PtB of IEEP TEEB Nagoya results SP and ABS

Environmental Policy Forum:
Global and European Biodiversity Policy after Nagoya:
Achievements and Challenges

Patrick ten Brink
TEEB for Policy Makers Co-ordinator
Head of Brussels Office
Institute for European Environmental Policy (IEEP)

25 January 2011, 12-14h

Time: 16.30 – 18.00
Room 211A, Level 1, Building 2
Nagoya, Japan

1

Presentation overview

Short Context: TEEB for Nagoya
Achievements in Nagoya
• Strategic Plan
• Financing
• Access and Benefits Sharing
Making progress happen

TEEB origins

Source: Bishop (2010) Presentation at BIOECON

TEEB’s Genesis and progress

“Potsdam Initiative – Biological Diversity 2010”
1) The economic significance of the global loss of
biological diversity

Sweden
Sept. 2009

Brussels
13 Nov 2009

TEEB Interim London India, Brazil, Belgium,
Report @ CBD COP- July 2009 Japan % South Africa
9, Bonn, May 2008 Sept. 2010

The Economics of Ecosystems and Biodiversity in Policy Making

The Global Biodiversity Crisis

Measuring what we manage
• Ecosystem service indicators
• Accounts
• Valuation and assessment

Available Solutions
• Rewarding benefits: PES, REDD+, fiscal
transfers, Access and Benefits Sharing
(ABS), markets, GPP et al
• Subsidy reform
• Addressing losses : Regulation legislation,
liability, taxes & charges, offsets, banking
• Protected Areas
• Investment in natural capital

Responding to the value of nature
http://www.teebweb.org/

Valuation and policy making:
from valuing natural assets to decisions

“I believe that the great part of miseries of mankind are brought upon
them by false estimates they have made of the value of things.”
Benjamin Franklin, 1706-1790

Ecosystem Services and awareness of values
Provisioning services Market values – known and generally taken into account in
• Food, fibre and fuel decision making on land use decisions
• Water provision ESS generally unpriced, often taken for granted, until service is lost`
• Genetic resources ESS generally overlooked; some private sector exceptions; access payments
& sharing of benefits rare / not providing incentives for conservation
Regulating Services
• Climate /climate change regulation Value long ignored, now being understood >> new
instruments (e.g. PES), markets, investments
• Water and waste purification
• Air purification Value often appreciated only after service is
• Erosion control degraded or gone > replacement, substitute costs
• Natural hazards mitigation (e.g. Flood control)
Value often appreciated only after service gone,
• Pollination output lost and damage costs incurred
• Biological control

Cultural Services
• Aesthetics, Landscape value, recreation and Sometimes value explicit / implicit in markets
tourism (e.g. tourism spend / house prices)
• Cultural values and inspirational services
Values generally rarely calculated
Supporting Services - e.g. soil formation

Habitat Services - e.g. nurseries The benefits to our economies, livelihoods and wellbeing have
generally not been taken into account. There is, however, now
+ Resilience - e.g. to climate change a new awareness of the value of ecosystem services and a
growing use of instruments to reward benefits.


“There is a renaissance underway, in which people are waking up
to the tremendous values of natural capital and devising
ingenious ways of incorporating these values into major resource
decisions.”
Gretchen Daily, Stanford University

The Evidence base on the value of nature

Assessing the value of working with natural capital has helped determine where
ecosystems can provide goods and services at lower cost than by man-made
technological alternatives and where they can lead to significant savings

• USA-NY: Catskills-Delaware watershed: PES/working with nature saves money (~5US$bn)
• New Zealand: Te Papanui Park - water supply to hydro, Dunedin city, farmers (~$136m)
• Mexico: PSAH to forest owners, aquifer recharge, water quality, deforestation, poverty (~US$303m)
• France & Belgium: Vittel (Mineral water) PES and Rochefort (Beer) PES for water quality
• Belgium: dikes + floodplains vs. storm surge barrier et al: 14 vs. 41 year payback
•Venezuela: PA helps avoid potential replacement costs of hydro dams (~US$90-$134m over 30yr)
•South Africa: WfW public PES to address IAS, avoids costs and provides jobs (~20,000; 52%♀)
• Germany : peatland restoration: avoidance cost of CO2 ~ 8 to 12 €/t CO2 (0-4 alt. land use)

TEEB communicating the evidence base on the value of nature – aim to encourage action by taking the
value of nature into account

Sources: various. Mainly TEEB in National and International Policy Making 2011, TEEB for local and regional policy and TEEB cases


Achievements in Nagoya

An interlinked package – Strategic Plan, Financial resource
mobilisation strategy and ABS protocol.

Negotiated in parallel – working groups on different aspects of
the strategic plan, one dedicated to ABS, and also a “friends
of the chair”

“Brazil and others could not accept the adoption of a strategic plan and
a financial resource mobilization strategy if no [ABS] protocol is put
into place. We are not bluffing. We are very clear on this”
Brazil - press conference Oct 2010.

The CBD Strategic Plan for the period 2011-2020 “Aïchi Protocol”

Strategic goal A: Address the underlying causes of biodiversity loss by
mainstreaming biodiversity across government and society
Strategic goal B: Reduce the direct pressures on biodiversity and promote
sustainable use
Strategic goal C: To improve the status of biodiversity by safeguarding
ecosystems, species and genetic diversity
Strategic goal D: Enhance the benefits to all from biodiversity and ecosystem
services
Strategic goal E: Enhance implementation through participatory planning,
knowledge management and capacity building

CBD (2010); see also ten Brink, P., Eijs, A., Lehmann, M., Mazza, L., Ruhweza, A., and Shine, C., (2011). Transforming our
approach to natural capital: the way forward. In The Economics of Ecosystems and Biodiversity in National and International P olicy
Making. Edited by Patrick ten Brink. Earthscan, London and Washington

Strategic goal A: Address the underlying causes of biodiversity loss by
mainstreaming biodiversity across government and society

Target 1: By 2020, at the latest, people are aware of the values of biodiversity and the
steps they can take to conserve and use it sustainably.
Target 2: By 2020, at the latest, biodiversity values have been integrated into national
and local development and poverty reduction strategies and planning processes and
are being incorporated into national accounting, as appropriate, and reporting
systems.
Target 3: By 2020, at the latest, incentives, including subsidies, harmful to
biodiversity are eliminated, phased out or reformed in order to minimize or avoid
negative impacts, and positive incentives for the conservation and sustainable use of
biodiversity are developed and applied, consistent and in harmony with the
Convention and other relevant international obligations, taking into account national
socio-economic conditions.
Target 4: By 2020, at the latest, Governments, business and stakeholders at all levels
have taken steps to achieve or have implemented plans for sustainable production
and consumption and have kept the impacts of use of natural resources well within
safe ecological limits.
CBD (2010)

Strategic goal B: Reduce the direct pressures on biodiversity and
promote sustainable use

Target 5: By 2020, the rate of loss of all natural habitats, including forests, is at least
halved and where feasible brought close to zero, and degradation and fragmentation is
significantly reduced.

Target 6: By 2020 all fish and invertebrate stocks and aquatic plants are managed and
harvested sustainably, legally and applying ecosystem based approaches, so that
overfishing is avoided, recovery plans and measures are in place for all depleted species,
fisheries have no significant adverse impacts on threatened species and vulnerable
ecosystems and the impacts of fisheries on stocks, species and ecosystems are within
safe ecological limits.

Target 7: By 2020 areas under agriculture, aquaculture and forestry are managed
sustainably, ensuring conservation of biodiversity.

CBD (2010)

Strategic goal B: .cont.

Target 8: By 2020, pollution, including from excess nutrients, has been brought to levels
that are not detrimental to ecosystem function and biodiversity.
Target 9: By 2020, invasive alien species and pathways are identified and prioritized,
priority species are controlled or eradicated, and measures are in place to manage
pathways to prevent their introduction and establishment.
Target 10: By 2015, the multiple anthropogenic pressures on coral reefs, and other
vulnerable ecosystems impacted by climate change or ocean acidification are minimized,
so as to maintain their integrity and functioning.

CBD (2010)

Strategic goal C: To improve the status of biodiversity by safeguarding
ecosystems, species and genetic diversity

Target 11: By 2020, at least 17 per cent of terrestrial and inland water, and 10 per
cent of coastal and marine areas, especially areas of particular importance for
biodiversity and ecosystem services, are conserved through effectively and
equitably managed, ecologically representative and well connected systems of
protected areas and other effective area-based conservation measures, and
integrated into the wider landscape and seascapes.
Target 12: By 2020 the extinction of known threatened species has been
prevented and their conservation status, particularly of those most in decline, has
been improved and sustained.
Target 13: By 2020, the genetic diversity of cultivated plants and farmed and
domesticated animals and of wild relatives, including other socio-economically as
well as culturally valuable species, is maintained, and strategies have been
developed and implemented for minimizing genetic erosion and safeguarding
their genetic diversity.

CBD (2010)

Strategic goal D: Enhance the benefits to all from biodiversity and
ecosystem services

Target 14: By 2020, ecosystems that provide essential services, including services
related to water, and contribute to health, livelihoods and well-being, are restored
and safeguarded, taking into account the needs of women, indigenous and local
communities, and the poor and vulnerable.
Target 15: By 2020, ecosystem resilience and the contribution of biodiversity to
carbon stocks has been enhanced, through conservation and restoration,
including restoration of at least 15 per cent of degraded ecosystems, thereby
contributing to climate change mitigation and adaptation and to combating
desertification.
Target 16: By 2015, the Nagoya Protocol on Access to Genetic Resources and the
Fair and Equitable Sharing of Benefits Arising from their Utilization is in force and
operational, consistent with national legislation.

CBD (2010)

Strategic goal E: Enhance implementation through
participatory planning, knowledge management & capacity building
Target 17: By 2015 each Party has developed, adopted as a policy instrument, and
has commenced implementing an effective, participatory and updated national
biodiversity strategy and action plan.
Target 18: By 2020, the traditional knowledge, innovations and practices of
indigenous and local communities relevant for the conservation and sustainable
use of biodiversity, and their customary use of biological resources, are respected,
subject to national legislation and relevant international obligations, and fully
integrated and reflected in the implementation of the Convention with the full and
effective participation of indigenous and local communities, at all relevant levels.
Target 19: By 2020, knowledge, the science base and technologies relating to
biodiversity, its values, functioning, status and trends, and the consequences of
its loss, are improved, widely shared and transferred, and applied.
Target 20: By 2020, at the latest, the mobilization of financial resources for
effectively implementing the Strategic Plan 2011-2020 from all sources and in
accordance with the consolidated and agreed process in the Strategy for
Resource Mobilization should increase substantially from the current levels. This
target will be subject to changes contingent to resources needs assessments to
be developed and reported by Parties.
CBD (2010)

Good Plan
Now its all about Implementation

ABS (Access and benefits sharing)
The fair and equitable sharing of benefits arising from the utilisation of genetic resources
is one of the three objectives of the Convention on Biological Diversity (CBD) - 1992/3

•This is desirable on equity grounds; and because it is
• critical to ensure the more efficient management and utilization of genetic resources
• In the interests of the “north” (access) and the “south” (benefits sharing)

“My father said: You must never try to make all the money that's in a deal.

Let the other fellow make some money too, because if you have a
reputation for always making all the money, you won't have many deals.”
J. Paul Getty

2010 - Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable
Sharing of Benefit arising out of their Utilization - after seven years of negotiations,
this sets out rules and procedures for implementing the Convention‟s third objective

ABS - Key questions for Business

A key question from a business perspective is how much of the value of final products is
attributable to genetic material and how much to other factors of production (labour,
capital, local knowledge, etc.)?

To answer this, we need to distinguish between:
• what a producer of drugs or other products has to pay to obtain the genetic material; and
• what the material is worth to the producer (i.e. the maximum that a company would pay –
the so-called „willingness-to-pay‟).

The difference between this maximum payment and the cost of obtaining the genetic
material is called its „rent‟.

The other big question is who should receive what share of the “rent”? And how should
this be articulated/contractually supported?

Source : Markandya and Nunes (2011) Sharing benefits derived from genetic resources. In The Economics of Ecosystems and Biodiversity in
National and International Policy Making. Edited by Patrick ten Brink. Earthscan, London and Washington

Values of genetic resources

A key early study (Simpson et al, 1996) calculated values of genetic resources in 1996
prices at between US$0.20/ha (California), & US$20.60/ ha (Western Ecuador).

These values are lower than some expected - reasons identified included the high cost of
developing the final goods & bringing them to market, the long time lags involved &
inefficiencies in the systems for exploiting genetic resources.

Subsequent studies tried to improve on these estimates. Craft and Simpson (2001) argued
that if we base calculations not on the price of final drugs but on the willingness-to-pay of
those who benefit from lifesaving drugs, the rent could be two orders of magnitude higher
than the above estimates.

There are now far more uses of genetic resources than covered in Simpson et al (1996),
which should increase their net value. Finding more effective and cost-efficient ways to
collect information (e.g. Traditional knowledge) about and screen genetic materials can
also increase the rent. Rausser and Small (2000) estimated the possible increase as equal
to one order of magnitude higher than the estimates in Simpson et al (1996).


Values of genetic resources


Access and Benefit Sharing agreements: Example: India

Scientists at the Tropical Botanical Garden and Research Institute (TBGRI), a publicly-
funded research institute based in Trivandrum, worked with the Kani tribals of Kerala to
obtain traditional knowledge about medicinal use of the plant Arogyapaacha (Trichopus
zeylanicus).

TBGRI successfully developed a drug from the plant and sold the technology to a
Coimbatore-based pharmaceutical company, which agreed to pay Rs.1 million and a two
per cent share in the royalty. These proceeds are being shared equally by TBGRI and the
tribal community.

Source : Markandya and Nunes (2011) in TEEB (2011)

ABS Example: Kenya

In May 2007 the Kenya Wildlife Service (KWS) and Novozymes, a Danish biotech company,
entered a five-year partnership for the collection, identification and characterization of
micro-organisms from Kenya‟s national parks.

The agreement was not driven from a particular interest on the part of Novozymes
to undertake bioprospecting in the region, but rather to negotiate a benefit-sharing
agreement for commercialization of much earlier collections made outside any agreement.

One of these led to the development of a commercial product (pulpzyme) that reduces the
amount of chlorine needed to bleach wood pulp.

Under the agreement :
• KWS will receive running royalties on any commercial product developed, as well as
• An upfront payment to cover the costs of sample collections and laboratory work.
• Training for KWS its staff.
• Any intellectual property that comes out of the partnership will be co-owned.


ABS Example: Ethiopia

In 2004 a ten-year ABS agreement was concluded for the breeding and development of tef
(Eragrostis tef) between the Institute for Biodiversity Conservation in Ethiopia, the
Ethiopian Agrocultural Research Organization and a small Netherlands-based company,
Health and Performance Food International (HPFI).

Tef is one of the most significant cereal crop species in the region. Because it is gluten
free it is increasingly in demand in Western markets.

Benefit-sharing takes the form of an agreement:
• HPFI to pay IBC a lump sum of profits arising from the use of tef genetic resources;
• Royalties of 30 per cent of net profit from the sale of tef varieties;
• a license fee linked to the amount of tef grown by HPFI to anybody supplied seed; and
• contributions by HPFI of five per cent net profit, no less than €20,000 per year, to a fund
named the Financial Resource Support for Tef (FiRST), established to improve the living
conditions of local farming communities and for developing tef business in Ethiopia.


A(B)S Example: Brazil

In 1999, Glaxo Wellcome and Brazilian Extracta jointly signed a contract where Glaxo paid
US$3.2 million for the right to screen 30,000 compounds of plant, fungus and bacterial
origin from several regions in Brazilian forests.

This however, relates to a payment for the permission to access, and

is not strictly speaking about sharing benefits arising from the use of these compounds

A(B)S Example: Costa Rica

The best-known and most emblemmatic contract was signed between INBio (National
Biodiversity Institute) and Merck Pharmaceutical Ltd. in 1991. INBio received US$1 million
over two years and equipment for processing samples and scientific training from Merck.


ABS Summary

• A few agreements,

• Few covering both access and benefits for new products

• Conditions are generally less favourably for host countries

• Some bio-piracy

• Feeling of unfair terms as regards access and benefit sharing – hence need for protocol

• Different interests/incentives for those hosting the biodiversity and those hoping to
access and build on these resources has led to historical “no-progress” beyond a few ad
hoc agreements.

Breaking the deadlock – hard negotiations and
realisation that the time had come

A number of developing countries lead by the G77-China bloc had
repeatedly stated that they would not settle for an agreement on
financing and the strategic plan alone.

“It was momentum we had to make use of. Not agreeing was not an
option. It would have squashed whatever we had achieved by now,”
government official - http://ictsd.org/i/news/biores/94075/

Once formal agreement on the ABS protocol was reached, a package
consisting of the three main decisions was quickly sealed and
adopted, accompanied by almost 50 specialised room documents.
Delegates applauded COP 10 as a historic success.

http://ictsd.org/i/news/biores/94075/


“The ABS Protocol is only a starting point. Whether it will result in the
viable regime against bio-piracy now depends on the
implementation,”

The African Group formally made a similar point in the closing
plenary, stating for the record that the protocol was simply a first step
for moving towards the implementation of the Convention‟s third
objective, the “fair and equitable sharing of the benefits arising out of
the utilization of genetic resources.”

Other countries called the protocol “imperfect” and “incomplete,”
though nonetheless an “important step” and “milestone
achievement”.

http://ictsd.org/i/news/biores/94075/

Summary – Nagoya/CBD COP 10
A success – in that agreements were reached for the overall package
A success – in that multilateral approach shown to still work.... (fear after
Copenhagen)
Finance mobilisation – an agreement to come up with funding by 2012... enough
to avoid blocking progress

But

Strategic Plan – its success depends on national commitment and results
Finance mobilisation – countries (EU et al) need to find the money...non-trivial in
these times of crisis
ABS – needs commitment in implementation.

…a lot still needs to be done

…hopefully the TEEB evidence base on the value of nature will help encourage action

Thank you
TEEB Reports available on http://www.teebweb.org/
See also www.teeb4me.com

Patrick ten Brink, ptenbrink@ieep.eu

IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding
and promotion of policies for a sustainable environment. www.ieep.eu

PtB of IEEP TEEB Nagoya results SP and ABS

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