulating and cultural services. In the UK, the Forestry Commission has become increasingly concerned with the recreational and cultural benefits of forest tourism as the economic value of timber has declined. Some ecosystem services, such as carbon storage, are generated over timescales that are longer than the normal life cycles of policies. The benefits of these may be difficult to integrate into decision-making, as the benefits are only realised in several years or decades time and not aligned to short-term policy and funding cycles. The Natural Capital Committee advocate viewing investment into ecosystem services projects the same as traditional infrastructure investment, to focus attention on the long timescales over which many services are delivered. Many toolkits have been produced to help decision makers adopt an ecosystem services approach to decision-making. The process of producing a toolkit can itself be an important part of dialogue among stakeholders. However, developing detailed toolkit outputs typically requires extensive time and resources due to their requirements for data, and their development may take too long to influence decision-making. Relatively simple toolkits may best support decision makers and be most time effective to use, but oversimplified or inflexible approaches can reduce the value of the outputs (Ruckelshaus et al., 2015) or increase the likelihood of some potentially important biophysical processes being overlooked. Practitioners are faced with a bewildering array of ecosystem services toolkits; the need for a “tool-assessing tool”2 highlights the proliferation of them, and the current difficulty in repurposing existing tools to new situations with different levels of knowledge, understanding and required output. The UKNEA argues that the natural world is consistently undervalued in conventional economic analysis, and that financially valuing natural resources will enable greater weight to be given to them in decision-making. Financial valuation can bring in new sources of finance to environmental management, such as private investments, as seen in the emergence of carbon markets. A notable success of market-based approaches is the global effort to reduce the hole in the ozone layer. The Montreal agreement imposed a cap on the total amount of damaging emissions which reduced over time, and allowed emissions trading within the cap, creating a financial incentive for manufacturers to innovate and create replacements for ozone depleting chemicals. Despite the potential of market-based mechanisms to enhance ecosystem services, a number of practical and ethical challenges exist. Critics of market-based approaches contend that biodiversity is devalued by monetisation and it needs legal protection from market forces, not exposure to them. Practically, market mechanisms can lead to: short-termism; focusing on a single ecosystem service at the expense of others; and in some cases reliance on non-native species to deliver that service. Market-based mechanisms are short-term compared to adding a protected area to national land bank or other legal protection: Silvertown (2015) uses the example of coffee plantations in Costa Rica. The coffee plantations benefit from wild bird populations that live in small areas of woodland, having much lower levels of coffee pests and diseases. However, because the value of commodities changes over time, when the price of coffee fell dramatically farmers stopped growing coffee and switched to growing pineapples. The forest patches that supported birds were not so beneficial for pineapples, leading to their removal, and a resulting loss of biodiversity. Market-based approaches tend to favour single ecosystem services rather than multiple benefits (Muradian & Rival, 2012), because marketisation leads to itemisation of services to create distinct, tradable “commodities.” One solution to this is bundling together services, where a package of complementary and related services can be traded as a single commodity. However, this has been criticised as it may lead to inadvertent trade-offs within bundles and some services being overlooked (Kosoy & Corbera, 2010). If proxy measurements are used to decide the value of services, rather than measurements of the service itself, multiple benefits are more likely to occur: planting a biodiverse, mixed woodland compared to a monospecific woodland exclusively with a high water consumption species to reduce flooding both accrue the same proxy value (area of land planted). Even though the flood reduction effect of the monospecific woodland may be higher, the mixed woodland provides multiple benefits due to its enhanced biodiversity value. However, experience from agri-enviroment schemes shows that proxy payments to land managers for actions such as planting hedges or filling in drainage ditches can stifle innovation in land management practices, and discourage landowners from developing context- or location-specific approaches (Jack, Kousky, & Katherine, 2008). Encouraging innovation and adopting the most cost effective approaches are key benefits of following market-based incentives, and are limited by proxy payment schemes. One of the challenges facing academics and practitioners is ensuring that a robust evidence base is built that bridges the gap between management actions and ecosystem service outcomes. Markets function best when there is a good level of knowledge held by those both buying and selling (as illustrated by the 2007 sub-prime mortgage crisis). Levels of confidence in knowledge about ecosystem services are relatively low among both land managers and those working in statutory agencies, and strikingly only 3% of freshwater ecologists expressed confidence in their knowledge of ecosystem services.3 Ecosystem functioning is complex and unpredictable, and factors such as unusual seasonal variations and disruption from extreme weather events can make determining appropriate payments difficult. Ensuring payment effects change in landowner practices requires a careful balance between the amount paid, and the financial advantage of less environmentally favourable practices (Muradian & Rival, 2012). Payments need to be sufficiently beneficial to landowners to effect change, although these amounts are usually modest compared to the financial benefits that derive from say, effective flood prevention (Muradian & Rival, 2012). Furthermore, as Baker (2018) reflects, one policy implication of Brexit will be the greater emphasis placed on delivering a full range of public benefits (including air quality, soil conservation, animal welfare) that extend beyond the current limited, conservation focussed objectives for agri-environment schemes. The extent to which this full range of public benefits can be valued is complicated and often highly uncertain. The need for incorporating well designed and effective monitoring to evidence the effectiveness of land management approaches, and mechanisms to measure the value of other benefits, is a key challenge for practitioners and academics. One final challenge concerns the morality of market led mechanisms. use has been as part of wider about climate change policy and delivering just outcomes. a flood protection that and in the of may a more financial than one that and in the of where are valuation of not take into the on by are and are often about the benefits of market-based approaches because of public against of The public could be by the financial of market-based which is from the interaction that have with the natural about and financial capital can to Furthermore, in which service trade-offs lead to the loss of some services can be difficult. 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