Presentation on TEEB by Patrick ten Brink of IEEP at the PES Workshop on the 5 May 2009 in Oslo

1. The Economics of Ecosystems and
Biodiversity (TEEB)
The Economics of Ecosystems and Biodiversity (TEEB)
Ambitions, Content, Process and Working insights
Workshop on Payment for
Ecosystem Services
Fridtjof Nansen Institute, Polhøgda, Lysaker (Oslo)
Friday 5 June2009, 09:00-13:00
An initiative of the
G8+5, BMU (D) & the
Patrick ten Brink
European Commission TEEB D1 Co-ordinator
Supported by
Defra (UK), UNEP, OECD, CBD Secretariat,
VROM, EEA, UFZ, IUCN, Univ. Liverpool,
IEEP
& experts from across the world
Building on and borrowing from the work & insights of the wider TEEB team
and contributors of supporting studies, call for evidence and other contributions
9/4/2009 1

2. TEEB overview
1. TEEB Background
2. The links: Biodiversity, Ecosystems,
Functions, Benefits and Value
3. TEEB Phase 1: Results and impacts
4. TEEB Phase 2: Ambitions and
working results (from TEEB for Policy Makers)

3. TEEB overview
1. TEEB Background
2. The links: Biodiversity, Ecosystems,
Functions, Benefits and Value
3. TEEB Phase 1: Results and impacts
4. TEEB Phase 2: Ambitions and
working results (from TEEB for Policy
Makers)

4. Background: TEEB’s Genesis
Potsdam 2007: meeting of the environment
ministers of the G8 countries and the five
major newly industrialising countries
“Potsdam Initiative – Biological Diversity 2010”
1) The economic significance of the global loss of biological diversity
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.

5. TEEB’s Goals
• Assess and communicate the urgency of action to address ecosystems
and biodiversity loss – by presenting the economic, societal and human value
of the benefits of ecosystems and biodiversity, and the scale of the benefits lost,
• Show how we (can) take into account the value of ecosystems and
biodiversity in our decisions and choices,
• Address the needs of policy-makers, local administrators, business and
citizens (the “end-users”) – interests, opportunities, & responsibilities.
Phase 2 (2008-2010):
Phase 1 (2007-2008): • Additional analysis within wider
• Preliminary scoping work, Valuation framework
• Some first analysis, • Broaden the scope of studies (methods;
• Clarification as to how to address the ecosystem services (ESS) and biomes)
wider goals, • Focus on End-user products
• Preliminary identification of experts and • Stronger Involvement from different
organisations to contribute experts & organisations
Source: adapted from Pavan Sukhdev

6. TEEB Ambitions
1. Assess and communicate the value of ecosystems and biodiversity –
in qualitative, quantitative and monetary forms.
2. Demonstrate the value to the economy, to society/individuals and
wider environment – what we have and what we risk losing.
3. Underline the urgency of action and benefits of action
4. Identify / support solutions – new ones (eg REDD), support wider
use of good existing tools (eg PES), help make existing tools realise
their potential better (eg EIA, Pas); help provide information to
reform “bad ones” (eg harmful subsidy reform)
5. Communicate the value to policy makers & implementers, business
and citizens & wider policy community - Help ensure that nature /
natural capital is taken into account in measurement, analysis,
decision making and decisions/choices.

7. History Lesson: What were the
past Losses?
Global Forest Area has shrunk by approximately 40% since 1700. [1].
Since 1900, the world has lost about 50%of its wetlands. [2].
Some 20% of the world’s coral reefs have gone [3]
In the past two decades, 35% of mangroves have disappeared. [4]
Rate of species extinction ~ 100 to 1,000 times > “natural” extinction rate (MA 2005).
[1] United Nations Forest and Agriculture Organisation, 2001.Global Forest Resources Assessment 2000; United Nations Forest and Agriculture Organisation, 2006 Global Forest
Resources Assessment 2005.
[2] http://www.ramsar.org/about/about_wetland_loss.htm
[3]
Wilkinson C., 2004: Status of Coral Reefs of the World: 2004 report
[4]
Millennium Ecosystem Assessment, 2005: Global Assessment Report 1: Current State & Trends Assessment. Island Press, Washington DC. Detail: Chapter 19 Coastal
Systems. Coordinating lead authors: Tundi Agardy and Jacqueline Alder. Original reference: 35%: Valiela et al. 2001; 80% reference: Spalding et al. 1997

8. Running down our natural capital
The Demise of Global Fisheries
40 %
40 %
20 %
2010
Source: Sea Around Us project

9. Substitution?
We are fishing down the foodweb – D. Pauly (UBC, Canada)
Source: L Braat presentation COP9 Bonn May 2008; based on slide by D. Pauly

10. TEEB overview
1. TEEB Background
2. The links: Biodiversity, Ecosystems,
Functions, Benefits and Value
3. TEEB Phase 1: Results and impacts
4. TEEB Phase 2: Ambitions and
working results (from TEEB for Policy Makers)

11. Mapping changes : from Biodiversity
& Ecosystems to Economic Values
(Human)
Drivers
Change
Change in
in Change
Economic
Natural Land use, in
Change Value
Drivers Climate, Biodiversity
Pollution, In
Water use Ecosystem
Services
Policies Change
Nat. Reg. in
Loc. Int. Ecosystem
functions
Source: L. Braat & P. ten Brink (eds.)

12. Ecosystem Services - The Millennium Ecosystem
framework
Source: MEA

13. The link between biodiversity,
ecosystems, their services, and benefits
to mankind…
Maintenance and
restoration costs
Biophysical
Structure of Economic and
process social values (&
market values)
eg 1: woodland Function
habitat
eg 1: slow
eg 2: net primary passage of water
productivity) Service
eg 2: biomass eg 1: flood
prevention
eg 2: harvestable Benefit (value)
products eg 1: willingness to pay
for woodland protection /
avoided costs of impacts
eg 2: for more woodland
harvestable products
Source: Building on presentation by Jean-Louis Weber (EEA) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6
March 2008, Brussels, Belgium

14. Ecosystem Services across land-uses:
Trade-offs of conversion
1natural Climate
regulation 2 extensive Climate
regulation
Food Energy Food
Energy
Soil
Soil protection
protection Freshwater Freshwater
Climate
regulation
Landuses within Biome
Natural areas
Food
Bare natural
Forest managed Energy
Extensive
-
Intensive
Cultivated and managed areas,
woody biofuels
Cultivated land, grazing area
Artificial surfaces and associated Soil
protection
Freshwater
3 intensive
areas
Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.

15. Ecosystem services
public goods & difficulty of valuation
Spiritual & religious ?
Economic
Aesthetic ?
Valuation
Flood/Fire ?
Difficult or
regulation impossible
Disease regulation ?
Water purification ?
Climate regulation ?
Freshwater ?
Genetic resources ?
Recreation & ?
tourism
Fiber ? Easy
Food ?
Economic Value ($)
Source: Jeffrey A. McNeely, Chief Scientist, IUCN-The World Conservation Union from presentaion: FUNDING MECHANISMS FOR BIODIVERSITY. 27
July 2006 Inter-American Development Bank Workshop on Biodiversity Loss

16. TEEB overview
1. TEEB Background
2. The links: Biodiversity, Ecosystems,
Functions, Benefits and Value
3. TEEB Phase 1: Results and impacts
4. TEEB Phase 2: Ambitions and
working results (from TEEB for Policy Makers)

17. TEEB – Interim Report
COP-9, Bonn, May 2008
Economic Size &
Welfare Impact of
Losses
Deep Links with
Poverty
Discount rates are
ethical choices

18. Biodiversity loss - 1700 to 2050
73%
62%
MSA statistics indicate that in the “Policy Inaction” scenario :
Global objective (significant reduction in rate of loss) unlikely by 2050
Stricter European goal (halting further loss ) unlikely by 2050
CBD goals (for 2010) unlikely over short term
Source: building on Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.

19. The Global Loss of
Biodiversity
2000
Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data

20. The Global Loss of
Biodiversity
2050
Europe – at Risk
India - at Risk
Africa – at Risk.
The World – at Risk.
Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data

21. Global COPI
Loss of Ecosystem services
from land based ecosystems
Relative to 2000 Relative to 2000
Equivalent to %
Area Billion EUR of GDP in 2050
Natural areas -15678 -7.97%
Forest managed 1852 0.95%
Extensive Agriculture -1109 -0.57%
Intensive Agriculture 1303 0.67%
Woody biofuels 381 0.19%
Cultivated grazing -786 -0.40%
World Total -13938 -7.1%
Land based ecosystems only
The loss grows with each year of biodiversity and ecosystem loss.
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study for DGENV

22. (1) Economic size of losses
(COPI 1 study)
A : 50-year impact of inaction or B : Natural Capital Loss every year
‘business as usual’
Source: Braat & ten Brink (Eds., 2008): Cost of Policy Inaction
Welfare losses equivalent Natural Capital Lost : Annually
to 7 % of GDP, horizon 2050 EUR 1.35 x 1012 to 3.10 x 1012
(@ 4% (@ 1%
Discount Rate) Discount Rate)
3. TEEB Phase 1 results

23. COPI - Some key results
• The welfare loss grows with each year of biodiversity and ecosystem loss.
• Over the period 2000 to 2010 this amounts to around 50 billion Euros extra loss
per year, every year.
• By 2010 the welfare losses from the loss of ecosystem services amount to 545
billion EUR in 2010 or just under 1% of world GDP.
• The value of the amount lost every year rises, until it is around 275bn
EUR/yr in 2050.
• The loss of welfare in 2050 from the cumulative loss of ecosystem services
between now and then amounts to 14 trillion (10^12) Euros under the fuller
estimation scenario
• This is equivalent in scale to 7% of projected global GDP for 2050 – across
land-based biomes
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study

24. TEEB overview
1. TEEB Background
2. The links: Biodiversity, Ecosystems,
Functions, Benefits and Value
3. TEEB Phase 1: Results and impacts
4. TEEB Phase 2: Ambitions and
working results (from TEEB for Policy Makers)

25. TEEB – Final Reports
Sep 2009 - June 2010
Science & Economics
Foundations, Policy D0
Costs & Costs of Inaction
Policy opportunities for
D1
National & International
Policy-Makers
Decision Support D2
for Local Administrators
Business Risks D3
& Opportunities
Citizen / Consumer D4
Ownership
9/4/2009 25

26. The Process for TEEB Phase 2
2008 2009 2010
Nagoya, Japan
Inputs from Science and Economics
experts through the Call for Evidence,
participation in Working Groups, etc
CBD COP9 - Bonn, Germany
Val‘n Framework, Methodologies, Cost Analyses D0
D0
End-User Outreach
TEEB for Policy-Makers D1 D1
D2
TEEB for Administrators D2 D3
D4
TEEB for Business D3
CBD COP10
TEEB for Citizens/Consumers D4
Continuous involvement of End-User Groups
9/4/2009 26

27. The D1 (Policy Level) TEEB Report:
D1 Structuring the issues
The “wireframe”
Ch Title
1 The Biodiversity Policy Challenge
2 Policy Responses: Actors and instruments
3 Measuring to Manage our Natural Capital
4 Evaluation Tools that (can) Integrate the Value of Biodiversity
5 Policies to Reward (unrecognised) Benefits of Ecosystems and Biodiversity
6 Aligning Today’s Subsidies to Tomorrow’s Priorities
7 Policies to Address the Losses of Biodiversity
8 Protecting areas, ecosystems, habitats and species
9 Using the whole Policy Toolkit to address the challenge
Structure and content being developed continuously taking into account insights & suggestions –
detailed wireframe on http://ec.europa.eu/environment/nature/biodiversity/economics/pdf/d1.pdf
9/4/2009 27

28. The D1 (Policy Level) TEEB Report:
D1 (The “wireframe”)
turned into questions
Ch Questions being addressed
1 Why is there Urgency for Action to address biodiversity loss?
2 Who can take up the biodiversity challenge; what tools can help ?
3 What should we measure to ensure a proper stewardship of our natural capital?
4 What tools work, what needs and opportunities are there for their use?
5 What policy instruments can help & how to make markets give the right signals?
6 Can we save money and avoid the destruction of biodiversity?
7 What instruments and market signals can help ensure that the polluter pays ?
8 What role do Protected Areas play and how to we help them meet their promise?
9 What package of instruments and responses do we need?
9/4/2009 28

29. TEEB for Policy Makers
Some working recommendations
The North has a major responsibility to act and provide resources; the South
cannot escape the responsibility of protecting forest and other resources but
cannot do so alone. A shared project. Institutions must rise to this;
We have limited time; 10 years(?) to reverse trends;
Biodiversity must be tackled alongside climate change and the end of
poverty in a combined strategy – policy synergies exist (also with water,
food);
Public investment on a large scale will be needed (PAs, green
infrastructure, restoration)
New and better working markets are needed
9/4/2009 29

30. TEEB for Policy Makers
Some working recommendations
Sector priorities:
Fisheries (full scale emergency);
Forests (step change needed in concert with climate policy);
Agricultural land use (new global approach, including monitoring);
Biomass for energy (national & global strategies essential & new realism);
Others?
9/4/2009 30

31. Solutions - areas of focus
The cost and price signals in the economy need to reflect the benefits
of ecosystems and biodiversity. There are
Opportunities for payments to reward benefits of ecosystems
and biodiversity (PES, REDD, Markets)
Opportunities and needs for reforming subsidies so that they
reflect tomorrow’s priorities (fisheries, agriculture, bio fuels et al)
Needs for a range of measures to make the polluters pay
(legislation, restoration, liability, compensation)
Engage the power of the government, consumers and the supply
chain (green public procurement, certification)
Protected areas (too small, lacking in some zones, lacking in marine
area, e.g. usually not well protected – need for designation,
funding/investment, management and enforcement.
9/4/2009 31

32. The D1 (Policy Level) TEEB Report:
Chapter 5
Policies to Reward (unrecognised) Benefits
of Ecosystems and Biodiversity
1 Introduction
2 Payments for Environmental Services (PES)
3 IPES: REDD (Reduced Emissions from Deforestation and Degradation) & more
4 Access and Benefits Sharing (ABS)
5 Other compensation/financing mechanisms
6 Markets
7 Green public procurement (GPP)
8 Synthesis
9/4/2009 32

33. PES & REDD
Contributions to today’s debate
- key points and questions
- ESS values and geographic scales
- links between the principles of PES and PPP
9/4/2009 33

34. PES - A set of Instruments to Reward
Ecosystems Services: Locally, Regionally
and Nationally; but also Globally?
Application of PES - dynamic field; diverse tools, diverse challenges, lots
of lessons.
Where do you see potential to build on existing tools?
Needs and Opportunities for IPES– launching new approaches eg REDD
Where is there potential for new tools ?
Design & implementation
What are necessary or enabling conditions to make them work?
Different Geographic roles
Are some PES for local ESS, other national, others Global?
Are there some regions of the world with greater practical potential than
others?
- for discussion -
9/4/2009 34

35. Local action leads to local, to national & to
global benefits - scope for PES?
Mainly local benefit = Local PES? Mainly global benefit = global PES?
Biochemicals &
pharmaceuticals
5
Climate / climate change
Pollination / seed dispersal
4 regulation
Water and air purification & 3
Genetic / species diversity
waste management maintenance
2
Natural hazards control (fire, 1
Biodiversity
flood) 0
Erosion control Ecotourism & recreation
Food/Fibre/Fuel Education, art & research
Water (quantity) Cultural & amenity values
Additional national benefit: national PES?

36. Payments for Environmental Services (PES)
and the Polluter Pays Principle (PPP)
Reducing emissions/impacts
example farming & PES
Zero emissions
Zero impact (within
assimilative capacity) Costs born by society (env impacts)
Environmental target
(practical /politically feasible Government pays PES to help
env optimum at the time) PES? farmers pay for measures to
meeting targets/objectives beyond
legislative requirements
Legal requirements
(“reference level”)
Costs of measures borne by
farmer – eg Polluter Pays
Farmer Economic Principle (partly implemented)
Optimum Self-damaging
practice (Damage) Costs to farmers
No control – “full damage” and society

37. REDD (Reduced Emissions from
Deforestation and Forest Degradation)
REDD – An Instrument to Reward the Carbon Storage Function of Forests;
and also other Forest Ecosystem and Biodiversity Benefits ?
“Global warming may dominate headlines today.
Ecosystem degradation will do so tomorrow.”
Corporate Ecosystem Services Review, WRI et al. March 2008
Can REDD address them both?
9/4/2009 37

38. D1: REDD
Working key Messages
REDD and Biodiversity - Synergies in both directions
How to capture the synergies?
What are the scale of benefits in both directions?
REDD in the Context of the Conventions - UNFCCC and UNCBD (CBD) –
policy process realism
How to make it happen institutionally?
REDD Benefits to Biodiversity and Ecosystems; yet also Risks – results
realism What are the key risks, how can they be avoided?
Design and implementation – making it work
What is needed to make it work?
- for discussion -
9/4/2009 38

39. PES instruments and ESS -
potential for the future? -for discussion
Ecosystem service “Today” Future
Provisioning services $$$$$$ $$$$$
Fibre / materials, e.g. timber et al $$$$$$ (Timber) $$$$$ (FSC or equiv.)
Natural medicines $ (biotrade) $$$ (biotrade)
Biochemicals & pharmaceuticals $$ $$$ (ABS)
Water provision (quantity) $ (PES) $$$$ (PES)
Cultural & social services $$$ (tourism et al) $$$$ (tourism et al)
Regulating services $ $$$$$
Climate / climate change regulation - $$$$$ (REDD, PINC)
Water regulation / purification (quality + risks) $ (PES) $$$$ (PES, IPES)
Air quality regulation - $$$ (direct investment)
- $$$ PES Ag
Erosion control
Dir. investment ?
Genetic / species diversity maintenance inc. endemic $ (investment seed banks) $$ ?
breeds and varieties
Aggregate – as a whole
Protected Areas $$ (dir. investment) $$$$ (+PES?)
Biodiversity rich agriculture $$$ (PES) $$$$ (PES)
Provisioning service led values Greater balance across services
Synthesis
Existing Markets PES creates new markets

40. Thank You
& looking forward to your questions and feedback
& also your presentations on PES/REDD!
Patrick ten Brink
ptenbrink@ieep.eu
not-for-
IEEP is an independent, not-for-profit institute dedicated to the
analysis, understanding and promotion of policies for a
sustainable environment in Europe
9/4/2009 40

41. Thank You!
• Further information and Call for Evidence: www.teebweb.info
• Contact Scientific Coordination: teeb@ufz.de
• TEEB for Policy Makers: ptenbrink@ieep.eu
• Further contributors:
41