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PtB of IEEP Presentation on The Economics of Ecosystems and Biodiversity TEEB The Science and Economics 22 September 2008 Prague
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9/25/2008 1
The Economics of Ecosystems and Biodiversity (TEEB)
Part A: Ecological losses to Economic losses
(Issues and values in TEEB Phase I)
Patrick ten BrinkSenior Fellow and Head of Brussels Office
Institute for European Environmental Policy (IEEP)
Building on the work of: COPI Team: Alterra, IEEP, MNP, Ecologic, GHK, FEEM, W&B, UNEP-WCMC, &
TEEB Core team (Pavan Sukhdev, EC, BMU, EEA, UFZ, IEEP, UoL, IIT)and other experts
22 September 2008Prague
9/25/2008 2
Presentation Structure
1. Biodiversity and Ecosystem losses – The Ecological Case
for the Urgency of Action
2. Ecosystems and Ecosystem services – benefitting society,
the economy, business and individuals.
3. The Valuation Challenge – attributing monetary values to
the value of ecosystem services
4. COPI / TEEB Phase 1 numbers – The Economic Case for
the Urgency of Action
Then Presentation by Pavan Sukhdev, TEEB Study LeaderOn
TEEB Phase II: The Aims & Ambitions, Focus and Process
9/25/2008 3
The Urgency for Action
The Ecological Case
9/25/2008 4
Past Losses
� Global Forest Area has shrunk by approximately 40% since 1700. Forests have
completely disappeared in 25 countries [1].
� Since 1900, the world has lost about 50%of its wetlands. [2].
� Some 20% of the world’s coral reefs - have been effectively destroyed by
fishing, pollution, disease and coral bleaching and approximately 24% of the
remaining reefs in the world are under imminent risk of collapse through human
pressures.[3]
� In the past two decades, 35% of mangroves have disappeared. Some countries have lost up to 80% through conversion for aquaculture, overexploitation and
storms.[4]
� The rate of species extinction is estimated to be 100 to 1,000 times more rapid than
the “natural” extinction rate (MA 2005).
[1] United Nations Forest and Agriculture Organisation, 2001.Global Forest Resources Assessment 2000; United Nations Forest and Agriculture Organisation, 2006 Global Forest Resources Assessment 2005.[2] http://www.ramsar.org/about/about_wetland_loss.htm[3]Wilkinson C., 2004: Status of Coral Reefs of the World: 2004 report [4] Millennium Ecosystem Assessment, 2005: Global Assessment Report 1: Current State & Trends Assessment. Island Press, Washington DC. Detail: Chapter 19 Coastal Systems. Coordinating lead authors: Tundi Agardy and Jacqueline Alder. Original reference: 35%: Valiela et al. 2001; 80% reference: Spalding et al. 1997
9/25/2008 5Source: MEA
9/25/2008 6Source: Sea Around Us project
2010
40 %
40 %
20 %
Running down our natural capital The Demise of Global Fisheries
9/25/2008 7
We are fishing down the foodweb – D. Pauly (UBC, Canada)
Substitution?
Source: L Braat presentation COP9 Bonn May 2008; based on slide by D. Pauly
9/25/2008 8
Biodiversity loss From 1700 to 2050
Poorer Ecosystems
Richer Ecosystems
Source: building on Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.
73%
62%
9/25/2008 9
Changes in Ecosystem Services
due to loss of Biodiversity
Pristineforest
Degradedland
Extensive use
Plantation
Originalspecies
Fossil fuelsubsidized
Extensive use
Subsistenceagriculture
Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study
9/25/2008 10
Level of Biodiversity in the World in 2000
Using Mean Species Abundance (MSA) indicator
Remaining MSA in %
Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.
9/25/2008 11Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.
Level of Biodiversity in the World in 2050
One Scenario of the future : OECD/Globio
Remaining MSA in %
� MSA loss from 71% to 60% - not evenly spread
� Natural Areas decline by 7.5 Million Sq. Km.
� Most lose; the poor generally affected more strongly
9/25/2008 12
2000The Global Loss of
Biodiversity
Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data
9/25/2008 13
2050The Global Loss of
Biodiversity
Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data
� Europe – at Risk
India - at Risk
Africa – at Risk.
The World – at Risk.
9/25/2008 14
Ecosystems and Ecosystem services
The Ecosystems in which we live and in which our economies
operate, provide a range of services that benefit:
• Individuals • Society • Firms
• The economy
9/25/2008 15
Ecosystem Services - The Millennium Ecosystem framework
Source: MEA
9/25/2008 16
Provisioning services: Food & fibre, Water, Fuel …
Regulating services: Climate regulation (local, regional, global);
Water regulation (e.g. flood prevention, runoff …);
Water purification and waste management;
Erosion control; Natural hazards control …
Cultural & Supporting services – ALL
Wetlands
• Coastal wetlands
• Floodplains
• Swaps, bogs, moors …
• Etc.
Provisioning services: Food & fibre, Water, Fuel (biofuel)…
Regulating services: Air quality maintenance;
Climate regulation (local, regional, global) – carbon storage;
Water regulation (e.g. flood prevention, runoff …);
Erosion control
Natural hazards control (e.g. Fire resistance, storm & avalanche protection
Cultural & Supporting services – ALL (recreation, tourism et al)
Forests
• Boreal forest
• Temperate forests
• Mountain forests
• Etc.
Source: From presentation by Marianne Kettunen of IEEP; based on MA 2005 classification
Different Biomes, different (level) of services
9/25/2008 17
Ecosystems, land-use & human well-being : the extent of this relationship
Services 1.1 1.2 1.3 1.4 1.5 2.1 2.2 2.3 3.1 3.2 3.3 3.4 3.5
Land cover types Fo
od
Ma
teri
als
Fo
res
t tr
ee
s-
rela
ted
Pla
nt-
rela
ted
Ph
ys
ical
su
pp
ort
Am
en
ity
Iden
tity
Did
acti
c
Cycli
ng
Sin
k
Pre
ven
tio
n
Refu
giu
m
Bre
ed
ing
Artificial surfaces/
Urban
Arable land &
permanent crops
Grassland & mixed
farmland
Forests & woodland
shrub
Heathland,
sclerophylous veg.
Open space with
little/ no vegetation
Wetlands
Water bodies
Source: Jean-Louis Weber (EEA) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium
9/25/2008 18
The link between biodiversity, ecosystems, their services, and
benefits to mankind…
Function
eg 1: slow
passage of water
eg 2: biomass
Biophysical
Structure of
process
eg 1: woodland
habitat
eg 2: net primary
productivity) Service
eg 1: flood
prevention
eg 2: harvestable
products
Benefit (value)
eg 1: willingness to pay
for woodland protection /
avoided costs of impacts
eg 2: for more woodland
harvestable products
Source: Building on presentation by Jean-Louis Weber (EEA) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6
March 2008, Brussels, Belgium
Maintenance and restoration costs
Economic and social values (& market values)
9/25/2008 19
Land-uses and trade offs
for ecosystem services
Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.
Soil
protection
Food
Climate
regulation
Energy
Freshwater
1natural
Soil
protection
Climate
regulation
Freshwater
Energy
Soil
protection
Food
Climate
regulation extensive
Freshwater
Energy
Soil
protection
Food
Climate
regulation 2
Freshwaterregulation
Energy
Soil
protection
Food
-
Freshwater3 intensive
Climate
regulation
Energy
Soil
protection
Food
-
Freshwater3
Upon closer analysis
Net value may be less
9/25/2008 20
Ecosystem service production & useIt can be a complex relationship; benefits sharing?
Source: Andrew Balmford & Ana Rodrigues 2008 Scoping the Science report. Contribution to TEEB Report
9/25/2008 21
ESS service provision & spatial relation Example: carbon storage
� Production rates, flows and values all vary spatially
� Services produced and enjoyed in different places
� Costs and benefits of conserving services accrue in different places
t C/ha
Source: Andrew Balmford & Ana Rodrigues 2008 Presentation within the Scoping the Science work
9/25/2008 22
The Evaluation Challenge
What should we measure to understand
and communicate the problem?
How can we go about doing this?
9/25/2008 23
Monetary Value
Quantitative Review of Effects
Qualitative Review
Non-Specified
Benefits
Increasing up the
benefits
pyramid
Measuring Benefits of Ecosystem services
What can be said in what terms and what was explored?
Full range of ecosystem services from biodiversity
Type of benefits; health benefits
from clean air, social benefits
from recreation, income from
products, security, wellbeing.
Quantitative: eg number people
benefiting from wood from forests,
# of avoided health impacts;
number of visitors
Monetary: eg avoided water purification
costs, avoided flood damage, tourist value,
value of medicines / pharmaceuticals from
natural products
Knowledge gaps The “known-
unknowns” and
“unknown-unknowns”
Source: P. ten Brink: presentation at March 2008 workshop Review of Economics of Biodiversity Loss, Brussels
The Benefits
Pyramid
9/25/2008 24
Interest and evidence
� There are different audiences, and different messages are needed for each.
� Different types of messages have different power and different reach.
Monetary
Quantitative /
qualitative
Level of information Level of press/interest
The overall aim is to get the message across to the (range of) key audiences – in a
manner that is representative of the facts and that engages interest. Hence, we need
to work out how best to combine monetary and non-monetary information.
Source: P. ten Brink: presentation at March 2008 workshop Review of Economics of Biodiversity Loss, Brussels
9/25/2008 25
Press Echo to TEEB I, May 2008
Source: Dr Carsten Neßhöver, Heidi Wittmer & Christoph Schröter-Schlaack, Presentation in Vilm, 26.8.2008
9/25/2008 26
The Cost of Policy Inaction: Not Halting Biodiversity Loss
L. Braat & P. ten Brink (eds.)
with
J. Bakkes, K. Bolt, I. Braeuer, B. ten Brink, A. Chiabai, H. Ding, H. Gerdes, M. Jeuken, M.
Kettunen, U. Kirchholtes, C. Klok, A.Markandya, P. Nunes, M. van Oorschot, N. Peralta-
Bezerra, M. Rayment, C. Travisi, M. Walpole.
Wageningen / Brussels, May 2008
Based on the Report to the European Commission, May 29, 2008
COPI Results
9/25/2008 27
Mapping changes : from Biodiversity & Ecosystems to Economic Values
Source: L. Braat & P. ten Brink (eds.)
Change in
Economic
Value
International
Policies
Change
in
Land use,
Climate,
Pollution,
Water use
OECD
Baseline
scenario
Change
In
Ecosystem
Services
Change
in
Biodiversity
Change
in
Ecosystem
functions
Change in
Economic
Value
International
Policies
Change
in
Land use,
Climate,
Pollution,
Water use
OECD
Baseline
scenario
Change
In
Ecosystem
Services
Change
in
Biodiversity
Change
in
Ecosystem
functions
Change in
Economic
Value
International
Policies
Change
in
Land use,
Climate,
Pollution,
Water use
OECD
Baseline
scenario
Change
In
Ecosystem
Services
Change
in
Biodiversity
Change
in
Ecosystem
functions
9/25/2008 28
Biodiversity loss - 1700 to 2050
Source: building on Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.
73%
62%
9/25/2008 29
Change of Landuse (area coverage) across all biomes – Global Total
0%108.4108.4World Total *
0%0.20.2Artificial surfaces
9%20.819.1Cultivated grazing
626%0.50.1Woody biofuels
44%15.811.0Intensive agriculture
-39%3.05.0Extensive agriculture
70%7.04.2Forest managed
-9%3.03.3Bare natural
-11%58.065.5Natural areas
2000 to 2050million km2million km2Area
Difference 20502000Actual
Source: L. Braat & P. ten Brink (eds.) 2008 COPI
� Natural areas loss is 7.5m km2 - broadly equivalent to the area of the Australia.
�Losses: natural, bare natural areas & extensive agriculture broadly equals the USA
9/25/2008 30
Loss of QualityGlobal total
Loss of quality - due to pollution, fragmentation, infrastructure and climate
impacts (Global average all biomes)
Mean Species Abundance indicator
18%World Total
14%Cultivated grazing
0%Woody biofuels
-2%Intensive agriculture
8%Extensive agriculture
20%Forest managed
8%Bare natural
11%Natural areas
MSA loss 2000 to 2050
Mean species abundance change for different land use
categories
Source: L. Braat & P. ten Brink (eds.) 2008 COPI
9/25/2008 31
Valuation and Ecosystem service losses COPI calculation: A
Annual Loss of economic value of ecosystem services that would have been
available had biodiversity remained at 2000 levels. Estimate for 2050.
2000 2050
Services that would
have been there, had
biodiversity been
halted.Ecosystem
service level
Relative to 2000
2010 2030
A
Losses
continue
into the
future
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study
9/25/2008 32
COPI - Some key results
• The welfare loss grows with each year of biodiversity and ecosystem loss.
• Over the period 2000 to 2010 this amounts to around 50 billion Euros extra loss
per year, every year.
• By 2010 the welfare losses from the loss of ecosystem services amount to 545
billion EUR in 2010 or just under 1% of world GDP.
• The value of the amount lost every year rises, until it is around 275bn
EUR/yr in 2050.
• The loss of welfare in 2050 from the cumulative loss of ecosystem services
between now and then amounts to 14 trillion (10^12) Euros under the fuller
estimation scenario
• This is equivalent in scale to 7% of projected global GDP for 2050 – across
land-based biomes
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study
9/25/2008 33
The loss grows with each year of biodiversity and ecosystem loss.
Land based ecosystems only
-7.1%-13938World Total
-0.40%-786Cultivated grazing
0.19%381Woody biofuels
0.67%1303Intensive Agriculture
-0.57%-1109Extensive Agriculture
0.95%1852Forest managed
-7.97%-15678Natural areas
Equivalent to %
of GDP in 2050Billion EURArea
Relative to 2000Relative to 2000
Global COPI Loss of Ecosystem services from land based ecosystems
All land based biomes*
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study for DGENV
9/25/2008 34
-6.3%-0.8%
Losses of ESS from natural areas in forest biomes as share of %
GDP
195.5World GDP in 2050 (trillion (10^12) EUR)*
-12310-1552Natural areas
-5.5%-0.7%Losses of ESS from forests as share of % GDP
-10791-1317Forest Total
-1025-133Temperate deciduous forest
-701-47Cool coniferous forest
-1372-190Temperate mixed forest
-2332-249Warm mixed forest
-3362-536Tropical forest
-1999-163Boreal forest
Fuller EstimationPartial EstimationForest biomes
Global COPI Loss of Ecosystem services
Forestry biomes
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study Building on FEEM forestry per hectare values
9/25/2008 35
What ESS could already be included (forests)?
Not included - (10 services)
Provisioning services
� Biochemicals, natural medicines,
pharmaceuticals
� Ornamental resources
� Fresh water
Regulating services
� Temperature regulation, precipitation
� Erosion control
� Technology development from nature
� Regulation of human diseases
� Biological control and pollination
� Natural hazards control / mitigation
Cultural services
• Living comfort due to environmental
amenities
Included - (8 services)
Provisioning services
� Food, fiber, fuel
Regulating services
� Air quality maintenance
� Soil quality maintenance
� Climate regulation (i.e. carbon storage)
� Water regulation (i.e. flood prevention,,
aquifer recharge etc.)
� Water purification and waste
management
Cultural services
� Cultural diversity, spiritual and religious
values, educational values, aesthetic and
cultural
� Recreation and ecotourism
Source: L. Braat & P. ten Brink (eds.) 2008 COPI Study
9/25/2008 36
A : 50-year impact of inaction B : Natural Capital Loss every year
Lost Welfare equivalent
to 5.5 % of GDP (from forest
biomes overall) … or…
Natural Capital Lost from
USD 1.35 x 10 12 to 3.10 x 10 12
(@ 4% Discount Rate) (@ 1% Discount Rate)
COPI – Forestry Biome Different ways of calculating the loss
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study for DGENV
9/25/2008 37
Valuation and Ecosystem service losses
2000 2050
Services that would have been there,
had biodiversity been halted
Ecosystem
service level
Population
9100 million
GDP (OECD Scenarios) 2.8%/year
GDP, with feedback on
economic losses from biodiversity losses integrated -
illustrative
Relative to 2000
Population: 6092 million
GDP: 41.4$ trillion (PPP) (10^12)
GDP/capita: 680$ (PPP)
GDP adjusted for impact of
biodiversity loss - illustrative
Source: Patrick ten Brink (IEEP), Leon Braat (Alterra), Mark van Ooorshot (MNP), Matt Rayment (GHK)
9/25/2008 38
Summary
Biodiversity arguments for action – eroding our natural capital
Social arguments for action – services lost hit all, and poor hardest.
Economic arguments for action – we risk undermining future growth and prosperity by undermining our natural capital
Need to understand and communicate the Values of Ecosystems and Biodiversity and the risk of their loss
Need to understand and communicate what can be done to respond more effectively – across all “end user” types.
The Economics of Ecosystems and Biodiversity: Phase II
Presentation by Pavan Sukhdev, TEEB Study Leader
9/25/2008 39
London Office
15 Queen Anne's Gate,
London SW1H 9BU
UK
Tel: +44 (0)207 799 2244
Fax: +44 (0)207 799 2600
Brussels Office
55 Quai au Foin/Hooikaai
B-1000 Brussels
Belgium
Tel: +32 (0) 2738 7482
Fax: +32 (0) 2732 4004
www.ieep.eu
Thank You
Patrick ten Brink
Institute for European Environmental Policy (IEEP)[email protected]
www.ieep.eu
IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment in EuropeNow to how the TEEB will respond to these challenges
Presentation by Pavan Sukhdev, TEEB Study Leader
9/25/2008 40
Study Authors and ContributorsCOPI, and Scoping the Science Studies
9/25/2008 41
Study Authors & Contributors (cont.)