Climate scientists are confident that warming and sea level change will continue for centuries because of their knowledge of the carbon cycle in the case of carbon dioxide and of the lifetime of other Green House Gases (GHGs) in the atmosphere. For example, the lifetimes for methane and hydrochlorofluorocarbon-22 (as a representative of these types of chemicals) is about 12 years and for nitrous oxide about 110 years. The concentration of any GHG in the atmosphere depends on how much of the gas is being added to the atmosphere in comparison to how much is being removed. Therefore, for these substances (excluding carbon dioxide), it is not difficult to calculate the atmospheric concentration that would result from a reduction in the emissions of the gas. Stabilization and even a return to preindustrial levels (if emissions are eliminated) are possible within decades or a few centuries for substances with a short atmospheric lifetime.

However, this is not the case with carbon dioxide, for which an atmospheric lifetime cannot be calculated. Unfortunately, carbon dioxide is by far the most important GHG. Until the age of industrialisation, the concentration of carbon dioxide in the atmosphere was maintained over the long term at a roughly constant level (approximately 280 ppm) through the carbon cycle, which involves gas exchange between the atmosphere, the ocean and the lithosphere and which is made up of slow and fast components. At present, the oceans are absorbing much of the “excess” carbon dioxide we are adding to the atmosphere – but not all. About 20% will remain in the atmosphere for many millennia.

What about that 375 billion tonnes of carbon that humankind has injected into the atmosphere through our CO2 emissions since the beginning of the Industrial Revolution? The oceans are a very significant component of the carbon cycle. In fact, the oceans are thought to have already absorbed about 48% of the carbon emitted to the atmosphere from anthropogenic sources between 1800 and 1994. However, carbon dioxide absorption by the oceans is a slow process.

The phrase “Arctic Messenger” is taken from a conference held in Copenhagen in May 2011 and organised by the Arctic Monitoring and Assessment Programme (AMAP), the University of Copenhagen and Aarhus University. In this book, I imagine the Arctic Messenger as a living entity– a harbinger that possesses omnipotent consciousness. It is of enormous age and experience, akin to the Sumerian Utnapishtim or the biblical Methuselah. Our messenger is able to tell us about its (the Arctic's) well-being and to warn us that in the past, the global ecosystem has always been astonishingly sensitive to geophysical changes in the Arctic.

This chapter takes a quick look at the breadth of environmental issues that are eroding the Arctic that was and the Arctic that is now. It is therefore an introduction to the Arctic Messenger and a rough summary of what is to come in later pages. I hope it will tempt you to read on.

About 10–13 million people live in the entire Arctic region. Between 1.5 million (Arctic Council Indigenous Peoples Secretariat) and 0.4 million (United Nations Permanent Forum on Indigenous Issues) are indigenous. The Arctic environment is their home, their source of food and the foundation of their culture and spirituality. It is part of an extended soul that binds atavistically through their ancestors into the deep past and outwards into the living world. It is a psyche that outsiders can admire and respect but never acquire. Arctic indigenous peoples are, quite simply, an intimate part of their natural Arctic ecosystem. However, they do not enjoy an existence disconnected to the rest of the globe, and for the last 60 years, they have faced an incremental tide of environmental dangers flooding from the industrial world.

Before starting this chapter, I have to admit I have no educational expertise. To share my thoughts on education is presumptuous or foolhardy or hazardous. It is probably all three. However, I am going to take the risk. I firmly believe that the importance of environmental education cannot be overestimated. Three aspects really surprise me when talking to non specialists about the state of the Arctic environment and of its implications to the environments in which most of us live. The first is the general public's high level of interest in the Arctic. The second is how little many people know about the Arctic and environmental sciences in comparison with their understanding of topics that are more demanding on the mind. The third is the widespread reach of many misconceptions about the state of the Arctic and global environments.

As global society moves deeper into the twenty-first century, it is clear that socioeconomic models of the last two centuries are unsustainable. Our globe has limited resources and limited capacity to deal with our persistent wastes. Developing countries are determined to gain their fair share of global resources and attain lifestyles presently only enjoyed in developed countries. Our unrelenting use of hydrocarbons to power our economies is fundamentally altering Earth's climate system in a way that will be difficult to reverse. At the same time, the global human population is increasing. It grew from 1 billion to 7 billion between 1800 and 2011 and it will hit 8 billion by 2025. It will pass 10 billion in 2040. We are entering unknown territory. We do not know what all this will mean. However, it is clear we are exceeding the capacity of our planet to support the implied future utopian global economy and its ability to recycle our wastes.

The troposphere, the stratosphere and the polar vortex:

There are only two layers of the atmosphere we need to think about in this discussion: the troposphere and the stratosphere. The troposphere extends upwards from Earth's surface to an altitude of about 18 kilometres over equatorial regions and to about 8 kilometres over the High Arctic and Antarctic. The upper boundary is known as the tropopause and is the altitude at which air ceases to cool with height. Above the tropopause lies the stratosphere, where temperature increases with altitude. This is caused by the presence of the ozone maximum layer at an altitude of between 15 and 35 kilometres. Stratospheric ozone is formed naturally at these altitudes, where solar ultraviolet radiation breaks oxygen (O2) molecules into free oxygen atoms that are then able to combine with intact oxygen molecules to produce ozone (O3). Ozone in the stratosphere absorbs solar UV radiation. Therefore, the stratospheric temperature gradient runs in the opposite direction to that seen in the troposphere, which is warmest close to Earth. This temperature trend is part of the definition of the troposphere (cooling with height) and the stratosphere (warming with height). The upper boundary of the stratosphere (the stratopause) lies at an altitude of about 50 kilometres. Above this level, temperature decreases with altitude out into space.

The stratospheric polar vortex is a large-scale region of low pressure air that is constrained by a strong west-to-east jet stream that circles the polar region. It usually has two centres: one over Baffin Island and the other over north-east Siberia. The polar vortex extends from the upper troposphere through the stratosphere. Low values of ozone and cold temperatures are associated with the air inside the vortex, which acts as a barrier to prevent the movement of air from the South.

Coriolis effect:

Earth rotates towards the east, but the velocity of rotation varies according to latitude on Earth's surface.

When scientists in North America, Europe and the Soviet Union were beginning to detect and understand the causes of freshwater and terrestrial acidification, another potentially more serious problem (especially for the Arctic) was slowly being recognized: The stratospheric ozone layer that protects us all from the harmful effects of solar ultraviolet light was thinning.

Before we go further into this part of the Arctic Messenger's story, we need a basic understanding of the behaviour and nature of oxygen and ozone in the stratosphere. Oxygen can exist in three forms. Most commonly, it occurs as a molecule made up of two oxygen atoms (O2). However, it can also occur alone as a single atom (atomic oxygen) or as a molecule of three oxygen atoms (O3). This is ozone. In the stratosphere, highly energetic shortwave ultraviolet radiation from the sun can break O2 molecules apart into lone oxygen atoms. When one of these free oxygen atoms bumps into an intact O2 molecule, it can join up with the molecule to form ozone. However, a cascade of chemical and physical processes involving solar radiation and a number of naturally occurring compounds containing nitrogen, hydrogen and chlorine also continually break down stratospheric ozone. Therefore, the amount of stratospheric ozone present at any moment in time is the result of a dynamic process of production and removal.

Why Is Stratospheric Ozone Important?

Stratospheric ozone absorbs solar ultraviolet radiation (UV), which warms the stratosphere. More importantly, this absorption acts as a sort of filter. The ozone allows only a relatively small proportion of the highly energetic UV radiation to reach the troposphere below.

Introduction

Ecosystem services for the benefit of people are to a large extent determined by the functioning of the ecosystems involved. When taking the classification of the MEA (2005), it is apparent that provisioning services, such as food and water supply, are directly related to quantities (of energy, water, and other substances) and quality (e.g. food quality or drinking water quality) delivered by ecosystems. Also supporting services, such as nutrient cycling, directly relate to quantity and quality of particular ecosystem processes (de Bello et al., 2010). To a lesser extent, this is also true for regulating services such as flood or fire control and cultural services. These latter two categories might be more directly related to the stability and biodiversity of ecosystems (as described in Chapter 2 of this book); see Figure 3.1.

So, in order to predict and quantify provisioning and supporting services, we need to understand the quantity and quality of products delivered by ecosystems. In other words, we need to understand how ecosystems function. While most of the literature on the valuation of ecosystem services so far has mainly focused on the quantities delivered by ecosystems, we will show in this chapter that quantity and quality are intimately linked through the properties of the species living in the ecosystems and their behavior.

Introduction

All organisms respond to and change their environment to a greater or lesser degree. This interaction affects their survival and that of other organisms. Humankind is no different: it has responded to and altered its environment. For example, humans burn landscapes and domesticate plants and animals (Schleidt and Schalter, 2003; Archibald et al., 2012). However, unprecedented in the history of our earth is the extent of environmental changes brought about by this single species (Haberl et al., 2007; Rockström et al., 2009a; Klein Goldewijk et al., 2011). Our presence is identifiable everywhere on earth, thus, the current geological epoch has been dubbed the Anthropocene (Steffen et al., 2007) and humankind exploits all earth’s ecosystems, whether seemingly pristine like the vast ice fields of Antarctica and the high seas of the open ocean, or highly modified and regulated, like the terraced rice fields of Asia or dykes of the Netherlands.

Ecosystems provide us with a range of goods and perform services without which humans would go extinct. While some ecosystems have been optimized by humans to deliver and sustain a specific service, few services have been fully incorporated into a market economy whereas several are being depleted without societal appreciation (Fisher et al., 2008; Rockström et al., 2009a; Bateman et al., 2010). The notion of imminent depletion has led concerned scientists to draw up the MEA (MEA, 2005). The MEA analysed the present condition of the earth’s ecosystems as an integrated product of changes in biodiversity, environmental change, and their effect on ecosystem services. The assessment concluded that much of the gain in economic growth and human well-being over the last century has been possible because of large-scale exploitation of the services that natural ecosystems provide. The resulting degradation of ecosystems and loss of biodiversity is thought to diminish future use of ecosystem services and to endanger our planet’s sustainability. Rockström et al. (2009a) have framed this in the form of eight planetary boundary indicators that together depict a safe operating space for humankind (Figure 2.1). For many indicators the world is considered to be “close to the edge,” and among these biodiversity loss was judged to be the furthest outside the planetary boundary.

Introduction

Ecosystems provide important commodities and environmental benefits to society. As such, the management of ecosystems is an economic, social, and political issue encompassing all sectors of an economy. It involves trade-offs between competing uses and users, as well as between additional economic growth, ecosystem protection, and further natural resource depletion and degradation. Any particular use of ecosystems has its opportunity costs, consisting of the foregone benefits from possible alternative uses of the resource, including non-use. Decision-makers are faced with balancing these varied resource uses, for example, between freshwater demands from agricultural irrigation on the one hand, and the desire to protect rivers for fish and wildlife habitat on the other hand. Striking a balance between the trade-offs of economic growth and ecosystem resource use, possibly leading to their degradation and depletion, is crucial for the sustainable management of our natural resources. Economic valuation contributes to an improved natural resource allocation by informing decision-makers on the full social costs of ecosystem exploitation and the full social benefits of the goods and services that healthy ecosystems provide. This chapter addresses the various dimensions of economic and social value, before explaining the different valuation and evaluation techniques in Chapters 6 and 7, respectively.

Introduction

Various valuation methods exist and have been applied to estimate the values of different ecosystem services. The methods reflect the extent to which the services provided by ecosystems touch on the welfare of society either as direct determinants of individuals’ well-being (e.g. as consumer goods) or via production processes (e.g. as intermediate goods). The aim of this chapter is to provide an overview of available valuation methods, to discuss their advantages and disadvantages, and to provide guidance on when to use which method. In doing so we do not aim to be comprehensive; extensive details of the underlying theory and on the actual practice of applying the valuation methods are provided in general texts, including Braden and Kolstad (1991), Freeman (2003), Bateman et al. (2002), Mitchell and Carson (1989), Champ et al. (2003), Bockstael and McConnell (2007), and Kanninen (2007).

A number of economic valuation methods have been developed to estimate the value of changes in ecosystem services. An important distinction is between market-based and non-market-based valuation methods. Market-based valuation means that existing market behavior and market transactions are used as the basis for the valuation exercise. Economic values are derived from actual market prices for ecosystem services, both when they are used as inputs in production processes (production values) and when they provide direct outputs (consumption values). By observing how much of an ecosystem service is bought and sold at different prices, it is possible to infer directly how people value that good. Examples of market-based methods are the use of direct market prices, net factor income and production function methods, and the calculation of replacement costs, defensive expenditures, and avoided damage costs.

Introduction

After the previous chapters surveyed a wide array of policy instruments for governing ecosystem services at the global level, this chapter scrutinizes one specific approach to governing ecosystem services, public–private partnerships (PPPs) for sustainable development. PPPs have become a highly visible and much discussed element of global sustainability governance. Especially since the 2002 Johannesburg World Summit on Sustainable Development (WSSD), transnational PPPs have multiplied, now counting well above 300 partnerships in the register maintained by the United Nations Commission on Sustainable Development. In policy and academic debates alike, partnerships are promoted as a solution to deadlocked intergovernmental negotiations, to ineffective treaties and overly bureaucratic international organizations, to power-based state policies, corrupt elites, and many other real or perceived current problems of global governance. However, systematic evidence of the impacts of PPPs is scarce and the broader consequences of outsourcing and privatizing environmental governance are not well understood. This chapter draws on a multi-year research project on the emergence and effectiveness of PPPs for sustainable development that utilizes a large-N database to understand the role and relevance of PPPs in contemporary global environmental governance.

In addition to providing a general assessment of partnerships, this chapter also presents an analysis of the subset of partnerships most closely related to governing ecosystem services.

Introduction

Humans live off the bounty of the earth. In order to be able to sustainably enjoy these resources, humans need to organize their relationship with the earth. This organization is in terms of governing the use and abuse of the earth’s resources. The Global Environmental Outlook (UNEP, 2012) published by the United Nations Environment Programme (UNEP) argues that growing economies and populations within the context of complex globalization are leading to unprecedented pressures on the environment and ecosystem services. This calls for strong and effective governance!

There is nothing new about environmental governance and the study of environmental governance. For example, the history of water governance can be traced back some thousands of years (Dellapenna and Gupta, 2009). However, it would be fair to say that environmental governance came into its own in the twentieth century and that the study of environmental law, politics, policy, and economics has been on the agenda for at least the last 60 years. Numerous books and articles discuss environmental governance from the local to the global level. Such books include Carson’s (1962) Silent Spring, Falk’s (1971) This Endangered Planet, Ward and Dubos’ (1972) Only One Earth, Meadowset al.’s (1972) The Limits to Growth, and many others. These have paved the way to shaping global concerns on the environment.

Introduction

One important way in which the concept of ecosystem services has been put into practice is by providing incentives to the providers of these services to increase or maintain their provisioning levels. These incentives are typically monetary or in-kind compensations that are formalized in contracts. For example, a downstream community may pay upstream landowners to plant or protect forests and thereby maintain a continuous supply of water to the downstream community. This contract increases the ecosystem service “freshwater supply” in return for a payment. The general term that is used to refer to this type of contracts is “payments for ecosystem services” or PES. In this chapter we will provide detailed definitions of PES, assess important elements in the design of PES contracts, and look at potential and pitfalls in PES performance, based on case study evidence.

Our starting point is the argument made by Ferraro and Kiss (2002) that direct payment mechanisms like PES are in fact the most effective approach to nature conservation and ecosystem governance, as payments create a direct incentive for sustainable use. PES contracts are theoretically grounded in Nobel Prize-winning economist Ronald Coase’s theorem which states that “when trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights” (Coase, 1960). Following this theorem, PES contracts would normally reflect some bargaining outcome between ecosystem service providers and beneficiaries. Since the potential beneficiaries have a certain willingness to pay (WTP) for the safeguarding of ecosystem service provisioning and the potential providers have a certain willingness to accept (WTA) compensation to cover their opportunity cost, we should expect PES contracts to occur as long as the WTP exceeds the WTA. As we will see further along in this chapter, the fact that transaction costs are not zero limits the potential of PES contracts, in addition to the (semi-) public good character of most ecosystem services, which complicates PES contract design.