TEEB for Policy Makers


                   Patrick ten Brink
             TEEB for Policy Makers Co-ordinator
           ...
Presentation overview



      Part A: TEEB
             Process, content and context


      Part B: Values and Decision ...
TEEB’s goals

TEEB’s goals

 1. Demonstrate the value to the economy, to society/individuals
    and wider environment – w...
TEEB – Final Report June 2010

TEEB reports for different end-users

                                 TEEB D0: Ecological ...
TEEB timeline
TEEB timeline
    2008                                 2009                            2010
                ...
Presentation overview
Major Policy Interest


G8+5
                                                                       ...
Press Echo to TEEB I, May 2008




Source: Dr Carsten Neßhöver, Heidi Wittmer & Christoph Schröter-Schlaack, Presentation ...
TEEB for Policy Makers report
- launched 13 November 2009 -    The Global Biodiversity Crisis
                            ...
TEEB D1: TEEB for International
  and National Policy-Makers




    Available on http://www.teebweb.org/
Eroding natural capital base & tools for an
       alternative development path
                                          ...
Presentation overview



      Part A: TEEB
             Process, content and context


      Part B: Values and Decision ...
Integrating Economic Values into
                      Policy Assessment


“I believe that the great part of miseries of m...
Ecosystem Services - multiple benefits from ecosystems
                Ecosystem Services


Provisioning services         ...
Ecosystem Services and awareness of values

Provisioning services
•   Food, fibre and fuel                 Market values –...
Taking account of public goods
       …can change what is the “right” decision on land/resource use

 US$      Based only ...
Valuation and policy making:
         from valuing natural assets to decisions

   To underline the value of natural asset...
Valuation and policy making:
    from valuing natural assets to decisions

Create Political support for new (fiscal) instr...
Valuation and policy making:
        from valuing natural assets to decisions
Inform impact assessment of Proposed legisla...
Valuation and policy making:
       from valuing natural assets to decisions
Inform land-use decision - Creating and impro...
Valuation and policy making:
     from valuing natural assets to decisions

Evaluate damage to natural resources to determ...
Seeing the whole picture – timescales for
                            benefits
To address short-term bias - important to u...
Part B Summary
                     Values and Decision Making


Under-valuing biodiversity and the ecosystem services it ...
Presentation overview



      Part A: TEEB
             Process, content and context


      Part B: Values and Decision ...
Presentation overview
Part B: Using Economics-based Policy Instruments
   for Biodiversity and Ecosystem services

       ...
Ecosystem Services
                     Public Goods and Private Goods
Provisioning services
•   Food, fibre and fuel     ...
Rewarding Benefits through payments & markets


 Tools that reward the provision of ecosystem services and promote the
   ...
Payments for Ecosystem
                        Services (PES)

    Payments for Ecosystem Service (PES): PES can be define...
PES – Practice: Payments for
                Specific Ecosystem services
PES: payments to ensure the provision of a specif...
PES for provision of multiple services from a given area
• Costa Rica’s PSA (Pagos por Servicios Ambientales) supports a b...
PES: payment levels and opportunity costs

Payment levels vary widely in practice
•    Costa Rica, PSA: for forest conserv...
REDD+ Reducing Emissions from Deforestation and Forest Degradation

Major potential for this instrument    (deforestation ...
Tax and compensation measures

Tax breaks and other compensation mechanisms offer an important
‘thanks’ and incentives for...
Access and Benefits sharing




Countries benefited little from genetic resources sourced from their territory.
A fairer a...
“My father said: You must never try to make all the
          money that's in a deal.

          Let the other fellow make...
Greening Markets

Market (niches) for products & services demonstrating conservation benefits:
  products with reduced dir...
Green Public Procurement
Green Public Procurement (GPP) means that public purchasers take account of
environmental factors...
Subsidy reform


                    - increase share of the “good” subsidies
       still relevant, targeted, effective, ...
Aggregate subsidy estimates
for selected economic sectors
    Over $ 1 trillion per year in Subsidies




Most sensible us...
Fisheries Subsidies
Fisheries subsidies ~ US$30-34 bn/yr: only ~7bn “good”, 20bn “bad”
“Small” compared to other subsidies...
Subsidies & “Sunken Billions”

Contribution of fisheries harvest sector to the global economy ~US$
          50billion/ ye...
Since ‘60s - Europhication caused “dead-zones”:
       Regularly ~405 coastal dead-zones
Biofuels


                             An example of complex relationship between
                             renewable ...
Yet reforming EHS > potential benefits


•   Reduce the use of resource intensive inputs, thus saving resources (for
    s...
Offsets (no net loss+) to Habitat Banking
   When appropriately designed and effectively regulated, offsets and biodiversi...
Trading systems

 Not just CO2 and Sulphur trading - also

 ITQs (individual tradable quotas) and fisheries in New Zealand...
Addressing losses through pricing

           taxes/charges/fees and fines
            +liability and compensation

Instru...
Taxes & polluter pays principle

 Incentive effect & revenue raising effect
 Pesticides tax: 20 SEK/kg (in 2002) 65 % redu...
Charges / taxes for raising revenues
Mexico increased gasoline tax by 5.5% in October 2007. 12.5% of proceeds will go to
s...
Charges & full cost recovery

Water pricing:

e.g. Many EU Member States (e.g. Netherlands, UK) have moved towards full co...
Where can the private sector contribute to the
      alternative development path ?

                                     ...
•It is arguably in the long term interests of both private sector and the society at large that
Biodiversity and ecosystem...
Thank you
                                    Patrick ten Brink
                             TEEB for Policy Makers Coordi...
PtB of IEEP TEEB presentation to WBCSD 12 Mar 2010
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PtB of IEEP TEEB presentation to WBCSD 12 Mar 2010

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Presentation by Patrick ten Brink of IEEP on TEEB to WBCSD meeting 12 Mar 2010 in Switzerland

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PtB of IEEP TEEB presentation to WBCSD 12 Mar 2010

  1. 1. TEEB for Policy Makers Patrick ten Brink TEEB for Policy Makers Co-ordinator Head of Brussels Office Institute for European Environmental Policy (IEEP) WBCSD Liaison Delegate Meeting The Economics of Ecosystems and Biodiversity (TEEB) Evidence of Values, policy options and implications for business 8:30 – 15:30; 12 March 2010 Royal Plaza Hotel Montreux, Switzerland
  2. 2. Presentation overview Part A: TEEB Process, content and context Part B: Values and Decision Making Part C: TEEB for Policy Makers Selected elements for business
  3. 3. TEEB’s goals TEEB’s goals 1. Demonstrate the value to the economy, to society/individuals and wider environment – what we have & what we risk losing. 2. Underline the urgency of action, benefits of action (opportunities), analyse costs of action 3. Show how the value of ecosystem services and biodiversity can be assessed and where it can be useful 4. Show how we (can) take into account the value of ecosystem services and biodiversity in our decisions and choices, 5. Identify / support solutions 6. Address the needs of policy-makers, local administrators, business and citizens (the “end-users”) Source: adapted from Pavan Sukhdev
  4. 4. TEEB – Final Report June 2010 TEEB reports for different end-users TEEB D0: Ecological and Economic Foundations TEEB D1: TEEB for National and International Policy-Makers TEEB D2: TEEB for Local Policy- Makers and Administrators TEEB D3: TEEB for Business TEEB D4: TEEB for Citizens
  5. 5. TEEB timeline TEEB timeline 2008 2009 2010 D1: Engagement / Feedback / Fine-tune D1: Feedback / input – WBCSD Montreux TEEB Phase I TEEB Phase II Sep 09 TEEB Nov 09 Spring/ Summer Final TEEB May 08 Interim report Climate Issues D1 for / Autumn 2010 synthesis & (CBD COP9, Bonn) Update policy D0, D2, D3 & D4 publications (Strömstad) makers CBD COP10 (Oct 2010, Nagoya, Japan)
  6. 6. Presentation overview Major Policy Interest G8+5 Message from Syracuse http://www.g7.utoronto.ca/environment/env090424-summary.pdf Bonn (COP 9) CBD Process London (UK-Brazil co-chaired informal experts meeting) 60+countries; Trondheim Biodiversity Conferences 100+countries Nagoya (COP 10) EU Message from Athens http://ec.europa.eu/environment/nature/biodiversity/conference/pdf/message_final.pdf Message from Strömstad http://www.se2009.eu/polopoly_fs/1.14381!menu/standard/file/Chairs%20conclusion%20Str%C3%B6mstad.pdf Message from Madrid http://www.fundacion-biodiversidad.es/minisites/2009/conferencia2010/doc/Prioridades_Cibeles.pdf National Politics Benn to call on world leaders to adopt biodiversity pricing Environment secretary says a way must be found to take account of the economic impact of decisions on biodiversity Patrick Wintour http://www.guardian.co.uk/science/2010/jan/25/hilary-benn-biodiversity-pricing
  7. 7. Press Echo to TEEB I, May 2008 Source: Dr Carsten Neßhöver, Heidi Wittmer & Christoph Schröter-Schlaack, Presentation in Vilm, 26.8.2008
  8. 8. TEEB for Policy Makers report - launched 13 November 2009 - The Global Biodiversity Crisis • Coral reef emergency • Deforestation • Loss of public goods… Measuring what we manage • BD & ecosystem service indicators • Natural capital accounts • Beyond GDP indicators et al Available Solutions • PES water, PES – REDD+ • Markets, GPP • Subsidy reform • Legislation, liability, taxes & charges • Protected Areas • Investment in natural capital et al http://www.teebweb.org/ Responding to the value of nature
  9. 9. TEEB D1: TEEB for International and National Policy-Makers Available on http://www.teebweb.org/
  10. 10. Eroding natural capital base & tools for an alternative development path 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 degradation/damage: Alternative natural capital Subsidy reform (right signals for policy) Sustainable consumption (eg reduced meat) Development path 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 2009 What contribution can be made by the private sector and in which areas ? 2050 For what instruments? What conditions would help ?
  11. 11. Presentation overview Part A: TEEB Process, content and context Part B: Values and Decision Making Part C: TEEB for Policy Makers Selected elements for business
  12. 12. Integrating Economic Values into Policy Assessment “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
  13. 13. Ecosystem Services - multiple benefits from ecosystems Ecosystem Services Provisioning services Many services from the same resource • 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 Important to appreciate the whole set of eco-system services + Resilience - eg to climate change
  14. 14. Ecosystem Services and awareness of values Provisioning services • Food, fibre and fuel Market values – known and generally taken into account in decision making on land use decisions • Water provision • Genetic resources Value historically oft overlooked; priv. sector exceptions Regulating Services • Climate /climate change regulation Value long ignored, now being understood • Water and waste purification • Air purification Value often overlooked • Erosion control • Natural hazards mitigation • Pollination Value oft appreciated only after service gone • Biological control Cultural Services • Aesthetics, Landscape value, recreation and Sometimes value implicit in markets tourism • Cultural values and inspirational services Rarely values calculated Supporting Services • Soil formation Decision making is biased towards short term economic benefits as the (long-term) + Resilience - eg to climate change value of ecosystem services is poorly understood.
  15. 15. 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/ha 10000 $9632/ha After Adding Storm Public protection 5000 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
  16. 16. Valuation and policy making: from valuing natural assets to decisions To underline the value of natural assets & help determine where ecosystem services can be provided at lower cost than man-made technological alternatives e.g. water purification and provision, carbon storage, flood control Conservation / restoration Investment decision e.g. New Zealand – Te Papanui Park - water e.g. USA-NY – Catskills-Delaware watershed e.g. Saltillo City, Mexico – Zapaliname mountains e.g. Venezuela and PAs to avoid sedimentation e.g. Vietnam and restoring/investing in Mangroves - cheaper than dyke maintenance
  17. 17. Valuation and policy making: from valuing natural assets to decisions Create Political support for new (fiscal) instruments eg UK landfill tax, building on valuation of damage of using landfills for waste disposal. To communicate the need for and influence the size of payments for ecosystem services (PES). Valuation can be useful for municipalities setting up PES for activities leading to clean water provision – and also private sector (eg Vittel) & at international/national level in discussions on design and future implementation of REDD (reducing Emissions from Deforestation and Degradation) and REDD+ Political and public support for action Instrument Choice Instrument design
  18. 18. Valuation and policy making: from valuing natural assets to decisions Inform impact assessment of Proposed legislation & policies Creating and improved evidence base Valuable for new marine legislation in UK: establishment of Marine Conservation Zones on the basis of ecosystem service benefits Impact assessment within European Commission - change around 2/3rds of policies for the better & often low-cost investment (Evaluation Partnership 2007; Jacobs 2006) Valuable for EU Water Framework Directive Improve legislative design and implementation Trend: we can expect future legislation (and its implementation) to ever increasingly take the value of nature into account
  19. 19. Valuation and policy making: from valuing natural assets to decisions Inform land-use decision - Creating and improved evidence base – eg India: Floodplain between Yamuna River and Delhi. Choice: convert floodplain / embankment plan or not Evidence showed that ecosystem benefits exceeded opportunity costs of conversion. >> Delhi government halted embankment plan of Yamuna until further order - e.g. Opuntia scrubland in Peru Choice: maintain scrubland or move to agriculture? Analysis of value of provisioning services (e.g. fruit and cochineal), regulating services (nursery and refugium services), erosion control and supporting services (soil formation) >> even if only some of the intangible benefits considered, the value of the scrubland higher than direct revenues from agriculture. Avoid socially less good investment decisions
  20. 20. Valuation and policy making: from valuing natural assets to decisions Evaluate damage to natural resources to determine appropriate compensation, e.g. under liability regimes in the US and the EU – Exxon Valdez, Erika e.g. Indian Supreme court: compensation payments for forested land conversion Court rules Court rulings Expect increasing attention in future? Sea deadzones & Ag? Pollution impacts? Damage to resources?
  21. 21. Seeing the whole picture – timescales for benefits To address short-term bias - important to understand the timescale of benefits • A review of 112 studies in 80 MPAs (marine protected areas) : fish populations, size & biomass all dramatically increased inside reserves, allowing spill-over to nearby fishing grounds (Halpern 2003). • Eight years after designation of Kenya’s Mombasa Marine National Park, fish catches around the park had reached three times the level of those further away (McClanahan and Mangi 2000) • For other MPAs, benefits after 5, even after 3 years. Help demonstrate the sense of the measures • to those facing potential impacts on activities • to wider benefits to society Identifying and Implementing transition measures to address short-term needs critical for stock recovery phase. What Advice do WBCSD members have for dealing with sectors/activities, where there is a need to integrate medium and long term interests, but this comes at a (short term)cost (opportunity cost)?
  22. 22. Part B Summary Values and Decision Making Under-valuing biodiversity and the ecosystem services it supports has contributed to the loss of natural capital Historically, many values have been invisible Increasingly values are understood and available Increasing use in policy assessment and policy choices. Real world effects – on policies, instruments, investments, results. More steps are needed to appreciate and respond to the value of nature The whole picture of benefits and costs need to be appreciated – the here and now, the over there and over time, the private and public http://hattoriforth.typepad.com/.a/6a00d83549e5d069e20120a6ebb5b0970b-800wi …is this enough to work out what to do? …always better to look at the whole board
  23. 23. Presentation overview Part A: TEEB Process, content and context Part B: Values and Decision Making Part C: TEEB for Policy Makers Selected elements for business
  24. 24. Presentation overview Part B: Using Economics-based Policy Instruments for Biodiversity and Ecosystem services The Global Biodiversity Crisis Measuring what we manage Available Solutions • Rewarding benefits: PES, REDD+, ABS, tax relief & fiscal transfers, Markets, GPP • Subsidy reform • Addressing losses : Regulation legislation, liability, taxes & charges, offsets, banking • Protected Areas • Investment in natural capital et al Responding to the value of nature http://www.teebweb.org/
  25. 25. Ecosystem Services Public Goods and Private Goods Provisioning services • Food, fibre and fuel Market values • Water provision Potential Market values • Genetic resources – eg water supply PES; -eg ABS Regulating Services Potential Market values • Climate /climate change regulation – eg REDD & water purification PES • Water and waste purification - Avoided cost of purification • Air purification • Erosion control Social value – health, wellbeing • Pollination • Biological control Opportunity cost: Lost output or cost of alternative service provider Cultural Services • Aesthetics, Landscape value, recreation and Market values : eco-tourism tourism • Cultural values and inspirational services Social value – identity et al Supporting Services • Soil formation Creation of markets, development of pricing mechanisms one set of solutions + Resilience - eg to climate change to level the economic playing field
  26. 26. Rewarding Benefits through payments & markets Tools that reward the provision of ecosystem services and promote the greening of supply chains, include: • Payments for Ecosystem services (local, national, international) PES • Access and benefits sharing (ABS) • Tax based mechanism and public compensation mechanisms • Green markets and fiscal incentives (Certification, premia markets, GPP) + investment in natural capital (conservation/restoration/new green infrastructure)
  27. 27. Payments for Ecosystem Services (PES) Payments for Ecosystem Service (PES): PES can be defined as a voluntary transaction where a well-defined ecosystem service (ES) (or land-use likely to secure that service) is « bought » by at least on ES buyer from at least one ES provider, if and only if the ES provider secures ES provision (conditionality) (adapted from Wunder 2005) • PES offer considerable potential to raise new funds for biodiversity or to use existing funding more efficiently. • Both the public and private sectors can play a role in establishing PES in different contexts. • PES have proven to be a highly flexible tool, providing both direct and indirect rewards for various ecosystem services and biodiversity conservation at a range of different scales (496 hectares in an upper watershed in northern Ecuador) to much larger scales (e.g. 4.9 million hectares of sloping farmland reforested in China.
  28. 28. PES – Practice: Payments for Specific Ecosystem services PES: payments to ensure the provision of a specific service • Managing forest & agricultural land to ensure water quality - New York (Catskills-Delaware watershed); Saltillo city, Mexico (Zapalinamé mountains), • To cleanse coastal waters in Sweden • to protect groundwaters in many European countries & parts of Japan – Public - eg Germany – Private - eg Vittel mineral water, France • Carbon storage/sequestration via farm management is rewarded in New Zealand & via forest management in Costa Rica & Uganda & REDD+ • PES are also used to tackle external threats that could undermine service provision e.g. for removal of invasive alien species through South Africa’s Working for Water Programme What example of practice do you know of re private sector PES ? What do you see as the perspectives for private sector engagement in PESs?
  29. 29. PES for provision of multiple services from a given area • Costa Rica’s PSA (Pagos por Servicios Ambientales) supports a bundle of four services - carbon sequestration, hydrological services preserving biodiversity and landscape beauty. • PES schemes to combine improved groundwater quality with increased biodiversity are found in e.g. Germany and Bolivia (Los Negros watershed) • PES schemes primarily for biodiversity conservation include the Bushtender programme (Victoria, Australia) and the US Conservation Reserve Programme. Are there any examples of PES for multiple services from the private sector?
  30. 30. PES: payment levels and opportunity costs Payment levels vary widely in practice • Costa Rica, PSA: for forest conservation US$ 64 per ha/yr in 2006. Portela & Rodriguez 2008; Pagiola 2008 in Wunder & Wertz-Kanounnikoff 2009; • Mexico’s PSA-H: for preservation of cloud forest US$ 40 per ha/year; for other tree-covered land US$ 30 per hectare/year Muñoz-Piña et al. 2007. • Vittel mineral water, France Perrot-Maître 2006; Wunder and Wertz-Kanounnikoff 2009 – Ave. payments are EUR 200 ha/year over a five year transition period and – up to 150,000 EUR per farm to cover costs of new equipment. – Contracts are long-term (18-30 years), – with payments adjusted to opportunity costs on a farm-by-farm basis. PES will be able to address the opportunity costs in some cases only. Other or complementary measures needed. Are there any examples of private PES with insights on addressing opportunity costs?
  31. 31. REDD+ Reducing Emissions from Deforestation and Forest Degradation Major potential for this instrument (deforestation ~17% of global GHG emissions) One of the few areas given fairly solid support at the UNFCCC’s Copenhagen COP Probably a very significant scope for private sector engagement What private sector carbon offset agreements/investments are there ? And what lessons can be drawn from these? What does the private sector see as opportunities and necessary/helpful conditions to help engage industry in the solution?
  32. 32. Tax and compensation measures Tax breaks and other compensation mechanisms offer an important ‘thanks’ and incentives for efforts. Considerable potential to integrate and reward ecological concerns in land, property and income taxes They are only rarely used for this purpose. Tax incentives for conservation easements and ecological gifts in North America By 2005, land trusts held conservation easements on over 2.5 million hectares (6.2 million acres) Canada: The Ecogift Programme (introduced in 2001). Tax benefits to owners of ecologically sensitive land if they donate it (fully or partially) to specified recipients to manage sustainably / conserve the natural habitat. The Netherlands, savers and investors can obtain exemption from a capital gains tax if they invest in specified green projects or capital funds. Example of practice re available for and use by private sector?
  33. 33. Access and Benefits sharing Countries benefited little from genetic resources sourced from their territory. A fairer and more efficient regime is needed that can establish clear rights for local people, encourage the conservation of genetic resources in situ and facilitate discoveries and their application across a range of sectors.
  34. 34. “My father said: You must never try to make all the money that's in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won't have many deals.” J. Paul Getty The current ABS discussions do not appear to be proceeding at an adequate rate for positive final result in Nagoya (though strong interest to address this). What insights/advice do WBCSD member have for making progress?
  35. 35. Greening Markets Market (niches) for products & services demonstrating conservation benefits: products with reduced direct impacts on biodiversity, due to adoption of more efficient or low-impact production and processing methods e.g. for reduced impact forestry - FSC, PESC certified timber e.g. for fisheries, MSC certification; products with reduced indirect impacts on biodiversity as a result of decreased pollution load e.g. biodegradable detergents – eco-labelled products products and services based on the sustainable use of ecosystem services and biodiversity e.g. ecotourism or biotrade. These are less and less “niches”; and more and more “mainstreamed” Private sector role here critical – what insights would you wish to share with TEEB?
  36. 36. Green Public Procurement Green Public Procurement (GPP) means that public purchasers take account of environmental factors when buying products, services or works. A product or service can only qualify as ‘green’ if it goes beyond what is required by law and beyond the performance of products commonly sold in the market. GPP rapidly developing since the early 2000s; Now being mainstreamed by environmentally ambitious governments. EU: government purchases alone exceeds 1,500 bn EUR/year,16% of EU GNP. European Commission proposed to MS - by 2010, 50% of purchasing should be GPP. The Netherlands: nat. government intends to purchase 100% green by 2010, with levels of 50 to 75% for local and regional governments. Many other large economies – including Japan, China, New Zealand, Korea and the US – also have formal policies in place that stimulate GPP Major tool for greening the supply chain; direct link (demand side pull) to certification of products and services (supply side) Trend in increased GPP can be expected. To what extent is the private sector “reading the writing on the wall” to respond? What are fine examples of Green private procurement ?
  37. 37. Subsidy reform - increase share of the “good” subsidies still relevant, targeted, effective, positive impacts, few negative effects - remove/reform the “bad" subsidies no longer relevant, waste of money, important negative effects - reform the “ugly” subsidies badly designed – eg inefficient, badly targeted, potential for negative effects Source: building on Sumaiia and Pauly 2007
  38. 38. Aggregate subsidy estimates for selected economic sectors Over $ 1 trillion per year in Subsidies Most sensible use of funds? Or potential for reform?
  39. 39. Fisheries Subsidies Fisheries subsidies ~ US$30-34 bn/yr: only ~7bn “good”, 20bn “bad” “Small” compared to other subsidies – Agriculture, transport, energy Large relative to sector (~ US$ 90bn/yr landed value) and Major impacts (stock collapse, species composition, damage to ecosystems) 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)
  40. 40. Subsidies & “Sunken Billions” Contribution of fisheries harvest sector to the global economy ~US$ 50billion/ year less than it could be (World Bank and FAO 2008) Non optimal resource management, driven, in part, by subsidies leading to “too many fishers chasing too few fish”
  41. 41. Since ‘60s - Europhication caused “dead-zones”: Regularly ~405 coastal dead-zones
  42. 42. Biofuels An example of complex relationship between renewable energy subsidies and env. damaging impacts & interests across range of actors. US$11bn/yr (‘06: US+EU+Canada) (GSI 2007, OECD 2008) Cost of reducing CO2 ~ US$ 960 to 1700/tCO2 equiv. (OECD 2008) Biofuels subsidies generally not cost effective: cf EU-ETS: ~ US $ 30-50 / t avoided deforestation and degradation, soil quality maintenance, carbon and Ag. Effect opposite to stated objective: Where biofuels fom converted forest lands – there may be net increase of emissions Urgent need to review biofuels policies / instruments Support other (natural capital) solutions, notably those that lead to ESS
  43. 43. Yet reforming EHS > potential benefits • Reduce the use of resource intensive inputs, thus saving resources (for society/the economy now and for future generations) & causing less pollution >> Lesser pressure on the nature capital stock • Increase competitiveness by exposing subsidised sectors to competition and supporting future competitiveness by resource availability • Level the playing fields / fix market distortions by making resource prices reflect resource value, and making polluters pay for their pollution. • Overcome technological ‘lock-in’ whereby alternative, less established, and possibly more environmentally-friendly, technologies and practices are unable to compete on an equal basis with the subsidised sector >> Move to a more resource efficient economy • Enable governments to divert budget to other areas (e.g. education, poverty, PES, energy saving) >> Good governance in a time of crisis Which subsidies would the private sector welcome reform focus and how?
  44. 44. Offsets (no net loss+) to Habitat Banking When appropriately designed and effectively regulated, offsets and biodiversity banks can be efficient market-based instruments that help businesses compensate for the residual unavoidable harm from development projects. Over 30 countries now require some form of compensation for damage to biodiversity or have established programmes requiring offsets. Legal requirements for offsets include Brazil, South Africa, Australia and the United States (Bean et al. 2008; Carroll et al 2007). United States: More than 400 wetland banks have been established, creating a market for wetland mitigation worth more than $3 billion/year. 70+ species banks; can trade between $100mn & $370mn in species credits/yr. (Bayon 2008; DECC 2009) What lessons / examples do you have re offsets that work (economically & BD)? What insights have you re habitat banking – what do you see as potential for this instrument and appropriate enabling conditions?
  45. 45. Trading systems Not just CO2 and Sulphur trading - also ITQs (individual tradable quotas) and fisheries in New Zealand: rebuilt stock and some of very few to achieve conservation target of less than 10% stock collapse Tradable water use quotas in Zhangze City, China Minle County: irrigation districts allocated water rights certificates, reducing water used for irrigation Tradable development rights in Montgomery county - by 2008 50,000ha of prime land preserved. Habitat banking: USA, Australia. Scope for new/broadened markets (for which issues, where geographically?) What lessons/insights do you have from practice – eg enabling conditions?
  46. 46. Addressing losses through pricing taxes/charges/fees and fines +liability and compensation Instruments to make the full costs of loss visible and payable
  47. 47. Taxes & polluter pays principle Incentive effect & revenue raising effect Pesticides tax: 20 SEK/kg (in 2002) 65 % reduction in use (Sjöberg, 2007) Fertiliser taxes or taxes on excess nutrients: Decrease in product use 20-30% in the Netherlands, 11-22% in Finland, 15-20% in Sweden & 15% in Austria. (Ecotec 2001) Plastic bag tax: Ireland (2002). 33 cents per bag at checkout. Plastic bag consumption dropped by 80% from 1.2 billion to 230 million bags in the first year, generating tax revenues (US$ 9.6 million) earmarked for a green fund. Landfill tax: UK £1 billion of contributions paid from landfill operators to env. projects …also energy taxes, carbon taxes, NOx, SOx taxes, range of product taxes etc Progress Politically difficult but necessary Potential for innovation by private sector in response? In what areas would the private sector value government taxes (eg water use?) to help ensure resource availability for valuable inputs?
  48. 48. Charges / taxes for raising revenues Mexico increased gasoline tax by 5.5% in October 2007. 12.5% of proceeds will go to support investments in the env. sector, including PA management (Gutman & Davidson 2007); Bonaire National Marine Park (BNMP), Antilles: BNMP dive tags US $ 25 in 2005: + entrance fees. (Slootweg and van Beukering et al. 2008; Stinapa Bonaire 2009) USA, duck hunters - required to purchase Federal Duck Stamps. 98% of revenue ($50 mn/yr) goes directly to the purchase/lease of wetlands. (www.fws.gov/duckstamps). Entrance fees for the Galapagos Islands 100$ for international tourists; Revenues (> US$3 mn/yr) to improve the management of the National Park (Vanasselt, 2000) Water abstraction charge: Australia - for the Murray River basin; revenues earmarked for wetland restoration and salt interception schemes (Ashiabor 2004); Water abstraction charge: Germany - some revenues to farmers to help change farming practice – for lesser nitrogen in water/cleaner drinking water + biodiversity gains in extensive farms. Link to PES Reforestation charge in Liberia: 5US$/m3 of logged wood, reinvested
  49. 49. Charges & full cost recovery Water pricing: e.g. Many EU Member States (e.g. Netherlands, UK) have moved towards full cost recovery for water; significant changes in water pricing for most newer Member States In the Czech Republic, water pricing gradually increased from €0.02/m3 before 1990 to €0.71/m3 in 2004. Between 1990 and 1999, water withdrawals decreased by 88% (agriculture), 47% (industry) and 34% public water mains). Waste: e.g. Korea: volume based waste fee: 1994 to 2004: 14% reduction in municipal waste Greater application of full cost recovery in many countries (water, waste, energy) Business can respond by factoring charges in, and by adopting innovation Gradual transition important to address affordability/social concerns
  50. 50. Where can the private sector contribute to the alternative development path ? Opportunities/benefits of ESS No net loss from 2010 level Past loss/ Investment in natural capital +ve degradation Halting biodiversity loss change ` Regulation & standards Trading and new markets PES, REDD, ABS Charges, taxes, fines, EHS reform – and innovation Alternative natural capital Sustainable production and consumption Development path Reduced footprint Markets, certification/logos & GPP Investment in natural capital Predicted future loss of natural capital Restoration (schematic) – with no additional policy action & offsets Donations 2010 2050 Where do you see the major potential for private sector contribution ?
  51. 51. •It is arguably in the long term interests of both private sector and the society at large that Biodiversity and ecosystem services be preserved/invested in. •The TEEB vision is one of seeing biodiversity as natural capital – as important a capital base as man-made capital or social and human capital. •It is also one of taking the value of nature into account in measurement, in policies and associated measures – such that natural capital is not run down, but rather invested in. •Where do you see areas of common vision and opportunities for common / coordinated solutions? •Where do you see potential conflicts of incentives/interests ? •What can usefully be done to enable joint progress ? • We’d welcome general comments & debate as well as specific comments/suggestions re the D1 report that is available on the web. • The D1 report will be updated (in book form) and take into account work from D3 and any contributions that fit in D1 remit.
  52. 52. Thank you Patrick ten Brink TEEB for Policy Makers Coordinator ptenbrink@ieep.eu TEEB for Policy Makers report http://www.teebweb.org/ TEEB Contributors include: Major funders:
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