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 mkettunen@ieep.eu 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)