9/25/2008 1

ptenbrink@ieep.eu

The Economics of Ecosystems and Biodiversity (TEEB)

Part A: Ecological losses to Economic losses

(Issues and values in TEEB Phase I)

Patrick ten BrinkSenior Fellow and Head of Brussels Office

Institute for European Environmental Policy (IEEP)

Building on the work of: COPI Team: Alterra, IEEP, MNP, Ecologic, GHK, FEEM, W&B, UNEP-WCMC, &

TEEB Core team (Pavan Sukhdev, EC, BMU, EEA, UFZ, IEEP, UoL, IIT)and other experts

22 September 2008Prague

9/25/2008 2

Presentation Structure

1. Biodiversity and Ecosystem losses – The Ecological Case

for the Urgency of Action

2. Ecosystems and Ecosystem services – benefitting society,

the economy, business and individuals.

3. The Valuation Challenge – attributing monetary values to

the value of ecosystem services

4. COPI / TEEB Phase 1 numbers – The Economic Case for

the Urgency of Action

Then Presentation by Pavan Sukhdev, TEEB Study LeaderOn

TEEB Phase II: The Aims & Ambitions, Focus and Process

9/25/2008 3

The Urgency for Action

The Ecological Case

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Past Losses

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

completely disappeared in 25 countries [1].

� Since 1900, the world has lost about 50%of its wetlands. [2].

� Some 20% of the world’s coral reefs - have been effectively destroyed by

fishing, pollution, disease and coral bleaching and approximately 24% of the

remaining reefs in the world are under imminent risk of collapse through human

pressures.[3]

� 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]

� The rate of species extinction is estimated to be 100 to 1,000 times more rapid than

the “natural” extinction rate (MA 2005).

[1] United Nations Forest and Agriculture Organisation, 2001.Global Forest Resources Assessment 2000; United Nations Forest and Agriculture Organisation, 2006 Global Forest Resources Assessment 2005.[2] http://www.ramsar.org/about/about_wetland_loss.htm[3]Wilkinson C., 2004: Status of Coral Reefs of the World: 2004 report [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

9/25/2008 5Source: MEA

9/25/2008 6Source: Sea Around Us project

2010

40 %

40 %

20 %

Running down our natural capital The Demise of Global Fisheries

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We are fishing down the foodweb – D. Pauly (UBC, Canada)

Substitution?

Source: L Braat presentation COP9 Bonn May 2008; based on slide by D. Pauly

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Biodiversity loss From 1700 to 2050

Poorer Ecosystems

Richer Ecosystems

Source: building on Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.

73%

62%

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Changes in Ecosystem Services

due to loss of Biodiversity

Pristineforest

Degradedland

Extensive use

Plantation

Originalspecies

Fossil fuelsubsidized

Extensive use

Subsistenceagriculture

Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study

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Level of Biodiversity in the World in 2000

Using Mean Species Abundance (MSA) indicator

Remaining MSA in %

Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.

9/25/2008 11Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.

Level of Biodiversity in the World in 2050

One Scenario of the future : OECD/Globio

Remaining MSA in %

� MSA loss from 71% to 60% - not evenly spread

� Natural Areas decline by 7.5 Million Sq. Km.

� Most lose; the poor generally affected more strongly

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2000The Global Loss of

Biodiversity

Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data

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2050The Global Loss of

Biodiversity

Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data

� Europe – at Risk

India - at Risk

Africa – at Risk.

The World – at Risk.

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Ecosystems and Ecosystem services

The Ecosystems in which we live and in which our economies

operate, provide a range of services that benefit:

• Individuals • Society • Firms

• The economy

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Ecosystem Services - The Millennium Ecosystem framework

Source: MEA

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Provisioning services: Food & fibre, Water, Fuel …

Regulating services: Climate regulation (local, regional, global);

Water regulation (e.g. flood prevention, runoff …);

Water purification and waste management;

Erosion control; Natural hazards control …

Cultural & Supporting services – ALL

Wetlands

• Coastal wetlands

• Floodplains

• Swaps, bogs, moors …

• Etc.

Provisioning services: Food & fibre, Water, Fuel (biofuel)…

Regulating services: Air quality maintenance;

Climate regulation (local, regional, global) – carbon storage;

Water regulation (e.g. flood prevention, runoff …);

Erosion control

Natural hazards control (e.g. Fire resistance, storm & avalanche protection

Cultural & Supporting services – ALL (recreation, tourism et al)

Forests

• Boreal forest

• Temperate forests

• Mountain forests

• Etc.

Source: From presentation by Marianne Kettunen of IEEP; based on MA 2005 classification

Different Biomes, different (level) of services

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Ecosystems, land-use & human well-being : the extent of this relationship

Services 1.1 1.2 1.3 1.4 1.5 2.1 2.2 2.3 3.1 3.2 3.3 3.4 3.5

Land cover types Fo

od

Ma

teri

als

Fo

res

t tr

ee

s-

rela

ted

Pla

nt-

rela

ted

Ph

ys

ical

su

pp

ort

Am

en

ity

Iden

tity

Did

acti

c

Cycli

ng

Sin

k

Pre

ven

tio

n

Refu

giu

m

Bre

ed

ing

Artificial surfaces/

Urban

Arable land &

permanent crops

Grassland & mixed

farmland

Forests & woodland

shrub

Heathland,

sclerophylous veg.

Open space with

little/ no vegetation

Wetlands

Water bodies

Source: Jean-Louis Weber (EEA) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium

9/25/2008 18

The link between biodiversity, ecosystems, their services, and

benefits to mankind…

Function

eg 1: slow

passage of water

eg 2: biomass

Biophysical

Structure of

process

eg 1: woodland

habitat

eg 2: net primary

productivity) Service

eg 1: flood

prevention

eg 2: harvestable

products

Benefit (value)

eg 1: willingness to pay

for woodland protection /

avoided costs of impacts

eg 2: for more woodland

harvestable products

Source: Building on presentation by Jean-Louis Weber (EEA) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6

March 2008, Brussels, Belgium

Maintenance and restoration costs

Economic and social values (& market values)

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Land-uses and trade offs

for ecosystem services

Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.

Soil

protection

Food

Climate

regulation

Energy

Freshwater

1natural

Soil

protection

Climate

regulation

Freshwater

Energy

Soil

protection

Food

Climate

regulation extensive

Freshwater

Energy

Soil

protection

Food

Climate

regulation 2

Freshwaterregulation

Energy

Soil

protection

Food

-

Freshwater3 intensive

Climate

regulation

Energy

Soil

protection

Food

-

Freshwater3

Upon closer analysis

Net value may be less

9/25/2008 20

Ecosystem service production & useIt can be a complex relationship; benefits sharing?

Source: Andrew Balmford & Ana Rodrigues 2008 Scoping the Science report. Contribution to TEEB Report

9/25/2008 21

ESS service provision & spatial relation Example: carbon storage

� Production rates, flows and values all vary spatially

� Services produced and enjoyed in different places

� Costs and benefits of conserving services accrue in different places

t C/ha

Source: Andrew Balmford & Ana Rodrigues 2008 Presentation within the Scoping the Science work

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The Evaluation Challenge

What should we measure to understand

and communicate the problem?

How can we go about doing this?

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Monetary Value

Quantitative Review of Effects

Qualitative Review

Non-Specified

Benefits

Increasing up the

benefits

pyramid

Measuring Benefits of Ecosystem services

What can be said in what terms and what was explored?

Full range of ecosystem services from biodiversity

Type of benefits; health benefits

from clean air, social benefits

from recreation, income from

products, security, wellbeing.

Quantitative: eg number people

benefiting from wood from forests,

# of avoided health impacts;

number of visitors

Monetary: eg avoided water purification

costs, avoided flood damage, tourist value,

value of medicines / pharmaceuticals from

natural products

Knowledge gaps The “known-

unknowns” and

“unknown-unknowns”

Source: P. ten Brink: presentation at March 2008 workshop Review of Economics of Biodiversity Loss, Brussels

The Benefits

Pyramid

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Interest and evidence

� There are different audiences, and different messages are needed for each.

� Different types of messages have different power and different reach.

Monetary

Quantitative /

qualitative

Level of information Level of press/interest

The overall aim is to get the message across to the (range of) key audiences – in a

manner that is representative of the facts and that engages interest. Hence, we need

to work out how best to combine monetary and non-monetary information.

Source: P. ten Brink: presentation at March 2008 workshop Review of Economics of Biodiversity Loss, Brussels

9/25/2008 25

Press Echo to TEEB I, May 2008

Source: Dr Carsten Neßhöver, Heidi Wittmer & Christoph Schröter-Schlaack, Presentation in Vilm, 26.8.2008

9/25/2008 26

The Cost of Policy Inaction: Not Halting Biodiversity Loss

L. Braat & P. ten Brink (eds.)

with

J. Bakkes, K. Bolt, I. Braeuer, B. ten Brink, A. Chiabai, H. Ding, H. Gerdes, M. Jeuken, M.

Kettunen, U. Kirchholtes, C. Klok, A.Markandya, P. Nunes, M. van Oorschot, N. Peralta-

Bezerra, M. Rayment, C. Travisi, M. Walpole.

Wageningen / Brussels, May 2008

Based on the Report to the European Commission, May 29, 2008

COPI Results

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Mapping changes : from Biodiversity & Ecosystems to Economic Values

Source: L. Braat & P. ten Brink (eds.)

Change in

Economic

Value

International

Policies

Change

in

Land use,

Climate,

Pollution,

Water use

OECD

Baseline

scenario

Change

In

Ecosystem

Services

Change

in

Biodiversity

Change

in

Ecosystem

functions

Change in

Economic

Value

International

Policies

Change

in

Land use,

Climate,

Pollution,

Water use

OECD

Baseline

scenario

Change

In

Ecosystem

Services

Change

in

Biodiversity

Change

in

Ecosystem

functions

Change in

Economic

Value

International

Policies

Change

in

Land use,

Climate,

Pollution,

Water use

OECD

Baseline

scenario

Change

In

Ecosystem

Services

Change

in

Biodiversity

Change

in

Ecosystem

functions

9/25/2008 28

Biodiversity loss - 1700 to 2050

Source: building on Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.

73%

62%

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Change of Landuse (area coverage) across all biomes – Global Total

0%108.4108.4World Total *

0%0.20.2Artificial surfaces

9%20.819.1Cultivated grazing

626%0.50.1Woody biofuels

44%15.811.0Intensive agriculture

-39%3.05.0Extensive agriculture

70%7.04.2Forest managed

-9%3.03.3Bare natural

-11%58.065.5Natural areas

2000 to 2050million km2million km2Area

Difference 20502000Actual

Source: L. Braat & P. ten Brink (eds.) 2008 COPI

� Natural areas loss is 7.5m km2 - broadly equivalent to the area of the Australia.

�Losses: natural, bare natural areas & extensive agriculture broadly equals the USA

9/25/2008 30

Loss of QualityGlobal total

Loss of quality - due to pollution, fragmentation, infrastructure and climate

impacts (Global average all biomes)

Mean Species Abundance indicator

18%World Total

14%Cultivated grazing

0%Woody biofuels

-2%Intensive agriculture

8%Extensive agriculture

20%Forest managed

8%Bare natural

11%Natural areas

MSA loss 2000 to 2050

Mean species abundance change for different land use

categories

Source: L. Braat & P. ten Brink (eds.) 2008 COPI

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Valuation and Ecosystem service losses COPI calculation: A

Annual Loss of economic value of ecosystem services that would have been

available had biodiversity remained at 2000 levels. Estimate for 2050.

2000 2050

Services that would

have been there, had

biodiversity been

halted.Ecosystem

service level

Relative to 2000

2010 2030

A

Losses

continue

into the

future

Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study

9/25/2008 32

COPI - Some key results

• The welfare loss grows with each year of biodiversity and ecosystem loss.

• Over the period 2000 to 2010 this amounts to around 50 billion Euros extra loss

per year, every year.

• By 2010 the welfare losses from the loss of ecosystem services amount to 545

billion EUR in 2010 or just under 1% of world GDP.

• The value of the amount lost every year rises, until it is around 275bn

EUR/yr in 2050.

• The loss of welfare in 2050 from the cumulative loss of ecosystem services

between now and then amounts to 14 trillion (10^12) Euros under the fuller

estimation scenario

• This is equivalent in scale to 7% of projected global GDP for 2050 – across

land-based biomes

Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study

9/25/2008 33

The loss grows with each year of biodiversity and ecosystem loss.

Land based ecosystems only

-7.1%-13938World Total

-0.40%-786Cultivated grazing

0.19%381Woody biofuels

0.67%1303Intensive Agriculture

-0.57%-1109Extensive Agriculture

0.95%1852Forest managed

-7.97%-15678Natural areas

Equivalent to %

of GDP in 2050Billion EURArea

Relative to 2000Relative to 2000

Global COPI Loss of Ecosystem services from land based ecosystems

All land based biomes*

Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study for DGENV

9/25/2008 34

-6.3%-0.8%

Losses of ESS from natural areas in forest biomes as share of %

GDP

195.5World GDP in 2050 (trillion (10^12) EUR)*

-12310-1552Natural areas

-5.5%-0.7%Losses of ESS from forests as share of % GDP

-10791-1317Forest Total

-1025-133Temperate deciduous forest

-701-47Cool coniferous forest

-1372-190Temperate mixed forest

-2332-249Warm mixed forest

-3362-536Tropical forest

-1999-163Boreal forest

Fuller EstimationPartial EstimationForest biomes

Global COPI Loss of Ecosystem services

Forestry biomes

Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study Building on FEEM forestry per hectare values

9/25/2008 35

What ESS could already be included (forests)?

Not included - (10 services)

Provisioning services

� Biochemicals, natural medicines,

pharmaceuticals

� Ornamental resources

� Fresh water

Regulating services

� Temperature regulation, precipitation

� Erosion control

� Technology development from nature

� Regulation of human diseases

� Biological control and pollination

� Natural hazards control / mitigation

Cultural services

• Living comfort due to environmental

amenities

Included - (8 services)

Provisioning services

� Food, fiber, fuel

Regulating services

� Air quality maintenance

� Soil quality maintenance

� Climate regulation (i.e. carbon storage)

� Water regulation (i.e. flood prevention,,

aquifer recharge etc.)

� Water purification and waste

management

Cultural services

� Cultural diversity, spiritual and religious

values, educational values, aesthetic and

cultural

� Recreation and ecotourism

Source: L. Braat & P. ten Brink (eds.) 2008 COPI Study

9/25/2008 36

A : 50-year impact of inaction B : Natural Capital Loss every year

Lost Welfare equivalent

to 5.5 % of GDP (from forest

biomes overall) … or…

Natural Capital Lost from

USD 1.35 x 10 12 to 3.10 x 10 12

(@ 4% Discount Rate) (@ 1% Discount Rate)

COPI – Forestry Biome Different ways of calculating the loss

Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study for DGENV

9/25/2008 37

Valuation and Ecosystem service losses

2000 2050

Services that would have been there,

had biodiversity been halted

Ecosystem

service level

Population

9100 million

GDP (OECD Scenarios) 2.8%/year

GDP, with feedback on

economic losses from biodiversity losses integrated -

illustrative

Relative to 2000

Population: 6092 million

GDP: 41.4$ trillion (PPP) (10^12)

GDP/capita: 680$ (PPP)

GDP adjusted for impact of

biodiversity loss - illustrative

Source: Patrick ten Brink (IEEP), Leon Braat (Alterra), Mark van Ooorshot (MNP), Matt Rayment (GHK)

9/25/2008 38

Summary

Biodiversity arguments for action – eroding our natural capital

Social arguments for action – services lost hit all, and poor hardest.

Economic arguments for action – we risk undermining future growth and prosperity by undermining our natural capital

Need to understand and communicate the Values of Ecosystems and Biodiversity and the risk of their loss

Need to understand and communicate what can be done to respond more effectively – across all “end user” types.

The Economics of Ecosystems and Biodiversity: Phase II

Presentation by Pavan Sukhdev, TEEB Study Leader

9/25/2008 39

London Office

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Tel: +32 (0) 2738 7482

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www.ieep.eu

Thank You

Patrick ten Brink

Institute for European Environmental Policy (IEEP)ptenbrink@ieep.eu

www.ieep.eu

IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment in EuropeNow to how the TEEB will respond to these challenges

Presentation by Pavan Sukhdev, TEEB Study Leader

9/25/2008 40

Study Authors and ContributorsCOPI, and Scoping the Science Studies

9/25/2008 41

Study Authors & Contributors (cont.)