The Economics of Ecosystems and Biodiversity (TEEB) in National and International Policy Making

Patrick ten Brink TEEB for Policy Makers Co-ordinator

Head of Brussels Office

Institute for European Environmental Policy (IEEP)

Earthscan – Webinar 7 April 2011

1

TEEB’s Genesis, Aims and progress

“Potsdam Initiative – Biological Diversity 2010”

1) The economic significance of the global loss of biological diversity

Importance of recognising, demonstrating & responding to values of nature

Engagement: ~500 authors, reviewers & cases from across the globe

Interim

Report

India, Brazil, Belgium,

Japan & South Africa

Sept. 2010

TEEB

Synthesis

CBD COP11

Delhi

National

TEEB

Work

Sectoral

TEEB

work

Et al.

Rio+20

Brazil

Climate

Issues Update

Ecol./Env. Economics literature

G8+5

Potsdam

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

• Variety of species - plants, animals and microorganisms

• Genetic differences within each species - e.g. varieties of

crops and breeds of livestock

• Variety of ecosystems - e.g. forests, wetlands, mountains,

deserts, lakes, rivers, coastal marine, agricultural et al

UN Convention on Biological Diversity (CBD)

defines biodiversity as “the web of life”

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

E.g. genetic resources: > than

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

retention;

• E.g. for fish production: > than

• Quality – e.g landscape and tourism, ecosystems and water filtration

Biodiversity and its value is about

Building on Balmford and Rodriguez et al (2009) Scoping the Science

Biodiversity loss

UNEP (2011)

UNEP Yearbook

2011

Biodiversity loss leads to loss of natural wealth, ecosystem services, benefits to

economy and society/wellbeing (see TEEB (2009,2010,2011) MEA (2005)

The Pathway from Ecosystem Structure and processes to human well-being

Need: reduce pressure on coral reefs, MPAs et al & encourage GHG emissions reductions -450ppm and 2 degrees already accepting major losses

Coral Reefs: Critical natural asset in danger

• Coral Reef Services (per hectare) can have very high values

• Global valuation studies place the value as high as US$ 172 billion per annum

• Over 500 million people are dependent on the services from reefs

• however…. Coral Reefs are an ecosystem at the threshold of irreversibility

Global Fish stocks: an overexploited, underperforming natural asset at risk of collapse

Half of wild marine fisheries are fully exploited; a further quarter already over-exploited

At risk : $ 80-100 billion income from the sector

est. 27 million jobs

over a billion people rely on fish as their main or sole source of animal protein

Source: adapted from FAO 2005

short term vs long term

Valuation and policy making: from valuing natural assets to decisions

“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

Valuation and policy making: from valuing natural assets to decisions

“There is a renaissance underway, in which people are waking up

to the tremendous values of natural capital and devising

ingenious ways of incorporating these values into major resource

decisions.” Gretchen Daily, Stanford University

TEEB Reports: http://www.teebweb.org/

Summaries (in range of languages) and chapters

Book announcement: The Economics of Ecosystems and

Biodiversity in National and International Policy Making now

available from Earthscan

The Global Biodiversity Crisis • Nature’s assets & biodiversity loss

• Economic values and loss

• Social dimension

Transforming our approach to natural capital

Available Solutions • Markets/pricing/incentives

• Regulation: standards

• Regulation: planning, protected areas

• Investment (man-made & natural capital)

Measuring what we manage • Indicators

• Accounts

• Valuation

• Assessment

http://www.teebweb.org/

TEEB for Policy Makers Book

Provisioning services • Food, fibre and fuel • Water provision • Genetic resources

Regulating Services • Climate /climate change regulation • Water and waste purification • Air purification • Erosion control • Natural hazards mitigation • Pollination • Biological control

Cultural Services • Aesthetics, Landscape value, recreation and

tourism • Cultural values and inspirational services

Supporting Services • Soil formation

+ Resilience- eg to climate change

Many services from the same resource

Important to appreciate the whole set of eco-system

services & take into account in decisions

Not only after they have been lost and oft costly substitutes

needed

Multiple benefits from ecosystems

Evidence base - Assessing values and actions

Assessing the value of working with natural capital has helped determine where

ecosystems can provide goods and services at lower cost than by man-made

technological alternatives and where they can lead to significant savings

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

• New Zealand: Te Papanui Park - water supply to hydropower, Dunedin city, farmers (~$136m)

• Mexico: PSAH to forest owners, aquifer recharge, water quality, deforestation, poverty (~US$303m)

• 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)

• Vietnam restoring/investing in Mangroves - cheaper than dyke maintenance (~US$: 1m to 7m/yr)

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

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

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

Beneficiaries:

Public sector (e.g. water – national & municipalities),

Public goods (e.g forests, biodiversity, climate),

Private sector (e.g. water, beer, energy, agriculture),

Citizens (e.g. water quantity, quality, price, security) and

Communities (e.g. payments, livelihoods/jobs, ecological assets & “GDP of the poor”)

Decisions: conservation / restoration investment, PES / public programmes, protected areas

Policy synergies: Water – availability/quantity, quality,

Climate - mitigation (green carbon) and (ecosystem based) adaptation to CC

Job creation and livelihoods

Security - natural hazards (e.g. flooding), water, energy

Finances - public sector budget savings (Nat. gov’t, public services, municipalities)

Industrial policy – energy, water, forestry, agriculture...

Consumer affordability

Poverty and in each case : biodiversity.

Mecklenburg-Vorpommern project 2000-2008

• Restoration of 30,000 ha (10%)

• Emission savings of up to 300,000 t CO2-eq.

• CO2 Avoidance cost of 8 to 12 € / t CO2

• if alternative land use options are realized

(extensive grazing, reed production or alder

forest) costs decrease to 0 to 4 € / t CO2

Global Issues, Regional solutions: Assessing value of nature-based CC mitigation

Source: Federal Environmental Agency 2007; MLUV MV 2009; Schäfer 2009

Restored peatland in Trebeltal 2007

Foto: D. Zak, http://www.fv-berlin.de

Cities & assessing Multiple Benefits – City of Toronto

Source: Wilson, S. J. (2008)

Map: http://greenbeltalliance.ca/images/Greebelt_2_update.jpg

Ecosystem

Valuation Benefits

Annual Value

(2005, CDN $)

Carbon Values 366 million

Air Protection Values 69 million

Watershed Values 409 million

Pollination Values 360 million

Biodiversity Value 98 million

Recreation Value 95 million

Agricultural Land

Value

329 million

• Rewarding benefits • Payments for ecosystem services (PES)

• REDD+

• Tax incentives, and tax transfers

• Markets and certification/labelling

• Green public procurement (GPP)

• Avoiding damage • Pricing – full cost recovery, pollution charges,

liability

• Regulation: standards, bans

• Protecting assets • Spatial planning

• Protected areas – designation, management

• Investing in natural capital • Restoration, new investments

http://www.teebweb.org/

TEEB for Policy Makers – Available Solutions to respond to the value of nature

Instrument: Mexico PSAH: PES to forest

owners to preserve forest: manage &

not convert forest

Result

Deforestation rate fell from 1.6 % to 0.6 %.

18.3 thousand hectares of avoided deforestation

Avoided GHG emissions ~ 3.2 million tCO2e

Hydrological services: Aquifer recharge;

Improved surface water quality, reduce

frequency & damage from flooding`

Munoz 2010); Muñoz-Piña et al. 2008; Muñoz-Piña et al. 2007.

Reduce Deforestation Address Poverty

Payments for Ecosystem Services

(PES)

Protected areas & benefits

• 1/3 of the world’s 100 largest

cit ies draw a large part of their

drinking water from PAs.

• PAs & forests purify water for

NY city = US$ 6 billion (total)

savings in water treatment

costs

• Venezuela’s national PA system

prevents sedimentation that

would reduce farm earnings by

around US$ 3.5 million/year.

Dudley and Stolton 2003, Pabon-Zamora et al. 2009

Investment in ecological infrastructure: multiple benefits

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

• Wetlands and forests and reduced risk of flooding impacts

• Mangroves and coastal erosion and natural hazards

• Restore Forests, lakes and wetlands to address water scarcity

• Coral reefs as fish nurseries for fisheries productivity / food security

• PAs & connectivity to facilitate resilience of ecosystems and species

Potential for lower cost adaption to climate change and policy synergies

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 & invest.

Eroding natural capital base & tools for an alternative development path

Past loss/

degradation

Predicted future loss of natural capital

(schematic) – with no additional policy action

2010 2050

Halting biodiversity loss

Opportunities/benefits of ESS

Investment in natural capital +ve

change

Alternative natural capital

Development path

Regulation

PAs

Restoration

Investment in natural capital:

green infrastructure

Economic signals :

PES, REDD, ABS (to reward benefits)

Charges, taxes, fines (to avoid degradation/damage:

Subsidy reform (right signals for policy)

Better governance

`

Sustainable consumption (eg reduced meat)

Markets, certification/logos & GPP

Agricultural innovation

No net loss from 2010 level

TEEB quantitative assessment

Expanding PAs has a role, as does reducing deforestation. Changing diet the most

important. Biofuels can be counterproductive. Combined these issues are not enough –

need full set of instruments and integration across sectors

Ben ten Brink et al (2010)

-50%

Summary

Making Natures Values Visible: improved

evidence base for improved governance, awareness for action – government, business, people

Measuring better to manage better: from

indicators to accounts

Changing the incentives: taxes, charges, subsidy

reform, markets

Protected areas: biodiversity riches that can offer value

for money

Ecological infrastructure and benefits: climate

change and beyond

Natural capital and poverty reduction:

investment for synergies

Mainstream the economics of nature: across

sectors, across policies, seek synergies across disciplines.

…always better to look at

the whole board

And engage the full set of

players.

…is this enough to work out

what to do?

TEEB Implementation – some post Nagoya steps

TEEB Brazil, TEEB India, TEEB NL, TEEB Nordics ..

World Bank/UNEP et al 5+5 initiative on National accounts …

TEEB for Agriculture; TEEB & Water ….

Rio+20

CBD COP11

SEEA 2012

Parallel track: Similar type work independent of TEEB

Many initiatives that focus on (responding to) the value of nature by range of actors

Support for business and biodiversity (indicators, valuation reporting)

Quantitative assessment, valuation, Green infrastructure etc

TEEB Country & Regional Studies

Initiatives building on TEEB recommendations

TEEB Integration

Science / Economics evidence base

RAMSAR

COP 2012

Thank you TEEB Reports available on http://www.teebweb.org/

The Economics of Ecosystems and Biodiversity in National and International Policy Making and

other TEEB books available on Earthscan

and follow us on http://twitter.com/TEEB4ME & http://www.facebook.com/TEEB4me

Patrick ten Brink, ptenbrink@ieep.eu

IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment.

www.ieep.eu

The Manual of European Environmental Policy

http://www.europeanenvironmentalpolicy.eu/