AN ECOSYSTEM APPROACH TO SEEA LONDON GROUP MEETING ROME, 17-19 DECEMBER 2007 Session 9 on ecosystem accounts

1. AN ECOSYSTEM APPROACH TO SEEALONDON GROUP MEETINGROME, 17-19 DECEMBER 2007Session 9 on ecosystem accounts Jean-Louis WeberEuropean Environment Agencyjean-louis.weber@eea.europa.eu

2. Outline • Developing the ecosystem approach into the SEEA • Framework of ecosystem natural capital accounts • Classification of stocks and flows of land cover • Classification of ecosystem services • Measurement and valuation of ecosystem services • Measurement and valuation of maintenance and restoration costs • Integration into SEEA: MFA, PIOT, NAMEA, Expenditure, Assets (Forest, Fisheries, Water and forthcoming soil), valuation, application of E-EA. • Articulation to SNA (adjustment of net savings, inclusive gross domestic product, full cost of goods and services) • Implementation strategy

3. Developing the ecosystem approach into the SEEACurrent situation • SEEA2003 fully integrated with SNA but • relations to nature are scattered between chapters and unevenly developed. • Ecosystems assets are indeed part of SEEA 2003 structure: forest, water, land and ecosystem accounts, soil (p.m.), fisheries but • few links exist between these assets, considered more as inventories than systems. • “ecosystem service” is not a well identified concept • Flows between the economic system and the ecosystems are asymmetric, balancing the economic system (backed up by SNA) with a mere interface ( “environment” column, “ecosystem inputs”) • No place for feedbacks • Unclear measurement of the value of nature

4. Developing the ecosystem approach into the SEEAImprove integration • Recognize first the interaction of 2 co-evolving systems • Clarify the concept of natural capital by separating non-renewable resources (where the rent and its reinvestment is the interest) from renewable resource (for which the conservation of critical level of stocks in good functioning state is main issue). • Full integration vs. dual integration • Renew approach of valuation with clear distinction of values, costs and their role in decision processes

5. Developing the ecosystem approach into the SEEAFlows from ecosystem to economic system Is this harvesting/extraction sustainable ? Harvesting/extraction Economy Sources: Kling/U Michigan_2005 & Friend/ISEE_2004

6. Non-basic eco-product Surplus available for harvesting/extraction Basic eco-product Necessary for ecosystem reproduction (conservation of ecosystem health, integrity, functions & services) Sustainable flows from ecosystem to economic system 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 Sources: Kling/U Michigan_2005 & Friend/ISEE_2004

7. Non-basic eco-product Surplus available for harvesting/extraction Basic eco-product Non-sustainable harvesting/extraction Developing the ecosystem approach into the SEEA Interaction of 2 co-evolving systems Trade-off = increased yields against losses of natural functions and biodiversity Possible compensation = artificial input (irrigation, energy, fertilizers, infrastructures…) Economy Necessary for ecosystem reproduction (conservation of ecosystem health, integrity, functions & services) Sources: Kling/U Michigan_2005 & Friend/ISEE_2004

8. Developing the ecosystem approach into the SEEAFull integration vs. partial or dual integration • Full integrationof socio-economic and ecological systems as socio-ecosystems, respecting the properties of both (such as the general equilibrium of prices and quantities for the economic system, the resilience for the ecosystem or the metabolism of the two): Inclusive Wealth, Enlarged Material Energy Flow (metabolism) Accounts • Partial or dual integration doesn’t contradict the concepts of inclusive wealth or metabolism; it refers to them as a theoretical background guidance instead; short term step forward

9. Developing the ecosystem approach into the SEEADual integration: 4 main questions • is the renewable natural capital maintained over time at the amount and quality expected by the society?  physical measurement of “quantityquality” in reference to stated social norms • is the full cost of maintaining the natural capital covered by the price of goods and services?  measurement of costs not currently covered for maintaining and restoring domestic ecosystems (provision for depreciation) and addition to value of goods and services • is the full cost of ecosystems services covered by import prices?  calculation andaddition to value of goods and services • is the total of goods and services supplied to final uses by the market (and government institutions) and for free by ecosystems, developing over time?  measure and value free end use services and add these benefits to GDP

10. IDP Ecosystem Services Stocks & flows (quantities) Resilience/Health (qualities) FCGS Costs € Accounting for environmental benefits and costs Benefits: the Demand side € GDP + Final Use of Ecosystem Services = IDP € Final Services Inclusive Domestic Product + (Intermediate consumption) + Additional maintenance cost of the resource + Costs of restoration from ecosystem degradation + Full ecosystem cost of imports Costs: the Supply side Ecosystem Assets Full Cost of Goods & Services

11. Framework of Ecosystem Accounts Spatial integration Economic sectors Accounts of flows of ecosystem goods and services Core accounts of assets & flows (by ecosystem types, raw quantities) Material/energy flows (biomass, water, nutrients, residuals) • Ecosystem Services • Marketed Ecosystem Services (€) • Non-market end use ES (physical units, €) Supply & use of ecosystem goods and services (Use of resource by sectors, supply to consumption & residuals, accumulation, I-O analysis, NAMEA) Counts of stocks diversity / integrity (by ecosystem types, focus on state, health, resilience, stress) Ecosystem types • Natural capital • Natural capital stocks, resilience & wealth, distance to objective (physical units, by sectors) • Natural capital consumption/maintenance costs (€) • Ecosystem assets inclusive wealth (€) Ecosystem Stocks & State Accounts Natural Capital Accounts/ living & cycling natural capital Economic integration

12. € € Framework of Ecosystem Accounts Spatial integration Economic sectors Accounts of flows of ecosystem goods and services Core accounts of assets & flows (by ecosystem types, raw quantities) Material/energy flows (biomass, water, nutrients, residuals) • Ecosystem Services • Marketed Ecosystem Services (€) • Non-market end use ES (physical units, €) Supply & use of ecosystem goods and services (Use of resource by sectors, supply to consumption & residuals, accumulation, I-O analysis, NAMEA) Counts of stocks diversity / integrity (by ecosystem types, focus on state, health, resilience, stress) Ecosystem types • Natural capital • Natural capital stocks, resilience & wealth, distance to objective (physical units, by sectors) • Natural capital consumption/maintenance costs (€) • Ecosystem assets inclusive wealth (€) € Ecosystem Stocks & State Accounts € Natural Capital Accounts/ living & cycling natural capital Economic integration

13.  Basic ecosystem stock flows accounts Stocks & flows • Spatial systems: • Land cover (units, zones, landscape types) • Rivers, river reaches, catchments • Coastal systems • Soil • Biomass (NPP/NEP), Carbon • Nutrients (N,P…) • Water • Species • Other…

14. LEAC/Land cover accounts’ basic framing

15. Change Matrix (44x43=1932 possible changes) summarized into flows LCF8 LCF5 LCF1 LCF6 LCF4 LCF2 LCF3 LCF7 LCF9 LEAC: from changes to flows of land cover 2000 1990

16. From Land cover to ecosystem at macro scale:Net Landscape Ecological Potential 2000, 1 km² grid NLEP = (Vegetation+Nature Value) ---------------------------------- Fragmentation Source: EEA/ETCLUSI from GBLI, NATURILIS and MEFF Methodology: EEA/ETCLUSI

17. Net Landscape Ecological Potential 2000, aggregated by regions Source: EEA/ETCLUSI from GBLI/CLC, NATURILIS and MEFF Methodology: EEA/ETCLUSI

18. Change 1990-2000 in Net Landscape Ecological Potential (NLEP), 1 km² grid Source: EEA/ETCLUSI from GBLI, NATURILIS and MEFF Methodology: EEA/ETCLUSI

19. Ecosystem health: counts of health/resilience Ecosystem Distress Syndrome model: 5 types of symptoms • Vigor: e.g. disruptions of nutrients cycling, population dynamics (loss or excess) • Organisation, degradation of substrates: e.g. fragmentation, water stress, change in food chain • Resilience: e.g. change in species composition (invasive…), intoxication • Dependence of systems from artificial input: e.g energy, water, subsidies • Capacity of supporting healthy communities: wildlife, human Source: David J. Rapport

20. Services Capital stocks and functions Nomenclature of ES Ecosystems services Market values Physical measurement and shadow prices

21. Land Use Functions& Ecosystem Services • LUF analysis and mapping • address cross-cutting issues e.g.:Urban/Rural, Agro/Environment • detect & measure ES services = ecosystem functions which benefit to people, somewhere

22. Challenges for implementation • Classification and measurement • Geographical scales The issue is to play with heterogeneous datasets: • Exhaustive but rather contents-poor geographic datasets, frequently updated by satellite images • Exhaustive, contents-rich but rather poorly geographically detailed socio-economic statistics • Scattered in situ monitoring of the physical world • Detailed analysis and modelling of the socio-ecosystems and valuation of ecosystem services available as case studies • Time scales • Time series • Nowcasting • Infra-annual accounts when relevant • Ecological “surprises”

23. Work sharing for a fast track implementation/ National level • Process management: not simply compilation but learning by doing as well • Ongoing processes: • “beyond GDP” type demands • Evaluation of policies, compensatory measures, taxes • Ecosystem assessments in preparation • Statistical coordination: • Statistical offices & science • Statistical offices & mapping agencies • Statistical offices & environment agencies

24. Work sharing for a fast track implementation/ International level • UN agencies, WB, IMF, OECD (…?) • MA2 context (e.g. WCMC/UNEP: manual on ES currently drafted) • GEO/GEOSS (GMES…) (support regional global monitoring) • International conventions (CBD, IPCC, IGBP, HDP, Ramsar, Desertification… ) • Regional regulations, agreements, conventions • Key NGOs in the domain (IUCN, WWF, ISEE) • UNEP-IPES, UNEP-FI • London group/subgroup + Eurostat + EEA & scientific expert panel: issue paper, outline by end 2008

25. Addressing ecosystem issues & SEEA recognition • Forthcoming MA2 (2015) launched by UNEP will include ecosystem services accounts: will it be SEEA? • Correlated regional projects like Eureca!2012 for Europe, and national assessments: ecosystem accounting part of the assessment • “Beyond GDP” developments • Assessment of benefits provided by biodiversity demanded by the G8+5 in Potsdam, March 2007 as an input to the Convention on Biological Diversity (CBD) • Ecosystem and carbon accounting, continuation of the “Stern report” • As well demands by business (e.g. UNEP Financial Initiative) – can we help?

26. Thanks!

28. Ecosystems and services

29. Production & Consumption Atmosphere/ Climate Economic Assets Water system Infrastructures & Technologies Population CORE LAND COVER ACCOUNT Flora & Fauna Soil Spatial integration of ecosystem accounts Inclusive use of market & non market ecosystem services Ecosystem services Ecosystem assets Land use economic & social functions Stocks Material & energy flows Resilience Intensity of use & full maintenance costs ECOSYSTEM ACCOUNTS

30. Full ecosystem costs of domestic products Full ecosystem cost of imports Integrated National Accounts: GDP, Ecosystem Services & Assets, Monetary & Physical Indicators Final Use of Non-Market Ecosystem Services LEP (Landscape net Ecological Potential) HANPP (Human appropriation of the net primary productivity) Ecosystem services (provisioning, regulating and socio-cultural services – supply & use) Ecosystem Assets/ Natural Capital (stocks, material & energy flows, health/resilience – land, water, biomass, biodiversity…) Ecosystem Accounts MFA/ (Material / energy flow accounts) GDP EF (Ecological Footprint)