Image by Thomas Höggren

         Brazil | Atlantic and Amazon rainforests, Pantanal, Cerrado and Caatinga, biodiversity conservation and restoration, monetary valuation |  Status: Finished 2021

Standards and Poor's: Estimating the value of ecosystem services in Brazil using the ESVD

The objective of the current assignment performed for the Sustainable Finance group of S&P Global Ratings (SPGR) is to provide an indicative summary of monetary values of the ecosystem services provided by specific ecoregions in Brazil. This information will be used for a subsection of the report: ‘Natural capital valuation: an incentive to protect nature’ (SPGR, 2021). To this end, the assignment updated the ESVD with additional ecosystem service values to improve the coverage and representation of ecosystem services for 5 selected ecoregions in Brazil.

Prior to this update, the ESVD contained 156 value records for Brazil. After the project, the total number of relevant records rose to 451 (i.e., 295 records were added).

Key messages include:

  1. Although in general mean values should be used with great care (de Groot et al, 2020), there are some important messages to be drawn. For example, this research has revealed that the potential economic benefits provided by one hectare of tropical forest in Brazil are worth 4,741 Int$/year. Communicating these monetary values, and welfare benefits can help to create more awareness among the general public, governments, business and NGO’s to take nature more into account in everyday decision making.

  2. In the context of this case study, these insights highlight the negative externalities caused by natural ecosystem loss as a result of cattle range expansion in Brazil. Such externalities are currently not being internalised by beef processors, thus underestimating the socio-economic costs of increased meat production. In the long term, this underestimation will have significant negative welfare effects to society and other economic sectors that critically depend on natural capital. Therefore, the consideration of natural capital and ecosystem services is of pivotal strategic importance for the long-term sustainability of livestock industry.

Involved user groups and ESVD applications

In this project we aim to show the benefits of using the ecosystem services approach to take the 'full' value of forests into account. We are specifically targeting the following user groups through the following ESVD applications:

Business & Consultancy

The ESVD assisted Standards and Poor's work on Natural Capital to show the benefits and losses of cattle range expansion at the expense of natural ecosystems.

COST-BENEFIT ANALYSES

The ESVD was used to express the benefits of natural ecosystems in comparison with cattle and beef producing systems.