Presentation by Patrick ten Brink of IEEP on Responding to Environmental Challenges TEEB at the World Bank SD leadership program workshop Cambridge UK 14 December 2011
Responding to the Challenge:The Economics of Ecosystems and Biodiversity (TEEB) Patrick ten Brink TEEB for Policy Makers Co-ordinator Head of Brussels Office Institute for European Environmental Policy (IEEP) World Bank Sustainable Development Leadership Programme, 11th – 16th December 2011 The Moller Centre, Cambridge, UK Wednesday 14th December
Presentation overview TEEB & the biodiversity challenges Valuation & the evidence base Policy tools to respond to the challenge Summary
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 CBD COP11 Reports Brussels Delhi Interim Climate 2009, London 2010 Report Issues Update National TEEB TEEB TEEBs Synthesis Books Netherlands Nordics Norway BrazilEcol./Env. IndiaEconomics …literature CBD COP 9 Input to Sectoral Bonn 2008 UNFCCC 2009 TEEB India, Brazil, Belgium, work Japan & South Africa Water Sept. 2010 Ag Rio+20 BD COP 10 Nagoya, Oct 2010 Brazil
Critical issuesThe values of biodiversity and ecosystems are missing• Many not known (but this is changing); widespread lack of awareness• They are generally not integrated into the economic signals, into markets – the economy is therefore often not part of the solution• Values are not taken systematically into account in assessments and decision making (government, business, citizens)• The value of nature is not reflected in national accounts nor in leading macro economic indicators Inappropriate incentives; misinterpretation of right solutions, insufficient evidence base at policy makers’ finger tips and weaker public support for action There is not enough political will or conviction or awareness of benefits/cost to launch due policies Biodiversity loss continues – eroding natural capital base without realising its value
“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 Source: FAO 2005a: 7 Source: Nellemann et al 2008: 22 “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
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
Ecosystem services - different types of value in our economic and social systemsProvisioning services Market values• Food, fibre and fuel• Water provision Potential Market values• Genetic resources – eg water supply PES; -eg ABSRegulating Services Potential Market values• Climate /climate change regulation – eg REDD & water purification PES• Water and waste purification - Avoided cost of purification• Air purification Health: social value• Erosion control• Pollination Lost output or• Biological control cost of alternative service providerCultural Services• Aesthetics, Landscape value, recreation Market values – some tourism and tourism• Cultural values and inspirational services Social value – identity et al 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)
Biodiversity (genes, species, ecosystems) & its value is aboutDiversity/variety – e.g. pharmaceuticals, food security, biomimicry; Building on Balmford and Rodriguez et al (2009) Scoping the ScienceE.g. genetic resources: > thanQuantity – e.g. timber, carbon storage, fish stock, flood control, water retentionE.g. for fish production: > thanQuality – e.g landscape & tourism, ecosystems & water filtration, resilience(to climate change, IAS) Need investment into biodiversity indicators and mapping
Many ecosystem services from the same piece of land Benefits local to global Benefits are spatially dependent Key to understand the interactions - it is the link of ecological systems with economic and social systems that defines the value
Taking account of public goods…can change what is the “right” decision on land/resource use 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 $11,172/ha Source: Barbier et al, 2007
Local community “best option” option” Logging industry “best Distribution of ecosystem benefits Leuser National Park on Sumatra, Indonesia Sources: van Beukering, P.J.H., H.S.J. Cesar, M.A. Janssen (2003). Economic valuation of the Leuser National Park on Sumatra, Indonesia. Ecological Economics 44, pp 43-62. and van Beukering, P.J.H., H.S.J. Cesar, M.A. Janssen (2002). Economic valuation of the Leuser Ecosystem in Sumatra.What is “best” depends on who you are: understanding who wins & who stands to lose in decisions is paramount. In: Conservation Dividents? ASEAN Biodiversity Vol 2. Nr. 2, 17-24.
Leuser National Park on Sumatra, Indonesia (cont.)Range of ecosystem benefits and time profile The benefits and who wins and loses will be time sensitive Analysis critical – need capacity Scenarios 2000 to 2030, discount rate 0% (Beukering et al. 2002 )
Biodiversity ‘values’: What can you know; wish to know The Benefits Pyramid To get the full picture one needs mix of monetary, quantitative, spatial, and qualitative information / understanding Available Press Policy information interest needs QuantitativeThe Evidence Base / qualitative and Demand Monetary
TEEB for Policy Makers The Global Biodiversity Crisis • Nature’s assets & biodiversity loss • Economic values and loss • Social dimension Measuring what we manage • Indicators • Accounts (SEEA/Waves) • Valuation • Assessment Available Solutions • PES (e.g. water), PES: REDD+ • Markets, GPP • Subsidy reform • Legislation, liability, taxes & charges • Protected Areas • Investment in natural capital (restoration et al) Transforming our approach to http://www.teebweb.org/ natural capital
Evidence base - Assessing values and actionsAssessing the value of working with natural capital has helped determine whereecosystems can provide goods and services at lower cost than by man-madetechnological 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) Critical to assess where working with nature saves money for public (city, region, national), private sector, communities and citizens & who can make it happenSources: 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 areasPolicy 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. TEEB implementation: understand beneficiaries, appreciate synergies – build on both
Valuation of ESS from Kampala wetlands, UgandaServices provided by the Nakivubo swamp include natural water purification andtreatment & supporting small-scale income activities of poorer communitiesProblem recognition: Plans to drain the Nakivubo Swamp (>40sqkm) for agriculture→ Waste water treatment capacity of the swamp was assessed (Emerton 2004)Assessment: Maintaining the wetlands: ~235.000$ p.a.Running a sewage treatment facility of equivalent capacity: ~2Mio. US$ p.a.Policy Solution: draining plans abandoned & Nakivubo Swamps designated as PA Sources: TEEBCases for TEEB for local and regional policyRecognising and demonstrating the values again critical for decision making. Capacity support .
Establishment of a MPA: Tubbataha Reefs, PhilippinesUNESCO World Heritage site, contains 396 species of corals & has higherspecies diversity per square meter than the Great Barrier ReefProblem Recognition - 1998 Bleaching & losses>>Stakeholders meetingPolicy Solution“No-take” areas agreed, & later, the Presidentpassed the Tubbataha Reefs Natural Park Act in2010 ( 10 mile buffer zone around the no-takemarine reserve) thus increasing Park by 200%Impacts of policy Increase coral cover – 40% 1999-2003, 50% 2004 Fish biomass in nearby reefs doubled since2000 and perceived fish catches increased 1999 –2004 from 10 to 15-20 kg/daySurvey found a significant increase in livingstandards from 2000 to 2004 Sources: Tongson 2007, Samonte-Tan et al. 2008, Dygico 2006; in TEEBCases for TEEB for local and regional Policy
Sourou River Valley, Burkina Faso • Traditional development strategies focused on converting wetlands for agriculture BUT: wetlands provide multiple ecosystem services contributing to the livelihood of about 60,000 people, worth some 15 Mio. € (Somda et al. 2010) → Agriculture is only one service among many others Sources: TEEBCases for TEEB for local and regional policy Study helped Stakeholder and decision makers realise: – Importance of intact wetlands and their multiple ES for local economy – Economic valuation of ES is an important tool for guiding wetland management and development strategies Local stakeholders call for including ES in local development plan Cross-sectoral partnerships for integrated wetland management Million Ecosystem Service % EURO Timber (fuelwood and construction) 37 5.6 Non-timber forest products 21 3.2 Pastures 18 2.7 Fishery 10 1.5 Transportation on water 10 1.5 Agricultural production 3 0.5 Tourism 1 0.2 Photo: abcBurkina (http://www.abcburkina.net/ancien/photos/riz_foto/sourou_750.jpg) Total 100 15.0Source: Somda et al. 2010 Valeur économique de la vallée du Sourou: Une évaluation préliminaire. IUCN West Africa. Source: Somda et al. 2010URL:http://cmsdata.iucn.org/downloads/brochure_sourou_corrige_09_08_2010.pdf
Working for Water (WfW): SAThe Manalana wetland (near Bushbuckridge, Mpumalanga)• Severely degraded by erosion that threatened to consume the entire system Sources: TEEBCases for TEEB for local and regional policy• WfW public works programme intervened in 2006 to reduce the erosion and improve the wetland’s ability to continue providing its beneficial servicesResults• The value of livelihood benefits from degraded wetland was just 34 % of what could beachieved after investment in ecosystem rehabilitation;• Rehabilitated wetland now contributes provisioning services at a net return of 297EUR/household/year;• Livelihood benefits ~ 182,000 EUR by the rehabilitated wetland; x2 costs• The Manalana wetland acts as a safety net for households. Sources: Pollard et al. 2008; Wunder et al 2008a; http://www.dwaf.gov.za/wfw/ Recognising and demonstrating the values and potential for increased value critically important. Needs: development support for assessment of values
Hydrological services: Aquifer recharge; Improved surface water quality, reduceSolution: Mexico PSAH: PES to frequency & damage from flooding` forest owners to preserve forest: manage & not convert forestResultDeforestation rate fell from 1.6 % to 0.6 %.18.3 thousand hectares of avoided deforestationAvoided GHG emissions ~ 3.2 million tCO2e Reduce Deforestation Address Poverty Investment in good spatially relevant data critical to develop an2010); Muñoz-Piña et al. policy instruments2007 Munoz evidence base for 2008; Muñoz-Piña et al.
PES: They exist, they work, learning by doing• The underlying principle of PES - ‘beneficiary / user pays’ principle + service providers get paid for their service• PES aim to change the economics of ecosystem service provision by improving incentives for land use and management practices that supply such services• Instrument growing in applications – 300 PES programmes globally, range of ecosystem services (Blackman & Woodward, 2010) – Broad estimate for global value: USD 8.2 billion (Ecosystem Marketplace, 2008) – USD 6.53 billion in China, Costa Rica, Mexico, the UK and the US alone. (OECD 2010) – Increasing by 10-20% per year (Karousakis, 2010) – Dynamic field – new support (e.g. Natural England White Paper), potential solution to challenges (e.g. public payments for public goods and EU CAP reform), new tool flood control (Eg Danube – exploring options)• Big and small – E.g. 496 ha being protected in an upper watershed in northern Ecuador – eg. 4.9 million ha sloped land being reforested by paying landowners China. See also Chapter 5 TEEB for Policy Makers
Public (municipal, reg., nat.) & private (eg Vittel (Fr), Rochefort (B), Bionade (D)for quality water & mixedLocal (e.g. New York, Quito), Regional (e.g. Niedersachsen), national (e.g CostaRica, Mexico and Ecuador and international (e.g. REDD+, ABS)PES address a wide range of objectives• For Specific services - e.g. provision of quality water (NY, Ec, Mx), protect groundwater (J, D), cleanse coastal waters (Sw), carbon Storage (NZ, Uganda, CR), invasive alien species (SA - WfW), biodiversity (EU, AUS), traditional knowledge for bio-prospecting (India), flood control (exploring Danube)• Multiple services: e.g. Costa Rica’s PSA - carbon, hydrological services preserving biodiversity and landscape beauty. Germany and Bolivia for biodiversity and water• Multiple objectives - e.g. Mexico’s PSAH – hydrological services, deforestation, poverty ‘Men do not value a good deed unless it brings a reward’ Ovid, B.C. 43 – 18 A.D.
REDD-Plus: Reducing Emissions from Deforestation and Forest Degradation-PlusMajor potential for this instrument to address Green carbon• Curb deforestation/degradation - deforestation ~17% of global GHG emissions• Could offer substantial biodiversity co-benefits: range of ecosystem services• Eliasch (2008) estimated that REDD could lead to a halving of deforestation rates by 2030 and have an estimated long-term net benefit of US$3.7 trillion in present value terms• One of the few areas given fairly solid support at the UNFCCC’s Copenhagen COP, Cancun and (at the time of writing) Durban• Many risks that need to be addressed: carbon leakage, additionality, permanence, biodiversity impacts (carbon only focus; plantations), competition for landNeeds:Confidence: monitoring & verification; natural capital accountsExperience: pilot projects, capacity building, monitoring solutionsInvestment: money for the projects and payments.Evolution: phasing from pilot, to funds, to market links….Support to address the needs is critical to make this tool realise its potential : climate & biodiversity & new incomes / livelihoods as well as for poverty alleviation, community viability
ABS (Access and benefits sharing)The fair and equitable sharing of benefits arising from the utilisation of genetic resourcesis one of the three objectives of the Convention on Biological Diversity (CBD) - 1992/3 •This is desirable on equity grounds; and because it is • critical to ensure the more efficient management and utilization of genetic resources2010 - Nagoya Protocol on Access to Genetic Resources and the Fair and EquitableSharing of Benefit arising out of their Utilization - after seven years of negotiations,this sets out rules and procedures for implementing the Convention’s third objective“The ABS Protocol is only a starting point. Whether it will result in the viable regimeagainst bio-piracy now depends on the implementation,”The African Group formally made a similar point in the closing plenary, stating for therecord that the protocol was simply a first step http://ictsd.org/i/news/biores/94075/ Potentially an important area for development support Potential area of important for green economy
Green products and servicesAlready a growing set of market niches for services and products based on sustainableuse of ecosystem services and biodiversity • Services - e.g. ecotourism • Products - e.g. the natural cosmetics sector • Major future potential? - biomimicryThis can lead to positive investment / rewards for benefits from ecosystem services.Complements growing market for products and services that are more respectful to theenvironment directly – eg forestry, fisheries, organic certifications – and indirectly – eg eco-labelling.Certification non progressing at same speed globally- potential need for support?Part of greening the supply chain, andgreening of the economy.Range of Areas for development support - certification of markets; capacity building for biomimicry and new economy etc
Subsidy Reform : Win-win: environment-economy Subsidies: Over $1trillion/year: a mix of “the good, the bad & the ugly” (TEEB 2011 Chapter 6: Lehman & ten Brink et al 2011) Opportunities: win-wins, reduce lock-in, progress towards a green economy; free up money to help with MEAs
Compensating for losses: offsets and biodiversity banks Biodiversity offsets – aim of avoiding losses • some companies committing to “no net loss” Biodiversity banking - credits may be produced in advance of - and without ex-ante links to - the debits they compensate and be stored over time • more complex than carbon trading • many biodiversity components and ecosystem services are unique and irreplaceable and cannot be effectively compensated Examples • 39 biodiversity compensation programmes around the world (and another 25 in development (Madsen et al. 2010) • United States more than 400 wetland banks have been established, creating a market for wetland mitigation worth more than US$3 billion/year (Bayon 2008; DECC 2009) Opportunity for international offsets? Green Development Initiative?
Investment in ecological infrastructureEcological infrastructure key for adaptation to climate change• Afforestation: carbon store+ reduced risk of soil erosion & landslides• Wetlands and forests and reduced risk of flooding impacts• Mangroves and coastal erosion and natural hazards• Restore Forests, lakes and wetlands to address water scarcity• PAs & connectivity to facilitate resilience of ecosystems and speciesCan help adapt to climate change at lower cost than man-made technological solutions – critical to understand where and support it (eg restoration, protection & management, financing). Adaptation to climate change will receive hundreds of US$ 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, towards a green economy Opportunities/benefits of ESS No net loss from 2009 level Past loss/ Investment in natural capital +ve degradation Halting biodiversity loss change ` Regulation Better governance Economic signals : PES, REDD, ABS (to reward benefits) Charges, taxes, fines (to avoid Alternative natural capital degradation/damage: Development path Sustainable consumption (eg reduced meat) Subsidy reform right signals for policy) Markets, 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 Progress in one country depends on institutional and instrument context, potential, incentives &motivation, & often progress elsewhere & the global context. Need multi-level governance & engagement(government, business, communities, citizens) & integration – all essential for a transition to a green economy
TEEB SummaryMaking Natures Values Visible: improved evidence base for improved governance, awareness for …is this enough to work out what to do? action – government (all levels), business, peopleMeasuring better to manage better: from indicators to accounts, valuation & certificationChanging the incentives: payments, taxes, charges, subsidy reform, marketsProtected areas: biodiversity riches that can also offer value for money, recreation and cultural identity, tourism.Ecological infrastructure and benefits: climate change (mitigation/adaptation), air pollution & health et al …always better to look atNatural capital and poverty reduction: the whole board investment for synergies –livelihoods, food, water, fuel. And engage the full set ofMainstream the economics of nature: across players sectors, across policies, seek synergies across disciplines.
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 See also IEEP’s award winning Manual of European Environmental Policy http://www.ieep.eu/the-manual/introduction/ http://www.europeanenvironmentalpolicy.eu/