The United States Agency for International Development (USAID) is among the largest international development agencies worldwide. One of the tools USAID uses to select, design, and improve programming is cost-benefit analysis (CBA). As part of the USAID BRIDGE (Biodiversity Results and Integrated Development Gains Enhanced) project, the USAID Office of Forestry and Biodiversity is exploring the use of ecosystem service valuations in Agency CBAs.
Ecosystems provide various services that support human wellbeing, ranging from pest control for crops, to purification of water, to protection from flooding. Because these services are difficult to value and often unrecognized, they are not typically considered in CBAs. This puts USAID at risk of not identifying key project dependencies on natural ecosystems, as well as possibly significant negative impacts on ecosystem services. Better integration of ecosystem service valuations in Agency CBAs offers an opportunity to identify and mitigate risks, and to design new programming that is sustainable.
To support this work, CSF was contracted by BRIDGE to generate a set of guidelines combining best practice with USAID’s approaches and needs. CSF interviewed staff from both USAID Washington and field operating units to determine their familiarity with ecosystem service valuation, its inclusion into CBA, and key barriers and opportunities. We also reviewed the literature to identify best practices for ecosystem service valuation and relevant case studies, and assembled a catalog of key data sources USAID and its contractors can use. We then combined these interviews, evidence, and data sources to develop recommendations for USAID CBA practitioners and USAID as an institution. The recommendations include step-by-step guidance for incorporating ecosystem service valuations into Agency CBAs. The goal is to ultimately improve the quality and comprehensiveness of CBAs Agency-wide, as a means to improve delivery on development and environment objectives.
Read the full report here.
Photo: Mangrove in Brazil. Photo credit: Freya Fennwood