Reflections on The Economics of Ecosystems and Biodiversity: (and the TEEB Report for Business)

Transcription

1 Reflections on The Economics of Ecosystems and Biodiversity: (and the TEEB Report for Business) 28 September 2010 Joshua Bishop, IUCN (Coordinator, TEEB for Business)

2 Outline 1. TEEB overview 2. Selected findings Interim report Climate change update D0, D1 (not D2, D4) TEEB for Business

3 Outline 1. TEEB overview 2. Selected findings Interim report Climate change update D0, D1 (not D2, D4) TEEB for Business

4 TEEB origins:

5 TEEB mandate: Potsdam Initiative Biological Diversity 2010 In a global study we will initiate the process of analysing the global economic benefit of biological diversity, the costs of the loss of biodiversity and the failure to take protective measures versus the costs of effective conservation. potsdam_initiative_en.pdf

6 TEEB structure: Multi-donor project, initiated by the EU and Germany on behalf of G8+5, hosted by UNEP Study includes data synthesis, new analysis, methodological and policy advice over the period contributors / reviewers from public agencies, businesses, NGOs and individuals

7 TEEB governance: Study Leader: Pavan Sukhdev, Managing Director, Deutsche Bank Advisory Board: Achim Steiner, Executive Director, UNEP Yolanda Kakabadse, President, WWF Herman Mulder, Director, Global Reporting Initiative Jacqueline McGlade, Executive Director, European Environment Agency Julia Marton-Lefevre, Director-General, IUCN Ladislav Miko, Minister of Environment, Czech Republic Jochen Flasbarth, Director-General, EPA, Germany Prof. Lord Nicholas Stern, London School of Economics, UK Prof. Karl-Goran Maler, Beijer Institute, Sweden Prof. Peter May, President, International Society for Ecological Economics Prof. Edward Barbier, University of Wyoming, USA Prof. Joan Martinez Alier, University of Barcelona, Spain Dr. Giles Atkinson, London School of Economics, UK Ahmed Djoglaf, Executive Secretary, CBD

8 TEEB timing & outputs: TEEB Phase I TEEB Phase II May 08 Interim report (CBD COP9, Bonn) Sep 09 TEEB Climate Issues Update (Strömstad) Nov 09 TEEB D1 for policy makers (Brussels) Summer / Autumn 2010 D2, D3, D4 Final TEEB synthesis & D0 launch CBD COP10 (Oct 2010, Nagoya)

9 TEEB final reports for different audiences TEEB Ecological and Economic Foundations (D0) TEEB for Policy-Makers (D1) TEEB for Local Policy (D2) September 2010 TEEB for Business (D3) July 2010 TEEB for Citizens (D4)

10 Policy-Makers.. Administrators.. D1 D2 D3 D4 Businesses.. Citizens.. D0 Ecological and Economic Foundations

11 Outline 1. TEEB overview 2. Selected findings Interim report Climate change update D0, D1 (not D2, D4) TEEB for Business

12 Biodiversity and ecosystem services Biodiversity Quality Quantity Services (examples) Ecosystems Variety Extent Recreation Water regulation Carbon storage Species Diversity Population Food, fibre, fuel Design inspiration Pollination Genes Variability Number Medicinal discovery Disease resistance Adaptive capacity

13 TEEB Interim Report (COP-9, Bonn, May 2008) Economic Size & Impact of Losses Links with Poverty Ethics of Discounting

14 TEEB Climate Issues Update (Sept 09) Coral reef emergency Forest carbon for climate mitigation National accounting for forest carbon Ecosystem investment for climate adaptation

15 TEEB Interim Report (COP-9, Bonn, May 2008) Economic Size & Impact of Losses Links with Poverty Ethics of Discounting

16 TEEB Foundations report (D0) Coordinator: Pushpam Kumar, U. Liverpool Ch1 Ch2 Ch3 Ch4 Ch5 Integrating ecological and economic dimensions Biodiversity, ecosystems and ecosystem services Measuring biophysical quantities and the use of indicators Socio-cultural context of ecosystem and biodiversity valuation The economics of valuing ecosystem services and biodiversity Annex A. Sources of support on biodiversity valuation Annex B. Database of valuation case studies (wetlands and forests) Annex C. Estimates of monetary values of ecosystem services Ch6 Ch7 Discounting, ethics and options for maintaining biodiversity and ecosystem integrity Lessons learned and linkages with national policies

17 TEEB Foundations report (D0) Coordinator: Pushpam Kumar, U. Liverpool Ch1 Ch2 Ch3 Ch4 Ch5 Integrating ecological and economic dimensions Biodiversity, ecosystems and ecosystem services Measuring biophysical quantities and the use of indicators Socio-cultural context of ecosystem and biodiversity valuation The economics of valuing ecosystem services and biodiversity Annex A. Sources of support on biodiversity valuation Annex B. Database of valuation case studies (wetlands and forests) Annex C. Estimates of monetary values of ecosystem services Ch6 Ch7 Discounting, ethics and options for maintaining biodiversity and ecosystem integrity Lessons learned and linkages with national policies

18 TEEB for Policy-Makers (D1) Coordinator: Patrick ten Brink, IEEP Ch1 Ch2 Ch3 Ch4 Ch5 Ch6 Ch7 Ch8 Ch9 Ch10 The global biodiversity crisis and related policy challenge Framework and guiding principles for the policy response Strengthening indicators and accounting systems for natural capital Integrating ecosystem and biodiversity values into policy assessment Rewarding benefits through payments and markets Reforming subsidies Addressing losses through regulation and pricing Recognising the value of protected areas Investing in ecological infrastructure Responding to the value of nature

19 A Green Development Mechanism (GDM) "A mechanism needs to be devised to compensate societies that preserve the global commons" (UNEP 2009) Key Principles (OECD 2009): 1. Support implementation of the CBD 2. Compatible with other policies (e.g. MDGs) 3. Address drivers of biodiversity loss 4. Payments conditional on performance 5. Provide on-going economic incentives 6. Mobilize private funding and voluntary action 7. Minimize leakage (avoid displacement of threats) 8. Cost-effective (low start-up & transaction costs) 9. Clear metrics and standards 10. Credible verification systems

20 TEEB for Policy-Makers (D1) Coordinator: Patrick ten Brink, IEEP Ch1 Ch2 Ch3 Ch4 Ch5 Ch6 Ch7 Ch8 Ch9 Ch10 The global biodiversity crisis and related policy challenge Framework and guiding principles for the policy response Strengthening indicators and accounting systems for natural capital Integrating ecosystem and biodiversity values into policy assessment Rewarding benefits through payments and markets Reforming subsidies Addressing losses through regulation and pricing Recognising the value of protected areas Investing in ecological infrastructure Responding to the value of nature

21 TEEB for Local Authorities (D2) Coordinators: Heidi Wittmer, UFZ; Haripriya Gundimeda, IITB Ch1 Ch2 Ch3 Ch4 Ch5 Ch6 Ch7 Ch8 Ch9 Introduction to the challenges at local level Approaches to consider the benefits of ecosystem services Methods to consider ecosystem services (cost-benefit analysis) Environmental Management in urban contexts Natural Resources Management (by sector) Spatial planning instruments and Impact Assessment Protected Area Management and local governments Marked-based instruments for conservation Competitions, certification and labeling

22 TEEB for Citizens (D4) Key issues and questions: Public knowledge about biodiversity Helping consumers make informed choices How to communicate biodiversity to citizens/consumers How consumers can influence the use of natural resources and biodiversity Equity and development impacts of biodiversity loss and conservation How to communicate the economics of biodiversity to the general public

23 TEEB for Business (Deliverable 3) 1. Business, biodiversity and ecosystem services 2. Business impacts & dependence on biodiversity and ecosystem services 3. Measuring & reporting biodiversity and ecosystem impacts & dependence 4. Scaling down biodiversity & ecosystem risks to business 5. Increasing biodiversity business opportunities 6. Business, biodiversity and sustainable development 7. A recipe for biodiversity and business growth

24 Chap 1: Business, biodiversity and ecosystem services (BES)

25 Source: McKinsey & Company (July 2010) Global Survey results: The next environmental issue for business Based on 1,576 responses from executives representing the full range of regions, industries, tenures, and functional specialties.

26 Growing consumer demand for ecocertified products and services Global sales of organic food and drink = US$ 46 billion in 2007 (threefold increase since 1999) Sales of certified sustainable forest products quadrupled between 2005 and 2007 From April 2008 to March 2009, the global market for eco-labeled fish products grew by over 50%, to a retail value of US$ 1.5 billion Major consumer brand owners and retailers added ecologicallyfriendly attributes to their products: Mars (Rainforest Alliance cocoa) Cadbury (Fairtrade cocoa) Kraft (Rainforest Alliance Kenco coffee) Unilever (Rainforest Alliance PG Tips).

27 Chap 2: Business impacts and dependence on BES

28 Mapping BES impacts and dependence: biodiversity relevance Source: JBIB for Ricoh Group Sustainability Report (Environment) 2009

29 Cost (US$/m ) The Economics of Ecosystems & Biodiversity Valuing business impacts on BES: Deforestation in China (Trucost plc) Ecosystem service losses ( ) US$12.2 Bn Property loss from flooding 5.5% Loss of river transport capacity 1.7% Sedimentation of water bodies 0.3% Desertification (crop yields) 7.7% Reduced lumber output 7.9% Loss of plant nutrients 16.7% Reduced water runoff 27.2% Reduced precipitation 33.0% Source: Hongchang, W. (1997) - Market Price of Timber External Cost

30 Valuing business dependence on BES: Blueberries in Michigan (Syngenta) Michigan blueberries: US$ 124 million/year, 90% reliant on pollination by bees at cost of US$ 1.5 million per year Domesticated bees threatened by colony collapse disorder (CCD) Operation Pollinator launched in 2009 in the USA and EU (13 countries) Restore native pollinators in agricultural landscapes by creating suitable habitat (field margins) Wild bees are natural back-stop for managed hives

31 Chap 3: Measuring & reporting BES impacts and dependence

32 Drivers of improved BES reporting Stakeholder expectations Global Reporting Initiative Carbon Disclosure Project Forest Footprint Disclosure Project Accountancy standards UK Environment Agency & ICAEW Environmental Issues and Annual Financial Reporting (2009) Regulatory requirements US Securities and Exchange Commission Guidance Regarding Disclosure Related to Climate Change (February 2010) Potential extension to BES?

33 Water reporting by SAB Miller Target: increase water productivity by 25% by 2015 Potential savings: 20 billion litres of water/year

34 More work needed on reporting Top 100 companies Annual reports 4% 2% Top 100 companies Sustainability reports 9% 11% 12% 15% 42% 23% 82% Source: PwC input to TEEB Report for Business Don't produce sustainability report No mention of biodiversity or ecosystems Passing mention of biodiversity or ecosystems Discuss approach to reduce impact on biodiversity Identify biodiversity as a key strategic issue

35 Work needed on indicators for business Climate change: CO 2 e Biodiversity and ecosystems: 1 Living Planet Index (LPI) Wild Bird / Waterbird indices IUCN Red List Index (RLI) Marine Trophic Index Forest / Mangrove / Seagrass extent Coral reef condition (cover) Water Quality Index Ecological Footprint Nitrogen deposition rate Number of Alien Species (in Europe) Exploitation of fish stocks Climatic Impact Indicator (on birds) Protected Area extent Coverage by PAs of important habitats Area of forest under sustainable mgmt. International IAS policy adoption National IAS policy adoption ODA in support of CBD LPI for utilized vertebrates RLI for food & medicinal species RLI for traded bird species Business needs indicators for: site, product, group level processes & performance internal & external reporting 1/ Adapted from: Butchart et al. (2010 ) Global Biodiversity: Indicators of Recent Declines Science Express (29 April)

36 Chap 4: Scaling down biodiversity & ecosystem risks to business

37 New tools for BES risk assessment and mitigation in business Integrated Biodiversity Assessment Tool GIS database for site-level risk assessment Based on World Database of Protected Areas, World Biodiversity Database, IUCN Red List of Threatened Species Business and Biodiversity Offsets Program Guidance on designing and implementing biodiversity offsets to ensure no net loss Led by Forest Trends, Wildlife Conservation Society and Conservation International Certification and labelling Global hub for social and environmental standards Members represent fair trade, forest stewardship, organic agriculture, fisheries, etc.

38 The concept of Net Positive Impact Source: Rio Tinto

39 From carbon neutral to biodiversity positive Danone Group: Attain carbon neutrality for the major Danone brands, including Evian, by the end of Marks & Spencer: Our goal is to become carbon neutral by 2012 in our UK and Republic of Ireland operations. Coca Cola: Our goal is to safely return to communities and nature an amount of water equivalent to what we use in all of our beverages and their production. BC Hydro: long-term goal of no net incremental environmental impact. Walmart: Committed to permanently conserve at least one acre of priority wildlife habitat for every developed acre. Rio Tinto: Our goal is to have a net positive impact on biodiversity.

40 The economics of restoration (Aggregate Industries UK) Proposed extension of existing quarry in North Yorkshire Farming > sand and gravel extraction > wetland & lake Source: Olsen & Shannon 2010

41 Chap 5: Increasing biodiversity business opportunities

42 Building biodiversity business Adding BES to existing business Agriculture Biodiversity mgmt services Cosmetics Extractive industries Finance Fisheries Forestry Garments Handicrafts Pharmaceuticals Retail Tourism New markets for BES Bio-carbon & REDD Biodiversity banking Enabling policy & tools

43 Adding BES to existing business Source: UNECE/FAO Forest Products Annual Market Review,

44 New markets for BES: Wetland mitigation banks in the USA Authorized under federal Clean Water Act Developers must compensate for loss of wetlands Most compensation is in-kind and within the same watershed as the damage Developers can do it themselves or purchase wetland credits from approved banks 450+ approved wetland banks, most privately financed on commercial basis US market currently worth >$2 billion/year Source: Ecosystem Marketplace 2009

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46 Growing investor interest in BES Sumitomo Trust & Banking Co., Ltd. (STB) launched a new Biodiversity Fund in July The fund will invest in listed companies that engage in biodiversity and sustainable development, focusing on: 1. Companies with technologies that reduce negative impacts on biodiversity 2. Companies with technologies that can secure biodiversity 3. Companies with medium or longer term plans to secure biodiversity Source: The Sumitomo Trust & Banking Co., Ltd. (2010).

47 Enabling policy for markets for BES Subsidy reform (agriculture, fisheries, water, transport, etc) Tax credits and other incentives for conservation Certification and eco-labelling (voluntary / mandatory) Payment for Ecosystem Services (national, international) Environmental responsibility (EU Environmental Liability Directive, damage assessment and compensation) Environmental trading schemes (REDD+, USA wetland and species mitigation, Australia biodiversity banking) Public access to information (Global Reporting Initiative, Carbon / Forest / Water footprint disclosure projects)

48 Chap 6: Business, biodiversity and sustainable development

49 Aligning BES and development (Rio Tinto in Madagascar) Net Positive Impact (NPI) policy: avoid, mitigate, restore & offset Support for conservation project (60,000 ha lowland forest) Potential benefits: Potential costs: Benefit-sharing with local communities (PES using REDD revenues) Source: Olsen & Anstee (2010)

50 Chap 7: A recipe for biodiversity and business growth

51 Guidance on integrating BES in business (selected examples) Millennium Ecosystem Assessment: Synthesis for Business IUCN & WBCSD Handbook for Corporate Action International Council on Mining and Metals International Petroleum Industry Environmental Conservation Assoc. Global Reporting Initiative World Economic Forum / Global Agenda Council on Valuing Nature In Good Company: German Business & Biodiversity Initiative Canadian Business and Biodiversity Initiative FRB/Orée Biodiversity Accountability Framework Declaration of Biodiversity (Japan, Nippon Keidanren) Guidelines for Private Sector Engagement in Biodiversity (Japan gov t)

52 What can business do TODAY? 1. Identify impacts and dependence on biodiversity and ecosystem services (BES) 2. Assess the business risks and opportunities associated with these impacts and dependencies 3. Develop BES information systems, set targets, measure and value performance, report results 4. Avoid, minimize and mitigate BES risks, using compensation ( offsets ) where appropriate, based on concept of Net Positive Impact 5. Grasp emerging BES business opportunities, e.g. cost-efficiencies, new products and new markets 6. Integrate BES actions with wider Corporate Social Responsibility 7. Engage with business peers and other stakeholders to improve BES guidance and policy

53 The Economics of Ecosystems & Biodiversity Main TEEB funders: Main D3 writers: All TEEB reports are available at: (

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55 Thank you