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TEEB and climate by Patrick ten Brink of IEEP at Delta & Climate Conf Rotterdam 30 Sep 2010


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TEEB and climate by Patrick ten Brink of IEEP at Delta & Climate Conf Rotterdam 30 Sep 2010

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TEEB and climate by Patrick ten Brink of IEEP at Delta & Climate Conf Rotterdam 30 Sep 2010

  1. 1. The Economics of Ecosystems and Biodiversity initiative (TEEB) and Climate Change Patrick ten Brink TEEB for Policy Makers Co-ordinator Head of Brussels Office, Institute for European Environmental Policy (IEEP) Deltas in Times of Climate Change Session DP FE 1.3 30 September 2010 13:00 – 14:45 Beurs Lounge Rotterdam, the Netherlands
  2. 2. Presentation overview 1. Introduction – TEEB ambitions and process and approach – Biodiversity and Ecosystem Services – The growing awareness of value 2. Biodiversity and climate change – Need for climate action : coral reef emergency – Need for BD action for climate: mitigation – Green Carbon and REDD+ – BD and adaptation – Ecosystem based adaption – Investment in natural capital – Other responses and instruments 3. Summary
  3. 3. TEEB origins Source: Bishop (2010) Presentation at BIOECON
  4. 4. TEEB‟s Genesis and progress “Potsdam Initiative – Biological Diversity 2010” 1) The economic significance of the global loss of biological diversity Sweden Sept. 2009 Brussels 13 Nov 2009TEEB Interim London India, Brazil, Belgium,Report @ CBD COP- July 2009 Japan % South Africa9, Bonn, May 2008 Sept. 2010 CBD COP 10 Nagoya Japan
  5. 5. TEEB final reports for different audiences TEEB Ecological and Economic Foundations (D0) TEEB for Policy-Makers (D1) TEEB for Local Policy (D2) September 2010 TEEB for Business (D3) July 2010 TEEB for Citizens (D4)
  6. 6. What is biodiversity?“the variability among living organisms from all sources including, terrestrial, marineand other aquatic ecosystems and the ecological complexes of which they are part;this includes diversity within species, between species and of ecosystems” (CBD 1992).In other words, biodiversity includes: Diversity within species populations - genetic variation;• The number of species, and• The diversity of ecosystems.Both quantity and quality of biodiversity are important when considering the links betweennature, economic activity and human well being.
  7. 7. How does Biodiversity help economic activity andhuman wellbeing ? Ecosystem ServicesEcosystem services = flows of value to human societies as a result of the state andquantity of natural capital.• Provisioning services – e.g. wild foods, crops, fresh water and plant-derived medicines;• Regulating services – e.g. filtration of pollutants by wetlands, climate regulation throughcarbon storage and water cycling, pollination and protection from disasters;• Cultural services – e.g. recreation, spiritual and aesthetic values, education;• Supporting services – e.g. soil formation, photosynthesis and nutrient cycling. (MA 2005)From an economic point of view, the flows of ecosystem services can be seen as the„dividend‟ that society receives from natural capital.Maintaining stocks of natural capital allow the sustained provision of future flows ofecosystem services, and thereby help to ensure enduring human well-being.
  8. 8. Biodiversity and ecosystem servicesBiodiversity „Quality‟ „Quantity‟ Services (examples)Ecosystems Variety Extent • Recreation • Water regulation • Carbon storageSpecies Diversity Population • Food, fibre, fuel • Design inspiration • PollinationGenes Variability Number • Medicinal discovery • Disease resistance • Adaptive capacity Source: Bishop (2010) Presentation at BIOECON
  9. 9. Links from Drivers to ecosystem functionsto impacts and wellbeing Drivers Pressures State Impact (Human) Drivers Human e.g. Wellbeing changes in & land use, Natural climate change, Biodiversity Drivers pollution, Ecosystem Economic water use, Services Value invasive alien species (IAS) Policies Nat. Reg. Loc. Int. Ecosystem functions Response
  10. 10. 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• 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
  11. 11. The Global Loss of Biodiversity 2000 Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data
  12. 12. The Global Loss of Biodiversity 2050 Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data
  13. 13. TEEB for Policy Makers report 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 Responding to the value of nature
  14. 14. Part I: The OpportunityChapter 1: The Value of Nature for Local DevelopmentPart II: The ToolsChapter 2: Conceptual Frameworks for Considering the Benefits of NatureChapter 3: Tools for Valuation and Appraisal of Ecosystem Services in Policy MakingPart III: The PracticeChapter 4: Ecosystem Services in Cities and Public ManagementChapter 5: Ecosystems Services in Rural Areas and Natural Resource ManagementChapter 6: Spatial Planning and Environmental AssessmentsChapter 7: Ecosystem Services and Protected AreasChapter 8: Payments for Ecosystem Services and Conservation BankingChapter 9: Certification and LabellingPart IV: ConclusionChapter 10: Making Your Natural Capital Work for Local DevelopmentOverview of tools and databases
  15. 15. “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
  16. 16. Multiple benefits from ecosystemsProvisioning services Many services from the same resource• Food, fibre and fuel• Water provision• Genetic resourcesRegulating Services• Climate /climate change regulation• Water and waste purification• Air purification• Erosion control• Natural hazards mitigation• Pollination• Biological controlCultural Services• Aesthetics, Landscape value, recreation and tourism• Cultural values and inspirational servicesSupporting Services• Soil formation Important to appreciate the whole set of eco-system services+ Resilience - eg to climate change
  17. 17. ‘We never know the worth of water til the well is dry’. ‘ English proverb ‘Men do not value a good deed unless it brings a reward’ Ovid, B.C. 43 – 18 A.D., Roman Poet
  18. 18. Ecosystem Services and awareness of valuesProvisioning services Market values – known and generally taken into account in decision• Food, fibre and fuel making on land use decisions• Water provision• Genetic resources Value historically often overlooked; private sector exceptionsRegulating Services• Climate /climate change regulation Value long ignored, now being understood >> new instruments, markets, investments• Water and waste purification• Air purification Value often appreciated only after loss/damage felt• Erosion control• Natural hazards mitigation Value often appreciated only after service gone >>• Pollination Replacement/substitute costs• Biological controlCultural Services• Aesthetics, Landscape value, recreation and Sometimes value explicit / implicit in markets tourism (e.g. tourism spend / house prices)• Cultural values and inspirational services Values generally rarely calculatedSupporting Services - e.g. soil formationHabitat Services - e.g. nurseries The benefits to our economies, livelihoods and wellbeing have generally not been taken into account. There is, however, now a+ Resilience - e.g. to climate change new awareness of the value of ecosystem services and a growing use of instruments to reward benefits.
  19. 19. Multiple Benefits: at the Urban level – City of Toronto • Estimating the value of the Greenbelt for the City of Toronto • The greenbelt around Toronto offers $ 2.7 billion worth of non-market ecological services with an average value of $ 3, 571 / ha. → Implication re: future management of the greater city area ? Ecosystem Annual Value Valuation Benefits (2005, CDN $) Carbon Values 366 million Air Protection Values 69 million Watershed Values 409 million Pollination Values 360 million Biodiversity Value 98 million Recreation Value 95 million Agricultural Land 329 million ValueSource: Wilson, S. J. (2008)Map:
  20. 20. Taking account of public goods …can change what is the “right” decision on land/resource use US$ Based only on private gain, the “trade-off” Shrimp Farm /ha/yr 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 $11,172/ha >> fundamental rationale for public policy Source: Barbier et al, 2007
  21. 21. Presentation overview 1. Introduction – TEEB ambitions and process and approach – Biodiversity and Ecosystem Services – The growing awareness of value 2. Biodiversity and climate change – Need for climate action : coral reef emergency – Need for BD action for climate: mitigation – Green Carbon and REDD+ – BD and adaptation – Ecosystem based adaption – Investment in natural capital – Other responses and instruments 3. Summary
  22. 22. TEEB Climate Issues Update Coral reef emergency Forest carbon for climate mitigation National accounting for forest carbon Ecosystem investment for climate adaptation
  23. 23. Coral Reefs•Major coral reef loss already happening given temperature rise to date.•Need as ambitious commitments as possible for GHG emissions reductions -450ppm and 2 degrees already accepting major losses
  26. 26. Coral Reef valuations thresholds… • Coral Reef Services (per hectare) can have very high values • global valuation studies place the value as high as US$ 172 billion per annum • Over 500 million people a year dependent on the services from reefs • however…. Coral Reefs are an ecosystem at the threshold of irreversibility • ethical choice coming up : stabilization targets … – at 450 ppm CO2 for 2 degrees – at 350 ppm CO2 for Coral Reef survival in the long term
  27. 27. “Playing the full hand” of carbon colours• Brown Carbon – CO2 emissions from human energy use and industry• Green Carbon – carbon stored in terrestrial ecosystems, e.g. plant biomass and soils in forests, agricultural lands, wetlands and pasture• Blue Carbon – 55% of all carbon in living organisms are stored in oceans, most of this in mangroves, marshes, see grasses, coral reefs and macro-algae• Black Carbon – soot emissions from incomplete combustion of fuels absorb heat in the atmosphere and reduce ability to reflect sunlight By halting the loss of “green” and “blue” carbon, the world could mitigate as much as 25% of total GHG emissions, with co-benefits for biodiversity, food security and livelihoods (IPCC 2007, Nellemann et al. in press)
  28. 28. Tropical forests of the world: largest terrestrial carbon sinks
  29. 29. Areas of rapid land use cover change
  30. 30. The role of tropical forests in climate regulation • tropical forests store a fourth of all terrestrial carbon – 547 gigatonnes (Gt) out 2,052 Gt (Trumper et al. 2009) • tropical forest capturing – up to 4.8 Gt CO2 annually! (Lewis & White 2009) • stopping deforestation holds an excellent cost-benefit ratio – halving deforestation generates net benefits of about $ 3.7 trillion (NPV) including only the avoided damage costs of climate change (Eliasch Review 2008) 30
  31. 31. 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• 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….
  32. 32. 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• Coral reefs as fish nurseries for fisheries productivity / food security• PAs & connectivity to facilitate resilience of ecosystems and species From local to national to EU efforts Global responsibility / contribution
  33. 33. Nature-based climate change mitigation in Germany• drainage of 930,000 ha peatlands in Germany for agriculture cause emissions of 20 Mio. t of CO2-eq. per year• total damage of these emissions amounts to 1.4 billion €• peatland restoration: low cost and biodiversity friendly mitigation option Mecklenburg-Vorpommern: • pilot project between 2000-2008 • restoration of 30,000 ha (10%) • emission savings of up to 300,000 t CO2-eq. • avoidance cost of 8 to 12 € / t CO2 • if alternative land use options are realized (extensive grazing, reed production or alder forest) costs decrease to 0 to 4 € / t CO2 • where Maize can be grown restoration can not compete Restored peatland in Trebeltal 2007Source: Federal Environmental Agency 2007; MLUV MV 2009; Schäfer 2009 Foto: D. Zak,
  34. 34. Investments in Ecological Infrastructure• restoration can be cost effective way of providing a service : planting mangroves along coastline in Vietnam cost $1.1 million but saved $ 7.3 million annually in dyke maintenance (GRID-Arendal 2002; Reid and Huq 2005)
  35. 35. Protected Areas (PAs)• Better managed, better connected, better governed and better financed protected areas are recognised as key to both mitigation and adaptation responses to climate change.• Climate change mitigation: 15% of global terrestrial carbon stock is contained in protected areas (Campbell et al.2008).• Adaptation: help people adapt - maintaining ecosystem services that reduce natural disaster impacts (coastal and river protection, control of desertification), stabilise soils and enhance resilience to changing conditions. Finalisation of the networks (in EU – notably MPAs - & globally) Address financing gap – new funding, new instruments (eg PES) In EU: use of funding – better integration (EAFRG, LFA, EFRD etc) New Biodiversity fund ?
  36. 36. Subsidy Reform : Win-win biodiversity & climate 1 trillion US$/year spent on subsidies – value for money ? Establish transparent and comprehensive subsidy inventories Develop prioritised plans of action for subsidy removal or reform, for implementation in the medium term
  37. 37. “Imaginary public goods of avoided public bads”- Biofuels  Early stated ambitions: helping avoid climate change – avoiding a public bad.  Subsidies in many forms launched  US$ 11/yr („06: US+EU+Canada) (GSI 2007, OECD 2008)  Cost of reducing CO2 ~ US$ 960 to 1700/tCO2 equiv. (OECD 2008) Not cost effective cf EU-ETS: ~ US $ 30-50 / t Where biofuels fom converted forrest lands – there may be net increase of emissions Effect opposite to stated objective. Urgent need to review biofuels policies / instruments
  38. 38. Natural resource management & spatial planning• Flooding of River Elbe, Germany (2002)• Damage over EUR 2 billion• Assessment that flood damage (+ cost of dams) by far exceed costs of upstream flooding arrangements with land holders→ The value of upstream ecosystems in regulating floods was re-discovered !→ Local authorities start changing spatial planning & seeking arrangements upstream
  39. 39. River Elbe flooding, Germany Step 1: Specify and agree on the problem • August 2002 heavy floods of the river Elbe, direct economic damage of over 9 billion € • occasion to revise system of flood protection towards integrated flood risk management © DPA Step 2: Which ecosystem service are relevant • flood protection • habitat for a multitude of species • nutrient retention Step 3: Define information needs and select methods • CBA of different alternatives (relocate dykes, establish polder) • replacement costs for assessment of the nutrient and pollutant filters • contingent valuation for the willingness to pay for flood control
  40. 40. Step 4: Conduct the assessment• relocation of the dykes creates a new flood retention area of just 35,000 ha of land• establish polder includes the creation of a surface of 3,248 ha• combination of both measures with dike relocations (3402 ha) and steered polders (4143 ha)Step 5: Identify and appraise policy options• all options have a positive benefit-cost-ratio if environmental benefits are included in the calculation• BCR: - relocation of the dykes = 3.1 - establish polders = 9.9 - combination = 4.6Step 6: Assess the distributional impacts of policy response• Maps are being made that indicate economic losses and social impacts involved in flooding © Grossmann, M.; Hartje, V.; Meyerhoff, J. Sources: Grossmann, M., Hartje, V., Meyerhoff, J. (2010) Ökonomische Bewertung naturverträglicher Hochwasservorsorge an der Elbe. Naturschutz und Biologische Vielfalt 89, Bundesamt für Naturschutz: Bonn.
  41. 41. TEEBcases – online accessible best practice examples • final version will contain more than 100 cases from around the world • showcasing the incorporation of economic valuation into local decision- making • In cooperation with EEA - accessible via
  42. 42. The Business Angle: Aspirations/objectives From carbon neutral … … to biodiversity positive• Danone Group: “Attain carbon neutrality for the major Danone brands, including Evian, by the end of 2011.”• Marks & Spencer: “Our goal is to become carbon neutral by 2012 in our UK and Republic of Ireland operations.”• Coca Cola: “Our goal is to safely return to communities and nature an amount of water equivalent to what we use in all of our beverages and their production.”• BC Hydro: “long-term goal of no net incremental environmental impact.”• Walmart: “Committed … to permanently conserve at least one acre of priority wildlife habitat for every developed acre.”• Rio Tinto: “Our goal is to have a „net positive impact‟ on biodiversity.” Source: Bishop (2010) Presentation at BIOECON
  43. 43. Biodiversity and Climate• Important synergies: win-wins for the two.• Cannot address climate without biodiversity - mitigation & adaptation• Or address biodiversity without addressing climate – e.g. corals, IAS• Avoid partial solutions that focus only on part of the picture - eg wrong REDD design/implementation; biofuels subsidies that encourage land conversion)• Moving to a low-carbon economy critical• This is only part of the solution – need to move to a resource efficient economy & work within natures resource and ecosystem limits• With 9 billion people in 2050, a lot of resource boundaries and ecosystem thresholds risk being crossed.• Need systematic use of windows of opportunity at global to local levels, and realise policy synergies and avoid policy disconnect• Taking account of the services from, and values of, nature in decisions will be essential and cost effective.
  44. 44. Thank youWhere do you see particular needs and opportunities for working with nature for Delta cities in Times of Climate Change? TEEB Reports available on & TEEB in Policy Making will come out as an Earthscan book in March 2011 ` Patrick ten Brink, IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment in Europe Manual of EU Environmental Policy: