The Economics of Ecosystems and Biodiversity
Biodiversity and Water
Patrick ten BrinkTEEB for Policy Makers Co-ordinator
Head of Brussels OfficeInstitute for European Environmental Policy (IEEP)
CBD COP 10Water Ecosystems and Climate Change
Room 211A level 1B16:30 – 17:45
22 October 2010
Nagoya, Japan
1
TEEB origins
Source: Bishop (2010) Presentation at BIOECON
TEEB’s Genesis and progress
“Potsdam Initiative – Biological Diversity 2010”
1) The economic significance of the global loss of biological diversity
TEEB Interim Report @ CBD COP-9, Bonn, May 2008
Brussels 13 Nov 2009
SwedenSept. 2009
India, Brazil, Belgium, Japan % South Africa
Sept. 2010
LondonJuly 2009
Ecosystem Services and awareness of values
Provisioning services• Food, fibre and fuel• Water provision• Genetic resources
Regulating Services• Climate /climate change regulation• Water and waste purification • Air purification • Erosion control• Natural hazards mitigation (e.g. Flood control)• Pollination• Biological control
Cultural Services • Aesthetics, Landscape value, recreation
and tourism• Cultural values and inspirational services
Supporting Services - e.g. soil formation
Habitat Services - e.g. nurseries
+ Resilience - e.g. to climate change
Market values – known and generally taken into account in decision making on land use decisions
Value long ignored, now being understood >> new instruments (e.g. PES), markets, investments
Value often appreciated only after service gone and damage done >> damage costs
Values generally rarely calculated
Value often appreciated only after service is degraded or gone > replacement, substitute costs
The benefits to our economies, livelihoods and wellbeing have generally not been taken into account. There is, however, now
a new awareness of the value of ecosystem services and a growing use of instruments to reward benefits.
Sometimes value explicit / implicit in markets (e.g. tourism spend / house prices)
Ecosystem service generally unpriced, often taken for granted, until service is lost
‘‘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
Presentation overview
The Economics of Ecosystems and Biodiversity in Policy Making
The Global Biodiversity Crisis
Responding to the value of nature
Available Solutions• Rewarding benefits: PES, REDD+, fiscal transfers, ABS, markets, GPP et al
• Subsidy reform • Addressing losses : Regulation legislation, liability, taxes & charges, offsets, banking
• Protected Areas• Investment in natural capital
Measuring what we manage
http://www.teebweb.org/
• Ecosystem service indicators• Accounts• Valuation and assessment
Valuation and policy making:from valuing natural assets to decisions
To underline the value of natural assets & help determine where ecosystem services can be provided at lower cost than man-made technological alternatives
e.g. water purification and provision, flood control
Conservation / restoration and other Investments decisionsPES instruments at different scales and by different stakeholders
Avoided cost of alternative water purification and provisione.g. USA-NY – Catskills-Delaware watershede.g. New Zealand – Te Papanui Park - watere.g. Mexico – PSAH nationally, and local application eg Saltillo City, Zapaliname mountains
Avoided loss of output e.g. Venezuela: PAs to avoid sedimentation & loss of hydro output
Lower cost of flood control e.g. Vietnam and restoring/investing in Mangroves - cheaper than dyke maintenancee.g. Belgium Schelde river: natural flood defence - cheaper than man-made infrastructure
Inform land-use decision - Creating and improved evidence base
Example: India: Floodplain between Yamuna River and Delhi.
Choice: convert floodplain / embankment plan or not
Evidence showed that ecosystem benefits exceeded opportunity costs of conversion.
Decision: Delhi government halted embankment plan of Yamuna until further order
. Avoid socially less good investment decisions
Valuation and policy making:from valuing natural assets to decisions
PES: They exist, they work(though lots of lessons to learn)
• 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)
• For Specific services - e.g. provision of quality water (NY), protect groundwaters (J, D), cleanse coastal waters (Sw), carbon Storage (NZ, Uganda), invasive alien species (SA - WfW), biodiversity (EU)
• Multiple services: e.g Costa Rica’s PSA - carbon, hydrological services preserving biodiversity and landscape beauty.
• Multiple objectives - e.g. Mexico’s PSAH – hydrological services, deforestation, poverty
• Big and small
– E.g. 496 ha being protected in an upper watershed in northern Ecuador
– eg. 4.9 million ha sloped land being reforested by paying landowners China.
• Public (municipal, regional, national) and private (eg Vittel (Fr), Rochefort (B) for quality water
• Local and national and international - e.g. REDD+ for forest carbon plus
See also Chapter 5 TEEB for Policy Makers
Multiple Objectives : PSAH MexicoPES to forest owners to preserve forestManage and not convert forest• e.g. cloud forest US$ 40 per ha/year;• e.g. other tree-covered land US$ 30 per ha/year
Hydrological services: Aquifer Recharge; Improved surface water quality, Reduce frequency & damage from flooding
Munoz 2010); Muñoz-Piña et al. 2008; Muñoz-Piña et al. 2007.
Reduce Deforestation Address Poverty
Multiple Objectives : PSAH Mexico
Balance of priorities varied over time
An instrument can evolve and respond to changing needs
Munoz 2010); Muñoz-Piña et al. 2008
Aquifers
Water scarcity
Deforestation
Poverty
P
A
WS
D
PSAH Mexico
Source Munoz 2010); Muñoz-Piña et al. 2008
Year in which forest is signed into the program …
2003 2004 2005 2006 2007 2008 2009 Total
Surface incorporated into the program (‘ooo ha)
127 184 169 118 546 654 567 2,365
Forest owners participating (individuals + collectives)
272 352 257 193 816 765 711 3,366
Total payment to be made over 5 years (US$ m)
17.5 26.0 23.5 17.2 84.2 100.9 87.4 303
Results: PSAH reduced the rate of deforestation from 1.6 % to 0.6 %. 18.3 thousand hectares of avoided deforestation Avoided GHG emissions this equates 3.2 million tCO2e.
Ecosystem Valuation Benefits
Annual Value (2005, CDN $)
Carbon Values 366 millionAir Protection Values 69 millionWatershed Values 409 millionPollination Values 360 millionBiodiversity Value 98 millionRecreation Value 95 millionAgricultural Land Value
329 million
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 ?
Source: Wilson, S. J. (2008) Map: http://greenbeltalliance.ca/images/Greebelt_2_update.jpg
The Social Dimension: Jobs: Working for Water
• WfW is a public works programme in South Africa which protects water resources by stopping the spread of invasive plants.
• Municipal government contracting workers to manage public land sustainably
Results - More than 300 projects in all nine South African provinces. • Employed around 20,000 people per year, • 52 per cent of them women4, and • also provided skills training, health and HIV/AIDS education to participants.• costs to rehabilitate catchments range from 200-700 EUR/ha (Turpie et al. 2008)
• benefits may reach a 40 year NPV of 47,000 EUR/ha (see TEEB Foundations, 2010)
Wunder et al 2008a; http://www.dwaf.gov.za/wfw/
WfW: The Manalana wetland (near Bushbuckridge, Mpumalanga)
• severely degraded by erosion that threatened to consume the entire system• WfW public works programme intervened in 2006 to reduce the erosion and
improve the wetland’s ability to continue providing its beneficial services
Results • The value of livelihood benefits from degraded wetland was just 34 % of what could be achieved after investment in ecosystem rehabilitation;• Rehabilitated wetland now contributes provisioning services at a net return of 297 EUR/household/year;• Livelihood benefits ~ 182,000 EUR by the rehabilitated wetland; x2 costs is • The Manalana wetland acts as a safety net for households.
Sources: Pollard et al. 2008’; Wunder et al 2008a; http://www.dwaf.gov.za/wfw/
Security and meeting objectives working with nature: Flood Control and the Schelde : Belgium
• Major infrastructural works were planned - deepening fairway to the harbour of Antwerp and complementary measures to protect the land from storm floods
• CBA carried out, including ecosystem services (recreational value) of new floodplains.
• Evaluation Result: an intelligent combination of dikes and floodplains can offer more benefits at lower cost than more drastic measures such as a storm surge barrier near Antwerp.
• 14 vs 41 year payback
• Policy Response / Action: The Dutch & Flemish gov’ts approved an integrated management plan consisting of the restoration of approximately 2500 ha of intertidal and 3000 ha of non-tidal areas
University of Antwerp and VITO (2004) in TEEB in National Policy (2011)
Security and meeting objectives working with nature: Flood Control and the Schelde : Belgium
University of Antwerp and VITO (2004) in TEEB in National Policy (2011)
Phase 1 2Measurements Storm
surge barrier
Over-Schelde
Dykes (340km)
Floodplains (CIA, 1800
ha)
Floodplains (RTA, 1800
ha)
Floodplains (1325 ha) +
dykes (24 km)
Investment and maintenance costs 387 1.597 241 140 151 132Loss of agriculture 16 19 12Flood protection benefits
727 759 691 648 648 737Ecological benefits 8 56 9Other impacts:- shipping- visual intrusion
-1 -3 -3 -5
Total net benefits 339 -837 451 498 530 596Payback period (years) 41 / 27 17 14 14
Table 4.2 Different alternatives for flood protection in the CBA (Phase 1: different measures; Phase 2 optimization)
Private Sector Interests: Water: Vittel (France)
Vittel mineral water, France Perrot-Maître 2006; Wunder and Wertz-Kanounnikoff 2009
Since 1993, PES programme in its 5100 ha catchment in the Vosges Mountains.26 farmers paid to adopt best low-impact practices in dairy farming
Payment levelsAve. payments are EUR 200 ha/year over a five year transition period and up to 150,000 EUR per farm to cover costs of new equipment. Contracts are long-term (18-30 years), with payments adjusted to opportunity costs on a farm-by-farm basis.
Making it Happen• built on a 4-years research by the France’s INRA (National Institute for Agricultural Research )• took 10 years to become operational• Success because of economic rationale + tenacity of Vittel
Similar case for Beer ! Rochefort, Belgium . What cases do you know of ?
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
Thank you
TEEB Reports available on http://www.teebweb.org/
& TEEB in Policy Making will come out as an Earthscan book in March 2011See also www.teeb4me.com
Patrick ten Brink, [email protected]
IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment www.ieep.euManual of EU Environmental Policy: http://www.earthscan.co.uk/JournalsHome/MEEP/tabid/102319/Default.aspx