Biodiversity Protection in Colombia: An Economic Perspective
GROW Colombia Project Report 2
Socio-Economics of Biodiversity Programme
OctoberMarch 20202020 GROW COLOMBIA PROJECT SERIES Authors Silvia Ferrini Biodiversity Kerry Turner Jaime Erazo Corrado Di Maria Valeria Toledo-Gallegos Natalia Valderrama Protection Sylvia Schlesinger Federica Di Palma – Principal Investigator This QR code links to the GROW Colombia website where you can download This report should be cited as: this document and other in Colombia: Ferrini, S. et al., 2020. Biodiversity protection resources of the project. in Colombia: An Economic Perspective. Report 2. GROW Colombia Project Series. GROW Colombia Project UKRI GCRF Grant BB/P028098/1. Norwich, UK. An Economic Acknowledgements: The authors would like to acknowledge support from the UK Research and Perspective Innovation (UKRI) Global Challenges Research Fund (GCRF) GROW Colombia grant via the UK’s Biotechnology and Biological Sciences Research Council (BB/P028098/1). Research support: James Richardson, GROW Colombia Project Report 2 Ana Bossa, Saskia Hervey, Sasha Stanbridge, Juan Azcárate. Operations support: Richard Doyle. Editorial Design: David Alejandro Reina Caviedes and Carolina Gómez Andrade. Copyrights: Attribution (CC BY) Socio-Economics of This work, with the exception any content marked with a separate copyright notice, is licensed under a Creative Commons Biodiversity Programme Attribution 4.0 International (CC BY 4.0). With this licence you can distribute, remix, tweak, October 2020 and build upon your work, even commercially, as long as you credit the original creation. To see the complete licence visit https:// creativecommons.org/licenses/by/4.0/ © Copyright 2020 – The Authors. Please use cited reference shown above. Photography © Shutterstock.com and their respective authors, unless stated otherwise. For further information, please contact: GROW Colombia Project Phone: +49 (0) 1603 450001 Email: [email protected] Website: www.growcolombia.org
ISBN Digital 978-1-9163470-3-8 Funders ISBN Print 978 1 9163470 2 1 https://doi.org/10.6084/m9.figshare.13049810.v1 BRIDGE
October 2020 Sustainable Content 1 tourism pg. 28 Biodiversity Protection in Colombia: An Economic Perspective / Report 2 April 2020
Sustainable cacao production: consumers’ demand 2 and farmers’ pg. 46 production options
pg. 08 Executive Summary
Sustainable 3 cattle ranching pg. 66
pg. 12 Introduction
pg. 82 References Executive Summary
Executive Summary
ROW Colombia is a four socio-economic team. Building on Gyear bioscience research the environmental change scoping and capacity building project to analysis in Report 1 (Turner et al preserve, restore and manage 2020), this second report focuses biodiversity through responsible on the possible policy response to innovation in Colombia. This the challenges and opportunities multidisciplinary initiative is faced by countries like Colombia funded by the UK Government’s in the 21st century. The corona Global Challenge Research Fund virus pandemic, in particular, will and involves a wide, international have widescale and profound collaboration of academic and civil consequences for both national society partners united in a shared economies and societies as well vision to conserve biodiversity, as the global economy. So future achieve sustainable prosperity economic and wellbeing recovery and secure lasting peace in and progress will be even more Colombia. The project has a dependent on carefully selected strong socio-economic component public sector investments within involving the Earlham Institute, a reduced overall budgetary University of Sydney, Humboldt spend. While spending will Institute, Natural History Museum, necessarily be focused on short Universidad de Los Andes and led term needs in the immediate by the University of East Anglia. aftermath of the pandemic, medium to longer term green This report is the second in a investment requirements should series from GROW Colombia’s not be ‘crowded out’ altogether. Photo: Alexander Velasquez-Valencia Alexander Photo: 9 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 Biodiversity Protection in Colombia: An Economic Perspective / Report 2
The development strategy and benefits vital for future human It is the case that valuing nature is and non-monetary valuation implementation measures (green livelihoods and prosperity. a multidimensional concept and methods and techniques. investments) we advocate are To implement a transition the assigned values are plural i.e. guided by a vision of the future towards green development nature in all its aspects means The more detailed analysis economy based on sustainability objectives, a macro (i.e. whole different things to different people of a potential policy switch principles, a so-called ‘Circular economy) economic policy, and communities. So, while we to foster the bio-economy in Economy’ with low carbon based on green investments, is recognise that not all aspects of Colombia will be focused on characteristics. The basic aim of proposed. The green investments nature can be assigned monetary three broad policy areas: this approach is to minimise, as (projects, policies and courses of values we argue that as many as far as is feasible, the throughput action) can provide an economic possible should be valued in this 1. An examination of ecotourism of matter and energy in the multiplier effect, which will way to avoid zero value status. opportunities, both from the economy (i.e the amounts of help create new business and market demand (national raw materials and energy we employment opportunities. Policymaking inevitably involves and international) side use to produce and consume choices and trade-offs. Green and the supply side; all the items that support our The Colombian Government investments will have to compete 2. An expanded production livelihoods and lifestyles). aims to generate 10% of its against other options as well as of cacao for high quality national income (GDP) from the each other for a share of a finite chocolate feasibility study, to One of the core features of this bio-economy by 2030. However, overall financial budget. To assist include an assessment of the type of economic system, in contemporary, conventional the policy /choice process, analysts national and international the Colombian context, is the economic appraisal of investment have devised a number of so-called potential market demand prioritisation of biodiversity, options is based on a monetary decision-support systems to provide and farmer production both its conservation and valuation of the costs and benefits an evidence base for decisions. opportunities and constraints; management i.e. the creation related to any given investment 3. An examination of cattle of a bio-economy. Given the opportunity. There is a danger The GROW project supports the ranching activities and the country’s natural endowment, that, for example, projects which ‘Balance Sheet approach’ for impacts on biodiversity, with biodiversity is a strategic natural generate a diverse range of costs decision support. This is both a a particular emphasis on capital asset which can power and benefits, some of which lack process and a set of tools which deforestation impacts; and a future, more sustainable monetary price values, do not fit can encompass multi-disciplinary the benefits/costs related to a development pathway. The easily into the current appraisal data across a range of spatial switch to cattle regimes within bio-economy strategy seeks procedure. These opportunities dimensions and plural assessment a silvo-pastoral setting. to protect both natural capital may therefore be given less criteria, including distributional and ecosystem services, which weight by policymakers and equity as well as conventional in turn provide the stock of not get the prioritisation and economic efficiency. The tool box wealth and flows of wellbeing investment that they deserve. therefore includes both monetary
10 11 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 Introduction Biodiversity Protection in Colombia: An Economic Perspective / Report 2 Introduction
CAL SYST OGI EM OL S Introduction C N E a tu ra l SOCIAL SYSTEMS V a r ia b i DRIVERS OF CHANGE l i t lobal biodiversity represents current environmental challenges (e.g. Population growth, y a vast store of wealth that faced by all countries, including economic growth, G climate change) provides humanity with multiple Colombia, demand urgent action. ACTIVITIES 1 (e.g. residential ecosystem services and welfare/ RESPONSES FEEDBACK development, agricultural wellbeing benefits, including most A contemporary problem we face (policy measures) innovations) significantly a life support system. in this context is the feasibility of a Colombia is the second most future in which governments wish biodiverse country on earth and to continue to promote economic PRESSURES therefore has a significant natural growth while also conserving IMPACTS (mechanisms of change (e.g. changes in capital stock on which to draw for biodiversity stocks e.g. forests, e.g. nutrient enrichment human welfare) its current and future development. wetlands, coastal and marine of water bodies) In Report 1 (Turner et al., 2019) the and other habitats. The question GROW Colombia team summarised becomes must we abandon growth CHANGE via the DPSI(W)R framework (Figure as a prime policy objective? At the IN STATES (e.g. enviromental Figure 1. 1), the range of environmental macroeconomic level, in the GROW Natural and characteristics) change drivers and pressures Colombia project we argue that a ecological boundaries and that Colombia is experiencing. ‘Sustainable Growth’ strategy based the extended on ecological macroeconomics DPSRI framework In this second report we offers a way forward in which focus on the policy response green investments enabled component of the DPSI(W)R through a mix of government scoping framework. We focus on expenditure, financial regulations selective development projects and monetary policy, can help to among many things, encouraging Governance in order to highlight the way promote a transition to a more reuse, recycling and product/ in which ecosystem services sustainable (bio-economic) low packaging innovations, together The Colombian Government aims can play an important role in carbon economy. While many with a precautionary approach to generate 10% of the national fostering more sustainable formidable technical, socio- to overall environmental limits GDP from the bio-economy by development in the future. We economic, socio-cultural and such as climate change, water 2030 and will use some of its see this development path as governance challenges will have to and air pollution and natural petroleum royalties devoted an evolutionary transition and be faced, turning production and resource over-extraction. Social to science and technology not a sharp macro-policy switch, consumption into a more circular limits must also be recognised in (1 billion USD in 2019/20) to although we recognise that the process is feasible. It will involve, that any growth benefits must not assist this transformation. contribute to increasing degrees of In December 2019, the 2015 Joint inequality, but rather benefits need Declaration of Intent (JDI) between 1) Ecosystem services are the benefits provided by ecosystems to human welfare and wellbeing. Examples of to be distributed across the diverse the UK, Norwegian, German ecosystem services include food and water provision, regulation of floods and soil erosion, nutrient cycling and waste remediation. Ecosystem services also include non-material benefits such as recreational and mix of communities and ethnic and Colombian Governments spiritual benefits in natural areas. Ecosystem services can be grouped in provisioning (the products obtained groups. Important advances have was reaffirmed. The new 2019 from ecosystems e.g. food, raw material, fresh water), regulating (the benefits obtained from the regulation of natural processes e.g. climate regulation, pollination, natural hazard regulation), supporting (those been made in recent years in terms document sets out the partner supporting the provision of other services e.g. nutrient cycling, soil formation), and cultural (the non-material of governance for sustainability. countries’ commitments on benefits obtained from ecosystems e.g. recreation and tourism, spiritual enrichment, aesthetic experience).
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climate change and the reduction Sustainability itself is a such as transforming stocks of It seems important to of greenhouse gas emissions multidimensional concept but a forests to agricultural production (GHG) from deforestation and spectrum of world views based on or through use of fossil fuels consider carefully which degradation, while fostering two polar opposites has support to produce man made capital. sustainable development. The in the published literature. In the weak sustainability components of natural JDI recognises that Colombia has viewpoint, it is the value of made significant reductions in Weak vs. strong the capital stock that should capital society deems GHG emissions from reduced sustainability be kept at least constant over to be substitutable and deforestation in the Amazon, time, as society takes advantage for which it has received 80 A long-standing debate has of substitution possibilities. which require long-term million EUR from the European evolved in the literature partners. Colombia aims to reduce and policy process between The two standpoints could conservation. its GHG emissions by 20% by supporters of so-called weak and be seen at the opposite sides 2030, and its carbon tax raised strong sustainability. Assuming of a spectrum of political Valuing nature 226 million USD in 2017/18. sustainability (i.e. non declining and philosophical positions overall stock of different forms stakeholders might take to the At the microeconomic scale (i.e. The JDI highlights the jointly of capital - human capital, management of the environment. individual projects, policies or shared view that biodiversity physical capital, social capital What each person, company, courses of action) many of the should be recognised as a and natural capital), one of the country or organisation adopts ecosystem services benefits strategic national asset. It sets out critical issues in this debate is as her/his/its worldview, is derived from biodiversity plans and a timetable for further the degree to which natural likely to define the choice of conservation are ‘crowded out’ reductions in the loss of natural capital is substitutable for other measurement system to account as a range of policy objectives forests and includes additional forms of capital. The proponents for sustainable growth. Further, jostle and compete for politicians’ areas to qualify for the payments of strong sustainability see there can be intermediate attention. Economists argue that for ecosystem services scheme. some components of natural positions held within this one of the reasons for this neglect Special emphasis will be placed capital (‘critical natural capital’) spectrum which might be of biodiversity benefits is that their on areas of high deforestation as non-substitutable and as different for different aspects of value is not fully recognised and and lands located in collective such it should be conserved and natural capital. For example, for that imputing monetary values territories of ethnic groups. protected so that its aggregate some aspects of natural capital, for them can raise their political Colombia has also signed zero stock is not decreasing over society/individuals can hold a visibility. Criticism of this position deforestation agreements with time. Weak sustainability accepts strong sustainability perspective focuses around the problem beef, dairy, palm oil and cocoa depletion of natural capital, as (e.g. species and habitats/ of incommensurability and the supply chains. Some payment far as this decrease is offset ecosystem protection; limiting possible “commodification” of for ecosystem services are by innovation and technical global GHG emissions), but nature, together with a need to financed through 1% of national progress which increases also hold a weak sustainability recognise the plurality of values central government transfers efficiency of usage and/or the perspective for other aspects of and ethics intertwined with to the regions2. Biodiversity role of other types of capital. natural capital (e.g. converting nature. While not all aspects offsets from mining, petroleum This paradigm is historically some components of natural of biodiversity are amenable and infrastructure are planned more broadly reflected in our capital to infrastructure allows to monetary valuation, it is (worth 150 million USD) in 2020. society – e.g. in land use change, increase in social capital in terms nevertheless possible to express of better housing, schools and many important ecosystem hospitals). Indeed, it seems service values in monetary terms. 2) Law 99/1993 defined in article 111 that 1% of central government money transfers to important to consider carefully In the GROW Colombia project, we regions, known as “ingresos corrientes de la nación”, should be used to buy lands that protect watersheds. Law 1450/2011, related to the National Development Plan 2010-2014, modified this which components of natural would argue that it is necessary article to allow local and regional governments to finance Payment for Environmental Services capital society deems to be to value (in monetary and non- in strategic environmental areas that provide water to municipalities and regions. Article 175 from Law 1753/2015 (National Development Plan 2014-2018) enable other funding sources like substitutable and which require monetary terms) many of the water use fees, money transfer from the electricity generation sector, 1% forced investment of long-term conservation. important services of biodiversity total value of projects that use water, and biodiversity offsets from environmental licenses.
16 17 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 Biodiversity Protection in Colombia: An Economic Perspective / Report 2 Introduction
linked to green growth projects, to An expanded circular minimum acceptable level of environmental and social avoid zero value by default. At the economy model of deprivation (Figure 2)3. consequences of economic same time, we support a plural view changes. At the sector and/ of values that opens up a number of We assume that the The Circular Economy sits or individual project level we opportunities for deliberation and overarching policy goal in between these boundaries in a deploy a pluralistic approach to negotiation in sustainability project/ Colombia is sustainable space that is ‘safe’ and ‘fair’. These appraisal which extends beyond policy decision making processes. development, enabled through boundaries serve to warn society the conventional economic We use the ‘Balance Sheet a sustainability pact, “that about any economic growth that cost-benefit approach. Approach’ as a decision support seeks an equilibrium between risks breaching thresholds or system to enable our analysis which production development and tipping points that may produce Plural values in nature is focused on three policy areas: the environment conservation sudden and/or irreversible that potentiate new economies environmental state changes and The economic valuation of 1. ranching activities and and ensures natural resources damage costs, which combine to natural capital and ecosystem biodiversity conservation; for future generations” threaten national and eventually services in monetary terms 2. the production of cacao for (Departamento Nacional de global systems resilience. has been criticised on two high quality chocolate; and Planeacion, 2019). Under such an The social inequality boundary main grounds: the problem of 3. ecotourism potential. approach contemporary society also has an economic dimension. incommensurability and the is required to pass on to future There is a strong case to argue “commodification” of nature; and We turn first to an explanation generations a total capital stock that gross inequality carries both the neglect of value plurality. The of the macroeconomic strategy (physical, human, social and an economic and a social price standpoint taken in this report is for green development linked to natural capital) that is as good and that these are interwoven. that while the “commodification” an expanded version of the so- as, or better than, that received. Growing inequality is associated of nature is something to be called circular economy model. Our expanded Circular Economy with growing inefficiencies and wary of, i.e., not all aspects of This is followed by a summary system is constrained by two less productive economies nature are amenable to monetary of our decision support system ‘boundary’ conditions; an outer which also display increased valuation, it is nevertheless used to analyse the gains environmental boundary and stress, poor health, and low possible to express many Figure 2. An expanded Circular and losses from the selected a lower ‘social floor’ boundary levels of social mobility. The important ecosystem service Economy constrained by boundary green development projects linked to maximum acceptable Expanded Circular Economy values in monetary terms. conditions at the microeconomic level. level of wealth inequality, and approach allows for a broader Further, we would argue that it vision of economic progress, is necessary to do so to avoid which produces sustainable these important services being economic development and assigned zero value by default ENVIRONMENTAL BOUNDARY increases in societal well-being. in policy appraisals. Value Our Expanded Circular Economy plurality opens up a number of paradigm is more comprehensive opportunities for deliberation than some previous applications and negotiation processes of this concept. Investments in with their related methods for Circular Economy green projects eventually leading eliciting relative values. It also to system-wide innovation will can help to highlight contestable be necessary, and the transition contexts in which disputes needs to be underpinned over rights and ethics are Progress Resource use through time by systematic assessment important (Fisher et al., 2008). Efficiency Resource supply Security Eco-innovation 3) The Circular Economy is expanded to include plural values in nature as well as equal and fair distribution of benefits across current and future generations. Therefore over time the economic growth is bounded by social and environmental limits.
SOCIAL BOUNDARY
18 19 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 Biodiversity Protection in Colombia: An Economic Perspective / Report 2 Introduction
ANTHROPOCENTRIC A plural view of values reflects There is a danger that too many ANTHROPOCENTRIC INTRINSIC VALUE the multiple ways in which definitions and terms add little INSTRUMENTAL VALUE people are connected to to our understanding of the role nature. Figure 3 illustrates four and value of natural capital and Intra or intergenerational altruism Cultural importance of resources quadrants that summarize the ecosystem services and so we Stewardship motivation Subjective stewardship major conceptions of value. argue the categorisation in Box 1 is a sufficient basis to distinguish The left-hand side includes between the different plural instrumental values, which relate values in nature that are relevant to the use of nature in order for policy. The way in which the Functioning of ecosystems Interest of non human species to improve human wellbeing values are broadly measured and nature functioning; on reflect the distinction between NON-ANTHROPOCENTRIC NON-ANTHROPOCENTRIC the other side intrinsic values economic, biophysical and socio- INSTRUMENTAL VALUE INTRINSIC VALUE reflect the value that nature cultural values. Economic and and its components have in and biophysical values are frequently of themselves (see Box 1). measured as quantities expressed in different units e.g. £ of food This categorisation of nature’s sold, tonnes of CO stored, and 2 Box 1: Major conceptions of Value Figure 3. value has been criticised in socio-cultural values in qualitative The Major conceptions Anthropocentric Anthropocentric Intrinsic Value Non-Anthropocentric terms of its abstraction and terms (e.g. narratives, expert of Value Instrumental Value Intrinsic Value lack of a more general appeal judgements and others). This value category is linked to to policymakers and the public This is equivalent to ‘total stewardship in a subjectivist This value category is viewed economic value’ = use + non-use sense of the term ‘value’. It is in an objective value sense, i.e. (Kenter, 2018). Some analysts Environmental economists value. The non-use category is culturally dependent. The value ‘inherent worth’ in nature, the portray our relationship with the have promoted the bounded by the existence value attribution is to entities which value that an object possesses concept, which has itself been have a ‘sake’ or ‘goods of their independently of the valuation environment as simply gaining a harmonization of quantitative the subject of much debate. own’, and instrumentally use of valuers. It is meta-ethical living from the environment; living measurements into a common Existence value may therefore other parts of nature for their claim, and usually involves encompass some or all of own intrinsic ends. It remains the search for strong rules in the environmental space; and unit money, but challenges and the following motivations: an anthropocentrically related or trump cards with which limits still exist. Social media concept because it is still a human to constrain anthropocentric living with an environment with • Intra-generational altruism: valuer that is ascribing intrinsic instrumental values and policy. other non-human interests which and big data are opening doors resource conservation value to non-human nature. to ensure availability for we nevertheless recognise and to new innovative approaches others; vicarious use value Non-Anthropocentric Source: take into our consideration (O’Neil to the understanding of linked to self-interested Instrumental Value Turner, R. (1999) The place of altruism and the ‘warm economic values in environmental et al., 2008). Chan et al. (2016) the relationship between glow’ effect of purchased In this value category entities valuation. In Valuing have proposed that “relational quantitative and qualitative moral satisfaction; are assumed to have sakes or Environmental Preferences • Intergenerational goods of their own independent (Bateman, I. and Willis, K., eds), values” might offer a simplified measures and people and the altruism (bequest of human interests. It also pp. 17–41, Oxford University; extension to how to think about environment. For example, motivation and value): encompasses the good adapted from Hargrove (1992) resource conservation of collective entities, e.g. environment-related values. van Zanten et al. (2016) use to ensure availability for ecosystems, in a way that is social media platforms (e.g. future generations; not irreducible to that of its members. But this category Flickr, Instagram) focusing on • Stewardship motivation: may not demand ‘moral human responsibilities considerability’ as far as publishing photos online to for resource conservation humans are concerned. identify valuable landscape on behalf of all nature; this motivation may be features across Europe. based on the belief that A plural view of values Further, work related to the non-human resources have rights and/or interests and reflects the multiple Intergovernmental Panel on as far as possible should Biodiversity and Ecosystem be left undisturbed. Services (IPBES) has developed a If Existence value is defined ways in which people are to include stewardship then it novel framework to extend the will overlap with the next value connected to nature. ecosystem services approach category outlined below.
20 21 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 Biodiversity Protection in Colombia: An Economic Perspective / Report 2 Introduction
- Nature’s Contributions to amenable to simple aggregation The Balance Sheet of different valuation concepts and People (Diaz et al., 2018) – into a composite score. This Approach: decision methods into sequential stages which aims to allow for a is particularly the case if support system of the decision-making process pluralistic valuation approach sustainability policy objectives and their application domains. to ecosystem assessment.4 are seen as key goals. Decision support systems should How this framework can aim to provide as comprehensive In the BSA three complementary be operationalised is yet to To sum up, the complex problems an evidence as possible. Such and interlinked stages of be fully demonstrated, and related to natural capital and systems need to include data analyses – or three overlapping the substitution of the term ecosystems management and collection, scoping and agenda balance sheets – are followed ecosystem services by nature’s policy making increasingly require setting frameworks, data which progressively focus on contribution to people does decision support systems that modelling and interpretation as the increased complexity of little to add clarity to the can encompass income and well as the monitoring of policy environmental decisions and debate (Kenter, 2018). possibly wealth inequality issues, outcomes. The Balance Sheet contested contexts that might together with plurality, i.e. a Approach (BSA) (Turner, 2016) arise in policy implementation (see Ecological economists have also wider diversity of consequences can represent one such decision Figures 4 & 5). Each stage provides long been concerned with the (benefits and costs) and a range support system for environmental complementary components that connections between the value of stakeholders’ perspectives. policy formation and evaluation. offer comparable sets of findings elicitation methods deployed and To chart a course through The distinct features of the BSA with overlaps and linkages the underlying values themselves. the different concepts and are firstly, its focus on fairness and (Turner, 2016). It has been argued that the worldviews that surround equity concerns and distribution elicitation process itself may the management of nature, of these across space and social define the values being uncovered we propose to start with the groups, while also explicitly and so methods such as cost conventional approach to the considering compensation Decision support benefit analysis and others are construction of an evidence mechanisms between the major themselves value articulating base for policy appraisal and stakeholders that are impacted processes and tools institutions – i.e., these processes then incrementally add to the by a given policy. In conventional and methods play a key role in underlying evidence base as we economics analysis a solution is should be able to forming the value itself (Vatn, recognise other decision criteria. deemed feasible when it passes 2005; Marshall et al., 2011). The This includes distributional a hypothetical compensation encompass a range of elicitation process may be not just equity and inequality concerns test, i.e. gainers from a policy value dimensions. uncovering existing values but in addition to the conventional change must gain enough to helping to form values through economic efficiency rule; hypothetically compensate all a sort of social learning process and different conceptions of losers from the change and still (Vatn and Bromley, 1994). nature’s value together with remain better off. In political The three stages provide their underlying ethics and their economy terms, however, further evidence and detailed The key message we take from inclusion in the evidence base hypothetical compensation is understanding of the spatial this debate is that decision for policy making. In the next unlikely to find much in the way distribution of impacts and the support processes and tools section we describe a process of general societal support. groups these impacts concern. should be able to encompass for incorporating these various Therefore, the BSA extends this As degree of complexity and a range of value dimensions dimensions of environmental analysis with an added emphasis degree of controversy increases, and should recognise that values into policy making process, on actual compensation, equity, the need for a range of value many are irreducible and not a Balance Sheet Approach. fairness and inequality, i.e. concepts and valuation methods who gains and who loses. increases. This range includes increased use of non-monetary 4) IPBES aims to reflect the different knowledge systems that exist around the globe by employing The second distinct feature of deliberative methods both for a generic perspective (seeking “a universally applicable set of categories of flows from nature to people”, p. 271) that is typical for western sciences and a context-specific perspective (that the BSA is that it also provides a assessment and (potential) “typically does not explicitly seek to extend or validate itself beyond specific geographical and framework for the incorporation conflict resolution. The overall cultural contexts”, p.272) which is often associated with local and indigenous knowledge (ibid).
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BALANCE SHEET 1 impacted by the decision at issue and the implied distribution and BALANCE SHEET 2 and on policy implementation. socio-economic characteristics of the winners and losers at the BALANCE SHEET 3 STRATEGIC LEVEL POLICY: In the second sheet, regional sub-national scale. The focus CONVENTIONAL ECONOMIC and local impact analysis focuses here shifts to regional and local TOOLS on the spatial disaggregation policy implications and/or their Cost-benefit Analysis, and Figure 5. variants, plus environmental REGIONAL AND LOCAL of the evidence gathered in the evaluations in the context of Policy Questions impact analysis IMPACT ANALYSIS and Context flow Distribution, equity and e.g. unemployment, first “balance sheet”, including major policy indicators such diagram: the Balance compensation loss of social capital and TRADE-OFF ANALYSIS: PLURAL Sheet Approach compensation measures VALUES IN NATURE regional natural capital assets, as income/wealth distribution, Multi-criteria analysis Deliberative approaches Rights and ethics
POLICY QUESTION & CONTEXT
BALANCE SHEET 1 BALANCE SHEET 2 BALANCE SHEET 3
INCREASING ‘SIMPLE’ ‘COMPLEX’ RISK OF ENVIRONEMNTAL ENVIRONMENTAL THRESHOLD CONTEXT CONTEXT EFFECTS STRATEGIC LEVEL POLICY: CONVENTIONAL ECONOMIC TOOLS BALANCE REGIONAL AND SHEET LOCAL IMPACT PROCESS ANALYSIS Figure 4. The Balance Sheet objective is to allocate resources The three Balance Sheets TRADE-OFF framework across projects, policies or ANALYSIS: PLURAL VALUES IN NATURE courses of action that maximise The analyses in the first balance the use of scare resources and sheet first considers and focuses reduce the social conflicts that on the (macro) economic might hamper implementation of efficiency criterion at the given CBA Multi-Criteria Approaches the concerned policy solution. decision level, which favours Env. Impact Economic TOOLS Assessment Multipliers the policy alternative that in Deliberative CEA Approaches For ease of exposition the BSA total generates the highest net is set out below in sequential benefits over all stakeholders. fashion, but the process and But it then extends this analysis Monetary Pricing Input-Output Non-monetary related tools involved can be into distributional questions and Cost-Based Models Quantitative utilised in a piecemeal way, the need for and practicality of e.g. it may be that a project actual compensation (Turner, METHODS at the regional scale is under 2007). This is the transition phase Economic Welfare Non-monetary (e.g. choice modelling) Qualitative analysis and policymakers just into the next balance sheet. want an indication of who gains Balance sheets 2 and 3 provide Hybrid Methods and losses in that localised a more nuanced understanding context and so the focus can of policy implications with be directed straight to balance added focus on spatial and sheet 2. So flexibility is a key socio-economic analysis of the characteristic of the BSA. different stakeholders that are EVIDENCE BASE
24 25 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 Biodiversity Protection in Colombia: An Economic Perspective / Report 2 Introduction
structural unemployment, but services scheme. This requires As income/wealth increases There is also another aspect also issues related to loss of detailed understanding of the an individual’s valuation of of inequality relevant for community identity, natural relevant stakeholders, their public environmental goods environmental valuation and capital and cultural assets. views, motivations and beliefs and welfare gain increases but policy, which is that there and therefore the wider range at a diminishing rate. So the is evidence to suggest that At this regional scale, tools such of values that might be at stake. preferences of wealthier people the costs of environmental as economic multipliers and In this third stage, a different have a greater weight/impact on degradation and loss fall input-output models can play a so-called social welfare function social decision making. Richer disproportionately on the poor useful role. Further, an explicit can be relevant which prioritises people will give up more of their (Sirinivasan et al., 2008; Turner discussion of the potential equity concerns. If strong, income than poorer people and Fisher., 2008). Care should compensation mechanisms sustainable development is the for a given (equally desirable) therefore be taken to consider between the winners and losers over-arching policy goal then environmental improvement the overall net distributional is required for the next balance ‘other regarding’ preferences and so have an undue influence effect, including both market sheet. In this stage of BSA, social in society can be accepted. This on policy changes. The overall and non-market benefits and network analysis (and similar translates into the assumption distribution of income in a costs. Inequality in society tools), may be used to identify that individuals care not only society, i.e. how equal or unequal encompasses not just income but the major stakeholders in the about themselves and their it is, will influence the value also wealth. The latter includes decision context which can then consumption of goods and put on environmental public stocks of natural capital and the be built on in the next stage of the services, but also the relative goods and who gains most benefits that flow from them in BSA. Indeed, it is likely that this position of other people in their from the resulting benefits. In a terms of ecosystem services. So analysis might reveal a number community, country, or globally. number of contexts, if a society the spatial distribution of natural of contested areas and potential If people have ‘other regarding’ is experiencing less income capital assets, e.g. forests, conflicts between stakeholder preferences and related ethics, inequality over time the value other culturally important groups that the planned then inequality and the value that it assigns to environmental landscapes etc. is important, policy change might create. of the environment and its public goods benefits will increase together with access provisions. conservation will be a more (and vice versa). As inequality In the third balance sheet, a prominent problem requiring decreases a disproportionate We now turn to selected green trade-off analysis aims to support solutions. This information share of the non-market investment projects which negotiation over contested can help to identify and, if environmental benefits flows could play a part in Colombia’s issues between stakeholders. possible, find procedural to poorer households. One way development strategy. The Crucially, this phase of BSA solutions to contested issues to adjust Cost Benefit Analysis report is focusing on the three focuses on implementation of of the policy change. (CBA) for this distributional following policy switches: feasible policy solutions that issue is to deploy distributional accommodates the views of Inequality, distribution and weights to the cost and benefit • from traditional tourism contesting stakeholders through the environment calculations, i.e. to weight more to eco-tourism specific compensation measures5 highly, for example, the costs • to sustainable cacao that can be in different forms, BSA’s distinct feature is its and benefits accruing to poorer production including in kind, e.g. biodiversity aim to incorporate inequality households in an increasingly • from traditional agriculture offsets; or through substitution and distribution concerns unequal society. This is rarely to more sustainable systems between natural capital loss and within the decision-making done in current cost benefit (e.g. silvo-pastoral system). social capital gains (Lazaro-Touza process. We therefore discuss appraisals, with the exception of and Atkinson, 2013; Turner, 2007) in this subsection why these climate change analysis. More or financial compensation such considerations are important in recently an aggregate willingness as the payments for ecosystem environmental management. to pay inequality adjustment approach has been suggested, which it is argued requires less 5) This is in contrast to the Strategic level view Sheet that focuses on application of potential information (Drupp et al., 2018). economic Pareto efficiency, which considers only hypothetical consideration of compensation.
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The peace agreement, signed in Okello and Yerian, 2009) and 2016, represents an opportunity aesthetical landscapes (Di Minin et to develop tourism activities al., 2013; Hausmann et al., 2017) in remote rural areas where represent positive signals that preserved forests offer high can motivate visits to protected concentrations of endemic and areas (Hausmann et al., 2017; Sustainable threatened fauna (Baptiste et Okello and Yerian, 2009). al., 2017). Therefore, sustainable tourism is considered to be a Domestic tourism is expected to tourism strategic source for recovery in play a major role in Latin American Colombia, after the signature of countries (de Oliveira Santos, the Peace Process Agreements 2015) but also with international in 2016, that is also compatible tourism, including ecotourism, with the economic development demand is steadily increasing ourism in Latin America is still in 2014 roughly 2,288 million7. of rural communities8 and the which can promote Colombia’s 1in a development stage as This suggests that foreign visitors conservation of the country’s popularity. At the same time, the T many economic and social factors almost quadrupled in 15 years Natural Capital. Colombia delay in developing mass tourism are delaying the growth of this and the tourism contribution has a significant diversity of activities represents a privileged sector.6 The annual growth rate to GDP is expected to be 6% ecosystems and species. position for Colombia, which over the last two decades in Latin by 2027 (WTTC, 2017). has the opportunity to develop a America was on average 3.4 %, a The country is ranked first for sustainable tourism sector which slow pace compared to the global Despite the enormous natural the number of birds and orchid encompasses economic growth, rate of 4.0 % (de Oliveira Santos, and cultural wealth of Colombia, species; second in richness of social inclusion and biodiversity 2015). However, Latin American the tourism sector was hampered plants, amphibians, butterflies protection. In 2018, the Colombian countries are rich in natural by Colombia’s civil war which and freshwater fish; third for Government produced the resources and attractions and lasted more than 50 years (Kokalj, number of palms and reptiles; and Voluntary National Review for the the tourism sector is forecasted 2007). The confrontation of the the fourth in mammals diversity Sustainable Development Goals to grow rapidly by 2030. The state army with rebel groups and (IAvH, 2017). On the other side, and committed to developing tourism sector in Colombia grew drug trafficking has affected the it has five ecosystems which are tourist opportunities within faster (10%) than in the rest of perceived image of Colombia considered emblematic: páramos, sustainable boundaries using Latin America in the period 2001 abroad and discouraged visitors high altitude wetlands, tropical innovative financial mechanisms and 2011 (PROEXPORT, 2012; from travelling. While the war savannas, tropical dry forest, to boost and promote the sector.9 Zuñiga-Collazos and Alexander, had detrimental economic and and cloud forest. The presence 2015). In 2000, the Ministry of social effects it also protected of wild and charismatic species Tourism can play a major role Commerce, Industry and Tourism the rural territories from (Naidoo and Adamowicz, 2005; in achieving several different of Colombia (MCIT, 2010) reported mass tourism exploitation. 557,280 international tourists and
8) In 2012, the Ministry of Commerce, Industry and Tourism of Colombia defined policy guidelines to develop communitarian tourism in Colombia. Since then the Ministry has recognized the importance of the tourist demand reactivation in the country, the need to strength the social 6) Such as “economic and financial instability, structural unemployment, inflationary function of tourism, the importance of this sector to promote local development and conservation, pressure, income inequality, uncontrolled urbanization, lack of public safety, and the active participation of local communities within the tourism sector. It is acknowledge that health problems and political uncertainty (de Oliveira Santos, 2015).” the communitarian tourism must contribute to enhance communities living conditions, based on 7) The Ministry of Commerce, Industry and Tourism of Colombia is developing a a differential ethnic and socioeconomic approach, that allow the establishment of development new methodology to estimate the number of international tourists. For 2014 total strategies, for overcoming poverty and to achieve the Millenium Development Goals (MCIT, 2012a). international tourist were estimated in 2,865 million, and for 2018 a total of 4,276 million 9)Bancóldex in Colombia has announced an energy efficiency credit line for were reported (MCIT, 2019). In 5 years international tourists grew 1,5 times. hotels that will be refinanced with a green bond emission (DNP, 2018)
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Sustainable Development Goals. tourism, scientific tourism, BEFORE 90s 90s SINCE 2000 In particular, the sector could have spiritual tourism, green
a positive impact on protecting tourism)10. Sustainable tourism Environmental Conservation of local conservation communities identity and belief biodiversity and promote a should satisfy the expectation and education sustainable use of terrestrial of visitors without damaging the and marine ecosystems. The natural and social capital of the Sustainability/Ethical/Responsible Colombian Voluntary National destination countries. Commercial travelling and consumption Review considers sustainable viability should be combined with tourism as a key sector to economic/financial benefits to the Environmental Environmental and Equitable sharing promote economic growth and local economies, and a respect for ECOTOURISM conservation economic benefits of benefits and education tackle climate change (Fig.6). and understanding of the diversity of cultures (including heritage, Environmental and Tourism in general while religions and nature resources). economic benefits contributing to economic growth has also caused a range of In Colombia, history records one Equitable sharing Environmental conservation environmental and social problems. of the first forms of ecotourism of benefits and education In the future a more sustainable in 1799, when Alexander von form of tourism should be a key Humboldt travelled in South policy objective in the 21st century. America to discover “a dramatic,
Figure 6. extraordinary nature, a spectacle The Role of Sustainable tourism includes a capable of overwhelming human sustainable tourism Figure 7. to support Goal 13 wide range of tourism activities knowledge and understanding. to be known and possessed, but Ecotourism The Definition of Climate change (e.g. ecotourism, nature-based Not a nature that sits and waits an active nature, bestowed with Ecotourism action Source: Adapted vital powers, many of which are The ecotourism definition from Departamento invisible to human eyes; a nature evolved in the last two decades Nacional de Planeación, 2019 10) Stronza et al (2019) report a detailed classification of green tourism. that dwarfs humans, dominates (Figure 7) from environmental their beings, awakens their conservation and education roots passions, and challenges their (Ceballos-Lascurain, 1991) and powers of perception. (Pratt, 2010, evolved into ethically responsible pp. 229–230).” In the 18th century, travelling which considers Goal 1: End poverty von Humboldt’s work provided local and cultural diversities Target 1.5: By 2030 empower communities and individuals to reduce their vulnerability to climate- a new vision of South America (Das and Chatterjee, 2015). change related risks and its natural beauties in (1) an overabundance of natural forests The key elements of (Amazon and Orinoco); (2) snow- ecotourism are: capped mountains (the Andes
Goal 3: Ensure healthy lives and promote wellbeing and Mexican volcanoes); and (3) • Conservation of the resources Target 3.9: By 2030 reduce the number of deaths, the vast central plains (Venezuela on which tourism relies illnesses from air, water and soil pollution and the Argentinean pampas). • Tourism that provides a sustainable flow of economic While von Humboldt was one of benefits to all relevant the first eco tourists that travelled stakeholders (national to local). Goal 8: Promote inclusive and sustainable economic in Colombia to learn about nature growth, employment and decent work Target 8.4: Improve progressively the resource and its ecological functioning, This new form of tourism requires efficiency in consumption and production, decoupling economic growth from environmental the characterisation and formal a different role for private and degradation definition of ecotourism only public agents and a constant Target 8.9: By 20130 devise and implement policies to promote sustainable tourism that creates jobs emerged many years later. engagement with stakeholders. and promotes local culture and products
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an interest in developing and rural tourism (or agritourism) ecotourism to generate as a number of sub categories. benefits for communities Among the touristic activities and businesses, with minimal prioritized for ecotoursim were impacts on the environment birdwatching, whalewatching and local communities (MCIT and scuba diving (see figure 8). and MADS, 2003). In the same This policy was very year, Resolution 531 was comprehensive in its definition signed in Colombia to position of nature tourism as “all kind of ecotourism as a complementary tourism, based on nature, in which tool for the conservation of the main motivation is nature biological diversity, and to observation and appreciation, define the policies/rules for as well as traditional cultures” developing ecotourism in the (MCIT, 2012b). The policy also Protected Areas of the country. considered the human dimension The 2004 policy document of tourism when it specified that: CONPES 3296, was created “tourism [..] is framed within the to establish the guidelines sustainable human development that regulate the private parameters. Ecotourism seeks the participation (concessions) visitors’ recreation and education in ecotourism services in through the observation, the study natural protected areas. of natural values, and the cultural aspects associated with them. In 2012, the Ministry of Thus, ecotourism is a controlled Photo: Alexander Ecotourism must reflect the differ according to the captive/ Commerce, Industry and Tourism and directed activity that produces Figure 8. Velasquez-Valencia Umbrella product, diversity of countries and non captive interaction of humans of Colombia adopted a National minimal impact over the natural sub products and should reflect local and cultural with wildlife and consumptive/ Policy for Nature Tourism, a priorities, for nature ecosystems, respect the cultural tourism in Colombia identifies. Das and Chatterjee non-consumptive tourism (Tisdell main or “umbrella” concept that patrimony, educate and raise Source: adapted (2015) and Stronza et al. (2019) and Wilson 2012 for a review). includes ecotourism, adventure awareness on the importance of from MCIT, 2012b review more than 30 years of ecotourism activities which yield Ecotourism requires the “UMBRELLA” mixed findings on the pros and intention and determination NATURE TOURISM PRODUCT cons of this form of tourism. to learn from and conserve “Ecotourism is both an expansion natural and social attractions. SUB PRODUCTS Ecotourism Adventure tourism Rural tourism and a refinement of the Stronza et al. (2019) highlight connection between tourism that ecotourism is frequently and conservation. It builds on confounded with other forms Birdwatching Scuba diving Agri-tourism the idea of using tourism to of tourism and its effectiveness
reinforce conservation and vice in protecting the environment TOURISTIC versa, while deepening the criteria depends on multiple factors. ACTIVITIES Whalewatching Rafting, rappel, torrentism, speleology, for sustainability” (Stronza et paragliding, trekking, Sport fishing al., 2019). Ecotourism differs high mountains, bicycle, Ecotourism in Colombia Others horse riding, others from nature-based and wildlife tourism as it requires learning, Since 2003, the Colombian interpretation and conservation Government has promoted of nature and local communities. guidelines to develop the COMPLEMENTARY Cultural tourism Wellness tourism Scientific tourism Wildlife tourism and ecotourism ecotourism sector and declared PRODUCTS
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ECOTOURISM ADVENTURE TOURISM RURAL TOURISM nature conservation. Ecotourism Magdalena), and adventure must generate income directed beaches (mr; Santander, to support and promote natural Boyacá, Magdalena), areas conservation, in which it • rural tourism: high quality
is developed, and surrounding coffee growing zone (im; (coffee) activities) Scuba diving Birdwatching
communities” (MCIT, 2012b). Caldas, Risaralda, Quindío), Whalewatching Protected Areas Pristine beaches Continental waters Adventure beaches Cultural landscapes Cultural Haciendas (welfare) Valleys and Mountains Valleys wellness ranch (mr; DEPARTMENT Haciendas (traditional In 2013, the Ministry of Commerce, Cundinamarca, Antioquia, Industry and Tourism of Colombia Caldas, Risaralda, Quindío) Antioquia IO IO IO developed the business plan and ranches with traditional for nature tourism and defined activities (mr; Antioquia, Boyacá STO STO IO STO priorities for touristic activities Casanare, Meta, Arauca). by department, for the three sub products, based on the ability of Carvajal Valero and Gonzalez Chocó STO STO STO STO achieving a competitive advantage (2016) analyse the prioritized
within three distinct time frames: activities and sub products from Cundinamarca IO IO IO immediate (im), short run (sr) and the nature-based tourism business medium run (mr)11. The priority plan (ecotourism, adventure, activities and departments were and rural tourism or agri-tourism Magdalena IO IO STO IO SOP STO (Avia Export, Tourism Leisure & and identify nine Colombian Sports, & Europraxis, 2013): departments (see Table 1) that Meta IO STO IO can be prioritised for their • ecotourism: National Parks/ ecotourism opportunities. These Quindío STO IO IO buffer zone of protected are Antioquia, Boyacá, Chocó, areas (im; Antioquia, Valle Cundinamarca, Magdalena, Meta, del Cauca, Amazonas, Quindío, Risaralda, San Andrés y Risaralda STO IO IO Magdalena, Cundinamarca, Providencia and Valle del Cauca. Meta), birdwatching (im; The authors recognised that these San Andrés y IO STO IO Antioquia, Magdalena. regions can be easily characterised Providencia Cundinamarca, Caldas, and marketed, following the Risaralda, Quindío), pristine example of other Spanish Valle del Cauca IO STO SOP beaches (sr; La Guajira, Chocó, speaking countries (e.g., Spain). Providencia, Magdalena) and Blue is Immediate Opportunities Green Short-Term Opportunities whalewatching (sr; Chocó), In 2015, the National Inter- • adventure tourism: continental Institutional Ecotourism waters (im; Antioquia, Committee of Colombia was Amazonas, Magdalena, created to promote, evaluate and part of the country’s’ biomes. the Amazon and other parts of Cundinamarca, Meta, articulate the implementation However, Forero-Medina and Colombia. The National System Table 1. Colombian departments with Santander, Boyacá, Huila, of plans, programs and projects Joppa (2010) found that 60% of Natural Parks (14.268.224 nature-based tourism potential (Modified Tolima, Bolívar), scuba to strengthen ecotourism. of these biomes have less than hectares) protects 11.27% of from Carvajal Valero diving (sr; Providencia, 10% of their area protected. the continental area and 1.5% and Gonzalez, 2016) Magdalena, San Andrés), Privilege areas for ecotourism The level of protection is not of the marine area. Private valleys and mountains are protected areas that in uniform nationally, and the conservation areas belong (sr; Santander, Boyacá, Colombia protect a significant Andes, the northern Orinoquia to the Civil Society Reserves regions, the Caribbean, the Network (MCIT and MADS, 2003) Magdalena and Cauca Valleys and they could be also suitable 11) Immediate actions correspond to activities between 2012 to 2015. Short run are less well protected than for ecotourism activities. corresponds to 2016-2018 and medium run corresponds to 2018-2021.
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NATURAL PARK TOURISM IN COLOMBIA Other suitable areas for Germany. This region comprises 1.800.000 ecotourism activities are UNESCO 25 municipalities of the central sites. Between 1984 and 2019, departments of Caldas, Risaralda 1.600.000 Colombia registered nine and Quindío; and is the location 1.400.000 UNESCO World Heritage sites for most of the national coffee designed for the conservation production (Aranda et al., 2009). 1.200.000 of globally significant locations. Six are cultural sites (Coffee In recent years, the number of 1.000.000 Cultural Landscape, Historic visitors to National Natural Parks 800.000 Centre of Santa Cruz de Mompox, has been increasing (Figure 9) 600.000 Port Fortresses and Group of with a spike in 2016 (49% annual NUMBER OF VISITORS Monuments, Andean Road System growth rate) which is the year 400.000 and San Agustín Archaeological when the peace treaty was Park), one site is both cultural signed in Colombia. Despite this 200.000 and natural (Chiribiquete growing trend there is not enough 0 National Park) and two sites are evidence to claim that this is 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 of natural interest (Los Katios ecotourism, as it might involve Natural Park and Malpelo Fauna activities which result in the and Flora Sanctuary). Tinsdell consumption of natural resources. and Wilson (2012) argue that contributed 13% of the yearly the Malpelo Island in the Pacific Figure 9. Yearly visits to National tourism increases when sites are Further, even if the majority of visits to National Natural Parks. Ocean and Providencia island in Natural Parks in UNESCO registered, but lack of protected areas offer “ecotourism the Caribbean Sea) demonstrates Colombia (USESPN- OEE-MINCIT, 2018) security and illegal activates might opportunities” and essential level Scuba diving represents one that scuba diving can attract threaten these sites (https://whc. of services (e.g. visitor centres, of the key successes in the two significant funds to prevent the unesco.org/en/news/1936/). trails, viewpoints), the numbers most popular national parks, acceleration in the destruction of visits to the National Natural and since it generates relatively of already degraded marine At the national level, the Coffee Parks are mainly driven by only low environmental impact, it has resources. The Caribbean coasts Region is the first rural tourism two protected areas (USESPNOEE- been promoted as a sustainable for example have experienced destination. According to SITUR MINCIT, 2018). According to the tourism option that can finance an 80% reduction of the coral PCC (Tourist Information System Colombian Ministry of Trade, marine and terrestrial biodiversity reef cover (Doney et al., 2012). of the Coffee Cultural Landscape, Industry and Tourism, the area conservation programs (Roberts 2018), the vast majority of which received the majority of et al., 2017). Trujillo et al. (2017) Zuñiga-Collazos and Alexander the visitors to this region in visits in 2018 was the Natural apply the travel cost method to (2015) report that the national 2018 were nationals (91.3%), Park Corales del Rosario y San estimate the economic welfare market highly favours ‘sun, sand followed by 1.8% travelling Bernardo (62% of the total visits) provided by recreational scuba and sea’ tourism over more from the US, and 0.5% from located in Sucre and Bolívar, which divers in the Coral Reefs in Rosario nature-based attractions and this contain a vast network of coral and San Bernardo National can explain the reduced demand reefs and protected ecosystems. Natural Park. The scuba diving for the other national parks. This is followed by the National activities in this natural park Data from the Colombian Travel Privilege areas for Natural Park Tayrona, which in generate an economic benefit & Tourist Agents Association 2018 received 25% of the total of USD 157 per diver, and a (ANATO, 2018) indicate that in ecotourism are protected number of tourists. It comprises total annual benefit of USD 2018 approximately 14% of the areas that in Colombia 15,000 ha of protected beaches 658,359 (on the basis of 4200 travel agencies mid-year sales and forested areas located annual diver visits in the area). were for beach destinations, protect a significant part near the city of Santa Marta in The extrapolation of the welfare whereas alternative forms of northern Colombia. The remaining benefits to other popular diving tourism like cultural tourism of the country’s’ biomes. natural protected areas only destinations in Colombia (e.g. (10.3%,), ecotourism (8%),
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adventure tourism (7.2%) and barriers. They include, the agri-tourism (5.4%) only capture absence of an effective ecotourism smaller percentages of sales. policy, the inadequate design Díaz et al. (2013) report that and development of ecotourism there is a low offer of ecotourism products and their promotion, opportunities by national travel the poor infrastructure (i.e. roads, agencies. They report that 26% public services, lodging), the of travel agencies were unaware lack of a national tourist culture, of the ecotourism destinations, and the absence of ecotourism and that 30% of them declared guides, information and marketing that their clients were also not packages (MCIT and MADS, aware of their existence. 2003; MCIT, 2012b). Further requirements for attracting The Colombian Travel & Tourist international visitors are bi-lingual Agents Association statistics guides and information products. (ANATO, 2018) also reveal that The current sustainable tourism statistics signal the need Colombia has the to further develop tourism potential to become supply chain policies that: • integrate tourism companies the world’s premier with national suppliers, Curved tail of a • avoid income leakages in the Andes–Amazon transition study does not however report humpback whale birdwatching • offer sufficient tourism- (Ocampo-Peñuela and Winton, specific results for regions but just in Bahia Solano, Colombia related infrastructures 2017). Maldonado et al. (2018) aggregated potential estimates. destination. and investments report that economic benefits • promote training for skilled can flow from birdwatching Whalewatching and pink-dolphin tourism workforce and tourism in regions previously are other opportunities for 54% of travel agencies sales were administrations and inaccessible due to the armed ecotourism activities. Currently, to international destinations • promote effective conflict. They report that at a cost few regions (Bahía Malaga in the signalling that in 2017 Colombians marketing strategies. equivalent to the average WTP southern Colombian Pacific and prefer out of country tours. of Audubon12 members (USD the Amazon basin) are organized Similarly, the results of the survey A promising opportunity to 310 person/day) the expected for whalewatching ecotourism on expenditure for domestic develop ecotourism activities annual number of bird observers (Zapetis et al., 2017). However, this tourism 2014-2015 (DANE, in Colombia is birdwatching. would be between 10,000 and ecotourism attraction has recently 2016a) indicate a lack of national Colombia has the potential to 15,000 accordingly to the models begun to expand to other regions tourism demand with only 12.4% become the world’s premier presented in the paper. Moreover, in Colombia, such as the Caribbean of residents living in the main birdwatching destination. they forecast that if birdwatchers which also provides suitable cities travelling outside of their Currently, the birdwatching visit Colombia once during the habitat for marine mega-fauna and area in a year. There is clear activities are concentrated in the next ten years, birdwatching is considered to be a migratory evidence that national demand Andes and the Sierra Nevada tourism would generate USD 9 corridor for several species of can represent a national driver de Santa Marta, but more million in profits per year, and cetaceans (Jiménez-Pinedo et for ecotourism activities. In order recently this activity has been more than 7,500 new jobs. This al., 2011; Zapetis et al., 2017). to promote the development extended to the southwestern of eco-tourism in Colombia, it corner of the country, in the is necessary to overcome some Putumayo department, located 12) Audubon International Alliances Program
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Given that Colombia ranks fourth (Goodwin and Leader-Williams, of locations of interest. In this in the world for the diversity 2000; Kerley et al., 2003). way ecotourism activities could Given that Colombia of mammals, charismatic attract national and international ranks fourth in the species ecotourism is another Recent literature has indicated tourists and provide local welfare promising option for promoting that more experienced tourists and environmental protection. world for the diversity of biodiversity conservation of are also interested in seeing Figure 10 conceptualises the terrestrial and marine species less charismatic species (Di logical framework to assess and mammals, charismatic (e.g. McClenachan et al., 2012). Minin et al., 2013) however in design ecotourism opportunities. Primates and birds (Calle-rendón high biodiverse countries like species ecotourism is et al., 2018; Ocampo-Peñuela Colombia, it is likely that protected The national political context is and Winton, 2017) have been areas with high conservation the key background to the analysis another promising option proposed as the flagship species value report a lower presence of of ecotourism opportunities. for promoting biodiversity that could be targeted by charismatic species (Baptiste et Since 2010 the Colombia ecotourism activities. However, al., 2017), and as a consequence government and ProColombia, conservation of terrestrial the exclusive use of flagship charismatic species tourism may the entity responsible for species to attract ecotourists produce detrimental effects. Colombia’s international and marine species. might produce unintended promotion as a tourism consequences like the In order to develop a destination, have shown interest marginalization of areas with low sustainable, effective, and and commitment in supporting numbers of charismatic species equitable ecotourism industry ecotourism opportunities. and socio-economic conditions. (Goodwin and Leader-Williams, in Colombia, it is important For example, a rural area with 2000; Krüger, 2005; Veríssimo et to systematically analyse The other influential factors in mainly low-income farmers View on Tuk tuk on the street in Bahia al., 2009) and an overall under- the different environmental, a successful ecotourism supply will complicate the choice of Solano, Colombia appreciation of biodiversity economic and social conditions chain are the main institutions where lodging and tourism operating in the locations of facilitates can be located. While interest. These can be the an area with existing lodging and local government, the private accommodations might just need sector, local organizations and to consider whether the tourism donors. Restrepo and Clave flow will be adequate for the local (2019) analyse the role of accommodation capacity or how different tourism institutions the current accommodations for the development of regional can respond to the eco-tourists’ tourism. They conclude that the demand. Local stakeholders need understanding of institutional to be involved in the designing dynamics is crucial to boost and planning of ecotourism management and planning for a infrastructures to minimise more effective regional tourism. the social conflict and provide Further, to assess and design a unique touristic experience ecotourism opportunities it is to visitors. The Utria National necessary to consider jointly Natural Park in the department of the supply and the demand Chocó represents a good example side of ecotourism. The supply of locals and tourism industry represents the opportunities that integration. Local communities the different local areas can offer who live in the Pacific coast have in term of natural capital (e.g. always protected the cultural charismatic vs non-charismatic traditions of their ancestors and species), human capital (workers) are now starting to appreciate
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Socio-economic that birds and whales are appreciate the profitability structure Identifying existing social, providing a valuable source of of the market. Direct market natural and economic capital wealth, and as a consequence surveys and well-coordinated Natural capital
Government SUPPLY they have stopped deforesting marketing strategies are the Job opportunities and are now protecting/ main instruments to determine Donor Identifying supplying a diverse natural the market demand for future Organisations social, natural and NGOs and economic capital for the tourists to enjoy. ecotourism opportunities needs Private sector (Tinsell and Wilson, 2012). Tourism
The development of ecotourism INSTITUTIONS Locals FOCUS opportunities also provides new For example, in 2016 the Utria Conservation Identifying target GROUP markets
opportunities for employment National Park doubled the DEMAND that can require training number of visitors due to the Job opportunities programs, experts from other promotion of the site as an eco- CHOICE Eco-tourism EXPERIMENT areas or competition with tourism experience for bird and policy options POLICY FRAMEWORK other industries in the local whalewatching. In this case, job market. For example, branding ecotourism initiatives in the Utria National Park, (Carvajal Valero and Gonzalez, POLICY DESIGN locals have stopped illegal 2016) or World Heritage awards hunting and they are now might offer comparative offering tourist guide and advantages to local communities. Figure 10. other touristic services. Before are the deterioration of fragile and the economic leakage that Visioning and investing in the ecotourism Research objectives environments (e.g. mangroves occurs when a lower per cent of planning for ecotourism opportunities is necessary to and coral reefs) as discussed by the benefits (e.g. due to low wages) opportunities anticipate the tourist demand, The design of ecotourism multiple authors (e.g. Ramírez et stay in the area (Sekercioglu, 2002). impact on natural conservation opportunities that are fair, al., 2008; Doiron & Weissenberger, programmes and socio- sustainable and profitable 2014); different types of pollution Figure 10 highlights the need for the economic consequences. The requires a careful assessment (e.g. water, visual, noise) (e.g. engagement of local stakeholders forecasting of tourist demand of the tourism supply chain and Lopez-Angarita, 2014); alterations at the beginning of the process to is crucial for investors as a transparent framework of to the wildlife behaviour (e.g. identify policy context, social and well as local stakeholders to analysis. Figure 10 reports the Bateman and Flemming, 2017); environmental conditions and framework suggested in this as well as the introduction of barriers to develop ecotourism project to identify and evaluate invasive species (Anderson et al., opportunities. The study of supply Ecotourism activities the tourism opportunities in 2015). In the sociocultural context, and demand for ecotourism can lead to social risk Colombia case studies. ecotourism activities can lead to activities is essential to determine social risk for local communities the success of the development for local communities, The construction of a framework or the commodification of and local characteristics should for analysis is considered essential, ethnic minorities as well as the be contrasted with local and commodification of as the literature shows that the appropriation of intellectual international visitors’ expectations. overall effects of ecotourism can property from ancestral knowledge For positive long-term benefits ethnic minorities, be either positive or negative. (e.g. Coria and Calfucura, 2012; of tourism in less developed Caviedes Rubio and Olaya Amaya Maldonado et al., 2006). Finally, the areas, tourism development is and appropriation of (2018) analyse the current impacts economic benefits generated in recommended to take place slowly intellectual property of ecotourism in Colombia the area could lead to an increase thus allowing the local community and they flag up the landscape in the cost of land and the cost of to learn, develop experience, capital, from ancestral disruption due to tourism living (e.g. Maldonado et al., 2006); knowledge and know-how, to make infrastructures and services. the generation of seasonal (rather necessary adjustments, and grow knowledge. Other environmental damages than permanent) employment; along with tourism growth.
44 45 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 Sustainable cacao Photo: Neil Palmer/CIAT Photo: Biodiversity Protection in Colombia: An Economic Perspective / Report 2 Sustainable cacao: Consumer demand and farmer production options
it became a cheaper product15. level is at around 10-15 years, By the beginning of the last subsequently trees decay at around century, chocolate entered into 30-50 years (International Cocoa the diet of Europeans and soon Organization, n.d.). Each cacao pod the production areas expanded usually encases about 40 beans from South America only (mainly which are roughly 30% of the weight in the Amazon basin and Andes of the cacao pod, the rest is crop mountains) towards European waste. Cacao trees can be damaged Sustainable colonies in West Africa (Squicciarini by pests and diseases and the most and Swinnen, 2016)16. Post common pathogen (Phytophthora World War II there was a boom palmivora, Moniliophthora roreri cacao: in cacao consumption and West and M. perniciosa) that causes Africa was already the leading black pod disease is one of the Consumer demand and production zone worldwide. major threats for cacao farming. Overtime, Colombia and other Traditionally, cacao trees were 2 South American countries have grown in natural or secondary farmer production options switched towards different crops forests, or in the shade of and cacao is not now a main crop. other crops as the biodiverse environment protects trees from Cacao farming and diseases. Nowadays ‘hybrid’ species the environment have been introduced and cacao History of cacao communities’ rulers. The history trees can be planted in direct sun of Spanish explorers’, as told in Cacao trees are very sensitive or thinned forest (Asare et al., Cacao is an important crop for their reports, indicates that in to environmental and weather 2018). However, the monoculture rural areas in Colombia, as it 1519 Hernán Cortés observed conditions and just grow in farming system is contributing to is the raw material from which at the court of Montezuma high temperature and high biodiversity loss, soil and water chocolate is manufactured. (ruler of Tenochtitlán) the rite of humidity.17 Therefore, many degradation and deforestation chocolate drinking and that soon regions of Colombia are naturally (Carsan et al., 2014; Obeng & In the pre-Columbian era (450 after Spanish travellers started endowed with the conditions Aguilar, 2015). Figure 11 reports BC), cacao trees were of high importing the cacao beans in necessary to invest in cacao the possible relationship between value, as the Aztecs believed that Europe. For a couple of centuries, farming. At the same time, few cacao monoculture, biodiversity cacao seeds were the gift of their only European aristocrats and other countries can produce and production intensity. Although god of wisdom (Quetzalcoatl).13 royals could consume chocolate.14 cacao and there is pressure to cacao production is also influenced Seeds were used as a form of In the early 18th century, satisfy the cacao global demand. by weather, soil, labour and currency and drinking chocolate innovations transformed the environmental conditions, the was a pleasure restricted to the cacao flavour and texture and Cacao trees take 3-5 years to figure shows how alternative produce fruits and peak production cacao farming systems present
13) Scientists studying cacao’s evolution believe that Theobroma cacao, the species that is the 15) In 1795, Joseph Fry invented a method of grinding cacao beans and in 1828, Coenraad van Houten source of cacao, evolved ten million years ago. Its relatives in the genus Theobroma consist of introduced the first processes to remediate the bitter taste of cacao and to extract cacao butter. about 20 species with pods and seeds similar to cacao’s (https://www.knowablemagazine.org/ 16) The cacao hybrids that are nowadays grown worldwide were created in Trinidad article/living-world/2018/searching-chocolates-roots-and-enemies-colombias-wilderness). and Tobago and from there disseminated to the rest of the world. 14) In France, Marie Antoniette was given health remedies in chocolate waffle 17) Cacao trees need lots of rain and humidity, coarse particled soil with sufficient nutrients and organic (still known as Pistoles of Marie Antoniette) and in the UK, the diary of Samuel matter and trees are very sensitive to soil water deficiency; excess water should be able to drain away. Pepys (‘700) describes the luxury habit of drinking chocolate in London.
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farm tree cover is beneficial for conventional monocultures. biodiversity through enhancing Moreover, they found that the landscape connectivity and habitat cumulative yields of all products availability (Schroth and Harvey, harvested were significantly 2007). Finally, lower levels of higher in the AFs (161% higher) forest fragmentation associated compared to the monocultures. with cacao AFs were also found Finally, but not least important, to be beneficial for pollinator lower levels of cadmium (Cd) diversity (Toledo-Hernández et leaf content have been found al., 2017). A growing number of in AFs than in monocultures studies have demonstrated the (Gramlich et al., 2016) environmental benefits of AF (e.g. Obeng and Aguilar, 2015). International initiatives have Evidence suggests that cacao been launched to promote
INTENSITY AFs promote jointly biodiversity AFs, reforestation and avoid
BIODIVERSITY BIODIVERSITY and ecosystem services (De deforestation.18 However, farmers Beenhouwer et al., 2013). There are sceptical about agroforestry is evidence suggesting that systems as they believe that shade LOW PRODUCTION INTENSITY HIGH pollination by cacao midges trees increase humidity and thus benefit from shade conditions susceptibility to disease infection (Groeneveld et al., 2010); and that (Anglaaere et al., 2011; Clough et Figure 11. Cacao sustainability trade-offs. and increase carbon stocks with that there is a positive relationship al., 2009). Further the investment farming systems and potential economic Monoculture cacao farming is the an annual rate of accumulation between shade management costs to switch to more and environmental predominant system in leading of carbon in aboveground with ant species-rich communities sustainable cacao farming can consequences exporting countries (e.g. Ivory biomass ranging between 1.3 and which improve the financial be substantial as more workers Source: adapted from Norris and Wade, (n.d.) Coast, Ghana, Ecuador). It relies 2.6 Mg C ha−1 y−1 (Somarriba performance of small-scale farms with diverse skills are needed to on persistent use of fertilizers et al., 2013). Middendorp et al. (Bisseleua et al., 2017; Tadu et manage the diverse crops and and pesticides and the reduced (2018) indicated that agroforests al., 2014). Insect pests of cacao trees and new selling markets labour costs and increased shaded by native trees could store trees in AFs seem to be controlled need to be identified (Millard production yield are counter up to 7% more aboveground by the diversity of arthropod 2011; Cerda et al., 2014). While balanced by the environmental biomass compared to communities (Klein et al., 2006) we claim that the agroforestry consequences (Donald, 2004; monocultures. These agroforestry and reduced by the presence system offers many incentives CocoaBarometer, 2018). In the last systems favour the diversity of of a diverse shade canopy to strengthen the cacao farming decade, alternative cacao farming species of flora and fauna as they (Daghela Bisseleua et al., 2013). system for a secure, sustainable, systems have been studied and function as buffer zones in natural long productive sector, this system results show that agroforestry can areas, facilitate connectivity The benefits provided by AFs is not the only response to the represent a promising substitute. between remnants of vegetation, are also related to food security multiple environmental pressures. and serve as a refuge for several and income diversification in Cacao agroforests (AFs) that species of migratory birds (Ríos the rural Colombian context. A For this reason, a parallel GROW retain a floristically diverse and et al., 2017). In this regard, study developed by Schneider Colombia stream of research structurally complex shade canopy animal diversity is found to be et al. (2017) found that cacao is focusing on preserving the have the potential to harbour higher in cacao agroforests with yields in AFs were not significantly genetic diversity of cacao trees in significant levels of biodiversity. high plant diversity, structurally different when compared with order to support the global cacao Cacao AFs provide several complex canopies, and abundant ecosystem services to society, surrounding forest cover 18) The Cacao and Forest initiative is a platform of industry, major donors and West African for instance, they contribute to (Deheuvels et al., 2012; Schroth countries that aims to promote sustainable cacao farming. The World Cocoa Foundation, IDH the fixation of atmospheric CO2 and Harvey, 2007). Retaining Sustainable Trade Initiative and the Prince of Wales are the main sponsors of the platform.
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PRODUCTION/CONSUMPTION production system as it responds poverty, lack of basic services (e.g. to market requirements, climate schools, infrastructure) and are change and environmental issues19. the main victims of price volatility. Drought and soil deterioration The sharp drop in the cacao price are the main limits that the in 2016 imposed 30%-40% losses sector is facing along with pest on smallholders’ income.20 They and disease control. Therefore, also suffered from the degradation innovative genetic materials of the natural environment that 351 1.852 Rest of Asia or management strategies can impacted productivity. Child labour Europe represent solutions to increase remains at very high levels in the 732 cacao productivity and preserve cacao sector, CocoaBarometer US 176 biodiversity. Colombia and other (2018) reports that in West Africa 154 Japan Africa 46 82 cacao producing South American more than two million children India China 333 countries are also exposed to are working in cocoa fields. There Rest of Americas 189 a high levels of soil cadmium is a sector-wide objective to Brazil that can have a negative effect reduce child labour by 70%, and 88 on the profitability of the cacao to empower farmers to develop 2.000 900 618 Rest of Côte Ghana Rest of 280 Asia sector. CacaoNet and ICOGen a sustainable cacao economy. d’Ivoire Africa Indonesia 317 165 270 are setting up two databases to Rest Brazil Ecuador conserve the different varieties The Global Cocoa Agenda 76 Australia that can be used in future cacao adopted at the first World Cocoa breeding programs (e.g. Padi et Conference 2012 aimed at Cocoa Production in 1,000 tonnes 2017/18 al., 2017; Livingstone et al., 2011). improving the wellbeing of cacao Domestic consumption in 1,000 tonnes 2015/16 farming communities through Cacao farming and their inclusion in the global social capital cacao survey. CocoaBarometer Figure 12. (2018) reported a lack of success better known as ‘bulk’, criollo and African and Latin American Cacao production Cacao farming is a labour intense in improving the conditions of and trinitario, which are the countries. USA and European and consumption farming activity and globally farmers and cacao workers. The varieties from which the ‘fine and countries are the major Source: adapted from 90% of the cacao is produced sector is aging and has difficulty in flavour’ designation is derived. consuming markets but new CocoaBarometer, by small holders. However, attracting younger generations of The quality and flavour profile consumers in Russia and Asia 2018 CocoaBarometer (2018) reports farmers which could significantly of cacao beans is affected by the are emerging. This increases that cacao farmers suffer structural impact global production of cacao. plant genotype, soil conditions, pressure on producing countries other ecosystem parameters, and that are experiencing a decrease Cacao international market postharvest treatments including in productivity due to pests, The global cacao price is fermentation (Kongor et al., 2016). diseases and climate change. On the cacao global market, three volatile and is influenced traded varieties exist: forastero, During the last decade, worldwide The global cacao price is volatile demand for special cacao has and is influenced by the supply- by the supplydemand grown at an annual rate of 9% demand balance for a particular (Badrie et al., 2015; Contreras origin and type of cacao (Figure 19) Genetic diversity of Colombian germplasm balance for a particular includes all the variants of cacao found throughout Pedraza, 2017; Ríos et al., 2017) 12). CocoaBarometer (2018) its native range and can play a relevant role and cacao is of significant reports that between September origin and type of cacao in supporting the industry (Osorio-Guarín et al., 2017). Colombia has 50% of the species economic importance both 2016 and February 2017 there of Theobroma therefore being the centre of Theobroma species and of T. cacao diversity. for producing and consuming was a significant drop in the 20) Ghana was an exception as the government countries (Figure 12). Producing world market price due to an is indirectly subsidising cacao´s price. countries are primarily Indonesia increase in the productivity of
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9 DIFFERENTIATING FACTORS DESCRIPTION
The interaction of physical factors (soil, water, temperature) with the type of climate and geo- 8 Origin graphic location influence the expression of the characteristics of a particular variety of cacao REAL PRICE 7
It determines the rarity of cacao in which other unique characteristics, both physical and organo- Singularity 6 leptic, also stand out; corresponds to crops with high specialisation in restricted production areas
5 The genetic group to which the cacao belongs determines to a great extent the physical and or- Variety ganoleptic characteristics that it will develop with an adequate management 4
3 TREND A parameter that is the result of the interaction between genetics of a specific variety and Quality post-harvest management 2
1 The management of a plantation added to the activities of harvest and post-harvest are factors Management 21 REAL PRICE (2015) ‘000 US$ PER TONNE that determine the expression of the organoleptic properties of cacao
0
Its management stands out for influencing positively in the social, environmental or productive 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017 Relevance environment, generating significant social benefits or environmental services
Figure 13. Cacao African farmers who benefit from processing is under investigation CacaoBarometer (2018) reports house sustainability programmes Table 2. Differentiating prices between 21 1952-2017 training and support programs (Catapul project) and traders that “none of the standards (e.g. Cocoa Life label). factors for special cacaos (Modified from Source: of major cacao companies and and retailers play a role in have been able to significantly Ríos et al., 2017) adapted from CocoaBarometer favourable weather. Many actors securing fair prices to farmers. contribute to farmers achieving Under pressure from the IMF and 2018 perform along the cacao supply a living income, or even to World Bank, in 1980 the cacao chain, but farmers are the most Ríos et al., (2017) suggests that lift farmers out of structural markets were liberalized in the exposed to financial risks. worldwide special cacaos are poverty.” Table 3 reports the hope that the demand-supply sold for a premium of USD most popular international labels balance could boost the livelihood The flavour of cacao develops 1,000 per ton over the price that aim to support farmers’ of the sector. Unfortunately, the on the farm, as harvested pods of conventional cacao. Special livelihood and environmental liberalization has performed are opened, and the processing cacao is characterised by protection. Some labels are poorly in terms of raising the of beans start. The beans get outstanding sensory profiles specific for cacao (e.g. UTZ) farm gate prices. Cacao prices piled in heaps or wooden boxes (fine flavour and aroma cacao) others for agriculture products and are fermented naturally by and differentiating factors (see in general (e.g. organic). Some yeasts and bacteria, then dried in Table 2) such as origin (Premium companies such as Hersheys the sun on wooden platforms or or origin cacao), the certifications and Mars have committed to cement/ground, where a gradual obtained by their producers increase their procurement Certifications/standards reduction in moisture content (sustainable cacao), as well as of sustainable cacao, whereas inhibits microbial growth. Beans cacao traceability and singularity Mondelēz has developed in- have played a role in are then bagged and marketed. (Chaux and Pérez, 2017). differentiating the cacao Good quality fermentation/dry and timely delivery to market Certifications/standards have 21) Organisms that ferment the beans will markets and securing are essential to benefit from played a role in differentiating have an impact on flavour and will differ depending on the region in which the trees a price premium. However, a the cacao markets and securing are grown. Therefore, varieties grown in price premiums. standardized protocol for bean price premiums. Although different regions might have different flavour due to different fermentation organisms.
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Table 3. Different certification strategies TRADER/GRINDERS CHOCOLATE PRODUCERS operating in the cacao market 36% 1,020 Barry Callebaut 35% 450 Mondelēz International
26% 950 Olam 43% 434 Nestlé
42% 750 Cargill >50% 410 Mars
CERTIFICATION LOGO YEAR DESCRIPTION 38% 593 Ecom 75% Hersheys 200 Fairtrade 1994 Max Havelaar Foundation The label supports the creation of cooperatives/ arranged fair trade certification. associations, monitor on limited used of 19% 500 Sucden 70% Ferrero 135 chemicals and no child labour. It guarantees a minimum export price of $2000/tonne. 22% 400 Touton 45% Lindt und Sprüngli 128
102 Cemoi 31%
100 Cocoanect 25%
N.A. Blommer US/EU organic USDA was approved in 1990. In In the cacao sector, EU recently requires buyers 1991, EU defined the rules for to satisfy additional requirements, especially in responsible use of resources, the field of food safety certification, Corporate environment and biodiversity. Social Responsibility (CSR) and sustainability. Cacao Authorized certification Figure 14. are set at the futures market the proportion of certified cacao retailers and chocolate bodies test that the product that is frequently dictated by sourced by the main international producers. In dark is compliant with rules. green their proportion computer algorithms and farmers retailers and chocolate producers. of certified cacao and in light green have minimum control on their Certified cacao generally total cacao in 1000 cash crop. Further the global represents a small proportion in tonnes used in 2017. Source: Rain forest It was founded in 1987 by Daniel Farmers must meet the Sustainable Agriculture cacao market exposes farmers to the industry, with some exceptions adapted from Katz and aims to promote Standard that aims to conserve ecosystems, alliance international competition coming such as Cargill that is the most CocoaBarometer, 2018 sustainable forestry, agriculture protect biodiversity and waterways, conserve tourism. Recently it merges forests, reduce agrochemical use, and safeguard from new producing countries active trader in resourcing with UTZ and in 2020 the new the well-being of workers and local communities (e.g. Indonesia) or countries which certified cacao, and Hersheys and program would be launched. subsidise production (e.g. Ghana). Ferrero that are dominating the Globally a few major producers category of chocolate producers and retailers (Figure 14) control for their attention to certification. the market and their investments
Sustainable In 2002 Nick Bocklandt, a Belgian- Farmers should follow sustainable cacao in certified cacao is still limited. García-Herrero et al. (2019) confirm farming of Guatemalan coffee grower, and farming system to favour shaded cocoa that consumers are demanding coffee, cocoa, Ward de Groote, a Dutch coffee systems, fair social and living conditions tea and roaster proposed the certification and adequate farm management. The cacao industry differentiates more sustainable chocolate hazelnuts of sustainable farming for coffee, between cacao traders/grinders products although the consumption cacao, hazelnuts and tea. and chocolate manufacturers. The is frequently associated with social, former usually cover all activities cultural meaning that provide for processing the beans in cacao rewarding emotional feelings products, including nib, liquor, (Squicciarini and Swinnen, 2016).
ISO 34101 July 2019 the new ISO sets butter, and powder. The chocolate Chocolate contains theobromine, the requirements for cacao manufacturers are responsible a psychoactive alkaloid content, sustainability management systems for mixing the cacao with other which has mildly stimulating and that includes economic, social and environmental requirements. ingredients to obtain market slightly addictive effects. At the chocolate products like chocolate same time, chocolate can produce bars. Both players have a relevant positive health effects such as role in sourcing and using certified the prevention of cardiovascular cacao. Figure 14 summarises diseases, improving periodontal
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health; effects on neurons; the different stages of production capable of providing livelihood Colombia has the potential to possible anti-tumour effects; (Recanati et al 2018) and the to growers (Ministerio de Justicia, participate in the fine chocolate anti-inflammatory effects and possibility that consumers cannot 2003). Cacao farming stands out market since the genotypes that anti-obesity effects (Araujo et fully assess the sustainability of as a rural development strategy in are grown in the country have al., 2016; van Wensem, 2015). In certificated chocolate products. the post-conflict Colombia and has achieved worldwide recognition European culture, chocolate is given García-Herrero et al (2019) suggest been adopted by the government for their quality and can be as a gift more than any other food that current labelling systems as the strategic crop to support positioned in the niche of special and is almost expected in certain are not fully communicating the families with the initiative cacaos (USAID et al., 2017). holiday settings as a consequence sustainable cacao initiatives and “Cacao, Forest, and Peace”24 led The country is already ranked the consumption is stable or slightly a gap in communication exists.22 by the World Cacao Foundation as the 10th largest cacao bean growing every year. Research (Ministerio de Agricultura y producer worldwide (Ríos shows (Squicciarini and Swinnen, More recently, the major Desarrollo Rural, 2018). et al., 2017) and represents 2016) that the European market companies are investing in their is close to saturation, but newer Corporate Social Responsibility
markets are emerging (e.g. Russia, activities to mitigate the social 24) “Cacao, Bosques y Paz”. China and India) and the global and environmental effects demand may not be matched of cacao production and key by the global supply by 2024. international organizations are Table 4. YEAR INITIATIVE DESCRIPTION supporting and monitoring the Major International Chocolate is a complex food with sector. Major organizations/ 1973 International Cocoa The organization collects research Cacao Initiatives Organization (ICCO) findings, organizes conferences and producers, traders, retails and initiatives are summarized in Table support sustainable cacao production. consumers frequently located in 4 although other organizations Member countries represent almost 85% of world cacao production and more than different geographical zones and are specifically operating in 60% of world cacao consumption. with a long supply chain. Recent West Africa as for example the life-cycle analysis studies report Child Labour Monitoring and multiple environmental impacts in Remediation Systems in which 2000 World Cocoa Foundation The mission is to train farmers and to strengthen the sector to guarantee cacao cacao producing communities production and communities’ livelihood. It was incorporated in the It promotes charitable activities and protect children and their rights. former U.S. Chocolate public-private partnerships that could Consumers are Manufacturers Association raise funds through contributions, grants established in 1995. Colombian cacao market and outside donors, allowing it to access demanding more larger networks and support farmers across the global. They organize the world sustainable chocolate In 2011, the Colombian cacao conference. Government created the National products as these are Policy of Consolidation and Territorial Reconstruction23, which 2017 Cacao and Forest Initiative More than 25 companies in a joint- promoted by the WCF partnership with governments to end frequently associated aims to protect the fundamental deforestation in the cacao sector. rights of the population of with social and territories historically affected by the armed conflict and illicit 2008 Cocoa of Excellence They promote the diversity of cacao and cultural meaning that offer market opportunities and provides crops. One of the strategies of this incentives to safeguard cacao diversity It is founded by Bioversity for the benefits of the entire value chain, provide rewarding program is to develop productive International22, Event from the farming communities to the International and CIRAD projects, such as agroforestry and consumers. Every two years they assign with support from emotional feelings. the International Cocoa Awards. agricultural production, which are the Common Fund for Commodities (CFC), ICCO, Guittard, Barry Callebaut, Mars and Puratos. 22) In November 2018, Biodiversity International and the International Center for Tropical Agriculture (CIAT) joined forces in the Alliance of Biodiversity International and CIAT. 23) Política Nacional de Consolidación y Reconstrucción Territorial (PNCRT).
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have increased by 560% in the last often exceeds the permitted ten years, with 95% of these exports concentrations of cadmium (Cd) by (13,056 tons) being of ‘fine and international regulations (Gramlich flavour’ cacao (USAID et al., 2017). et al., 2016), such as “Proposition 65” in California30, and the EU The competitiveness of the Regulation 488/201431. Cd causes Colombian cacao sector in the health concerns as it is retained first stage of the value chain is in the human kidney (biological threatened by environmental half-life of 10–30 years) and factors limiting productivity, such accumulation effects of highly daily as the ageing of crops, inadequate doses can produce cancer, renal seeds or genetic material, shade dysfunction, osteoporosis, and excess or deficit and bad tree cardiovascular diseases (Järup and structure, as well as the presence Åkesson, 2009; Satarug et al., 2010; pests and deseases. Crop infection World Health Organization, 2010). with pathogens (Moniliophthora roreri, Moniliophthora perniciosa Although Cd is naturally released and Phytophthora sp.) and parasites into soils through weathering of (Rosellinia sp.) have generated rocks, Cd contamination of food significant production losses is caused by widespread low- (about 50%) and have increased level contamination of soil mainly farmers production costs (Instituto derived from anthropogenic Colombiano Agropecuario, 2012). activities such as mining, approximately 75% of the net of Santander25, Antioquia26, Socio-economic issues have also smelting, the development of the income of 35,000 families in Nariño27 and Arauca28. been identified in the country’s microelectronics industry and rural Colombia. Although the cacao value chain. For instance, the application of rock fertilizers cacao yield in Colombia has Approximately 74.5% of the total the low technological development (Clemens et al., 2013; Gramlich remained flat for the past 60 cacao production remains in the of the value chain; unequal et al., 2016). Bravo et al. (2018) years (average yield of 0.5 ton/ha. country (Red Nacional Cacaotera, distribution of income; problems identify that in Colombia the by the year 2017), the country’s 2016). The national market is of associativity (e.g. in forming primary anthropogenic sources total cacao production grew from controlled by large companies cooperatives and unions), trust of cadmium are soil management 36,731 tons in 2000 to 54,796 which often underpay the cacao and integration of agents of the practices, crop rotation and tons in 2015 (DANE, 2014). The bean producers as they do not meet chain; as well as the ignorance production increase was mainly the premium quality standards of the parameters of quality or explained by the extension of defined in the Normas Técnicas requirements of international Colombia has the the harvested area (98% change) Colombianas 1252 (Contreras markets from producers and potential to participate which started with 83,138 ha in Pedraza, 2017). Over 80% of the marketers (Contreras Pedraza, 2000 and extended to 165,006 national cacao production is bought 2017; Ríos et al., 2017). The latter in the fine chocolate ha in 2017 (USAID et al., 2017). by two Colombian companies: Casa issue is of particular importance The main producing areas are Luker and Nutresa29. Regarding the since cacao from Latin America market since the located in the departments international market, cacao exports genotypes that are 30) The Office of Environmental Health Hazard Assessment (OEHHA, 2001) established grown in the country 25) Approximately 31.25% of the national production. that the maximum allowable daily level for 26) Generates 8.36% of the national production. cadmium exposure for Reproductive Toxicity for Cadmium by the oral route is 4.1 µg/day. 27) It represents 8.25% of the national production. have achieved 31) The European Food Safety Authority (EFSA) 28) Approximately 6.71% of the national production. established a tolerable weekly intake (TWI) of 2,5 29) Formerly Grupo Nacional de Chocolates S.A. μg/kg body weight for cadmium (EU, 2014). worldwide recognition.
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soil amendments (particularly COP$1000 per kilo ~ USD 300 with phosphate fertilisers). per ton is necessary, to make the adoption of better management Even though Colombia’s cacao practice viable for farmers. production mainly depends on traditional smallholder cultivation Currently, there are insufficient systems (Ríos et al., 2017), recently, financial incentives to encourage there have been some initiatives farmers to enter the cacao market. to promote AFs in the country. The premium prices for growing On-farm benefits of agroforestry special cacaos do not appropriately alone are insufficient to justify reflect farmers’ additional effort the adoption, as farmers need for growing sustainable cacao. to benefit from the cacao price Therefore, there is scope for premium as well as payment for implementing additional financial the ecosystem services protected incentives, such as payments or enhanced by AF systems for ecosystem services (PES) (Asare et al., 2014). For instance, or certification schemes which farmers are currently receiving incentivise smallholder farmers an insufficient price increase for to switch from their current the added labour associated with management practices (i.e. illicit appropriate post-harvest practices, crops or non-sustainable cacao such as careful fermenting and production). This opportunity is Photo: drying correctly. The current reinforced by the establishment of Research objectives Environmental valuation studies Neil Palmer/CIAT premium paid in Colombia to a Zero Deforestation Pact, signed surveying farmers, commonly farmers adopting post-harvest in July 2018 between the Ministry On the demand side, research estimate their willingness to accept, practices is estimated to be of Environment, Casa Luker, The needs to explore whether and the willingness to participate, COP$200 per kilo ~ USD 62 per ton Sustainable Trade Initiative and consumers have a willingness to pay in management options that (USAID et al., 2017) and USD 300 the World Resources Institute – (WTP) higher premiums to obtain a generate changes in the natural per ton to farmers growing special WRI, as part of the Cacao, Forests product with flavour qualities, but state of the environment. Gibson cacao (Ríos et al., 2017). However, and Peace agreements32. The also to pay for the social and the et al. (2016) have suggested USAID et al. (2017) suggested agreements seek to incorporate environmental benefits derived using payment vehicles based that a price premium of around practices and technologies that from growing sustainable cacao on money whenever there are enhance cacao production, beans in rural Colombia. Estimating functional markets. However, help to close the agricultural the WTP for Colombian special there is scope for testing the use Research is needed to frontier, make a sustainable cacaos can provide further insights of labour contribution (willingness land use protect strategic on the magnitude of the premiums to work) as the payment vehicle explore whether farmers ecosystems and ensure that the in this market. However, if in the rural Colombian contexts establishment of this crop does consumers have a positive WTP for where cash income might are willing to engage not promote forest deforestation premium cacao, it is also relevant be low, and there are large or degradation (MADS, 2020) to explore consumers preferences percentages of the population in sustainable ways of for cacao farming features. not engaged in waged labour production that provides (i.e. barter or work exchange). On the supply side, research is them with livelihood needed to explore whether farmers Exploring the farmers’ willingness are willing to engage in sustainable to engage and participate in 32) The agreement is available at: https:// alternatives. www.minambiente.gov.co/images/ ways of production that provides sustainable ways of producing BosquesBiodiversidadyServiciosEcosistemicos/ them with livelihood alternatives. cacao, is as relevant as exploring pdf/Acuerdo_cero_deforestacion/cacao.pdf
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Identifying Innovation in their preferences within the collective incentives bonus33 opportunities cropping Economic benefits and barriers to wide range of AFs management could be helpful (Kuhfuss et al., National players strengthen the sector practices. In this regard, the 2016), or to determine if the social Diversification in CACAO production (e.g. present study could improve the pressure would affect farmers’ Farmers PRODUCTION Social impacts agroforestry) understanding of their preferences behaviour. Dumont et al. (2014) IN COLOMBIA Investigating the market demand International for chocolate Organisation of for the different practices used for argues that the transference of players Environmental products the sector improving crop productivity (e.g. knowledge, between farmers and impacts
shade complexity, income source scientists, have helped to improve POLICY FRAMEWORK diversification, pest and Cd levels cacao shade-tree management Systematic Choice management, adequate post- to implement certification literature review Experiment harvest practices, associativity); schemes for cacao and has as well as identifying means to been instrumental in promoting influence their preferences for diversity in AFs. Therefore, the opting out from illicit crop markets. design of cacao AFs should POLICY DESIGN For instance, this research could also take into account farmers’ be useful to determine whether knowledge, expectations (Jagoret there is a spillover effect of et al., 2014) and preferences. Figure 15. Visioning and information, whether conditional Research methods and planning for sustainable Field activities in the approaches cacao opportunities Choco cacao expedition, March 2019 Photo: Jaime Erazo 33) Landscape conservations versus farm conservation The research framework difficulties to directly contact farmer follows the scheme of Fig. 15 as such the revision of literature and the design of the policy will be the research method and interventions is supported by it will draw conclusions on current the study of the consumers’ barriers to implement AF systems. demand and producers’ interest in implementing alternative Finally, analysing consumer and cacao production systems. producer information in unison might help us to understand Exploring consumers’ preferences whether there is a balance or for sustainable cacao products mismatch on the demand and is not only relevant to determine supply side of the cacao market the existence of a price premium in Colombia. It will also allow for cacao from AF systems, but the identification of the aspects could also help to identify the that need improvement in the environmental and social attributes cacao value chain, so that the that have stronger impacts on supply of cacao could meet the consumers’ preferences. This requirements of the demand. information can be trivial in informing producers towards sustainable cacao systems. The producers’ preference for cacao agroforestry practices is another key information to design policy intervention however the possibility to survey producers is limited by their geographical distribution and
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LaValle, 2011), directly targeting of 1.6 hectares of Colombian Sustainable Development Goal land. With this in mind, it is clear 2, which aims to end hunger why extensive cattle ranching and enhance food and nutrition systems in Colombia have long security (United Nations, 2018). been characterized as having low land use efficiency and low According to the 2016 Colombian productivity (e.g. Mahecha, 2003) National Agricultural Survey, more also typically associated with than 37 million hectares (32% of high environmental impacts (e.g. the entire national territory) are greenhouse gases and water dedicated to livestock farming, pollution, WWF-Colombia, 2017). Sustainable although more than half of this area is not considered to have As highlighted in Turner et al. the environmental characteristics (2020), extensive farming is one of cattle ranching that would make it suitable for the key drivers of land degradation 3 grazing (DANE, 2016b). Given in Colombia and is considered the Figure 16. that the same source puts the main engine of deforestation and Deforestation in estimated overall number of loss of biodiversity in the country Colombia between 2008 and 2018 (ha) heads of cattle in Colombia at 22.9 (Lerner et al., 2017). According Source: adapted from million, the average stocking rate to the deforestation report from Instituto de Hidrología Meteorología y is just above 0.6, implying that the Ministry of Environment, Estudios Ambientales each head of cattle uses in excess in 2018 a total area of 197,159 (IDEAM), 2018
istorically, agriculture The livestock sector in Colombia is has been one of the main made up of a significant number H 500,000 engines of Colombian economic of smallholdings; Fundacion CIPAV development. The agricultural (2018), for example, reports that 450,000 HIGH-TENDENCY MODEL economic activity still contributes 82% of Colombian farmers own GROWING 400,000 TREND over 6% of the country’s GDP fewer than 50 animals. Such cattle MEDIUM TENDENCY MODEL and 4% of the value of exports ranchers face a very different set 350,000 (World Bank, 2018). Livestock of challenges than large, industrial
farming, in particular, is an producers. Chen and Ravallion 300,000 LOW-TENDENCY MODEL activity of great importance for (2006), for example, highlight both the rural economy and that an estimated 80% of the 250,000 the country’s food supply. The total number of people suffering -17% 2018 livestock sector contributes from food poverty worldwide 200,000 197,159 Has more than half of the agricultural live in developing countries, and HECTARES value added, adding 3.5% to that half of them are small-hold 150,000 the national GDP, as well as farmers. Therefore, improving the directly generating 950,000 jobs welfare of smallholder farmers in 100,000 (Fundacion CIPAV, 2018). This developing countries represents a figure represents a quarter of vital step on the path to achieving 50,000 the total jobs in agriculture, and food security and sustainable 0 almost 7% of total employment. development (Chappell and 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 YEAR
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Hectares
30,000 hectares (slightly more than by 153%, with a small reduction Greater London) was deforested between 2017 and 2018 (4%, or 25,000 in Colombia (Fig.16). Despite this 5,971 ha). Despite the decrease, 20,000 representing a reduction of 17% Amazonian deforestation in 2018 relative to the projected trajectory represented 70% of the total 15,000 of the mean deforestation model, deforestation in the country, current projections still predict a marked increase from 65% 10,000 that in the long run deforestation in 2017 and 39% in 2016. in Colombia will increase. By 5,000 the end of President Duque’s At the department level, four current mandate in 2022, total out of the six most deforested 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 Year deforestation is expected to reach areas are located in the 300,000 hectares, a total that Amazon: Caquetá, Meta, SAN VICENTE DEL CAGUÁN -26% SAN JOSÉ DEL GUAVIARE -21% PUERTO GUZMÁN 27% would increase to 400,000 ha/ Guaviare and Putumayo. Two LA MACARENA 26% CALAMAR 5% year by 2030 (MADR-UPRA, 2018). municipalities in Caquetá in CARTAGENA DEL CHAIRÁ -21% EL RETORNO 1% particular had nearly 19% of the Figure 16 reports the trend of total Colombian deforestation deforestation between 2008 for 2018: San Vicente and Figure 18. and 2030, and the current Cartagena de Chairá. These two where agricultural activities are forests, Andean forests, paramos Deforestation trends deforestation rate is depicted municipalities have consistently developed, conditioned areas and wetlands (Chará et al., 2011b). in most deforested municipalities (2012- in black. The figure shows an ranked first and second in terms and protected areas, those The loss and degradation of 2018) upward trend since 2015, despite of deforested area between of ecological importance and biodiversity is a significant driver Source: Instituto de Figure 17. Hidrología Meteorología Deforestation in the the recent drop in 2018. 2012 and 2017 (Figure 18). other areas where agricultural behind both the negative changes y Estudios Ambientales Colombian Amazon (IDEAM), 2018 2013-2018 (ha) activities are excluded by law” in system productivity and in Source: adapted from Restricting our focus to the In 2018, the Ministry of (MADR, 2018). This definition ecosystems functioning, leading Instituto de Hidrología Colombian Amazon, Figure 17 Agriculture defined the is important as it prompts to a lower stock of natural capital Meteorología y Estudios Ambientales highlights that between 2015 and 'agricultural frontier' as “the limit multiple policy options to try and a reduced flow of ecosystem (IDEAM), 2018 2017, deforestation has increased of rural soil that separates areas and stop deforestation and to benefits (Tilman et al., 2012). make a coordination of policies between the environmental A better understanding of the and agricultural sectors. full spectrum of environmental, social and economic cost Hectares More than 80% of Colombian and benefits associated with 160,000 deforested land is currently switching to silvo-pastoral used for cattle ranching (Calle systems (SPS) in Colombia 140,000 et al., 2013). The simplest, most is needed to help to assess 120,000 common cattle ranching system whether the total benefits 100,000 in Colombia consists of pasture outweigh the total cost and lands without shrubs or trees. subsequently, to develop 80,000 Areas devoted to such practices policy recommendations (e.g. 60,000 are both less biodiverse and more in the form of PES schemes). 40,000 vulnerable to fires and to the deleterious effects of invading Silvo-pastoral systems and 20,000 68,725 63,780 56,962 70,074 144,147 138,176 species (e.g. Suarez et al., 1998; their potential benefits Rivera et al., 2008). Livestock 2013 2014 2015 2016 2017 2018 Year farming generates particularly In the last decade, silvo-pastoral significant impacts on low tropical systems have been actively
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promoted in Colombia and at lower respiratory rates and 2019). The use of shrubs can Silvo-pastoral elsewhere as a means of meeting reduces the heat stress levels also help to improve pasture development pressures while they suffer (Montagnini and productivity and provide farmers systems are appealing mitigating the environmental Finney, 2011). Technoserve (2019) with a source of nutritional cattle costs of cattle ranching. These quantifies the average financial food (Paciullo et al., 2011; Sousa et agricultural strategies production systems are a form benefits of implementing SPS in al., 2010) that can reduce farmers’ of agroforestry that intensifies different regions of Colombia and dependency on commercial inputs. as they provide social livestock production through estimates that after 9 years of The structural and biological an improved use of ecosystem implementing SPS there are: 25% complexity of SPS increases the benefits and higher services and may lead to increase in milk productivity (l/ connectivity among forest habitats economic returns as the sustainable land use (Gumucio et ha/year), 26% increase in animal as well as providing nursery al., 2015). They are characterised load (LLU/ha), 114% increase services and sources of food for farmers can diversify by a combination of trees, shrubs, in daily body weight gain34, 9% wildlife species in Colombia, such forage resources and animals reduction in milk production costs as birds35, mammals, reptiles and the production. in the same agricultural system and 13% incremental in annual invertebrates36. Indeed, evidence (Calle et al., 2009; Sanchéz Matta income (compared to 3.4% for has shown that, in comparison to promote reforestation, avoiding et al., 2009). For these reasons, base line). Additionally, trees are conventional farming systems, the cattle ranching expansion in SPS may be used to enhance a potential source of firewood implementation of SPS worldwide pristine forests and minimize biological diversity and the and fodder, therefore providing has resulted in greater diversity cattle ranching environmental provision of ecosystem services additional streams of revenues to of medium-sized mammals impacts. In this regard, a life cycle (e.g. water regulation, carbon farmers (Montagnini and Finney, (Pineda-Guerrero et al., 2015), and analysis of alternative farming sequestration and biodiversity 2011). Chappell and LaValle (2011) improvements in key bio-indicator systems in the country (Rivera conservation) in cattle-dominated also conclude in their review of species such as ants (Ramírez et al., 2016) found that farms landscapes (Mosquera et al., the existing literature that SPS and Enríquez, 2003; Rivera et al., using silvo-pastoral management 2012; Murgueitio et al., 2011; can contribute to achieving food 2013), as well as species which practices have lower emissions of Rivera et al., 2013). SPS may security in developing countries. promote the recovery of ecological greenhouse gases (2.05 vs 2.34 also increase productivity and processes in ecosystems, like dung kg CO2-eq) and required 63% financial returns to farmers. Multiple complementary beetles (Giraldo et al., 2011). The less non-renewable energy for environmental benefits are abundance of beetles, in terms each unit of milk produced than Silvo-pastoral systems are associated with SPS. Tree of population size, increased 47% conventional farming practices37. considered particularly appealing conservation and planting may when comparing pasturelands Molina et al. (2008) reported that because of their presumed social enhance soil fertility. Martínez et without trees and SPS. Also, the adoption of silvo-pastoral and economic benefits. Their use al. (2014), for example, reported dung beetles increased by 53% systems based on Leucaena could lead to higher economic that a SPS implemented in the the amount of mobilized dung leucocephala in three Colombian benefits to farmers through the Colombian Sinu River Valley comparing improved pastureland departments (Tolima, Caldas and rise in cattle productivity, both in region, contributed significantly with SPS (Technoserve, 2019). Valle del Cauca) resulted in an terms of milk and meat, as well to the nutrient cycling via litter increase of 20% and 40% in milk as the potential diversification production and decomposition, Finally, the implementation of and meat production. It therefore of farmers’ sources of market therefore increasing soil reaction SPS in Colombia could help to seems reasonable to conclude income. In fact, cattle grazing and soil quality parameters. A under tree shade has been shown study in the Jabonal water shed to be associated with higher river, Costa Rica, showed that soil 35) The Regional Silvopastoral project found that silvopastoral systems present equal or higher birds diversity (Shannon index approximately 0.8) than, secondary vegetation, waterfront production of milk and meat, erosion reduced by nearly 46% in forests, secondary forests, improved pasturelands without trees and natural pasturelands as it allows cattle to graze more participating farms (Technoserve, without trees. Also, they found 32% increase of total birds’ species, 41% increase in bird species dependent on forests and a 90% increase in migratory species (Technoserve, 2019). 36) The Regional Silvopastoral project found a 0.82 correlation between vegetation cover and entomofauna diversity (Technoserve, 2019). 34) The quantity and quality of forage produced under SPS and intensive 37) The estimations include the energy usage involved in the transport of fertilizers and production of SPS allow cattle to reach their maximum weight faster. other forages, distribution of inputs, fuel combustion during the production of inputs, among others.
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objective to reduce the impact (43%) and establishment of cattle ranching and to identify of forages reserves (33%) improvements in ecosystem (Technoserve, 2019). services generated by the transition to SPS. Preliminary In 2011, the Mainstreaming results were published in Sustainable Cattle Ranching October 2019. Key insights Project defined a series of Good included: 4,388 ha converted Livestock Practices that wanted to to intensive SPS; 60,158 ha reduce the environmental impact (1520 farmers) under PES-1 of livestock due to agrochemicals (biodiversity) scheme; 3,967 ha contamination and increase (1,341 farmers) under PES-2 rural labour welfare as well as (carbon) scheme; 21,294 cattle cattle welfare (Uribe et al., 2011). ranching farmers sensitised and The final objective of the Good trained on SPS and sustainable Livestock Practices initiative cattle ranching production was to increase livestock feed, systems; 654 professionals and increase carrying capacity and technicians trained on SPS; productivity, reduce production 50 focal plant species used/ costs, increase water and soil conserved in cattle ranching quality and contribute to natural farms (25 of which are globally resources sustainable use and important species). These conservation (Rico, 2017). Since A traditional livestock that a switch from conventional identified by the GEF funded results were supported by 2011, the national government system in Colombia's southwestern Cauca cattle farming to a silvo-pastoral project “Integrated Silvopastoral changes that have had an has been working on 4 key policy Department. regime can produce both financial Approaches for Ecosystems impact at the landscape level areas: a) Nationally Appropriate Photo: Neil Palmer ©CIAT and environmental net gains. Management” implemented through identified conservation Mitigation Actions, that includes In this sense, it might fit the in Costa Rica, Colombia and corridors, with actions like: a) sustainable cattle ranching as part profile of a “production through Nicaragua between 2003 and in the Cesar river valley, 37% of the agricultural sector proposals, conservation and conservation 2007. The objective of the project of total land uses adopted through production”38 was “to promote the adoption sustainable systems, that investment within an ecological of environment-friendly Silvo- is nearly 25% of registered Silvo-pastoral macroeconomic strategy. pastoral Production Systems for producers; b) in 56% of the total initiatives exist in cattle ranching in Colombia’s converted area (nearly 27,000 Silvo-pastoral systems project areas, to improve natural ha), cattle ranchers implemented Colombia and aim to initiatives in Colombia resource management, enhance dispersed trees through natural the provision of environmental regeneration; c) in 38% of promote productivity Between March 2010 and services (biodiversity, land, converted area dispersed trees January 2020 the Mainstreaming carbon, and water), and raise were planted; d) producers through conservation Sustainable Cattle Ranching the productivity in participating adopted new technologies like Project was developed in farms” (World Bank, 2020). This dividing land and livestock and ecological Colombia. It was inspired by was one of the first efforts at rotation (86%), protection and macroeconomic the potential socioeconomic country level, working across reforestation of riparian areas and environmental benefits 5 different regions39, with the (73%), use of organic compost strategies.
38) This is the main approach that the National Development Plan 2018-2022 river (Atlántico and Bolivar), Boyacá and Santander, Orinoco grasslands foothills (Meta) and adopt to implement sustainability or green growth approaches. coffee growing zone ecoregion (Quindío, Risaralda, Caldas, Tolima and Valle del Cauca). 39) The five working regions and departments were: Cesar river valley Cesar( and Guajira), low Magdalena
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to reduce GHG emissions as resources can help to protect One of the most recent cultural factors are considered well as to increase carbon stocks water resources and biodiversity, milestones for the livestock as additional barriers that can through agroecosystems; b) the riparian forests reforestation, sector in Colombia is the Zero be exacerbated when SPS is not implementation of sustainable fresh water environments Deforestation Agreement for beef implemented in all the farms cattle ranching as part of the protection, reforestation of and milk, signed by the Colombian within the same region and could, Colombian Strategy for a Low water catchment areas, promote Federation of Cattle ranchers in therefore, lead to conflicts between Carbon Development; c) the REDD+ water and soil management. October 201940. This effort is in adopters and non-adopters program in Colombia established line with the Colombian Strategy in the farming community. a national registry of activities Another important forum is for a Low Carbon Development Finally, farmers may bealso be that reduce GHG emissions, in the Colombian Roundtable on and is also part of the goals concerned additionally about order to access compensation Sustainable Cattle Ranching. The of the National Development the unavailability of high-quality funds; d) Payment for ecosystems need for a roundtable emerged Plan (2018-2022) to sign zero planting material to establish the services for preserved forests and as a result of a workshop held deforestation agreements with 5 tree cover (Calle et al., 2009). for reforestation/restoration, as a during 2013, to develop a National productive sectors (MADS, 2019). result of the development of article Policy on Sustainable Agro Climatic The following table summarises 111 of law 99/1993 and subsequent Livestock, led by the Ministry Barriers to implementation some of the most critical decrees (Díaz and Burkart, 2017). of Agriculture and the German economic, technical, Cooperation Agency, GIZ. In 2014 Even though the promotion of environmental and sociocultural In 2018, the Colombian a working group was established SPS might yield several social, advantages and disadvantages Federation of Cattle Ranchers to define the objectives and a economic and environmental associated with SPS and therefore adopted a sectoral plan called first draft of the statutes. In benefits, the adoption of these is suggestive of the winners and “Colombian livestock. Roadmap 2015 the general guidelines and production systems has faced losers from the policy switch. 2018-2022” (FEDEGAN, 2018). In statutes were signed. Work plans significant implementation this document, the Colombian were defined for 2016 and 2017 barriers in Colombia. A study by Multiple types of SPS has been Federation of Cattle Ranchers (Mesa Ganadería Sostenible Calle et al. (2009) identified the already identified in Colombia. summarized their goals for Colombia, 2017). The objective main perceived barriers to SPS Mahecha (2003) reports implementing SPS and a of the Colombian Roundtable adoption in Quindío, Colombia. sustainable cattle ranching on Sustainable Cattle Ranching First, smallholder farmers often • silvo-pastoral production in system that were: a) training, is to develop public policy on have low investment capacity, integration with natural forests, technical assistance, and sustainable cattle ranching, and the adoption of SPS presents • forest plantations for wood, knowledge transfer on sustainable following the development of a high initial fixed costs41 in terms • orchards, cattle ranching production; World Roundtable. Nearly 30 of both financial and time • trees for industrial purposes, b) fundraising with external institutions participate, including investments, coupled with delayed • plantations of fruit trees, organizations like regional the Colombian Federation of Cattle returns (typically several years • meadows with trees and/or governments or the petroleum ranchers, the World Bank, the after implementation). Second, fodder shrubs in the meadows, royalties fund; c) generate a credit International Centre for Tropical the adoption of SPS is perceived • mixed systems with trees line with second tier Colombian Agriculture, representatives of beef as risky due to the lack of the or shrubs multipurpose bank for the agricultural production chain and milk National skilled workers, the information for cutting, sector with interest conditions Councils, Agrosavia, Finagro, and the technology required to • live fences, according to the evolution of this CIPAV, and WWF, among others. establish the new systems and • grazing in fodder banks business. Also, they proposed This initiative is supported by the manage them. Finally, social and of perennial woods. that, in order to establish National Planning Department, environmental sustainability the Ministry of Agriculture and the and a competitiveness strategy, Ministry of Environment in order 40) The agreement is available at: https://www.minambiente.gov.co/ images/BosquesBiodiversidadyServiciosEcosistemicos/pdf/Acuerdo_cero_ biodiversity offsets should finance to develop incentives that promote deforestacion/Acuerdo_sector_Carne_Cero_Deforestacion.pdf the implementation of SPS and sustainable livestock production 41) MSCRP calculated that implementation cost for non-intensive SPS (dispersed trees and agroforestry systems. These (Contexto Ganadero, 2017). live fences) are approximately 2 million COP (576 USD) per hectare, while intensive SPS are between 4 and 5 million COP (1,180 to 1497 USD) per hectare (Technoserve, 2019).
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ADVANTAGES DISADVANTAGES in such a way as to achieve However, to our knowledge, no the maximum possible output previous research has explored Economic Combination of the production of goods over different time Higher initial investments when compared horizons to beef production given its input choice and the adoption of silvo-pastoral the available technology. systems from a technical More attractive returns than pure livestock production systems A farm is considered to be and environmental efficiency technically efficient (TE) when it is standpoint. Nevertheless, producing the maximum output limits exist on the applicability Technical and Increased animal welfare and productivity provided by shade Increased complexity when compared to productive monocultures (e.g. milk, meat, dairy products) of this method that rely on Increased moisture retention and grass quality from the minimum quantity of detailed farmers’ information Lower production volumes of forest and animal products when combined and in inputs (e.g. land, labour, capital, for a significant sample of comparison to traditional systems technology -- e.g. Kumbhakar et adopters and non-adopters. 42 Competition between trees and grass al., 2015) , It is worth pointing out, however, that farmers may well be Costs-benefits analysis Cattle might cause damage to trees technically efficient and still cause and ecosystem services Environmental Reduced carbon emissions compared to pure livestock significant detrimental impacts systems on the natural environment. There is extensive research Cattle provide weed and fire control, reducing costs for To achieve more sustainable investigating the financial forestry protection farming management practices, benefits of implementing Erosion control and increased watershed protection it is necessary to consider SPS as an alternative to the compared to livestock and sometimes pure plantations farming performance in terms traditional livestock farming of the so-called environmental systems (Estrada Lopez, 2017; Social and The combined system provides more employment efficiency (EE) or 'eco-efficiency'. Gobbi and Casasola, 2003; cultural alternatives when compared to beef production systems Eco-efficient agents produce González, 2013; Husak and the maximum output possible Grado, 2002), the majority of while generating the minimum the studies have focused on environmental impacts; that is, assessing the economic benefits Table 5. Advantages and disadvantages of The costs for establishing SPS of the introduction of SPS on the they create value while decreasing associated with the increase adopting silvo-pastoral systems vary markedly with geographical productivity and, more importantly, the environmental impact in productivity. A smaller body Source: adapted from location and the intended the profitability of cattle ranching in (Huppes and Ishikawa, 2005). of research has focused on Braun et al., 2016 vegetation cover (types of trees (the different regions of) Colombia. assessing the monetary benefits and/or shrubs). Mahecha (2003) At the farm level, the prospects An extensive body of literature associated with the social, reports set-up cost of more for SPS adoption will be has assessed the TE of crop environmental and economic than USD 1,100 (adjusted to influenced by a number of production (see the meta- changes derived from this policy USD2020) in the Cauca region of factors including any expected analysis developed by Thiam et (Braun et al., 2016; Pagiola et Colombia, of which more than half changes to the efficiency of al., 2001); dairy farms (Angon al., 2007; Rade et al., 2017). are necessary for transporting the farming activity and the et al., 2013; Huang and Durón- and planting of the trees. profitability of the business. Benítez, 2014; Kavoi et al., 2010; There seems to be a consensus in Tools from productivity Ortega et al., 2007; Shortall the literature indicating that the Productivity and profitability in SPS analysis are optimally placed and Barnes, 2013; Wubeneh, adoption of SPS in Latin American Since set-up costs are considered to inform this discussion as 2006); and beef farms (Gatti et countries is financially profitable. as one of the main barriers to they allow an assessment of al., 2015; Isyanto et al., 2013; For instance, the study by Estrada adopting SPS, it is essential to the relative productivity and Mlote, 2014; Nwigwe et al., Lopez (2017) estimated that the identify strategies for scaling- efficiency of firms adopting 2016) in developing countries. net benefits of an SPS production up these alternative production different management systems. systems in Colombia. One first Broadly speaking `efficiency’ important step in this direction may be understood as the 42) An alternative, but substantially equivalent interpretation, of efficiency is is to gauge the economic impact ability of the farm to produce the input-orientated one, whereby the benchmarking is performed in terms of the amount of inputs necessary to produce a given level of output.
78 79 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 Biodiversity Protection in Colombia: An Economic Perspective / Report 2 Sustainable cattle ranching
Geo-spatial unit in Michoacán, Mexico are Costa Rica. In addition to this, Analysis of the economic analysis Economic benefits deforestation approximately MXN 159,842.00, their analysis indicated that PES National players drivers and observed a recovery of schemes could generate a total FARMING Cost-benefit analysis capital invested after six years income of USD 3,369 (without Farmers PRODUCTS Social impacts (E.G. MEAT, of operation. A similar study, discounting during four years), MILK) Analysis of the Rade et al. (2017), studied the which represents more than half International return of the Assesing players Environmental sectors sustainable financial viability of using silvo- of the investment associated impacts farming (intense cattle ranching) pastoral systems in Manabi with the costs of establishing POLICY FRAMEWORK (Ecuador) for biofuel production this system in Esparza farms. and found a Net Present Value (NPV) of USD 404.11 when After two decades of pioneering POLICY DESIGN using live fences with Piñón SPS activities in Colombia the (Jatropha curcas). The research alternative cattle ranching of Gobbi and Casasola (2003) system struggles to thrive Figure 19. also estimated an incremental and there is a need to assess Research objectives to deforestation based on a Visioning and planning net present value of US$ 1,61343 the full spectrum of cost and payment for ecosystem services for sustainable farming opportunities. and an internal rate of return benefits associated with the Against the background outlined scheme to reduce the economic Development and use of 20% when investing in silvo- adoption of this production above, the objective of our advantage of deforestation of forage resources in sustainable systems of pastoral systems in Esparza, system by farmers. research activity is to contribute over conservation (Fig. 19). bovine production for Cauca department. in broad terms to the Colombian debate on the transition to Methods and techniques Photo: ©2018CIAT 43) Expense categories: Supplements, Animal health, Labor, Field inputs sustainable cattle ranching. Our first goal is to inform policy Our work builds on methods of making by highlighting the costs extended cost benefit analysis and the benefits of the shift to evaluate the contribution of from extensive cattle ranching the different economic, social to intensive cattle ranching and environmental factors to within the context of silvo- the economic valuation of the pastoral systems. We aim to do switch to silvo-pastoral systems. this with a proper appreciation We will also deploy methods of of the importance of effectively productivity analysis, such as accounting for the environmental stochastic frontier estimation impacts of cattle ranching. Our of output distance functions, second strand of activity involves to estimate the value of the an evaluation of importance of contribution of eco-system ecosystem services for cattle services to the production of ranching. This research will allow marketed outputs of cattle us to identify an appropriate ranching, such as meat and level of subsidies to farmers who milk, for example. Finally, we engage in sustainable farming. will use geo-referenced data The final strand of this research within a Geographic Information brings all these elements Systems set-up, to gauge the together to simulate the impact potential differential impact of different policy scenarios of subsidies to conservation on the rate of deforestation in the form of payment of in Caquetá. Our goal is to eco-system services schemes, present a viable alternative most likely in Caquetá.
80 81 GROW Colombia Project / Biodiversity Protection in Colombia: An Economic Perspective October 2020 References
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