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June 18, 2006

Katoomba!

by Sylvia S Tognetti

Last week, while most of the blogosphere seems to have convened in Vegas, at the Yearly Kos conference, I was riding street cars in the beautiful city of Portland Oregon, which was gearing up for the annual Rose Festival - I'm not sure what "Jake the crab" has to do with it (pictured above) but he caught my eye. The streetcars took me back and forth between my hotel and the location of a conference of the Katoomba group, which I also helped to cover for the conference newsletter provided by the Ecosystem Marketplace. Now I'm going to take advantage of my blog to editorialize, and elaborate on a comment I made in one of the sessions.

First a bit of background. The Katoomba group is a gathering of people from different organizations (government, non-government, private, and inter-organizational (i.e., consultants like myself) who share an ambitious goal, of "making the priceless valuable" or, in other words, transforming the economy to one that recognizes the value of ecosystem services by actually covering their costs - for which markets are an important tool. The idea being that if farmers implement management practices that have a higher cost but result not only in food but also in clean water, biodiversity, higher carbon storage, and aesthetic values, they should be compensated also for the "service" of providing these other equally important even is less immediate necessities of life - or stewardship of the ecosystems that provide them. perhaps it would be more constructive to find a term that conveys the idea that what is being bought and sold is not the ecosystem or the water itself, but the management practices of landowners who might otherwise find it more profitable to allow land to become degraded and invest the short-term proceeds elsewhere. After all, the payments are not made to trees but to people, in exchange for adhering to an agreement. Then there is the question of who pays and what they get for it.

The concept of markets for ecosystem services is a powerful one, but carries a lot of baggage because markets, at least as we know them, often place the poor and less well off at a disadvantage. They also fail to provide any advance warning when ecosystems are degraded. In other words, contrary to the tenets of market fundamentalism, markets and private property rights do not automatically resolve tragedies of the commons but can instead create other problems, sometimes dubbed the "tragedy of enclosures." So, along with initiatives to develop such markets, a hot topic of research and debate is whether and how the playing field can be leveled and be structured to benefit the poor and those more dependent on natural resources, as well as create economic incentives for conservation and stewardship. Then there is the question of whether it is really a market when the funds used to pay farmers come from the public purse at prices established by the government - as is the case in many though not all of these kinds of payment initiatives. In a time of shrinking public budgets, the ideal is also to bring in other than public sources of funds to support an approach to conservation that goes beyond isolated parks and protected areas. There are all kinds of obstacles to putting this idea into practice and markets may be just as expensive as regulation if one could actually tally up all of the transaction costs associated with them that range from having a system of formally recognized property rights to getting the scientific information needed to demonstrate links between causes and effects of ecosystem degradation, and between ecosystem conditions and human well-being. Since the price of a loaf of bread does not include the cost of law enforcement, without which the bread probably would not be produced for sale, perhaps this is a double standard. However, in spite of the baggage, the language of markets also has a broad appeal, and seems to have value as at least as a metaphor, as we develop and agree on the rules of a new game that will be necessary to maintain systems of life support that can no longer be taken for granted.

I suspect that the problem is not so much with markets as it is with an economic system that is based on principles reminiscent of an outdated concept of Social Darwinism that fails to recognize that natural selection acts on populations rather than on individuals. This has little to do with how scientists currently understand evolution, but seems to have retained a hold on popular beliefs and ways of thinking. Not having had a course in biology or genetics since undergraduate days (a long time ago) I would particularly welcome comments from any biologist who would can take the time to put the following into the context of current understanding of evolution but, with that caveat - a bit more background.

Gregory Bateson - an anthropologist by training, who certainly believed in the theory of evolution (his father was the founder of genetics), saw this particular way of thinking about evolution as an error of logic that has contributed to the present environmental predicament and to disastrous social dogmas because of the profound influence it has had on how the modern world is organized. The error of logic was to regard the "survival of the fittest" as a struggle among individuals instead of as a process of selection that acts on populations, in which diversity among individuals is necessary for populations to adapt to changing conditions. An important difference between individuals and classes or groups is that classes are defined by convergent characteristics for which there is some degree of statistical probability. Individuals instead have divergent characteristics and cannot be expected to behave according to aggregate characteristics, as is assumed in any kind of deterministic approach to analysis of human behavior. So Bateson also saw a similar but opposite error in the ideas of Marx, in which events were seen as unfolding in a predictable sequence as a result of class structures, regardless of which individual is credited with starting the trend. Consistent with this idea, he also held that evolutionary theory might be very different today had Wallace rather than Darwin been the primary influence, because Wallace saw evolution in cybernetic terms, as a self-correcting system. Instead, in the prevailing image, evolution is characterized as a linear process, a force of progress, and a cause of material change, that fails to account for ecosystem organization or to recognize interdependent relationships between organisms and their environment, and that has supported delusional aspirations of overcoming the limitations of nature. Bateson had a cybernetic view of evolution, as the outcome of a process of learning that reflects "the wider knowing that holds together the starfishes and sea anemones and redwood forests and human communities" in a great "pattern that connects" that also underlies aesthetic sensibilities.

What this digression has to do with ecosystem services is, that protection of ecosystems is a problem of collective action in that good management practices are not effective unless they are carried out on a large enough scale to have a significant impact on the downstream outcome. In other words, provision of clean water requires collaboration among those in an upper watershed area, or what might, from the perspective of a market fundamentalist, be regarded as collusion. In the case of New York City, the alternative would have been an expensive treatment plant. New York City was able to avoid this expense by funding better management practices upstream. but this did not happen automatically. After several lengthy meetings that enabled all of the interested parties to better understand each other's predicaments, Al Appleton, as the former commissioner for the NYC department of the environment, negotiated an agreement with the farmers in which they were given the choice of being regulated or of meeting water quality goals on their own, but with financial support. They chose the latter and more than achieved water quality objectives. But to do it, they had to get the collaboration of all or most farmers - which they also did. Similarly, you can't protect a bird migration route unless all of the sites along the route are protected. And similarly, unless there is a cap on total consumption of, say, gasoline, any amount by which one personally reduces their consumption will just go into the hummer parked across the street.

As in any other market, whether or not anyone is willing to foot the bill, will depend on confidence, not only of receiving benefits, but that everyone is playing by rules that have been agreed upon and accepted as fair.
Given the lag time between implementing new upstream land management practices and seeing their downstream results, which can be highly variable and difficult to measure, agreement on the rules will probably be more important than actual outcomes - at least initially, for getting everybody to actually play the game. It is by playing the game that people can also learn about and reconsider the value they place on services that have been taken for granted, and what trade-offs they are willing to make to keep them coming. Practices themselves can always be modified if it is learned that they don't work. In other words, willingness-to-play comes before willingness-to pay. Or, as Al Appleton put it, in another meeting I also attended, "pay your money take your chances." He also described the bulletin I write as "iconoclastic.... but factual, and without being obnoxious." But what I have written here doesn't even fit into the bulletin....

I'm getting ready for another longer and more distant trip so stay tuned for reports from my alter ego, Sylvia Poggioli which isn't my name but I have been called that too... Like Sylvia Poggioli, I can say my last name without an American accent, just as I can speak English without an Italian one. For those of you from outside the United States, Sylvia Poggioli is a Rome based foreign correspondent for National Public Radio. Another 2nd generation Italian American who, like me, according to her bio, went to school in Italy but, unlike me, she then stayed there. Now that the American dream has become a Tuscan villa, she has some kind of cult status. I still like the rants of Oriana Fallaci profiled in the New Yorker - even if she has become senile, semi-coherent and politically incorrect - and believes that smoking "disinfects" her (hat tip to James Wolcott who has a few more comments on her). That doesn't mean I agree with her.

Posted by Sylvia S Tognetti at 11:35 PM | Comments (2) | TrackBack