PtB of IEEP TEEB ESS and Policy ESP Partnership Conference 4 October 2011


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PtB of IEEP TEEB ESS and Policy ESP Partnership Conference 4 October 2011

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PtB of IEEP TEEB ESS and Policy ESP Partnership Conference 4 October 2011

  1. 1. The Economics of Ecosystems and Biodiversity Ecosystem Services and Policy Patrick ten Brink TEEB for Policy Makers Co-ordinator Head of Brussels Office Institute for European Environmental Policy (IEEP) ESP Conference Wageningen 4-7 October 2011
  2. 2. Presentation overview TEEB overview ESS and the growing policy appetite / opportunities Policy instruments to respond to / integrate ESS Way forward
  3. 3. 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
  4. 4. Valuation and policy making: from valuing natural assets to decisions“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
  5. 5. Valuation and policy making: from valuing natural assets to decisions Critical issuesThe value of biodiversity and ecosystem services are not fully reflected in the markets, inprice signals, and policies Decision making (at company, policy & citizen level) still too often fails to take into account the local to global benefits, contributing to a loss of biodiversity and ecosystem services. However, there is a range of tried and tested tools to reward benefits from ecosystem services that start to address this and growing policy interest in ecosystem services  Local, regional, national and international.  Public, private, and public tools to engage private sector. Growing use and major potential for additional applications of tools to respond to the values of nature.  Care is needed to design instruments that address needs for conditionality, additionality, verifiability and inspire trust. Assessing ecosystem service benefits (and links to biodiversity and ecosystem functions) and identifying who benefits from what natural capital is critical for policy focus, interest and instrument choice, design and implementation.
  6. 6. From (policy) drivers to impacts to values Source: Adapted from Braat and ten Brink et al (2008) Policy measures one of Need for investment in Range of valuation many drivers. science & measurement tools and metrics
  7. 7. Evidence base & cost savings: Ecosystems can providegoods & services at lower cost than by man-made technological alternatives.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) Policy needs: appreciate where there is a potential for value for money / savings Treat Natural Capital as at least an equal to other capitals (& don’t forget multiple benefits).Sources: various. Mainly in TEEB for National and International Policy Makers, TEEB for local and regional policy and TEEB cases
  8. 8. 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 (e.g. in green infrastructure), PES / public programmes, protected areas (PAs), land use planning & regulation, permitting,Policy 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. ESS for Policy much more than “just” biodiversity and the biodiversity community
  9. 9. Presentation overview TEEB overview ESS and the growing policy appetite/opportunities Policy instruments to respond to / integrate ESS Way forward
  10. 10. Presentation overview CBD COP 10 Nagoya: Strategic Plan 2011-20 5 strategic goals & 20 headline targets ….extracts…Strategic goal A: Address the underlying causes of biodiversity loss by mainstreaming biodiversity across government and societyTarget 1:… people aware of the values of biodiversity …..Target 2: …. biodiversity values have been integrated ….into strategies… planning … national accounting…. reporting systems.Strategic goal D: Enhance the benefits to all from biodiversity and ecosystem servicesTarget 14: … ecosystems that provide essential services…. restored and safeguardedTarget 15: … contribution of biodiversity to carbon stocks has been enhanced…Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization; Evidence on values of biodiversity can also support many other targets e.g. On sustainable fisheries, agriculture, forestry, sustainable use …
  11. 11. EU Biodiversity Strategy DG Env Presentation at ´„Investing in Peattlands„ Sterling 2011. ActionsAction 5: Improve Knowledge of ecosystems and their services in the EU. Member Sates,with the assistance of the Commission, will map and assess the state of ecosystems and theirservices in their national territory by 2014, assess the economic value of such services, and promotethe integration of these values into accounting and reporting systems at EU and national level by 2020
  12. 12. UK Natural England White PaperProposed:A new Natural Capital Committee – an independent body to report to theGovernment’s economic affairs committee chaired by the Chancellor of the Exchequer. This bodywill put the value of nature at the heart of the Government’s economic thinking, and adviseGovernment about the best way of securing our natural assets for the future.An annual statement of green accounts for UK– showing where the economyhas withdrawn from or invested in the value of nature’s bank balance. This will help measuregreen growth alongside GDP.A business-led Task Force to expand the UK business opportunities from new productsand services which are good for the economy and nature alike.Inspired/informed by the UK Ecosystem Assessmenthttp://uknea.unep-wcmc.org
  13. 13. Valuation and policy making: from valuing natural assets to decisionsInform impact assessment of Proposed legislation & policiesCreating and improved evidence baseValuable for new marine legislation in UK: establishment of Marine ConservationZones on the basis of ecosystem service benefits Impact assessment within European Commission - change around 2/3rds ofpolicies for the better & often low-cost investment (Evaluation Partnership 2007; Jacobs 2006)Valuable for EU Water Framework Directive Improve legislative design and implementation
  14. 14. Presentation overview TEEB overview ESS and the growing policy appetite/opportunities Policy instruments to respond to / integrate ESS Way forward
  15. 15. TEEB for Policy Makers The Global Biodiversity Crisis • Nature’s assets & biodiversity loss • Economic values and loss • Social dimension Measuring what we manage • Indicators: BD, ESS, Beyond GDP, GDP of the Poor • Accounts – Nat Capital, SEEA • Valuation – toolkit • Assessment – integrating the value of nature • IA, EIA, SEA, BD proofing Available Solutions Transforming our approach toBook announcement: The Economics of Ecosystems and natural capitalBiodiversity in National and International Policy Making now available from Earthscan
  16. 16. 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
  17. 17. To understand the whole picture of benefits -need insights at all levels Non-Specified Monetary: e.g. avoided water Benefits purification costs, tourist value Increasing up Monetary Value the benefits Quantitative: e.g. number people pyramid benefiting from wood from forests Quantitative Review of Effects Type of benefits; health, social, income, wellbeing Qualitative Review Knowledge gaps The “known-unknowns” and Full range of ecosystem services from biodiversity “unknown-unknowns” Qualitative, quantitative, monetary, spatial, time dimension & interactions across ecological, economic an social systems
  18. 18. Implementing solutions that work in national/local contexts • Protecting assets • Protected areas – designation, management • Spatial planning • Investing in natural capital • Restoration, new investments • Rewarding benefits • Payments for ecosystem services (PES) • REDD+ • Tax incentives, and tax transfers • Markets and certification/labelling • Green public procurement (GPP) • Avoiding damage • Pricing – full cost recovery, pollution charges, liability • Regulation: standards, bans
  19. 19. Protected AreasBiodiversity with Economic/Social co-benefits  Natura 2000: 26,000 sites. 18% of EU territory.  Prime objective is for the conservation of the unique and endangered biodiversity Landscape & amenity values 5 Food Fibre / materials Fuel Cultural values and inspirational services 4  However, wide range of co-benefits Ecotourism & recreation 3 2 Ornamental resources Natural medicines Genetic / species diversity maintenance 1  1/3 of the world’s 100 largest cities draw a large Disease regulation of human health 0 Biochemicals & pharmaceuticals part of their drinking water from PAs and much Pollination Biological control Water quantity Climate / climate change regulation wider group for wider GI (Inc. agricultural land and Natural hazards control Erosion control Water regulation Water purification & w aste management forestry) . EU cities that benefits include: Berlin, Munich, Air quality regulation Local National Global Vienna, Oslo, Brighton, etc.  PAs help maintain and/or increase ESS flow  Generally (with exceptions) synergy between conservation measures and co-benefits  ESS co-benefits being used as arguments to encourage sustainable financingDudley and Stolton 2003, Pabon-Zamora et al. 2009 + Gantioler et al 2011 + Kettunen et al 2011
  20. 20. Protected Areas (PAs) and Climate change • 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 (support CBD SP Target 11) Address financing gap – new funding, new instruments (eg PES) Policy Synergy – with climate mitigation/adaptation; and also with cohesion policy (CP), with agricultural policy (CAP), with fisheries policy and fund (CFP, EFF), with culture, health….
  21. 21. Direct Investment in Natural Capital Investment in restoration and in green ecological infrastructure is also tool for rewarding benefits of ecosystem services • Monies can be private/public (direct investment via government funds or private investment for private gain, in addition to investments carried out in the context of PES or offset requirements etc.) • Local to national to EU (Cohesion Policy) to Global (bilateral, multilateral) • Investing in „ecological infrastructure‟ / „green infrastructure‟ can make economic sense in terms of cost effectiveness and (social) rates of returnExamples• Restoration of peatlands in Germany (Schäfer, 2009)• investing in wetland ecosystems and watersheds, instead of man-made infrastructurelike dykes or waste water treatment plant (Belgium, USA, New Zealand).• rehabilitating and restoring „post-shrimp farming‟ mangroves in Southern Thailand asnatural barriers to future coastal storm events Policy developments: New EU Policy focus (DGENV led); DGRegio also interested
  22. 22. Global Issues, Regional solutions: Assessing value of nature-based CC mitigation • Drainage of 930,000 ha peatlands in Germany for agriculture cause emissions of 20 Mio. t of CO2-eq. per year • Damage of these emissions amounts to ~1.4 billion € • Peatland restoration: low cost and biodiversity friendly mitigation option Mecklenburg-Vorpommern project 2000-2008 • Restoration of 30,000 ha (10%) • Emission savings of up to 300,000 t CO2-eq. • CO2 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 Restored peatland in Trebeltal 2007Source: Federal Environmental Agency 2007; MLUV MV 2009; Schäfer 2009 Foto: D. Zak,
  23. 23. Investment in ecological infrastructure: multiple benefits• 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 speciesPotential for lower cost adaption to climate change and policy synergies 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.
  24. 24. Cities & Multiple Benefits & Land use planning • Estimating the value of the Greenbelt for the City of Toronto • The greenbelt around Toronto offers $ 2.7 billion worth of non-market ecological Map: 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 Source: Wilson, S. J. (2008) Watershed Values 409 million Pollination Values 360 million Biodiversity Value 98 million Recreation Value 95 million Agricultural Land 329 million ValueWhich cities are looking into the value of their natural capital / green infrastructure? How are the values (going to be) taken into account in which city decisions ?
  25. 25. Rewarding Benefits - PES: They exist, they work, learning by doing• „Beneficiary / user pays‟ principle + service providers get paid• PES aim to change the economics of ecosystem service provision by improving incentives for land use and management practices• 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) – Public (municipalities, to regional, national, global) and private – Objectives– water supply/purification, carbon, IAS, biodiversity, deforestation… – Big (4.9 million ha sloped land reforested in China) and small (496 ha upper watershed in northern Ecuador) – 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) See also Chapter 5 TEEB for Policy Makers and OECD work
  26. 26. Payments for Ecosystem Services Hydrological services: Aquifer recharge; Improved surface water quality, reduce (PES) frequency & damage from flooding`Instrument: Mexico PSAH: PES to 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 Munoz 2010); Muñoz-Piña et al. 2008; Muñoz-Piña et al. 2007.
  27. 27. REDD-Plus: Reducing Emissions from Deforestation and Forest Degradation-Plus Major 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 land Needs: Confidence: monitoring & verification; natural capital accounts Experience: pilot projects, capacity building, monitoring solutions Investment: money for the projects and payments. Evolution: phasing from pilot, to funds, to market links….Support to address the needs critical to make this tool realise its potential : climate & biodiversity & new incomes/livelihoods
  28. 28. 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 EU / Countries still thinking through how best to set legislation / transpose
  29. 29. Presentation overview TEEB overview ESS and the growing policy appetite/opportunities Policy instruments to respond to / integrate ESS Way forward
  30. 30. Eroding natural capital base & tools for an alternative development path, towards a green economy Opportunities/benefits of ESS No net loss from 2010 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 Subsidy consumption (e.g. reduced meat) Sustainablereform 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 2010 2050Progress in one country depends on institutional and instrument context, potential, interest/motivation, in a global context
  31. 31. Presentation overviewEnvironmental policy is not enough – needcitizens, need integrationDirect and indirect impacts on BD and opportunities to actConsumption: Diet, Energy, transport, appliances, housing, holidays…Action: address consumption …e.g. lower meat content diet…Positive action: carbon neutral (trees…), green infrastructure
  32. 32. Solution: multi-level governance.Different actors different incentives/opportunities and reach Opportunities/benefits of ESS No net loss from 2009 level Past loss/ Investment in natural capital +ve degradation Halting biodiversity loss change ` Global governance EU: Commission EP Council Member States Alternative natural capital Regional authorities Development path Cities / municipalities Business Communities Predicted future loss of natural capital Citizens (schematic) – with no additional policy action 2009Need all the players if biodiversity loss is to be addressed and biodiversity 2050 opportunities to be realised
  33. 33. Challenges Understanding the science – rich, complex reality of biodiversity links to services, changes under drivers, links to benefitsThe economics – many data gaps; e.g. need investment in comparable studies, get more geographic balance. Need multiplicity of toolsMeasurement: indicators (e.g. ESS: public payments for public goods) to accounts (SEEA) and spatially explicit understandingEvidence base in useable form to key players: public to policy makers to parliamentarians Actions by the vanguard: progress begets progress, realistic steps Integration into decision making: political commitment to changePolicy integration / mainstreaming: communicating reason in others’ languages + political commitmentPolicy implementation: political courage & conviction – encouraged by evidenceRecognising and making use of, and also creating, Windows of Opportunity
  34. 34. Recognising & Making use of „Windows ofOpportunity‟ Environmental Fiscal / Tax Reform - good for finance/debt, good for the environment/biodiversity, good governance “Given that we in Ireland have to raise taxes, it makes sense to raise them in ways that simultaneously improve our environmental quality, provide incentives for new low carbon enterprise, ensure that we manage our resources efficiently, help meet our EU obligations, apply the polluter pays principle, and that allow other taxes that damage economic performance to be reduced or at least limit the extent of the rise.” Frank J. Convery, Director of the Earth Sciences Institute, University College Dublin Creating windows of opportunity…
  35. 35. TEEB’ Implementation Rio+20 TEEB Country & Regional Studies TEEB Brazil, TEEB India, TEEB NL, TEEB Nordics/Norway ... CBD COP11 Awareness raising / Capacity building (developing countries) Regional workshops (DGENV/Defra) + CBD collaboration re NBSAPs Initiatives building on TEEB recommendations SEEA 2012 World Bank/UNEP et al 10+10 initiative on National accounts … TEEB Integration / Mainstreaming RAMSAR Support for business and biodiversity (indicators, valuation reporting) COP 2012 TEEB for Agriculture; TEEB Water & Wetlands… TEEB for Cities Science / Economics evidence base Quantitative assessment, social dimension of BD, valuation, Green infrastructure, accounting, and links BD & ESS ESP Partnership Parallel track: Similar type work independent of TEEBMany initiatives that focus on (responding to) the value of nature by range of actors (e.g. UK MEA)
  36. 36. SummaryMaking Natures Values Visible: improved evidence base for improved governance, awareness for …is this enough to work out what to do? action – government, business, peopleMeasuring better to manage better: from indicators to accounts and mappingChanging the incentives: taxes, charges, subsidy reform, marketsProtected areas: biodiversity riches that can offer value for moneyEcological infrastructure and benefits: climate change and beyond …always better to look atNatural capital and poverty reduction: the whole board investment for synergies And engage the full set ofMainstream the economics of nature: across players. sectors, across policies, seek synergies across disciplines.
  37. 37. Thank you TEEB Reports available on TEEB in Policy Making now out as an Earthscan book See also Patrick ten Brink, IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment Manual of EU Environmental Policy: