Business and Biodiversity: Opportunities, conflicts and ways forward Patrick ten BrinkHead 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 overviewBusiness & Biodiversity: Opportunities, conflicts & ways forward1. Context2. Reasons to engage business with biodiversity3. Potential conflicts, potential synergies4. The Values of Nature – an opportunity for a new paradigm5. Business Commitments & recommendations6. 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 TEEB End User Nature & Green Economy Reports Brussels TEEB Water & Wetlands Interim Climate TEEB Oceans 2009, London 2010 Report Issues Update TEEB TEEB Synthesis BooksEcol./Env.Economics CBD COP 9 Input toliterature Bonn 2008 UNFCCC 2009 India, Brazil, Belgium, Japan & South Africa TEEB studies Sept. 2010 The Netherlands, Germany, Nordics, BD COP 10 Norway, India, Brazil, Nagoya, Oct 2010 South-East Asia
From (policy) drivers to impacts to values Range of data and Already useful and indicators evolving range of tools Source: Adapted from Braat and ten Brink et al (2008) Natural capital accounts Reporting / accounts Understanding data & interactions helps policy decisions SEEA
From Biodiversity loss to an alternative development path Opportunities/benefits of ESS No net loss from 2010 level Past loss/ Investment in natural capital +ve degradation change Halting biodiversity loss ` Slow biodiversity Regulation loss Better governance Economic signals : PES, REDD, ABS (to reward benefits) Charges, taxes, fines (to avoid degradation/damage: Alternative natural capital Subsidy reform right signals for policy) Sustainable consumption (eg reduced meat) Markets, Development path certification/logos & GPP Agricultural innovation Investment in natural capital: Green infrastructure Predicted future loss of natural capital Restoration (schematic) – with no additional policy action PAs Today 2020 2050 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
Reasons to Engage Business with BiodiversityBusiness 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 operateBusinesses 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 cropsEcosystem 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)The inter-connections / feedback loops need to be understood, as does the value of nature to business
Eutrophication : Damage to Biodiversity, reducing publicgoods, and also others’ private benefits Since ‘60s -Eutrophication caused“dead-zones”:Regularly ~405 coastal dead- zones
Undermining sector’s own interestsFisheries subsidies ~ US$30-34 bn/yr: only ~7bn “good”, 20bn “bad”Figure: State of exploitation of selected stock / species groups, 2004 28% over-exploited, 52% fully exploited, remaining 20% moderately exploited or underexploited (some low margin/uneconomic) (FAO 2006 and FAO 2008)
Potential conflicts, potential synergiesPotential Conflicts of interest /trade-offs• Intense agriculture: eutrophication, pesticides in water, soil quality loss• Mining: pollution impacts on water quality, biodiversity , on other sectors (e.g. water companies, food and beverage)• Forestry: monocultures, biodiversity loss, invasive species, ecosystem service loss• Transport infrastructure and fragmentation• High level of water abstraction reducing water table and availability for others,Potential Synergies / win-wins• High nature value farming; farming and natural pollinators• Water provisioning / purification & watershed protection, land management, restoration• Tourism and protected areas The private optimum will often differ from public optimum; What conflicts and synergies do you see?
Taking account of public goods US$ Based only on private gain, the “trade- Shrimp Farm /ha/yr off” choice favours conversion….. Mangroves $12,392/ha10000 $9632/ha After Adding Storm Public protection5000 Benefits From mangroves $1220/ha Fishery $584/ha nursery $584/ha private profits private private 0 profits profits Net of public less costs of subsidies restoration needed after 5 years If public wealth is included, the “trade-off” choice changes completely….. -ve $9,318/ha Source: Barbier et al, 2007
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
Business Commitments : towards no net loss and net positive impactsRio Tinto : “Our goal is to have a ‘net positive impact’ on biodiversity.” 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 lossIncreasing number of companies making Commitments http://www.thebiodiversityconsultancy.com/wp- content/uploads/2012/07/Private-Sector-No-Net-Loss-commitments.pdf Positive commitments – the implementation is the challenge. Need business leadership, transparency/disclosure and public “encouragement”
Offsetting and net positive impact Source: Rio Tinto 2008; http://www.riotinto.com/documents/ReportsPublications/RTBidoversitystrategyfinal.pdf What experience / plans do you have for (requiring) offsetting and net positive impacts ?
Offsetting: potential for Synergy & for Conflict: Design is everything Adapted from BBOP 2009
Business Commitments / engagement Ecosystem Valuation Initiative Natural Capital accounting – Rio+20 Declaration et al.www.wbcsd.org/web/evi.htm Environmental Profit & Loss accounts & disclosure – e.g. PUMA 2012
Presentation overview TEEB for Business Recommendations1. Identify impacts & dependence on biodiversity & ecosystem services (BES) Including through the value chain2. Assess the business risks & opportunities associated with impacts & dependencies3. Develop BES information systems, set targets, monitor and report results4. Act to avoid, minimize and mitigate BES risks, using ‘offsets’ where appropriate Build on concept of Net Positive Impact5. Act on emerging BES business opportunities and win-wins cost-efficiencies, new products and new markets6. Integrate BES actions with wider Corporate Social Responsibility7. Engage with business peers & other stakeholders to improve BES guidance & policy Building on TEEB for Business (2012)
Public Authority Perspective & Role vis-à-vis BusinessNational authorities remit to ensure biodiversity resources are conservedPublic authorities responsibility for public interest: wise stewardship of public goodsGovernment 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 email@example.comIEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment. www.ieep.eu