Economics of Biodiversity Marianne Kettunen Senior Policy Analyst Institute for European Environmental Policy (IEEP) Public hearing: How much for biodiversity? European Parliament 7 April 2010
Presentation at EP public hearing - How much for biodiversity? European Parliament, Brussels, 7 April 2010
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1. Economics of Biodiversity Marianne Kettunen Senior Policy
Analyst Institute for European Environmental Policy (IEEP) Public
hearing: How much for biodiversity? European Parliament 7 April
2010
2. We keep on loosing biodiversity ! Around 30% decline in
global biodiversity (1970-2005) Living Planet Index 2008
3. Content of the presentation Introduction: biodiversity the
basis for our wellbeing Economic evidence: the estimated value of
biodiversity Policy response: where should the valuation of
biodiversity lead to?
4. Introduction: Biodiversity the basis for our wellbeing M.
Kettunen
5. Biodiversity what are we talking about? Diversity of species
Genetic diversity Diversity of habitats Diversity of ecosystems
Diversity of ecosystem processes Diversity of ecosystems responses
Also, diversity of biodiversity resources
6. Why biodiversity & ecosystems matter to our wellbeing?
Ecosystems provide a variety of ecosystem services The diversity of
genes, species, habitats, ecosystems & their processes
underpins the provisioning of ecosystem services Millennium
Ecosystem Assessment 2005
7. The value of biodiversity things we can & cannot measure
! Total value Qualitative Quantitative Monetary Value Things we
cannot yet appreciate / knowledge gaps E.g. appreciation of nature
as our cultural heritage & source for inspiration E.g. number
people depending on the availability of biodiversity resources /
enjoying recreation in nature E.g. revenues from fisheries,
ecotourism, avoided costs of water purification Source: P. ten
Brink, March 2008, revised
8. Why has biodiversity become an acute welfare issue? Problem:
The total value of biodiversity (bd) & ecosystem services (ES)
has not been recognised by the society / integrated into the
markets Decision making is biased towards short-term economic
benefits as the (long-term) value of bd & ES is poorly
understood. Outcome: We are missing the right signals we are
running down our natural capital and the costs of this have become
increasingly apparent !
9. Presentation overview Nature has been supporting our
wellbeing & economy for free ! Seppo Leinonen
(www.seppo.net)
10. Missing a big part of the picture leads to
11. Economic evidence: The estimated value of biodiversity M.
Kettunen
12. Why try to estimate the economic value of biodiversity?
Money talks ! Advocacy: raise political, business & public
awareness Decision-making: enable better consideration of
biodiversity values in decision-making in practice Policy response:
appropriate & effective design of policy instruments Policy
synergies: help to demonstrate how there can be significant winwins
between biodiversity, climate change & food security agendas
Towards more far-sighted & sustainable decision-making
13. TEEB initiative (2008-2010): assessing the value of
biodiversity & ecosystem services Demonstrate biodiversity,
ecosystems & their services have multiple values to economy,
society, business & individuals Underline the urgency of action
highlight the benefits (vs. costs) of action Show how to assess the
value of bd and ES and how it can be used Show how to integrate
these values into everyday decision-making
14. TEEB reaching different end-users TEEB D0: Ecological and
Economic Foundations TEEB D1: TEEB for National and International
Policy-Makers TEEB D2: TEEB for Local PolicyMakers and
Administrators TEEB D3: TEEB for Business TEEB D4: TEEB for
Citizens
15. 2008 2009 2010 D1: Engagement / Feedback / Fine-tune TEEB
Phase I May 08 Interim report (CBD COP9, Bonn) TEEB Phase II Sep 09
TEEB Climate Issues Update (Strmstad) Nov 09 D1 for policy makers
Spring/ Summer / Autumn 2010 D0, D2, D3 & D4 Final TEEB
synthesis & publications CBD COP10 (Oct 2010, Nagoya,
Japan)
16. (preliminary) Estimates: global costs of loosing
biodiversity Cumulative loss of land-based ecosystem services (ES)
during 2000-2010: 500 billion $US (TEEB Interim report 2008) Loss
of land-based ES in 2050: ~275 billion $US / year (TEEB Interim
report 2008) Cumulative loss of land-based ecosystem services (at
current rate) by 2050: 7% of GDP in 2050 (TEEB Interim report 2008)
Unsustainable fishing reduces potential fisheries output by an
estimated $50 billion / year (TEEB for Policy Makers 2009)
17. (preliminary) Estimates: benefits of coral reefs 50 100%
coral reefs threatened by climate change related losses significant
! TEEB Climate Change Update 2009 & references within
18. (preliminary) Estimates: benefits of tropical forests
Protection of tropical forests can be a win-win-win for
biodiversity, climate & wellbeing TEEB Climate Change Update
2009 & references within
19. (preliminary) Estimates: benefits of investing in natural
capital Investment in restoring natural capital can be
cost-effective TEEB Climate Change Update 2009 & references
within
20. Protected areas: safeguarding biodiversity & also
supporting human wellbeing PA benefits (e.g.) Clean water Resource
productivity and sustainability Nature based tourism Climate change
mitigation Cultural and spiritual resources Future values
http://www.sacred-destinations.com
21. In situ conservation of crop wild relatives provides fresh
crop breeding material & helps to maintain food security Map:
Conservation Magazine 2008 (9/4), Pics: www.buyorganic.com.au,
www.preparednesspro.wordpress.com/2009/04/,
http://upload.wikimedia.org
22. Protected areas: safeguarding biodiversity & also
supporting human wellbeing PA benefits (e.g.) PA costs Clean water
Resource productivity and Human-wildlife conflict sustainability
Need to be co-analysed & balanced out! Nature based tourism
Loss of access to natural resources Climate change mitigation
Displacement Cultural and spiritual resources Foregone
opportunities Future values Protected area management
23. Long-term benefits of marine protected areas (MPAs) MPAs
can help fish stock recovery Note: need to address time lag between
recovery & new uptake of sustainable use
24. Policy response: Where is the valuation of biodiversity
leading to? M. Kettunen
25. The right policy response?!? *** Seppo Leinonen
(www.seppo.net), censured unofficially by M. Kettunen
26. REMEMBER: wise use of the economic estimates Lesson No. 1:
there always remains values that are difficult / impossible to
assess in EUR ! Lesson No. 2: consider different numbers for
different purposes global vs. local assessments Lesson No. 3: know
your numbers (i.e. what are the data, assumptions & methods
behind an estimate)
27. Examples of policy tools: rewards through payments &
markets Payments for environmental / ecosystem services (PES)
local. regional. national Global PES, e.g. REDD+ Access and
benefits sharing (ABS) Tax based mechanism and public compensation
mechanisms Green markets and fiscal incentives (Certification,
GPP)
28. Examples of policy tools: abolishing harmful subsidies
Remove / reform harmful subsidies Reform badly designed subsidies
Increase share of good subsidies Source:
http://srforums.prosoundweb.com/
29. Examples of policy tools: investing in protected areas
& natural capital Investing in natural capital / protected
areas / green infrastructure can be very cost-effective Seek
actively win-wins for biodiversity & wellbeing Explore
especially: ecosystem-based adaptation to climate change
30. Halting the loss of biodiversity & natural capital a
way forward? Opportunities/benefits of ES Past loss/ degradation No
net loss from 2010 level Halting biodiversity loss Investment in
natural capital +ve change Regulation Better governance Economic
signals : PES, REDD, ABS (to reward benefits) Charges, taxes, fines
(to avoid degradation/damage: Alternative natural capital
Development path Subsidy reform (right signals for policy)
Sustainable consumption (eg reduced meat) Markets,
certification/logos & GPP Agricultural innovation Investment in
natural capital: green infrastructure Predicted future loss of
natural capital (schematic) with no additional policy action P. ten
Brink 2010 Restoration PAs 2050 `
31. (some) Conclusions Economic valuation of biodiversity is
not an end in itself it is a tool to support decision-making !
Understand your economic estimates use them wisely ! Not all values
can be measured in money ! Do not miss synergies between
biodiversity, climate change, food security, poverty reduction
!
32. M. Kettunen
33. Thank you Marianne Kettunen [email protected] Institute for
European Environmental Policy (IEEP) TEEB for Policy Makers report
http://www.teebweb.org/ TEEB Contributors include: Major funders:
Seppo Leinonen (www.seppo.net), censured unofficially by M.
Kettunen
34. NOTE: The content of this presentation should not be
re-used without permission from the author / TEEB team The graphics
by Seppo Leinonen should not be re-used without permission from the
artist (www.seppo.net)