2/17/20161 The Global Economics view: The Economics of Ecosystems and Biodiversity (TEEB) project Afternoon session: The road to Copenhagen. Fast track implementation of environmental accounts for carbon Patrick ten Brink TEEB for Policy Makers Co-ordinator Head of Brussels Office Institute for European Environmental Policy (IEEP) Building on the TEEB D1 report developed by wide range of authors DIMESA-EEA MB Seminar 14 November 2009 Jean Monnet building, Luxembourg-Hirschberg Building on and borrowing from the work & insights of the wider TEEB team and contributors of supporting studies, call for evidence and other contributions Presentation overview 1.Introduction to TEEB ambitions and process, and products 2.TEEB and national accounting 3.The Colours of Carbon 4.TEEB & macro-indicators Beyond GDP et al TEEBs Genesis and progress Potsdam Initiative Biological Diversity 2010 1) The economic significance of the global loss of biological diversity TEEB Interim CBD COP-9, Bonn, May 2008 Brussels 13 Nov Stromstad Sept. TEEBs goals 1.Demonstrate the value to the economy, to society/individuals and wider environment what we have & what we risk losing. 2.Underline the urgency of action, benefits of action (opportunities), analyse costs of action 3.Show how the value of ecosystem services and biodiversity can be assessed and where it can be useful 4.Show how we (can) take into account the value of ecosystem services and biodiversity in our decisions and choices, 5.Identify / support solutions 6.Address the needs of policy-makers, local administrators, business and citizens (the end-users) Source: adapted from Pavan Sukhdev TEEB Final Report June 2010 TEEB D4: TEEB for Citizens TEEB D3: TEEB for Business TEEB D2: TEEB for Local Policy- Makers and Administrators TEEB D1: TEEB for National and International Policy-Makers TEEB D0: Ecological and Economic Foundations D0 D1 D3 D1 D3 D2 D4 Businesses.. Citizens.. Administrators.. Policy-Makers.. TEEB the Role of D0 Ecological and Economic Foundations TEEB Interim Report COP-9, Bonn, May 2008 Economic Size & Welfare Impact of Losses is enormous Strong Links between Poverty / MDGs & Biodiversity Losses Discount Rates are an ethical choice Key Messages from the Interim Report.. Press Echo to TEEB I, May 2008 Source: Dr Carsten Nehver, Heidi Wittmer & Christoph Schrter-Schlaack, Presentation in Vilm, GDP & natural capital loss How they (dont) fit 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 well-being impact of biodiversity loss - illustrative Source: Patrick ten Brink (IEEP), Leon Braat (Alterra), Mark van Ooorshot (MNP), Matt Rayment (GHK) TEEB Climate Issues Update - September Coral reef emergency Ecosystem investment for climate adaptation National accounting for forest carbon Forest carbon for climate mitigation TEEB for Policy Makers report - launched 13 November The Global Biodiversity Crisis Deforestation/degradation Coral reefs Global Fisheries Degradation and poverty Responding to the value of nature Available Solutions Measuring what we manage Biodiv. & ecosystem indicators Beyond GDP type indicators Nat. Cap. Accounts / SEEA / SNA GDP of the Poor Valuing nature and assessments Global Loss of Fisheries Is there a Solution ? We are fishing down the food web to ever smaller species Increasing risk of fish stock collapse (Source : Prof. Callum Roberts, University of York) . And do reserves work ? Reserves all over the world show large increases in spawning stocks.. Open Access & Perverse Subsidies drive fisheries losses 73% of the United States Haddock catch is now taken within 5km of the closed area boundaries Source: Fogarty et al. (2007) TEEB D1: TEEB for National and International Policy-Makers - Structure Part I The need for action Chapter 1 The global biodiversity crisis and related policy challenge Chapter 2 Framework and guiding principles for the policy response Part II Measuring what we manage: information tools for decision-makers Chapter 3 Strengthening indicators and accounting systems for natural capital Chapter 4 Integrating ecosystem and biodiversity values into policy assessment Part III Available solutions: instruments for better stewardship of natural capital Chapter 5 Rewarding benefits through payments and markets Chapter 6 Reforming subsidies Chapter 7 Addressing losses through regulation and pricing Chapter 8 Recognising the value of protected areas Chapter 9 Investing in ecological infrastructure Part IV The road ahead Chapter 10 Responding to the value of nature Eroding natural capital base & tools for an alternative development path Past loss/ degradation Predicted future loss of natural capital (schematic) with no additional policy action Halting biodiversity loss Opportunities/benefits of ESS Investment in natural capital +ve change Alternative natural capital Development path Regulation PAs Restoration Investment in natural capital : green infrastructure Economic signals : PES, REDD, ABS (to reward benefits) Charges, taxes, fines (to avoid degradation/damage: Subsidy reform (right signals for policy) Better governance ` Sustainable consumption (eg reduced meat) Markets, certification/logos & GPP Agricultural innovation No net loss from 2009 level 1.Introduction to TEEB ambitions and process, and products 2.TEEB and national accounting 3.The Colours of Carbon 4.TEEB and macro-indicatorsBeyond GDP et al Critical issues The values of biodiversity and ecosystems are missing Many not known (but this is changing); widespread lack of awareness They are generally not integrated into the economic signals, into markets the economy is therefore often not part of the solution Values not systematically taken into account in assessments / decision making The value of nature is not reflected in national accounts nor in leading macro economic indicators >> Inappropriate incentives; misinterpretation of right solutions, insufficient evidence base at policy makers finger tips and weaker public support for action >>There is not enough political will or conviction or awareness of benefits/cost to launch due policies >> Biodiversity loss continues eroding natural capital base without realising its value Measuring to Manage Policy makers do not have all the right tools and (economic) framework in place and operational National accounts do not integrate natural capital, its depreciation (or appreciation), or its value GDP and other macro-indicators do not give the right signals as regards maintaining natural capital, or for maintaining livelihoods (of the poor) The physical evidence base on biodiversity indicators, on baseline changes (eg forest cover), on ecosystem service indicators is not enough for true knowledge based policies Range of practice to build on and processes to link to Beyond GDP, OECD s Measuring Progress of Societies, Stiglitz-Sen-Fitoussi Commission, London Group, UNCEEA + efforts across the world Forest, fish, water, land accounts + SEEA etc range of countries, EEA etc TEEB and accounting Summary Fundamental need for improved accounts to take nature into account. Natural capital/natural asset accounts Understanding the ecosystem stocks and changes of stocks (depreciation, appreciation) Understanding the ecosystem services that flow from the stocks and changes of services from the flows Appreciate the value of depreciation of the stocks to allow better links to SNA Appreciate the costs of maintaining or restoring natural capital (gross fixed natural capital formation) Appreciate the value of services to allow better integration into accounts (useful re subsidies) A System of Economics Environmental Accounting (SEEA) Upgrade of the manual (planned 2013) + Full SEEA ecosystem accounts at national level Increased market signals on the value of nature reduces the invisibility of nature in SNA Critical investment for policy makers information in the medium & long term TEEB and accounting Links to Copenhagen Opportunity and need for NC accounts for carbon & biomass Overall objective of development of natural capital accounts that integrate across ecosystems and ecosystem services Development of harmonised accounting for carbon and biomass a useful priority linking to range of ecosystem types Forests, including soils - already much experience Agriculture Grasslands & other ecosystems Wetlands Coastal / marine (sea grasses, coral reefs etc) Not a prerequisite for launching REDD+ tool, but a fundamental support Essential to support the credibility and trust in REDD+ instrument and other carbon related instruments. Essential to support the evolution of REDD+ and its phasing (eg eventual link to markets) Careful re carbon-only / need integrated approach 1.Introduction to TEEB ambitions and process, and products 2.TEEB and national accounting 3.The Colours of Carbon 4.TEEB and macro-indicatorsBeyond GDP et al Playing the full hand of carbon colours Brown Carbon CO 2 emissions from human energy use and industry Green Carbon carbon stored in terrestrial ecosystems, e.g. plant biomass and soils in forests, agricultural lands, wetlands and pasture Blue Carbon 55% of all carbon in living organisms are stored in oceans, most of this in mangroves, marshes, see grasses, coral reefs and macro-algae Black Carbon soot emissions from incomplete combustion of fuels absorb heat in the atmosphere and reduce ability to reflect sunlight By halting the loss of green and blue carbon, the world could mitigate as much as 25% of total GHG emissions, with co-benefits for biodiversity, food security and livelihoods (IPCC 2007, Nellemann et al. in press) The role of tropical forests in climate regulation tropical forests store a fourth of all terrestrial carbon 547 gigatonnes (Gt) out 2,052 Gt (Trumper et al. 2009) tropical forest capturing up to 4.8 Gt CO2 annually (Lewis & White 2009) stopping deforestation holds an excellent cost- benefit ratio halving deforestation generates net benefits of about $ 3.7 trillion (NPV) including only the avoided damage costs of climate change (Eliasch Review 2008) 23 Needs - All colours of Carbon REDD+ (suitably designed and implemented to (be able to) take wider set of ecosystem services into account) Investment in ecological infrastructure for adaptation ( ecosystem based adaptation) & mitigation Natural capital accounts carbon-biomass (but in wider ecosystem service context and process). Start from existing work on forests/agriculture (improve methods, guidance, understanding, verifiability, comparability, acceptance) extend to other ecosystems. SEEA / extended income accounts 24 1.Introduction to TEEB ambitions and process, and products 2.TEEB and national accounting 3.The Colours of Carbon 4.TEEB and macro-indicatorsBeyond GDP et al Economic terms & need for Biodiversity terms Economic assets & natural assets Infrastructure & ecological infrastructure Gross fixed capital formation & natural capital formation Depreciation & degradation National net savings & genuine savings National debt & nature debt Financial tipping points & natural critical thresholds Income of the poor & natures income to the poor Wealth of nations & wealth of nature Need to treat natural capital as the same level of economic capital Need appropriate terms, indicators and measures TEEB and macro-indicators & the need to go Beyond GDP For Biodiversity critical to have indicators on (inter alia) Stocks (scale & quality) ( eg natural capital index; carbon in soil; genetic diversity) Trends - depreciation/consumption, appreciation of /investment in stocks (physical and monetary) Critical thresholds (eg fish stocks, marine dead zones, absorptive capacity) and boundaries (generative capacity of nature) Ecosystem service indicators Dashboard of key indicators on wealth, wellbeing, progress Integrate the value of nature Environmental index Footprint tool ecological, carbon, water footprints Identify creditor and debtor nations from biodiversity perspective GDP of the (rural) Poor Much to build on, range of commitments; but still developing field TEEB timeline TEEB Phase I TEEB Phase II May 08 Interim report (CBD COP9, Bonn) Final TEEB synthesis & publications CBD COP10 (Oct 2010, Nagoya, Japan) Sep 09 TEEB Climate Issues Update (Strmstad) Nov 09 D1 for policy makers Spring / Summer 2010 D0, D2, D3 & D4 2/17/ Thank you 1.Where do you see greatest benefits of accounting for nature? 2.What Beyond GDP type indicators do you see as having the greatest potential ? 3.What sort of progress is realistic in the short, medium and long term? 4.Where can TEEB help the process over the next year? ` Patrick ten Brink IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment in Europe