Business and Biodiversity: Opportunities, conflicts and ways forward

Patrick ten Brink Head of Brussels Office; Head of Environmental Economics Programme

Institute for European Environmental Policy (IEEP) Building on joint paper with AJ McConville

Block 3: EU Policy approach to Integrate biodiversity and business 11th Plenary Meeting of the

European Network of Heads of Nature Conservation Agencies 23-25 September 2012, Brussels, Belgium

Presentation overview

Business & Biodiversity: Opportunities, conflicts & ways forward

1. Context

2. Reasons to engage business with biodiversity

3. Potential conflicts, potential synergies

4. The Values of Nature – an opportunity for a new paradigm

5. Business Commitments & recommendations

6. Public authorities’ roles vis-à-vis business and biodiversity

“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

“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’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

So

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e: A

da

pte

d fro

m B

raa

t a

nd

te

n B

rin

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t a

l (2

00

8)

Range of data and indicators

Already useful and evolving range of tools

Understanding data & interactions helps policy decisions SEEA

Reporting / accounts

Natural capital accounts

From (policy) drivers to impacts to values

From Biodiversity loss to an alternative development path

Past loss/

degradation

Predicted future loss of natural capital

(schematic) – with no additional policy action

Today 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

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

Cannot address biodiversity loss with business action to reduce their impacts and invest in solutions

2020

Slow biodiversity

loss

Business has direct and indirect impacts on biodiversity • Public interest: biodiversity & public goods / ecosystem services

• Business’ own interest: via liabilities (e.g. re fines/compensation) and the bottom line; reputation/brand impacts, license to operate

Businesses depend upon biodiversity & ecosystem services • Water provision to agriculture, forestry, water sector, food and beverage and as an input to

production for wide range of other sectors

• Genetic materials for pharmaceuticals and crops

Ecosystem change creates business risks & opportunities • Risks: reduced water availability and agricultural production, energy output

• Fisheries impacts due to invasive jellyfish species or eutrophication events

• Opportunities: new products (certified wood, fish) and markets (e.g. carbon, water and wetland banking, PES)

Reasons to Engage Business with Biodiversity

The inter-connections / feedback loops need to be understood, as does the value of nature to business

Eutrophication : Damage to Biodiversity, reducing public goods, and also others’ private benefits

Since ‘60s - Eutrophication

caused “dead-zones”:

Regularly ~405 coastal dead-

zones

Fisheries subsidies ~ US$30-34 bn/yr: only ~7bn “good”, 20bn “bad”

Figure: State of exploitation of selected stock / species groups, 2004

28% over-exploited, 52% fully exploited, remaining 20% moderately exploited or underexploited (some low margin/uneconomic) (FAO 2006 and FAO 2008)

Undermining sector’s own interests

Potential conflicts, potential synergies

Potential Conflicts of interest /trade-offs

• Intense agriculture: eutrophication, pesticides in water, soil quality loss

• Mining: pollution impacts on water quality, biodiversity , on other sectors (e.g. water

companies, food and beverage)

• Forestry: monocultures, biodiversity loss, invasive species, ecosystem service loss

• Transport infrastructure and fragmentation

• High level of water abstraction reducing water table and availability for others,

Potential Synergies / win-wins

• High nature value farming; farming and natural pollinators

• Water provisioning / purification & watershed protection, land management, restoration

• Tourism and protected areas

The private optimum will often differ from public optimum;

What conflicts and synergies do you see?

Shrimp Farm

private

profits

less

subsidies

Net of public

costs of

restoration

needed

after 5 years

private

profits

Mangroves

0

10000

US$

/ha/yr

private profits

5000

If public wealth is included, the “trade-off”

choice changes completely…..

$584/ha

$1220/ha

$9632/ha

$584/ha

-ve $9,318/ha

$12,392/ha

Source: Barbier et al, 2007

After

Adding

Public

Benefits

From

mangroves

Based only on private gain, the “trade-

off” choice favours conversion…..

Taking account of public goods

Fishery

nursery

Storm

protection

Valuation: A tool to bridge the gap between business & policy makers

• Understand/quantify private and public values, interests and incentives – the public optimum may be different from the private optimum.

• Identify synergies and trade-offs and assess their scale. Identify what is in the public interest given flow of public goods from natural capital

• Inform policy choices, instrument selection and implementation - can help to raise the regulatory baseline, identify public instruments for public services

• Will need mix of qualitative, quantitative and monetary evidence and tools

• Care in understanding and responding to meaning of results

– Value/price and costs not the same

– Demonstrating value does not mean that it can be bought or sold

– Value includes ‘real money’, picked up by GDP, ‘avoided real costs’ picked up in budgets and bottom lines, and :welfare benefits” appreciated socially.

Inform government – “public/civil servants” - in light of appreciation of public goods

Rio Tinto : “Our goal is to have a ‘net positive impact’ on biodiversity.” [2004]

BC Hydro: “long-term goal of no net incremental environmental impact.”

Sony: “strives to achieve a zero environmental footprint throughout the lifecycle of our products and business activities.”

Walmart: “Committed … to permanently conserve at least one acre of priority wildlife habitat for every developed acre.” ~= no net BD loss

Increasing number of companies making Commitments

Positive commitments – the implementation is the challenge.

Need business leadership, transparency/disclosure and public “encouragement”

http://www.thebiodiversityconsultancy.com/wp-content/uploads/2012/07/Private-Sector-No-Net-Loss-commitments.pdf

Business Commitments : towards no net loss and net positive impacts

What experience / plans do you have for (requiring) offsetting and net positive impacts ?

Offsetting and net positive impact

Source: Rio Tinto 2008; http://www.riotinto.com/documents/ReportsPublications/RTBidoversitystrategyfinal.pdf

Offsetting: potential for Synergy & for Conflict: Design is everything

Adapted from BBOP 2009

www.wbcsd.org/web/evi.htm

Ecosystem Valuation Initiative

Natural Capital accounting – Rio+20 Declaration et al.

Environmental Profit & Loss accounts & disclosure – e.g. PUMA 2012

Business Commitments / engagement

Presentation overview TEEB for Business Recommendations

1. Identify impacts & dependence on biodiversity & ecosystem services (BES)

Including through the value chain

2. Assess the business risks & opportunities associated with impacts & dependencies

3. Develop BES information systems, set targets, monitor and report results

4. Act to avoid, minimize and mitigate BES risks, using ‘offsets’ where appropriate

Build on concept of Net Positive Impact

5. Act on emerging BES business opportunities and win-wins

cost-efficiencies, new products and new markets

6. Integrate BES actions with wider Corporate Social Responsibility

7. Engage with business peers & other stakeholders to improve BES guidance & policy

Building on TEEB for Business (2012)

Public Authority Perspective & Role vis-à-vis Business

National authorities remit to ensure biodiversity resources are conserved

Public authorities responsibility for public interest: wise stewardship of public goods

Government to provide an efficient, enabling and fiscal environment (right signals)

Practical way forward (examples)

• Improve evidence base: ecosystem service indicators, environmental accounts, valuation

• Take account of public goods, wider benefits in permitting and spatial planning

• Establish stronger offset requirements, liability and improve non-compliance enforcement

• Remove / reform environmentally harmful subsidies & Offer incentives for conservation

• Ensure public access to information / disclosure rules and improve labelling of goods to inform purchasing decisions

What works will be dependant on the particular context of each country. Care

is needed to ensure that wider values of nature to wider society taken into account.

What is your practical way forward, experience and lessons/recommendations?

Thank you

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

See also www.teeb4me.com

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