Author:

Keywords:

ecosystem services, spatial planning

Abstract:

So far science, policy nor the insurance business have devoted targeted attention to the capacity of ecosystems to mitigate the intensity and impact of naturally occurring damaging events. This capacity is rather obvious though for ecosystems capable of storing excess water, hence preventing or mitigating flooding of downstream settlements or ecosystems acting as wind breaks hence reducing storm damage of nearby infrastructure. The damage-preventing and reducing capacity of ecosystems can be interpreted as another ecosystem service expressed in terms of the ecosystems’ insurance value. In an insurance business logic, the presence of ecosystems with a given preventive or ex-ante insurance value can be seen as a complement to the traditional financial insurance system meant to compensate people ex-post for damage to their assets due to natural disasters. Whereas financial insurances cover damages resulting from natural hazards, but do not reduce these hazards, ecosystem insurance has the capacity to reduce the risk, but does not compensate for the damages. With regard to flood control and damage mitigation, investing in the proper ecosystem management upstream can be viewed as a mostly societal ex-ante payment for an ecosystem insurance which could lead to reduced individual financial insurance premiums. In this paper we further develop the concept of ‘insurance value of ecosystems’ and its relationship with the financial insurance logic. We illustrate the applicability for the case of flood risk and damage mitigation in the region of Flanders in Belgium and highlight the role of spatial planning and targeted ecosystem management practices to maximize the insurance value of ecosystems. We argue that such applications require spatially explicit information and decision support tools for addressing the typically off-site effects of ecosystems where it regards their insurance service.