Co-creating natural capital solutions in the Amazon Basin with communities, governments, and financial leaders

The economic and fiscal consequences of inaction on loss of biodiversity and the ecosystem services it provides are quite significant (OECD, 2019), given that US$44 trillion of global GDP—around half—is highly or moderately dependent on nature (WEF, 2020). Research shows that protected areas are not sufficient to maintain biodiversity and its benefits—especially in the face of climate change — thus, finding common visions for management and investments in production landscapes and seascapes is crucial to securing sustainable livelihoods and human wellbeing (Huntley, 2014). 

Despite growing recognition that biodiversity protection is fundamental to achieving food security, poverty reduction, and sustainable development, its value is not widely integrated into decision-making processes for public policies and investments. However, Natural Capital Assessments and Accounting (NCAA) are proving to be effective approaches for integrating information about the benefits of biodiversity and ecosystem services, drawn from diverse sources of knowledge and understanding, into policy and finance decisions (Natural Capital Project, 2023). Natural capital approaches are designed to directly inform decision-making, integrating people and the planet’s life-support systems into economic development (Ruckelshaus et al., 2022). Natural capital approaches are most effective when embedded in a science-policy process driven by both technical and policy experts, who are knowledgeable about a country or region’s priorities, as well as which policy and finance interventions are possible and relevant within the specific socio-political context. Strong stakeholder engagement is key to ensuring diverse sources of knowledge and values are considered. 

Natural capital approaches are already impacting policy and investment in the Amazon Basin. In this chapter, we highlight a handful of examples of such impact, illustrating the value of participatory science-policy processes where NCAA approaches inform policy and investment decisions for the benefit of multiple sectors and communities.  A growing community of practice—informed by technical, policy, and finance experts from the region and around the world—is poised to further develop capacity and demonstrable benefits for Amazonian people, their prosperity, and the planet.

Community resilience in the Amazon headwaters of Peru, Bolivia, and Brazil: Reducing risk from drought, floods, water pollution, and mosquito-borne disease

The tri-national area in the states of Madre de Dios (Peru), Acre (Brazil) and Pando (Bolivia) in the southwestern Amazon is a biologically, culturally, and socially diverse landscape that is increasingly vulnerable to extreme drought, flooding, and zoonotic diseases (see Chapter 3). These threats are driven by a combination of changing climate and human-driven disturbance in the form of rapid and unplanned urban development and extensive deforestation for gold mining, cattle ranching, and subsistence farming. To help address these pressing issues, the Natural Capital Project at Stanford (NatCap) worked with the Regional Government of Madre de Dios in Peru, municipal leaders and environmental planners in the region, the Amazon Center for Scientific Innovation (CINCIA), Cayetano Heredia University of Peru (UPCH), and Herencia in Bolivia to co-create actionable, science-based information on the values of natural capital to inform key policy opportunities.

Through a process of co-development, the project team identified critical challenges around water security and helped describe possible futures for the region consistent with stakeholders’ expressed visions and values. The results demonstrated strong linkages between land clearing and land use change, and downstream impacts on water resources, flood risk, and incidence of mosquito-borne diseases such as malaria and dengue (Guevara et al., 2020). New analyses of vulnerability to flooding revealed how flood risk and communities’ adaptive capacities could be affected by future land use changes. These findings (PRO-Agua, n.d.) helped make the case to policymakers at regional and municipal levels for forest protection and management through the MERESE-Hídrico (payments for watershed ecosystem services) framework (Guevara et al., 2020).

As a result of this work, regional government decision-makers and planners incorporated freshwater ecosystem services as key selection criteria in the design and implementation of watershed and land use management plans, two new MERESE-Hídrico areas were identified, and a committee was institutionalized within the Madre de Dios regional planning framework to streamline the identification and adoption of such programs in the future. Furthermore, some of the legal barriers to these payments for watershed services programs were addressed by codifying MERESE-Hídrico projects as an eligible category of protected areas within the Regional System of Protected Natural Areas.

Harmonizing livelihoods, cultural heritage, and water resources in the Llanos de Moxos region in Beni, Bolivia

The complex landscape of the Llanos de Moxos (LdM) is the result of its unique position as the largest seasonally flooded savanna ecosystem in the Amazon, its history of more than 10,000 years of human occupation, and its wealth of biological and cultural diversity. This extensive system of wetlands-savannas-forests is home to approximately half a million people including numerous Indigenous peoples, whose livelihoods largely depend on direct use of natural resources and the integrity and functionality of the ecosystems that sustain them. Rapid expansion of mechanized agriculture, alluvial gold mining, fires, and overexploitation of timber, fisheries, and wild game is putting pressure on this unique landscape and its ability to provide critical ecosystem services to local communities as well as those downstream in the Amazon Basin (Vogl, 2022). 

NatCap collaborated with a coalition of local and international researchers and NGOs to engage stakeholders at the Departmental and Municipal levels, generate new science, and build capacity for policymakers to integrate the benefits derived from the ecosystem services of this region into policy design and development planning.

The project partners collaborated to develop a comprehensive assessment of livelihood systems in the Llanos de Moxos. They articulated alternative development scenarios that highlighted conflicting visions for the future of the region and illuminated their impacts on key ecosystem services and human wellbeing (Vogl et al., 2022). Comprehensive mapping of actors influencing land use and development policy in Beni was used to design engagement and outreach. As a result, local leaders in each of the 19 municipalities in Beni Department have specific, locally supported, and actionable social-ecological and spatial information on the impacts of climate change and land transformation on ecosystem services and communities, enabling them to make decisions and to design development plans incorporating the potential of this landscape to boost the well-being of their constituencies.

Natural capital assessment helps target priority investments in Colombia

Colombia is home to an estimated 10 percent of all species in the world and has the highest diversity of birds and orchids globally. The Inter-American Development Bank (IDB) and the Colombian government invited NatCap to collaboratively develop a nationwide natural capital assessment to identify biodiversity and ecosystem-service hotspots. These hotspots are now part of the IDB’s Country Strategy for Colombia, used to guide priority investments by the government and IDB for protection, stewardship, and revitalization. The assessment was designed to answer two questions: what areas of the country provide the greatest benefit to people in Colombia, across multiple ecosystem services; and to what degree do these ecosystem service hotspots fall within existing protected areas and indigenous reserves?   

The team used the InVEST suite of models (Natural Capital Project, 2023) to spatially quantify four key ecosystem services: (i) climate regulation, in terms of carbon stored by ecosystems; clean water, in terms of both (ii) sediment retention and (iii) nitrogen retention for people downstream; and (iv) coastal protection, in terms of reducing risk to people in coastal areas from flooding and erosion.

The results showed that the Amazon region of Colombia contains the greatest biodiversity of any other region nationally. Forests in the Amazon (and Pacific) regions are especially important for carbon storage. The shared investment strategy for IDB and Colombia is now based on a clear picture of how targeted investments in the Amazon region will generate the greatest returns for biodiversity and climate mitigation. 

The potential of natural capital approaches in the Amazon

In addition to working with communities in the headwaters of the Amazon to understand their challenges and priorities, natural capital approaches were used to show the connections between upstream forest management and downstream water security, flood risk, and zoonotic disease. This facilitated the establishment of payment for ecosystem services programs that incentivize protecting and restoring nature to preserve the services it provides. In the Llanos de Moxos in Bolivia, the largest seasonally flooded savanna ecosystem in the Amazon, natural capital approaches provided information for local leaders to design development plans that maximize benefits to both livelihoods and ecosystems. In Colombia, a nationwide natural capital assessment is now guiding investment in key areas to maximize benefits.

Natural capital approaches are now being used in a variety of contexts to help connect the dots for decision-makers between how people value and manage their ecosystems, and the returns they see from those ecosystems – like water security, flood protection, disease mitigation, and livelihoods. Policymakers across the Amazon Basin are increasingly recognizing that strategic development and targeted investments in such benefits make their communities stronger in a multitude of ways, especially when participatory science-policy processes are used. These projects bring stakeholders together to co-develop a vision as well as the science needed to inform specific mechanisms and policies, moving them closer toward a future where people and nature can thrive.