Daily Archives: March 15, 2007

Ecosystem Services for Business

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Noam Ross writes about the honey bee pollination service and the importance of ecosystem services to a business.

If your business’s only supplier of a key service folded all of a sudden, what would you do?

That is what a lot of agricultural companies are asking themselves right now. As reported in the New York Times last week, honeybee colonies in 24 states have collapsed. Colony populations have crashed by 30-70 percent, causing bee prices to skyrocket at and sending a $14 billion agricultural sector scrambling for insects to pollinate their crops. Yet there are not many options out there. The U.S. agriculture has grown increasingly dependent on trucked-in bees as natural pollinator populations have declined from habitat fragmentation and pesticides since the mid-20th century.

If a business had such a clear warning about its supply chain, one would think it would work to diversify or at least do what they could to shore up their suppliers to ensure their continued viability. Yet as we’re learning from the bee crisis, few companies examine the risks related to ecosystem services, like pollination, that they rely on. These risks may be large — according to the Millennium Assessment, two-thirds of ecosystems worldwide are being degraded or used unsustainably, and degradation will likely accelerate over the next 50 years.

Hanson is leading the development of a “Corporate Ecosystem Services Review”, a methodology to assess business risk and new opportunities arising from the damaged state of ecosystems. The review will be designed to help companies figure out what ecosystem services they depend on and impact most, and then devise strategies to deal with the risks and opportunities represented.

Voluntary Carbon Offsets

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Alice Kenny on the increasing carbon offset deals in the market:

The voluntary carbon market surged 1000 percent over the past two years, according to recent reports. It racked in sales of over $100 million last year and is set to double again by next year. Yet no single standard exists to appraise the quality of marketed carbon offsets, forcing consumers to rely on advertisements for much of their education. In the short term, this could prove a bonanza for businesses marketing carbon offsets. But in the long term, it could compromise this consumer-driven market’s credibility, threatening inroads made in the battle against global warming.

The voluntary carbon market is not only just a first step; it is also a baby step. Voluntary offsets can lead the market but cannot solve the problem of global warming. Most scientists agree that seven billion tons of carbon emissions must be prevented from entering the atmosphere over the next 50 years to make a dent in global warming. The voluntary market can only deliver about 1/10,000 of these emissions cuts, Trexler estimates. Its strength, then, lies in its potential to spur massive government efforts to limit carbon emissions from large-scale emitters. If consumers lose confidence in their ability to fight global warming, they may be less likely to agitate for these reductions.