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Exploring ecosystem valuation to move towards net positive impact on biodiversity in the mining sector

by Rachel Stallings last modified Jun 03, 2015 10:11 AM
Contributors: Nathalie Olsen, Joshua Bishop, Stuart Anstee, IUCN, Rio Tinto

Executive Summary: Rio Tinto commissioned IUCN to estimate the monetary value of the expected biodiversity benefits of the rainforest conservation project. This study examines the costs of conservation, including up-front investment as well as maintenance costs of protected areas, together with the opportunity costs that local people bear when they lose access to land that has historically provided food and cash income in lean periods, as well as a resource for agricultural expansion. The ecosystem benefits considered here include wildlife habitat (US$2.9 million), hydrological regulation (US$470,000) and carbon storage (US$26.8 million). Potential ecotourism benefits (US$2.5 million) were excluded from the analysis as changes in regional tourism are generally expected to result in a reduction in tourism activity elsewhere in the country. The study found that there were significant net economic benefits associated with conservation (about US$17.3 million net of all costs), mainly due to carbon storage values. Many of these ecosystem service benefits accrue globally (e.g. wildlife habitat, carbon storage), while the costs of conservation are mainly borne by local communities, whose access to forest resources would be restricted under a conservation regime. The study underscored the need for, and potential scale of, compensation of local populations, for example through Payments for Ecosystem Services (PES). While the value of carbon storage is significant, local communities would need to receive about one-quarter of the potential revenues from Reduced Emissions from Deforestation and forest Degradation (REDD) to be disadvantaged by conservation and roughly half of the potential REDD revenues to be better off, compared to business as usual. More generally, the analysis showed how the economic values of natural assets can be included in business as well as environmental decision making.

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