The Economics of Ecosystems and Biodiversity (TEEB) The value of ecosystem services and the importance of natural capital. Patrick ten Brink TEEB for Policy Makers Co-ordinator Head of Brussels Office, Head of Environmental Economics Programme Institute for European Environmental Policy (IEEP) Hungry for Change II Conference and Exhibition, 11th April 2013, Brussels Biodiversity session - programme Ensuring healthy biodiversity and sustainable productive agriculture can coexist in Europe
Ecosystems provide multiple ecosystem servicesProvisioning services Regulating Services Cultural ServicesFood Climate regulation AestheticsFibre Water and waste purification Landscape value,Fuel Air purification Recreation & TourismWater provision Natural hazards management Cultural valuesOrnamental resources Erosion control Inspirational servicesGenetic resources Pollination EducationMedicinal resources Biological control Scientific KnowledgeSupporting Services: Soil formation & fertility, photosynthesis, nutrient cycleHabitat services such as nursery service, gene pool protection. Some are private goods (eg food provisioning), others public goods that can become (part) private (eg tourism, pollination), others are pure public goods (eg health, identify)
TEEB’s Genesis, Aims and progress G8+5 “Potsdam Initiative – Biological Diversity 2010” Potsdam 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 TEEB End User Reports Brussels Interim Climate TEEB W&W 2009, London 2010 TEEB Report Issues Update Nature & GE TEEB Books TEEB Oceans SynthesisEcol./Env.Economicsliterature CBD COP 9 Input to Bonn 2008 UNFCCC 2009 India, Brazil, Belgium, Japan & South Africa Sept. 2010 TEEB studies The Netherlands, BD COP 10 Germany, Nordics, Nagoya, Oct 2010 Norway, India, Brazil
Contribution of Natural Capital to Human Wellbeing & livelihood HUMAN WELLBEING AND LIVELIHOODS ECOSYSTEM SERVICES NATURAL CAPITAL Provisioning: Direct livelihood support food, timber, Food and materials, water… Social Human raw materials, water… capital capital Supporting: nutrient Regulating: water Security and resilience cycling, soil purification and Food security, mitigation of natural Man-made formation, retention, climate disasters, climate change adaptation capital control, pest and crop and mitigation disease control… pollination Cultural: aesthetic, Health spiritual, Access to clean air and water, recreational, disease control, medication, knowledge… traditional medicine Social relations INSTITUTIONS Government & public institutions, companies, communities, NGOs & citizensA range of factors can help lead to ecosystem service provisionA complex site specific production function Source: Own Representation adapted from Laure Ledoux in ten Brink et al 2012, building on MA (2005) and TEEB (2011a)
Action locally leads to local, to national & to global benefits. Mainly global benefit Mainly local benefit Additional national benefitSource: Own Representation Patrick ten Brink.
Economic importance of pollination• Over 75 % of the world’s crop plants rely on pollination by animals• The production of 87 of 115 leading global crops (~= 35 % of the global food supply) were increased by animal pollination. (Klein et al. 2007)• 30 % of fruits, 7 % of vegetables and 48 % of nuts produced in the EU depend on pollinators• The annual economic value of insect-pollinated crops in the EU is Domesticated pollinator (honey bee) about EUR 15 billion (Gallai et al 2009)• UK: economic value of biotic pollination as a contribution to crop market value in 2007 at EUR 629 million (UK NEA, 2011)• Pollination benefits linked to proximity: forest-based pollination in Costa Rica increased coffee yields by 20 % within 1 km of forest. (Ricketts et al. 2004)• Loss of pollinators (domesticated & wild) reduces crop yield through reduced and unreliable pollination Wild pollinator (hover fly)Building on presentation by Dr Anne Franklin (2010), various references in “EU 2010 Biodiversity Baseline” (EEA, 2010) + UK NEA, 2011, Ricketts et al, 2004)
Agricultural pests cause significant economic losses worldwide -biological control can reduce losses, costs and increase outputGlobally, >40 % of food production is lost to insect pests, plant pathogens & weeds,despite the application of more than 3 billion kilograms of pesticides to crops, plus othermeans of control (Pimentel 2008).In the US, ~ US$18 billion lost due to insect damage (including more than US$ 3 billionspent in insecticides), of which about 40 % attributed to native species and theremaining to exotic pests (Losey & Vaughan 2006).These values, however, would be much higher without biological control~ 65 per cent of potential pest species are being suppressed in the US. Total valueof pest control by native ecosystems around US$ 13.60 billion. (Losey & Vaughan, 2006)The presence of natural enemies increased barley yields 303 kg/ha, preventing 52per cent of yield loss due to aphids. (Estimated via a predator removal experiment in Östman et al. 2003)Source: Balmford 2008
Natura 2000 Protected areas have a significant role in: • Harbouring wild pollinators, • Controlling the spread of pests and pathogens, • Regulating and filtrating water • Supporting soil fertility through erosion control • A gene bank for our crops, fruits and vegetables • + Recreation, tourism, landscape value • + HNV & organic farming: provisioning service HNV farmingOrganic agriculture represents a promising agriculturalmanagement option for Natura 2000 sites and protectedareas under agricultural land-use (Scialabba, 2003)Organic farming host 30% more species than non-organic farming (Kukreja, 2010).But most issues of Agriculture-Biodiversity outside PAs Source: Paracchini et al. (2008)
Land-uses and trade offs for ecosystem servicesSource: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.
Meeting future demands sustainably The future balance of commodities and environmental services will depend on individual decisions taken by millions of farmers and foresters in the EU. Decisions will be heavily influenced by the future trajectories of market prices and production costs as well as by public policies. Three aspects need close attention: • current forms of land management which are depleting essential natural resources must be modified to ensure that production methods are sustainable; • growth in agricultural and forest productivity must be accompanied by an increase in the production of environmental services – sustainable intensification; • land that has a high environmental value currently should be maintained and valued for the benefits already provided and measures taken to prevent abandonment, urbanisation or intensification of agricultural or forest management.Source: Building on presentation by Kaley Hart, IEEP on Land as an Environmental Resource
Meeting future demands – agriculture • There continues to be some potential to increase crop yields sustainably , especially in the EU-12 – but far less than assumed in many land use models • There is significant potential to improve the environmental performance of farms - recent research suggests this need not have a significant impact on output per hectare, with appropriate crop types and management The food – environment production possibilities frontier • There may also be opportunities to bring back some areas of land that have been recently abandoned. Often such areas will be appropriate only for extensive grazing because of the negative impact of cultivation on environmental servicesSource: Building on presentation by Kaley Hart, IEEP on Land as an Environmental Resource
Increasing rewards for ecosystem services provision through PES Intensive land use Biodiversity ‘friendly’ land use Eg Private optimum Eg social optimum Cultural Potential new Services income from (eg tourism) differentTo date ‘unpaid’ CS Regulating payments for RSecosystem services (eg ecosystem PSservices water quality) BENEFITS services - Additional PS public & (other products, pollination) private Income(Paid) Benefit to fromland user - provisioning Income from Services (PS) Opportunity cost - originalprovisioning Income foregoneservices (eg farm to landowner products inor forest products) (in absence of PES) existing marketsCost to population COSTSof pollutionSocial Benefit = Private benefit + public good (ESS) – pollution costs
Summary• Ecosystem services an increasingly appreciated concept, but awareness still needs to grow and integration of the concept in agricultural economy is in early stages• There are important synergies between agriculture and biodiversity conservation• Also important trade-offs. Food provision and food security a public good, but impacts on biodiversity also create losses of other public goods (e.g. via eutrophication, water quality loss impacts) & losses of other private goods (e.g. via lower levels of wild pollinators or natural pest control)• Some public goods can be sustainable managed, via PES – important tool (private and public), good potential, but not the only tool and many complicating factors (eg state aid issues and issues about the additionality of actions with regard to the environmental baseline)• All public goods need to be underpinned by effective baseline regulation• Decision making needs to factor in private and public goods• Major effort needed to reform of support/pricing to ensure optimal use of natural capital• Cannot do without public policy for public goods – fundamental rationale for role of government. Focus on private optimum alone will not lead to social optimum.
Thank you for your attention ! Patrick ten Brink firstname.lastname@example.org 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_EUFor more information about IEEP’s work on Nature and the Green Economy visit www.ieep.eu and for TEEB also www.teebweb.org
Additional information sourcesThe Economics of Ecosystems and Biodiversity (TEEB) in National and International Policy Making (ed. Patrick tenBrink) www.teebweb.org or via www.ieep.euTEEB Water and Wetlands (Russi et al 2013; ten Brink et al 2013) http://www.ieep.eu/publications/2013/02/the-economics-of-ecosystems-and-biodiversity-for-water-and-wetlandsRecognising the value of protected areas (Kettunen et al 2011) www.cbd.int/database/attachment/?id=1408Estimating 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-networkCosts 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.pdfGreen Infrastructure options (Mazza et al, 2010))http://www.ieep.eu/assets/898/Green_Infrastructure_Implementation_and_Efficiency.pdfNature 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 and Economic Benefits of Protected Areas: an Assessment Guide (Kettunen and ten Brink eds 2013forthcoming) http://www.routledge.com/books/details/9780415632843/Land as an Environmental Resource (Hart et al, 2013)Sustainable management of natural resources with a focus on water and agriculture (Poláková et al, forthcoming):http://www.europarl.europa.eu/stoa/