Trading the environment in the marketplace

“It’s the economy, stupid!” said Bill Clinton once. Economics is all pervading, even in environmental management. This is because the environment is an asset and  has value. The value can be quoted in direct as well as indirect terms. Our Marine Parks provide direct financial benefits through entry fees, private sector profits and employment. The Morne Seychellois National Park provides benefits such as water catchment and filtration. Coral reefs provide both direct benefits in supplying fish as well as other benefits such as coastal protection and formation of beaches.
If parts of the environment have value, can they be traded? Yes they can, and in fact this is an approach to environmental protection that has been under development in the US and Europe since the 1980’s. The approach goes beyond current financial benefits such as entry fees to national parks and natural areas like the Valle de Maie.

A market-based view of what is now being labeled as “ecosystem benefits” is supported by environmental organisations like The Nature Conservancy (TNC) in the US and also business groups such as Citigroup and the reinsurance company, Swiss Re. In developed countries many of the environmental assets result from international and national laws such as those which try to limit greenhouse gas emissions, thus leading to trading in carbon credits.

But in countries like Seychelles there are other options such as “biodiversity banks”. In the United States these “banks” have been used since the late 1980’s where land developers pay for the preservation and maintenance of sensitive habitats in compensation for the environmental impact they cause elsewhere. In the US, the land protected through these transactions amount to more than half a billion dollars.

A similar approach is called “conservation incentive agreements”. This is where conservation is guaranteed for a defined geographical area through a legal agreement in exchange for a package of benefits. An example is found in the Solomon Islands, where some communities knew they were over-harvesting marine resources. They made a large marine and land area into a reserve.  In exchange, TNC provides training and salaries to local community members to undertake protection and monitoring   TNC is now establishing a trust fund to ensure there is sustainability.

In Seychelles, these approaches are well in line with the policy of the government for privatization of activities. In fact the Environmental Management Plan of Seychelles has programs that look at the initiation of environmental management as part of the economic marketplace. We are half way through the Plan period. All that remains is for further elaboration of these activities and for implementation to take place in collaboration with stakeholders.

By Nirmal Jivan Shah, published on the People Newspaper, Seychelles

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