Most ecosystems are dependent on interactions between the natural environment and man-made factor; hence the many sub definitions of ecosystems which include urban ecosystems, grassland ecosystems, woodland ecosystem etc. Such is the case for managed forests, like the Cork Oak (Quercus suber) Montado, a ‘Directive habitat’ which forms its own unique ecosystem delivering many important ecological services. Recent efforts to quantify and valuate Ecosystem Services (ES) have been seen as vital in order to conceive of appropriate conservation and protection strategies in the long-term. This is urgently needed given that many ES are public goods and common resources with no private ownership or management can be poorly visible and thus falsely assumed or have no market values and tend to be underprovided. According to some reference authors, the Montado effectively exports a large number of ES to the public systems, both tangible and intangible. Especially in small areas like farms, parklands and estates, it is very important to link mechanisms like payment for ES and green EU agro-forestry subsidies or promote an extended environmental fiscal reform in order to provide non-market solutions. The present work pretends to explore the state of the art in terms of externalities like biodiversity, ecosystem services and landscape valuation approaches and methods and explore possible pathways for solving market and non-market economic failures in terms of recognition of sustainable supply of public services.

1. ABSTRACT
Most ecosystems are dependent on interactions between the natural
environment and man-made factor; hence the many sub definitions of
ecosystems which include urban ecosystems, grassland ecosystems,
woodland ecosystem etc. Such is the case for managed forests, like the
Cork Oak (Quercus suber) Montado, a ‘Directive habitat’ which forms its own
unique ecosystem delivering many important ecological services.
Recent efforts to quantify and valuate Ecosystem Services (ES) have
been seen as vital in order to conceive of appropriate conservation and
protection strategies in the long-term. This is urgently needed given that
many ES are public goods and common resources with no private ownership
or management can be poorly visible and thus falsely assumed or have no
market values and tend to be underprovided.
According to some reference authors, the Montado effectively exports a
large number of ES to the public systems, both tangible and intangible.
Especially in small areas like farms, parklands and estates, it is very
important to link mechanisms like payment for ES and green EU agro-
forestry subsidies or promote an extended environmental fiscal reform in
order to provide non-market solutions.
The present work pretends to explore the state of the art in terms of
externalities like biodiversity, ecosystem services and landscape
valuation approaches and methods and explore possible pathways for
solving market and non-market economic failures in terms of
recognition of sustainable supply of public services.
Valuing the Montado ‘Natural Externalities’
 Trends and Tendencies
Nuno Gaspar de Oliveira, João Rui Ferreira, Paulo Bessa
1CIGEST|Environment & Sustainability – ISG Business & Economics School, R. Vitorino Nemésio, 5, Lisbon, Portugal, +351 751 37 00 ext. 127,
nunogoliveira@cigest.ensinus.pt, www.cigest.ensinus.pt
2CE LIÈGE, Confédération Européenne du Liège ; 10, Rue du Debarcadere; 75852 Paris Cedex 17 FRANCE; joaoferreira@celiege.com; www.celiege.com
3CORTICEIRA AMORIM, SGPS, S.A; Apartado 13, 4536-907 S. Paio de Oleiros, PORTUGAL. tel: +351227475793. paulo.bessa@corticeira.amorim.com; www.amorim.com
ICAAM International Conference 2013 | Évora, Portugal
Acknowledging the MONTADOS and DEHESAS as High Nature Value Farming Systems
Montado’s
Natural
Externalities
Biodiversity
Ecosystem
Services
Cultural
Landscapes
Incentives &
Subsidies
How to Capture the Montado’s
Natural Externalities?
What’s going on?
Several EU forestry related policy documents (EU Rural Dev. Regulation, EU Forestry strategy, etc.) reflect this new situation and the
EU Forest Action Plan emphasis the importance of valuing and marketing those type of forest goods and services
• Valuation is an important tool and can help to:
• awareness raising , land use decisions, cost-effective forest management, encourage the provision of innovative forest goods
and services, justify investments, compare the benefits and costs of different projects or programs, etc.
• But, in general, not to determine the price to be paid to the provide of non-market forest goods and services
• Non-market forest goods and services have a (potentially high) economic value to the society but since there is no market for
them, forest owners do not extract any benefit from their provision and hence, these FGS are underprovided (or their sustainable
provision cannot be guaranteed)
• The European Commission has proposed a new Environment Action
Programme for the EU. Entitled "Living well, within the limits of our
planet", it will guide environment policy up to 2020.
• The proposal aims to enhance Europe's ecological resilience and
transform the EU into an inclusive and sustainable green economy.
• Protecting natural capital, encouraging more resource efficiency
and accelerating the transition to the low-carbon economy are key
features of the programme, which also seeks to tackle environmental
causes of disease.
• The results should help stimulate sustainable growth and create
new jobs to set the Union on a path to becoming a better and
healthier place to live.
http://ec.europa.eu/environment/newprg/index.htm
Unfortunately, market prices do not take into account the full economic value of many
goods and services we obtain from our environment. From clean air and water to timber,
food and strolls in nature, we often pay for only a fraction of the benefits we receive.
Recent studies, including the European Environment Agency’s State and Outlook Report 2010
(SOER 2010), underline that we cannot look at environmental issues in isolation.
To preserve and manage our natural capital wisely, Europe needs to reshape its economy
and improve resource efficiency.
Environmental tax reform is one of the measures that could contribute to Europe’s
transition towards a greener economy.
• In terms of financing mechanism, there are clear trends towards the use of market mechanisms, e.g. regarding tax
systems, subsidy elimination and/or reallocation and the creation of ‘cap-and-trade’ and ‘mitigation/compensation’
mechanisms or regimes.
• And since we live in a “post-liberal-capitalism-free-market” modus operandi we should consider empowering the civil
society, namelly the land owners and the Montado agroforestry-based communities to lobby at the political-
institutional level considering economic incentives, taxes, subsidies, certification-based markets, contracts or tradable
permits that can put a value in the Ecosystem Services (ES) externalities that are in fact supporting the well being and
ecological health of these unique systems. But stakeholders’ resposponsibility doesn’t end here, actually, it starts with
the impulse to innovate the way ES and Biodiversity are perceived and included in the management plans.
When Externalities are part of the equation: accounting fot the Total Economic Value
EFI Technical Report 50, 2011, www.efi.int
In economics, an externality is defined as an (un)intended
action caused by an economic agent that directly influences the
utility of another agent (Merlo and Croitoru, 2005, Mas- Colell et al. 1995).
On the Value
of Portuguese
Forests
On the last few years,
there’s been an effort
to valuate the ES
provided by the
forests iun Portugal.
This table (on the
right) is a good
example of an
exercice that shows
that the non-market
value of ES is far,
quite far from zero.
"Living well, within the limits of our planet“
Hey, do you mean NATURAL limits? More externalities stuff, right…
This little externality went to market… and failed!
How do we start a tax reform that recognises total economic value?
What about doing … nothing!?
The agonizing costs of Policy Inaction
In search of Trends and Tendencies
What type of mechanism could actually work for the Montado?