Call for evidence TEEB D0: The scientific and economic foundations for valuing biodiversity and ecosystem services

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1 The Economics of Ecosystems and Biodiversity TEEB Call for evidence TEEB D0: The scientific and economic foundations for valuing biodiversity and ecosystem services We are looking for studies, papers and data on the relation between biodiversity, ecosystems and the services they provide, how to measure these services, state-of-the-art theory and practice on their economic valuation, as well as the costs of conservation and sustainable use. The TEEB D0 report aims to present a comprehensive assessment of the economic value of biodiversity and ecosystem services. It will review the state of relevant knowledge in natural science and economics, and develop a framework and methodological recommendations. It will build a matrix of values and examine how the costs of the loss of biodiversity and ecosystem services compare with the costs of protective action. D0 will provide theoretical foundations for the other deliverables (D1-D4) of TEEB. THE TEEB STUDY: The TEEB initiative was launched as a consequence of the G8+5 Environmental Ministers meeting in Potsdam, Germany, in March The study is carried out under the supervision of Mr Pavan Sukhdev, who has been appointed as independent study leader. TEEB is hosted and organised by UNEP and is currently funded by the German Federal Ministry for the Environment, the European Commission s Directorate General for the Environment, and the UK Department for Environment, Food and Rural Affairs, with additional contributions from other partners. TEEB will seek to make more visible the many ways in which we depend on biodiversity and the costs and problems we will encounter if biodiversity is not fully considered in decisions at various policy levels and in economic decisions. The TEEB D0 report is coordinated by a team led by Dr Pushpam Kumar with contributions from a range of experts. Process This call for evidence is a key mechanism to solicit input from scientists, stakeholders, interested individuals and organizations worldwide. Responses to this call are welcome at any stage but are especially encouraged before 31 August They can reach the TEEB D0 team at: env-teeb-calld0@ec.europa.eu. A first version of the D0 report will be presented in September CALL FOR EVIDENCE: All contributions used will be referenced and duly acknowledged, if contributors permit. Please use this call for evidence to share your experience with a larger audience. For responding to this CfE please send your contribution: env-teeb-call-d0@ec.europa.eu

2 We are interested in theoretical and applied studies, material and internet links addressing the general description of D0 in the box above or specific parts of the report as presented in the following draft outline. STRUCTURE OF THE D0 REPORT: The D0 report will evolve in response to inputs and feedbacks on the way. So far, it follows this structure: Section Sub-Section Summary Executive summary INTRODUCTION 1. Framework for ecological and economic integration Objectives of the report 1.1 Review of existing frameworks linking the functioning of ecosystems with human welfare 1.2 TEEB conceptual framework - Rationale and proposed framework - Typology of ecosystems, typology of ecosystem services, typology or benefits and values - How the framework relates to TEEB "building blocks". 1.3 How the framework can be applied - Case studies at different scales 2. Relation between biodiversity, ecosystems and their services 2.1 Conceptual issues in biodiversity, ecosystems functions, and services - The challenges of linking economics to robust evidence base from natural science - Biodiversity: definition and interpretation - Ecosystem model - Ecosystem services 2.2 The evidence base - Linkage between various characterisations of ecosystems and prediction of the provision of ESS - Ecosystem properties, functions, services, measures/indicators, functional approach - Meta-analysis of state of knowledge, identification of gaps - Uncertainties and surprises: what is crucial knowledge that we don t have? And what is not easily predictable? 2.3 Ecosystem resilience and integrity - Ecosystem health - Stability and instability - Restorability - Thresholds and non-linearity - Role of biodiversity For responding to this CfE please send your contribution: env-teeb-call-d0@ec.europa.eu 2/1

3 - Functional groups - Disturbances and impacts 2.4 Conclusions - response measures 3. Measuring biophysical quantities, and the use of Indicators 3.1. Introduction - Why do we need indicators? For whom? - What do we need to measure for TEEB? (relevance to economic valuation) 3.2. Existing indicators and indices - Main characteristics - Strong and weak points 3.3. In search of relevant indicators for ecosystem services - Criteria for selecting indicators - Challenges - Examples - Lessons 3.4 Links to economic valuation 4. Methodology of valuation for biodiversity and ecosystem services 4.1 Introduction and objectives 4.2 Valuating ecosystem services derived from biodiversity Classification of evaluation and accounting approaches a) Approaches based on human preferences - Monetary valuation: direct market valuation, indirect market valuation, simulated valuation - Non-monetary valuation: choice modeling, multi-criteria analysis b) Approaches based on physical costs - Energy-based - Materials-based - Time use-based Economic values, and valuation methods within the neoclassical stream a) A typology of the economic values derived from ecosystem services - Use value, non-use value, intrinsic value - The challenge of non-use values Which methods are the most appropriate to estimate the different services derived from ecosystems? Pros and cons of valuation methods For responding to this CfE please send your contribution: env-teeb-call-d0@ec.europa.eu 3/1

4 4.2.5 Value transfer How to integrate the spatial component into valuation? 4.3 Valuation challenges: how to deal with uncertainty and non-linearity of ecosystem services? - Definition of risk, uncertainty and error - Decision making under uncertainty and partial irreversibility - Sources of error 5. Socio-cultural dimensions of ecosystem and biodiversity valuation 3.1 Introduction and objectives - ethical concerns (limitations of valuation) - important socio-cultural dimensions for making decisions on appropriate methodologies - value perceptions in different cultural contexts - value exclusion 5.2 Implications for policy and decision-making - alternative routes, institutions 5.3 Conclusions - contextualisation - link with equity 6. Discount rates, ethics, and options for preserving biodiversity 6.1 Introduction 6.2 The discounting equation 6.3 Recent literature on discounting, risk and uncertainty 6.4 Biodiversity in the very long run 6.5 Biodiversity loss, ecosystem services, and discounting in the short run Income levels, biomes, and discount rate ranges 6.6 Summary of critical issues 7. Evidence on estimates of economic values 7.1 Introduction - proposed matrix of values, intentions and limitations, assumptions 7.2 Sources and criteria for selection of source studies 7.3 Matrix of values - per ecosystem type, ecosystem service, socioeconomic parameters 7.4 Discussion of values per ecosystem service - availability, ranges, putting values into perspective For responding to this CfE please send your contribution: env-teeb-call-d0@ec.europa.eu 4/1

5 7.5 Key messages 8.Quantitative assessment of the costs of the loss of biodiversity and ecosystem services and the costs of action 8.1 Introduction 8.2 Scenarios for assessing changes in biodiversity and ecosystem services - Overview of global assessment scenarios - Business as usual / policy inaction scenarios - Policy action scenarios - Selection for analysis 8.3 An assessment framework - Extension of COPI - Results - Discussion 8.4 The costs and benefits of action 8.5 Conclusions 9. Macroeconomic dimension of ecosystem and biodiversity management 9.1 Current issues in ESSP and macroeconomics Linking national and green accounts with multi-sector growth models Link with ecosystem dynamics Deforestation - Foregone GDP from slowing rate of deforestation - Policy instruments - Economic trade-offs Coastal ecosystems and economic trade-offs - Mangrove forests, the carrying capacity of fish stocks, and fish harvests - Shrimp or rice cultivation, and deforestation of mangrove forests - Value added by local coastal processes - Impact of policy on linked production systems 9.2 Overview of relevant work - Green accounting - Coastal systems - Terrestrial systems - Growth research - Empirical research 9.3 Conceptual issues CONCLUSION For responding to this CfE please send your contribution: env-teeb-call-d0@ec.europa.eu 5/1