Mainstreaming the Economics of Nature: EU nature conservation

& Nature and the Green Economy

Patrick ten Brink Institute for European Environmental Policy (IEEP)

Public Hearing

Protected areas and green employment Monday 3.12.12, 14.00-17.00

European Parliament, room PHS 6B054, Brussels

Presentation overview

Part A: Mainstreaming the Economics of Nature

a) TEEB for Policy Makers and the EU

b) Benefits of Natura 2000

Part B: Nature and the green economy

c) Nature and GE

“I believe that the great part of miseries of mankind are brought upon them by false estimates they have made of

the value of things.” Benjamin Franklin, 1706-1790

Source: Nellemann et al 2008: 22

~ 20% of the world’s coral reefs loss - effectively destroyed by fishing, pollution, disease and coral bleaching

~ 24% of remaining reefs under imminent risk of collapse through human pressures.[3]

[2] http://www.ramsar.org/about/about_wetland_loss.htm [3] Wilkinson C., 2004: Status of Coral Reefs of the World: 2004 report

Species extinction ~ 100 to 1,000 times more rapid than “natural” extinction rate (MA 2005)

Since 1900, global loss ~ 50%of its wetlands. [2].

Coral Reefs

Biodiversity loss

Forests

Global Forest Area has shrunk by approximately 40% since 1700.

Forests have completely disappeared in 25 countries [1].

[1] United Nations FAO, 2001.Global Forest Resources Assessment 2000; United Nations Forest and Agriculture Organisation, 2006 Global Forest Resources Assessment 2005 [4] Millennium Ecosystem Assessment, 2005: Global Assessment Report 1: Current State & Trends Assessment. Island Press, Washington DC. Detail: Chapter 19 Coastal Systems. Coordinating

lead authors: Tundi Agardy and Jacqueline Alder. Original reference: 35%: Valiela et al. 2001; 80% reference: Spalding et al. 1997

.

In the past two decades, 35% of mangroves have disappeared.

Some countries have lost up to 80% through conversion for aquaculture, overexploitation and storms.[4]

http://upload.wikimedia.org/wikipedia/commons/9/95/World_map_mangrove_distribution.png

Mangroves

Source: FAO 2005a: 7

$50 bn/yr lost econ. value, over exploitation (World Bank 2008)

Collapse of fisheries: loss of livelihoods

Fisheries

Source: Sea Around Us project

2010

40 %

40 %

20 %

Worlds Fisheries : overexploited

Lake Karla, Greece: 1300 fishermen lost their jobs due to the degradation of the former Lake Karla in Greece and impacts on commercial fisheries. (Zalidis and

Gerakis, 1999)

Provisioning services Food, fibre and fuel Water provision Genetic resources

Ecosystem services

Regulating Services Climate /climate change regulation Water and waste purification Air purification Erosion control Biological control

Cultural Services Aesthetics, landscape, recreation & tourism Cultural values and inspirational services

Supporting Services: Soil formation & fertility, photosynthesis, nutrient cycle et al

TEEB’s Genesis and Developments

Interim

Report

India, Brazil, Belgium,

Japan & South Africa

Sept. 2010

TEEB

Synthesis

Climate

Issues Update

Ecol./Env. Economics literature

TEEB End User

Reports Brussels

2009, London 2010

CBD COP 9

Bonn 2008 Input to

UNFCCC 2009

BD COP 10

Nagoya, Oct 2010

TEEB

Books

Nature & Green Economy

TEEB Water & Wetlands

TEEB Oceans

TEEB studies

The Netherlands,

Germany, Nordics,

Norway, India, Brazil,

South-East Asia

The Global Biodiversity Crisis

Transforming our approach to natural capital

Available Solutions • PES (e.g. water), PES: REDD+

• Markets, GPP

• Subsidy reform

• Legislation, liability, taxes & charges

• Protected Areas

• Investment in natural capital (restoration et al)

Measuring what we manage

http://www.teebweb.org/

TEEB for Policy Makers

Diversity/variety – e.g. pharmaceuticals, food security, biomimicry;

E.g. genetic resources: > than

Quantity – e.g. timber, carbon storage, fish stock, flood control, water retention

E.g. for fish production: > than

Quality – e.g landscape & tourism, ecosystems & water filtration, resilience

(to climate change, IAS)

Biodiversity (genes, species, ecosystems) & its value is about

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Values of Working with Nature – evidence base

• Germany : peatland restoration: avoidance cost of CO2 ~ 8 to 12 €/t CO2 (0-4 alt. land use)

• USA-NY: Catskills-Delaware watershed for NY: PES/working with nature saves money (~5US$bn)

• France & Belgium: Priv. Sector: Vittel (Mineral water) PES & Rochefort (Beer) PES for water quality

• Venezuela: PA helps avoid potential replacement costs of hydro dams (~US$90-$134m over 30yr)

• South Africa: WfW public PES to address IAS, avoids costs and provides jobs (~20,000; 52%♀)

Sources: various. Mainly in TEEB for National and International Policy Makers, TEEB for local and regional policy and TEEB cases

Range of policy synergies of Biodiversity: with Water security, climate change, jobs,

health, public and private finance

Jobs

EU: 14.6 million jobs (7% employment) highly dependent on ecosystem services (Nunes et al, 2011)

USA: Nature-based recreation. Wildlife-related recreational activities ~ US$ 122 billion – just under 1% of GDP in 2006 (US Fish and Wildlife Service 2007).

New Zealand’s South Island (West Coast Region)- additional 1,814 jobs (15% of total jobs in

2004) and extra spending US$ 221m/yr (10% of total spending), mainly from tourism related to conservation lands (Butcher Partners 2004).

Black Sea and job losses: invasion by a non native comb jellyfish in late 1980s led to collapse of the fishing industry with a loss of 150,000 jobs. (Lubschenco, 1997)

CBD COP 10 Nagoya: Strategic Plan 2011-20

5 strategic goals & 20 headline targets ….extracts…

Target 1: “… people aware of the values of biodiversity …..”

Target 2: “…. biodiversity values have been integrated ….into strategies… planning … national accounting…. reporting systems.”

…

…

Target 11: “By 2020, at least 17% cover of terrestrial and inland water and 10% coastal and marine areas …. are conserved through effectively and equitably managed... systems of protected areas”

Protected Areas - “crown jewels” of biodiversity

Intrinsic value

Also: food security

Water security (supply & quality)

Climate mitigation & adaptation,

Knowledge, Culture Recreation and tourism And other ecosystem services

Dudley and Stolton, 2010

Current status: ~12.9% terrestrial; 6.3% territorial seas, <1% open seas (IUCN and UNEP-WCMC 2010)

Investment in natural infrastructure

Ecological (green) infrastructure is key for adaptation to climate change

• Afforestation: carbon store+ reduced risk of soil erosion & landslides

• Wetlands and forests and reduced risk of flooding impacts

• Restore Forests, lakes and wetlands to address water scarcity

• PAs & connectivity to facilitate resilience of ecosystems and species

Can help adapt to climate change at lower cost than man-made technological solutions

Adaptation to climate change will receive hundreds of US$ billions in coming years/decades.

Critically important that this be cost-effective.

Support for identifying where natural capital solutions are appropriate & mobilise resources

Past loss/ degradation

Baseline: Future loss of biodiversity, natural capital (schematic) – with no additional policy action

Today 2050

Halting biodiversity loss

Regulation & standards.

Protected areas;

Restoration & offsets;

Investment in natural capital;

Trading and new markets;

Better regulation, assessment, accounting, integration, monitoring,

enforcement;

Sustainable production and consumption, markets, certification/logos, innovation & GPP;

No net loss from current levels

2020

Slowing biodiversity loss

Source: Patrick ten Brink, own representation

Eroding Natural Capital Base & Tools for an Alternative Development Path, Towards a Green Economy

Alternative natural capital development path: Meeting biodiversity objectives, investing in natural capital

Charges, taxes, fines, fees, liability, subsidy reform;

PES, REDD, ABS;

Instru

me

nts &

me

asure

s – illustra

tive

Need multi-level governance & engagement (government, business, communities, citizens) & integration.

Part A: Summary

Mainstream the economics of nature – Making Nature’s Values Visible: across sectors,

across policies, seek synergies across disciplines.

Protected areas: biodiversity riches that can also offer

value for money, recreation and cultural identity, tourism.

Ecological infrastructure and benefits: climate

change (mitigation/adaptation), air pollution & health et al

Changing the incentives: payments, taxes, charges,

subsidy reform, markets …always better to look at

the whole board

And engage the full set of

players

…is this enough to work out

what to do?

Part A: Mainstreaming the Economics of Nature Benefits of Natura 2000

Natura 2000

Birds Directive 2009/147/EC in 1979

Habitats Directive 92/43/EEC in 1992.

26,000 sites ~ 18 % of EU Terrestrial SCIs/SACs: ~ 59 million ha, Terrestrial SPAs: ~ 49 million ha (Natura

2000 Barometer, 2010).

Marine protected area (MPA) network – ~14.5 million ha2

Natura 2000 Conservation Status Remaining Challenge

Funding a challenge Costs ~ 5.8 bnEUR/yr Source: Gantioler et al 2010

But also benefits

First year after

designation as

protected area

Before

designation as

protected area

COSTS

Ecological services that

would have remained

without protected area

Risk of degradation

without PA measures

Management and

investment

Opportunity Costs Cost of management,

TIME

BENEFITS

Source: Patrick ten Brink, own representation in TEEB 2011

Illustrative schematic for analysing the value of PAs

A decade in…

Benefit Numbers

Natura 2000 network total benefits

~ €200 - 300 bn/year Building on 3 estimates (different assumptions): €223 – 314 bn /yr (a) €251 – 360 bn /yr (b) €189 – 308 bn /yr (c)

Carbon sequestration / storage

Current Stock: €600 bn - €1130 bn Annual Sequestration Benefits:

€79-88 bn increase to 2020 if ecosystem quality is improved;

€82-92 bn to 2020 if a 10% increase: forest area.

Tourism expenditures ~€ 50-85 billion /year for 1.7 billion visitor days (~466,000

visitors/day average)

~€ 9-20 billion/year directly for Natura 2000

Recreation (non market benefits)

~€ 5-9 billion/year for Natura 2000 (4 € / visit )

Natura 2000 : An first Economic Assessment

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Finland: The Total annual revenue linked with the visitor spending in national parks was

€70.1 million and supported local employment by creating 893 person-years. In general, it

was estimated that €1 public investment to protected areas provided €20 return.

(Metsahallitus, 2009).

Spain: The implementation of Natura 2000 network > positive impacts on GDP (0.1 - 0.26

per cent at national level). Network estimated to generate an additional 12,792 jobs.

Andalucía, Aragon and the Canarias islands - benefit most from Natura 2000: 0.26 - 0.44

per cent increase in their GDP and between 1346 - 5957 additional jobs created. (Fernandez et al

2008 in Gantioler et al 2010)

Natura 2000 Benefits: jobs

Germany: national park Wattenmeer in Germany is responsible of around 23 per

cent of total tourists in the region, with associated gross economic income of over €100

million in 2003 (Neidlein and Walser, 2005)

Natura 2000 Benefits: interpreting the results

• A first estimate

• Methodological issues

• Impossible to attribute EU wide numbers to all services – eg water, pollination, natural hazards, HNV farming….

• Whole picture of benefits is needed

• For robust value focus at site level assessments

• EU wide assessment to communicate the benefits beyond intrinsic values

• Useful to attract funding, encourage restoration, wise use & management

Part B: Nature and the green economy

Challenges

• Feeding the 9 billion; Water; Poverty alleviation, Urbanisation, Jobs, Climate change, Financial crisis etc

• The rising level of consumption and production will put increasing stress on the planet’s resources and ecosystems – limits, scarcity, price volatility, critical (ecological and social) thresholds...

Nature and the Transition to a Green Economy

• Need for a transition towards a “green” economy that promotes social equity, poverty eradication and human well-being.

• Increasing appreciation of biodiversity and ecosystem services and the value of nature.

• Healthy and resilient ecosystems are necessary for long-term socio-economic development

• Efforts to build a green economy should be based on an appreciation of the values of nature.

Economic Sectors (examples)

- Agriculture, hunting, forestry & fishing

- Oil and Gas; Mining & quarrying

- Wood and wood products

- Food products, beverages & tobacco

- Pulp, paper & paper products

- Research & development

- Hotels & restaurants

- Chemicals - Pharmaceuticals

- Recycling - Manufacturing

- Electricity - Water supply

- Education - Finance & insurance

Outputs from one sector can be

intermediate inputs to another Human & Social Capital

Inputs: labour, skills, knowledge, institutions,

culture

Ou

tpu

ts: P

rod

ucts &

Service

s Exports

Public Sector

House-holds

Private Sector

Man-made capital (inc. financial capital)

€

€

Waste / pollution

Society Environment / Nature

The Economy

Social impact

€

The Greening Economy

Source: ten Brink, Russi and Mazza, 2012 building on ten Brink et al. 2011

€

Impacts on environment

Imported natural capital Timber,

Food , Primary materials &

embedded Biodiversity,

Water, Carbon

in products

Domestic Natural Capital

Minerals, Energy

Water, Land

Timber, Fish, Ag

Other Biodiversity (genes, species,

ecosystems) Ecosystem service flows

Natural capital

€

€

€

€

€

Go

od

go

vern

ance

Go

od

Go

vern

ance

Current Situation

Declining Sustainability in a Brown Economy

Resource over-exploitation & pollution pressures

Climate Change

Biodiversity and natural capital loss

Critical ecological and resource thresholds passed

or at risk

Resource scarcity and limited access to a clean

environment

Health impacts and man-made natural disasters

An economy that is not resource efficient, low carbon

and socially inclusive

Ambitions for the Future

A Green Economy

Improved human well-being and social equity, while significantly

reducing environmental risks and ecological scarcities

Staying within a ‘safe operating space’: using resources within the planet’s regenerative capacities &

avoiding critical ecological thresholds

No net loss of biodiversity and climate change within ‘acceptable’

limits

Sustainability for future generations and business:

available natural capital and a clean environment

Health and livelihoods for citizens and communities

An economy decoupled from environmental impacts and

resource use

Building Blocks in the

Transition to a Green Economy

Business-as-Usual

Approaches

Avoiding Unsustainable Trade-offs

+ Environmental compliance &

infrastructure

Active environmental

management Active Risk Management

+

Proactive Investment in Natural Capital

Pursuing environmental

sustainability Eco-efficiency

+ Decoupling via Radical

Innovation & Demand change

+

+

Source: Patrick ten Brink & Leonardo Mazza, own representation

The Transition to a Green Economy

G. G

oo

d

G

ove

rnan

ce

Building Blocks in the

Transition to a Green Economy

Business-as-Usual

Approaches

A. Avoiding Unsustainable Trade-offs

+ B. Environmental compliance &

infrastructure

Active environmental

management C. Active Risk Management

+

D. Proactive Investment in Natural Capital

Pursuing environmental

sustainability E. Eco-efficiency

+ F. Decoupling via Radical

Innovation & Demand change

+

+

Examples of actions

A: Assessment to understand winners/losers, impacts & responses

B: Investment in water and waste infrastructures

C: Flood risk mapping, taxonomy & pathways for IAS

D: Restoration of ecological infrastructure & Conservation, protected area management

E: EHS reform, positive incentives, polluter pays

F: R&D for new products/applications + Information / engagement for demand changes

G: Indicators and Environmental accounts

Conclusions

1. Nature provides a wide range of benefits and values to society and the economy.

2. A green economy aims to incorporate these values into decision-making across all levels of governance.

3. There are major opportunities to be realised and also trade-offs. Transition management is critical for success.

4. Protected areas are a key element of the transition to a green economy.

Additional information sources

The Economics of Ecosystems and Biodiversity (TEEB) in National and International Policy Making (ed. Patrick ten Brink) www.teebweb.org or via www.ieep.eu Estimating the Overall Economic Value of the Benefits provided by the Natura 2000 Network (ten Brink et al 2011) http://www.ieep.eu/publications/2012/06/estimating-the-overall-economic-value-of-the-benefits-provided-by-the-natura-2000-network

Costs and Socio-Economic Benefits associated with the Natura 2000 Network (Gantioler et al 2010) http://ec.europa.eu/environment/nature/natura2000/financing/docs/natura2000_costs_benefits.pdf Green Infrastructure options (Mazza et al, 2010)) http://www.ieep.eu/assets/898/Green_Infrastructure_Implementation_and_Efficiency.pdf

Nature in the Transition to a Green Economy (ten Brink et al 2012) http://www.ieep.eu/newsletter/summer-2012/nature-in-the-transition-to-a-green-economy/

The Social Dimension of Biodiversity Policy: Final Report (Nunes et al 2011) http://ec.europa.eu/environment/enveco/biodiversity/pdf/Social%20Dimension%20of%20Biodiversity.pdf

Recognising the value of protected areas (Kettunen et al 2011) www.cbd.int/database/attachment/?id=1408

The Social and Economic Benefits of Protected Areas: an Assessment Guide (Kettunen and ten Brink eds 2013 forthcoming) http://www.routledge.com/books/details/9780415632843/

Thank you for your attention !

Patrick ten Brink

ptenbrink@ieep.eu

IEEP is an independent not for profit institute dedicated to advancing an environmentally sustainable Europe through policy analysis, development and dissemination.

For further information see: http://www.ieep.eu Follow us on twitter: IEEP_EU

For more information about IEEP’s work on Nature and the Green Economy visit

www.ieep.eu and for TEEB also www.teebweb.org

Institute for European Environmental Policy (IEEP)

• IEEP is an independent research organisation concerned with policies affecting the environment in Europe and beyond • Research and consultancy on the development, implementation and evaluation of

environmental and environment-related policies in Europe • Policy advise and intelligence • Capacity-building

• Interdisciplinary staff including natural and social scientists, lawyers and

economists

• Key research areas: • Governance • Agriculture and land management • Biodiversity • Climate change and energy • Resources use, waste and chemicals • Water, marine and fisheries; and • Environmental Economics (green economy, value of nature, EHS/MBI et al,)