Giving value to biodiversity & ecosystems – global to local

1. Cornis van der Lugt, Coordinator: Resource Efficiency , UNEP Paris, 29 March 2010 Giving value to biodiversity & ecosystems – global to local

2. Drivers of change that create risk… Millennium Ecosystem Assessment (2005): • Water scarcity • Climate Change • Habitat Change • Biodiversity loss and invasive species • Over-exploitation of the oceans • Nutrient overload

3. Ecosystem services Production and Consumption – Resource Efficiency, Chemicals Management Human systems and their governance Ecosystems Human well-being, development Ecosystem Services and Resource Efficiency NATURAL CAPITAL HUMAN CAPITAL

4. TEEB Reports: 2009 – 2010 Science & Economics Foundations, Policy Costs, & Costs of Inaction Policy Evaluation for Policy-Makers Decision Support for Administrators Business Risks & Opportunities Citizen & Consumer Ownership

5. TEEB D1, for Policy Makers • Urgent strategic priorities: • Halt deforestation and forest degradation (“green carbon”, REDD+) • Protect tropical coral reefs (incl livelihoods of half billion people) • Save and restore global fisheries • Recognize link between ecosystem degradation and persistent rural poverty… “GDP of the poor”

6. Global Loss of Fisheries… Human Welfare Impact • Open Access & Perverse Subsidies are key drivers of the loss of fisheries • Half of wild marine fisheries are fully exploited, with a further quarter already over-exploited • At risk : $ 80-100 billion income from the sector • At risk : est. 27 million jobs • Most important of all….. We are fishing down the food web to ever smaller species… at risk : Health … over a billion rely on fish as their main or sole source of animal protein, especially in developing countries. Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium. Original source: Pauly

7. 73% of the United States Haddock catch is now taken within 5km of the closed area boundaries Source: Fogarty et al. (2007)

8. TEEB D1, for Policy Makers • Available solutions, instruments: • Rewarding benefits through payments (PES) & markets (eg standards, labels, procurement) • Reform environmentally harmful subsidies • Address losses through regulation & pricing • Add value through protected areas • Invest in ecological infrastructure (eg increasing resilience to climate change impacts)

9. Amazonia: beyond Carbon Storage… Ecosystem Services Amazon Rainforest “Water Pump” Evapo-transpiration puts 20 billion tonnes of water into the atmosphere daily, some of which falls as rain in the Rio Plata Basin… (Global Canopy Programme & Canopy Capital Ltd, 2008)

10. Ecosystem losses and links to MDGs Example of Haiti: MDG # 1, 4, 5, 8… HAITI DOMINICAN REPUBLIC

11. TEEB “Interim Report” : ExamplesRewarding Unrecognized Benefits • Panama Canal : Insurance firms and shipping companies financing a 25-year project to reforest the water catchment of the canal to restore freshwater flow to its locks… the fear of loss due to closures of the Canal had been making shipping insurance premiums mount. • Costa Rican PES : Payments for Environmental Services are virtually a national strategy for forest and biodiversity conservation and sustainable development

12. Ecosystems valuation • Significant progress over last 20 years, but: • Values remain approximations; need to develop baselines & headline indicators, key attributes • Markets fail to capture most ecosystem service values; so does GDP / conventional macro-economic indicators • Potential for using valuation to inform policy-making still largely unrealized • Regulatory & cultural services harder to measure than provisioning services… in particular indirect use values • Ecosystem services values are context specific: consider local vs global context, up vs downstream

13. Ecosystems valuation Monetary values allow for comparisons on basis of single currency or like-for-like basis

14. Emerging tools for measurement • Macro level, national accounts: System of Economic Environmental Accounting • Micro level, eg company, product, project: Footprinting (carbon, water, etc), Reporting

15. Water stress index

16. Principles & Norms • Precaution (scientific uncertainty) • Prevention • Polluter Pays • Extended producer responsibility • Full cost recovery (downstream user / beneficiary)

17. TEEB D3 Report (forthcoming): Business impacts & dependencies • Biodiversity loss and decline in ecosystem services affect all businesses, directly or indirectly. • New and growing biodiversity risks to business… must be managed. • Just as climate change has stimulated new technologies, new business models and new markets, biodiversity also offers new opportunities for investors and entrepreneurs. • Integrating biodiversity and ecosystem services (BES) in business can help companies contribute to sustainable development.

18. Status of biodiversity & ecosystems -implications for business

19. BES at industry sector level - for example...

20. BES and Life Cycle Assessment (UNEP/SETAC Life Cycle Initiative) Impact categories in Life Cycle Analysis (IMPACT methodology, Jolliet et al, 2003)

21. Global supply & demand: Adding life cycle impacts up along a global value chain

22. Gaps in BES measurement and reporting Externality → improper market pricing → BES excluded from accounts Source: PwC input to TEEB Report for Business

23. Global Reporting Initiative (GRI) reporting indicators Eg on the “Aspect: Biodiversity”: EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. EN13 Habitats protected or restored. (ADD) EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. (ADD) EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk. (ADD)

24. Scaling down biodiversity risk in business: setting new goals, targets • BES impacts often manifest at a broad eco-regional level and thus demand shared responses supported by smart regulation Source: Rio Tinto

25. TEEB D1, D3 note… • Barriers to improved management of our natural capital: • Decision-making around narrow concept of GDP • Poor awareness of value of ecosystem services • Weak legal frameworks (incl regulatory baseline, liability rules) • Private benefits that don’t match public needs • Market shortemismvs longer term benefit , business financial valuation techniques (eg discount rates, return on investment) • Poor governance (redistributional consequences / social impacts, property / use / collective rights)

26. Cornis van der Lugt, Coordinator: Resource Efficiency , UNEP Paris, 29 March 2010 Thank you