Development and Implementation of Simplified Ecosystem Capital Accounts by the European Environment Agency Jean-Louis Weber Special Adviser to Economic Environmental Accounting European Environmnent Agency [email protected]MEGS Working Committee Meeting Statistics Canada RH Coats building 7, Ottawa 13 January 2012
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Jean-Louis Weber Special Adviser to Economic Environmental Accounting European Environmnent Agency
MEGS Working Committee Meeting Statistics Canada RH Coats building 7, Ottawa 13 January 2012. Development and Implementation of Simplified Ecosystem Capital Accounts by the European Environment Agency. Jean-Louis Weber Special Adviser to Economic Environmental Accounting - PowerPoint PPT Presentation
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Development and Implementation of Simplified Ecosystem Capital Accounts by the European Environment Agency
Jean-Louis Weber
Special Adviser to Economic Environmental Accounting
• Europe: – European Strategy for Environmental Accounting 2003/2008 includes
ecosystem accounts (under EEA responsibility)– EEA-MB/ Eurostat-DIMESA Seminar, Luxembourg, 24 November 2009: Fast
Track Implementation of Simplified Ecosystem Capital Accounts– Demand by the European Parliament for further inclusion of ecosystems in
the new environmental accounting regulation • Request from UNCEEA at its 5th meeting (June 2010) for UNSD,
World Bank and EEA to report back with a broad outline and road map for ecosystem accounts
• 6th UNCEEA meeting: endorsement of the outline and roadmap of SEEA part 2 on experimental ecosystem accounts to be presented at UNSC 2013
Policy Demand
• Europe:– GDP and Beyond process– Resource Efficiency Flagship Initiative 2020– Water Framework Directive – Environment Liability Directive of 2004– Forthcoming ecosystem assessment 2014
• International (as expressed at the UNCEEA meeting of 15-17 June 2011)– Wide range of emerging measurement/monitoring initiatives require an
ecosystems perspective of sustainability and information on the links between ecosystems and human well-being
– Millennium Ecosystem Assessment (MA) 2015 under preparation;– World Bank’s WAVES partnership– At the UNCEEA, demands by UNEP (Green Economy), OECD, CBD (Aichi-
Nagoya Strategy), FAO (SEEA Agri), the UN Coordinator of the Rio+20 Conference...
• EEA asked to deliver first (physical) accounts by MAY 2012
Simplified ecosystem capital accounts
• Make it feasible NOW – keep it simple
• Don’t miss important issues: needs a good narrative and checklist
• All ecosystems need to be addressed: land/sea/atmosphere, and for land: urban, agriculture, forest, other natural and soil.
• Basic accounts of biomass/carbon, water and landscape/biodiversity combined with diagnoses (instead of mere additions): ref. to the “ecosystem distress syndrome” approach of David J. Rapport integrated into an accounting framework
• Physical accounts first (2012), stocks, flows (natural flows and economic use), accessible surplus and integration; ecosystem capital potential/ capacity and degradation measured with a composite equivalent-unit.
• Physical accounts followed by valuation of selected ecosystem services and of ecosystem restoration costs. No valuation of ecosystem stocks.
The “fast tract implementation of ecosystem capital accounts” in Europe, based on land accounts.
Nov. 2011: publication of an experimental framework based on the EEA experience in land accounting, assessments and valuation (in particular in the context of TEEB) and the tests carried out in 2010-2011.
Characteristics of ecosystem capital accounts• Top-down approach
• Compiled at the European scale; member countries involved progressively on a voluntary basis
• Geo-referenced approach to 1) detect issues and hotspots and 2) connect global/EU to national to local scales
– 1km2 EU standard grid to integrate multiple dimensions– Small analytical functional units: “Land cover functional units”, “Socio-ecological
systems” or “socio-ecological production landscapes” or proxies…– Reporting units: countries, regions/provinces, catchments…
• Meet the policy demand: annual updates for t – 1; first time serie for 2000-2010
• Deep rooted in the best available datasets: – Socio-economic statistics – Monitoring by satellites (land use, biomass, climate variables…)– Best available in situ monitoring data
• Necessary additional estimations transparent and reproducible
• Relevance matter more than accuracy
• Measure ecosystem capital degradation
Ecosystem capital approach: narrative and practicalities
1. Narrative: an ultra-short version by 3 Japanese students
2. Narrative: additional details
3. Practicalities: focus on statistical units
1. Ultra-short story
Ecosystem capital potential (& degradation) can be measured by combining measurements of 3 ecosystem services:biomass/carbon, freshwater and systemic services
The simplified ecosystem capital accounting circuit
there is little or no compensation or tradeoff between them; the use of one should not reduce the use of the othersbiomass/carbon, freshwater are based on conventional balances systemic services (regulating, socio-cultural…) are measured indirectly in relation to ecosystem integrity.
carbon
water
systemic services
The background of Ecosystem Capital Accounts:
Healthy ecosystem benefit
Calculating economic aggregate
Ecosystem degradation
Ecosystem capital depreciationEcological debts
Adapted from
Aoyama Yukiko, Oguro Michio, and Yano Tohru,
Tohoku University, Sendai, Japan, November 2011
Land cover, landscape units, 1km2 grids and calculation of
ecosystem capital
44 11
66 44
22 44
44 33
66 55
1010 88
1212 1010
2020 1515
Carbonsurplus
Water surplus
Landscape integrity,
biodiversity
“+”
“=”
“+”
Total ecosystem capital potential
(or capacity)
1212 1010
2020 1515
-3-3 +1+1
-3-3-8-8
Capital1 – Capital2 = Change in capital
Time 1 Time 2
=
Capital1 Capital2 Improvement
Degradation
1212 1010
2020 1515
99 1111
1212 1212_
Adapted from
Aoyama Yukiko, Oguro Michio, and Yano Tohru
Tohoku University, Sendai, Japan, November 2011
2. More detailed narrative
a. Accounting for the performance(s) of 2 co-evolving systems: resources, productivity and health
b. Ecosystems deliver altogether multiple servicesc. Ecosystems deliver altogether services which are private, common and public
goodsd. Only a surplus from ecosystem services is accessible for human use e. Ecosystem capital produces altogether 3 broad types of services between which
there is little or no tradeoff: biomass/carbon AND freshwater AND functional services. Ecosystem capital potential (& degradation) can be measured by combining measurements of these 3 broad services (accessible resources).
f. Estimation of ecosystem capital depreciation can be derived from physical degradation
g. The integrated ecosystem capital frameworkh. Ecosystem Capital should not be valued as a stock; ecosystem services can be
valued one by one but are not fully additive (functional analysis)i. To address multiple scales, ecosystem capital accounts need to integrate
geographical information
Products &
economic assets
Fossil energy & materials
Biomass/carbon
Water
Land functional services
Economy performance
Economic growthTradeValue-added, income, profit… ConsumptionInvestment Wealth (non-financial and financial assets)
Ecosystem potential (capacity to deliver services)
Ecosystem productivityFlowsAccumulation Stocks
Ecosystem health (biodiversity, integrity, resilience, interdependence)
Capital maintenance(to remediate degradation)
The narrative behind Ecosystem Capital Accounts:
a. Accounting for the performance(s) of 2 co-evolving systems: resources, productivity and health
Economic systemEc
osys
tem
Use of natural
resources
The narrative behind Ecosystem Capital Accounts:
b. Ecosystems deliver altogether multiple services
Source: Gilbert Long, 1972 A propos du diagnostic écologique appliqué au milieu de vie de l'homme. Options Méditerranéennes, 13 , CHIEAM, Montpellier, Juin 1972
3 – Ecosystem good state: health, sustainable capacity of delivering services, life-support functions, Public Good: non-rival, non-exclusive use, non-transferable rights, taxes or lease
with covenants are possible
1 – ES incorporated into commodities &
economic assets: mostly private goods, market
prices
Payments for restoring
ecosystem potential
Reg
ulat
ing
serv
ices
Recreating services
Provisioning services
2 - Non valued services: mostly common goods, tradable,
transferable rights
Services valuation,
payments for services
GDP, consumption,
trade...
Jean-Louis Weber, CBD Conférence, Libreville, 16 Septembre 2010 Jean-Louis Weber, CBD Conférence, Libreville, 16 Septembre 2010
The narrative behind Ecosystem Capital Accounts:
c. Ecosystems deliver altogether services which are private, common or public goods
The narrative behind Ecosystem Capital Accounts:
d - Only a surplus from ecosystem services is accessible for human use
Ecoproduct (of cycling and reproductive systems/ capital) are produced by means of other ecoproducts. The ecosystem production function includes a surplus ecoproduct that can be used by the economy. (from Anthony Friend 2004)
Economy
Basic eco-product
Non-basic eco-product
Sources: Kling/U Michigan_2005 & Friend/ISEE_2004
Necessary for ecosystem reproduction (conservation of ecosystem health, integrity, functions & services)
Surplus accessible for harvest/abstraction
The narrative behind Ecosystem Capital Accounts:
d - Only a surplus from ecosystem services is accessible for human use
Basic eco-product
Non-basic eco-product
Sources: Kling/U Michigan_2005 & Friend/ISEE_2004
Possible compensation = artificial input (irrigation,
energy, fertilizers, infrastructures…)
Challenge = maximise yields while maintaining natural functions and biodiversity
Necessary for ecosystem reproduction (conservation of ecosystem health, integrity, functions & services)
• Available resource: the total resource (actual stocks and flows) which can be used in principle (but should to be shared between economy and nature…).
• Appropriated resource: the share of the total potential resource flows (flows which would be available in an ecosystem in the absence of human activities or flows from managed ecosystems) which is used (abstracted, harvested or destroyed during harvest). N.B.: Once used, the resource is considered as appropriated in total, even though one part is returned to the ecosystem.
• Accessible resource: the surplus (actual stocks and flows) which can be used considering 1) physical constraints (timeliness and location, cyclical risks, bio-chemical quality) & 2) the amount to be left to nature for ecosystem reproduction. N.B.: When returned to the ecosystem (leftovers in agriculture or forestry, water returns…) the resource destroyed or modified during the production process becomes accessible again.
Ecosystem capital accounts refer to accessible resource and intensity of use.
Accessible resource =Stocks (soil, forests, aquifers, reservoirs, landscapes…)Plus/minus change in stocks (from the previous year)Minus inaccessible stocks
Physical inaccessibility (deep aquifers …)Inappropriate quality (salted or polluted water, non arable land…)
Plus flows (NPP, effective rainfall…)Minus inaccessible flows
Physical inaccessibility (most of flood water, distance, non transportable resource, timeliness issues, water evaporated by irrigation…)
Inappropriate quality (polluted water)Maintenance of stocks (soil carbon, forests, aquifer level, dilution of
pollutants in rivers…)
Plus/minus adjustment for stress, risk
Example of accessible water adjustment: occurrence of soil water stressNumber of days when no water was available for plants in 2001, 1 km^2 grid
Source: Blaz Kurnik, EEA, 2011
The narrative behind Ecosystem Capital Accounts:
e. Ecosystem capital produces altogether 3 broad types of services between which there is no compensation or tradeoff: biomass/carbon AND freshwater AND systemic services. Ecosystem capital potential (& degradation) can be measured by combining measurements of these 3 broad services (accessible resources).
Accessible carbon surplus
Accessible water
surplus
Accessibleecosystem functional services
Total Ecosystem Capital Potential/Capacity
&
Ecosystem Capital Improvement/Degradation
Ecological debts in
physical units
Depreciation (money) &
adjustments
Physical accounts of E-services Physical accounts
of E-services
t1
t2
()
t2 t1
Degradation of ecosystem capital
…based on remediation costs
…based on assets values
&
addition
€t2 t1 €
Valuation of E-services
€
Valuation of E-services
€ €Assessment of
remediation costs by issues
Asse
ts
Flow
s
()
The narrative behind Ecosystem Capital Accounts:
f. Estimation of ecosystem capital depreciation can be derived from physical degradation
NPV & addition
€
NPV & addition
€
Asse
ts €
Calculation
of unit costs
Account of pressures
responsible of degradation
Jean-Louis Weber EEA Scientific Committee Workshop 5 October 2011
Ecosystem services valuation Bottom-up, individual preferences, market and shadow prices,
Costs-Benefits Analysis, General Equilibrium model
Top-Down, collective preferences, multi-criteria decision (economic & social values, long term targets…), Consumption of Ecosystem Capital
Ecosystem restoration costs
Ecosystem capital
1 32 4 5 n
Service 2: e.g. fish provision
2
Impacts assessments, costs & benefits
Local government, Agencies assessment
Corporate accounting results, rating, trade
Markets of specific ecosystem services, PES
Accounting guidelines, norms, geographical data
Action level:
Local scale, management,
Site level, case studies,
Projects,
Business
Beyond GDP Accounting
Sector accounts
Green taxes
Clearing house mechanisms on
[1] ES prices & [2] ecosystem mitigation costs
SEEA 2013SEEA 2013
FrameworkFramework
National & regional government: Environmental agencies,
Ministries of economy, Statistical offices,
Courts
Global trade of ecosystem permits, IPES Programmes assessment (e.g. REDD+)International financial standards (for loans…)Country contribution to international organisations
Simplified accountsGlobal scale:
International Conventions
Markets framing & regulation
The narrative behind Ecosystem Capital Accounts:
i. To address multiple scales, ecosystem capital accounts need to integrate geographical information
Ecosystem physical degradation, sustainable benefits from ecosystem services and non-paid maintenance costs
Consumption of ecosystem capital (non-paid costs)
Sustainable benefits
(income from key ecosystem services)
Sustainable use
coefficients
Economic statistics & national accounts
Mean restoration
prices Improvement
Degradation
Sustainable benefits
(Value Added from key ecosystem
services)
An experimental framework for ecosystem capital accounting in EuropeEEA Technical report No 13/2011
Theoretical background (very incomplete…):– Georgescu-Roegen (The Entropy Law and the Economic Process (1971), – Odum (emergy) – Resource depletion: Hotelling, El Serafy– System approach : Joel de Rosnay (The macroscope, 1975)– Dissipative structures: Prigogine (The New Alliance, 1986)– L'économique et le vivant: René Passet (1977)– Natural resource economy: Naredo (1987)– Urban metabolism: Duvignaud– Global biotic regulation: Gorshkov– Co-evolving systems: Norgaard– Ecosystem services: Long (1972), Costanza and De Groot, Millennium Ecosystem
Assessment (2003)– Interaction between scales: Hollin (“panarchy”)– Landscape ecology (UK)– Ecosystem units: socio-ecological systems (Gallopin, Carpenter, Rockström,
MA2003…)– Ecosystem health (D. J. Rapport), resilience (the Resilience Alliance)
from economic-ecological theory to statistical practice and accounts :
statistical units and classifications
From theory to statistics and accounts
Theoretical background (very incomplete…):– Georgescu-Roegen (The Entropy Law and the Economic Process (1971),
Odum (emergy), Hollin (panarchy,interaction between scales)– Co-evolving systems (Norgaard)– Ecosystem services: Long (1972), Costanza and De Groot, Millennium
Stockholm Resilience Centre, MA2003…)– Ecosystem health (D. Rapport), resilience (the Resilience Alliance)
from economic-ecological theory to statistical practice and accounts : statistical units and classifications
Main relations between classifications & accounting units
Monetary Statistics of Products
Physical Statistics of Products
Land Use: productive land
functions
Land Cover: biophysical land units
Ecosystems:Socio-ecological landscape units (SELU)
(terrestrial, marine & atmospheric)
Land Functions & Ecosystem Services
Institutional & Production Units
(sectors & industries)
Land Ownership(private & public)
(from UNCEEA 2009 – EEA & FAO)
Ecosystem accounting and statistical units
SNA statistical units don’t record ecosystem degradation need for other units…
Theoretical units vs. observation units (proxies for collecting data)
• Theoretical units: characteristic systems into which natural and socioeconomic elements interact to transform ecosystem functions into goods and services: – Functional units producing elementary
services– “Socio-ecological systems”, “socio
ecosystems” or “Socio-ecological production landscapes” (the Japanese satoyama and satoumi)
• Observation units: – For which we can collect data in a
systematic way– Mostly surface units: “geo-systems”, land
Japan Satoyama Satoumi Assessment, 2010.Satoyama-Satoumi Ecosystems and Human Well-being: Socio-ecological Production Landscapes of Japan – Summary for Decision Makers.United Nations University, Tokyo, Japan.
Japan Satoyama Satoumi Assessment, 2010.Satoyama-Satoumi Ecosystems and Human Well-being: Socio-ecological Production Landscapes of Japan – Summary for Decision Makers.United Nations University, Tokyo, Japan.
Theoretical units vs. observation units
SES / SEPLSES / SEPLTheoretical analytical
unit
Theoretical analytical
unit
Candidate observation
units
Candidate observation
unitsModeled
SES/ SEPL
ModeledSES/ SEPL
Administrative or cadastral unit
Administrative or cadastral unit
Basic land cover systems
Basic land cover systems
??Topographic unit (eg.
catchment)
Topographic unit (eg.
catchment)
Land cover functional units: example of EuropeLand cover units are homogenous considering production of ecosystem services: crops, timber, water…
Land cover functional units & Socio-ecological landscape units
(SELU)
Dominant land cover types (more than 50% criteria)In grey are areas where no land cover type is dominant
Relief and river basins limits
The SELU map/database
SELU classified by landscape types
ZOOM: SELU in Central Europe
ZOOM: Land cover functional units by SELU
The land/ landscape account
Land cover balance, by land cover types ( = 0)
Stock t0
- Consumption of land land cover
+ Formation of land cover
= Stock t1
Ecosystem landscape balance ( ≠ 0)Stock t0
- Decrease in LEP
+ Increase in LEP
= Stock t1
Sprawl of artificial areas 1990-2000
Urban and infrastructure land development "1990" - 2000 - EUR23 - ha/year
0 10000 20000 30000 40000 50000 60000
Land uptake byhousing, services
and recreation
Land uptake byindustrial &
commercial sites
Land uptake bytransport netw orks &
inf rastructures
Land uptake bymines, quarries and
w aste dumpsites
Origin of artificial land uptake as % of total, "1990"- 2000, EUR23
Mean annual urban and infrastructures land take as % of Artificial land cover "1990"
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Mean annual urban and infrastructures land take as % of total Europe-23 urban land take
0.00
5.00
10.00
15.00
20.00
25.00
Corine land cover map (CLC is derived from satellite images)
Green Landscape Index (derived from CLC)
Nature Value (Naturilis, derived from Natura2000 designated areas)
Fragmentation (Effective Mesh Size (MEFF) derived from TeleAtlas Roads and CLC)
Landscape Ecological Potential (LEP) 2000, by 1km² grid cell
LEP 2000 by NUTS 2/3
From Land Cover to Landscape Ecological Potential (LEP)
and
Land cover flows 1990-2006 and mean Landscape Ecosystem Potential (LEP) by ecosystem landscape unitLand cover flows are measured according to the EEA LEAC methodology based on Corine land cover
(J-L Weber and E. Ivanov, 2011)
Landscape Ecological Potential change 1990-2006, by ecosystem landscape unit(J-L Weber and E. Ivanov, 2011)
Conclusion: biodiversity & finance, a few questions…
• Back to the first quotation by Bertrand de Jouvenel, 1968: “Because National Accounts are based on financial transactions, they account nothing for Nature, to which we don’t owe anything in terms of payments but to which we owe everything in terms of livelihood.”
• We certainly owe nothing to Nature, but by degrading biodiversity and ecosystem don’t we create debts to future generations?
• These ecological debts don’t they come in addition to conventional debt, private and public - which will have to be repaid one day, one way or another?
• Should not the international financial and monetary system take into account(s) ecological debts, in addition to conventional debt?
• Can ecosystem capital accounts contribute to this endeavour?
Jean-Louis Weber, CBD Conférence, Libreville, 16 Septembre 2010 Jean-Louis Weber, CBD Conférence, Libreville, 16 Septembre 2010