Presntation on TEEB by Patrick ten Brink of IEEP at the Globe Forum in Rome on the 13 June 2009

1. The Economics of Ecosystems and
Biodiversity (TEEB)
The Economics of Ecosystems and Biodiversity (TEEB)
Measuring Natural Capital
TEEB approach and Working insights
Rome G8+5 Legislators Forum
Italian Chamber of Deputies
12th- 13th June 2009
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 genesis, aims and ambitions
2. Approach to valuing natural capital
3. From value to policy tools
Incentive schemes
Subsidies
Protected areas & other investment in green
infrastructure
Regulation
Policy instrument mixes
4. From value to priorities

3. TEEB’s Goals
1. Demonstrate the value to the economy, to society/individuals
and wider environment – what we have & what we risk losing.
2. Underline the urgency of action, benefits of action (opportunities)
3. Show how we (can) take into account the value of ecosystems
and biodiversity in our decisions and choices,
4. Identify / support solutions
New instruments,
Support wider use of good existing tools (eg in other countries),
Help make existing tools realise their potential;
Help provide information to reform “bad ones”
5. Address the needs of policy-makers, local administrators,
business and citizens (the “end-users”)
Source: adapted from Pavan Sukhdev

4. The Process for TEEB Phase 2
2008 2009 2010
Nagoya, Japan
Inputs from Science and Economics Scenarios and models for exploring
experts through the Call for Evidence, future trends in biodiversity and
participation in Working Groups, etc ecosystem services - CEC
CBD COP9 - Bonn, Germany
Science & Economics Foundations D0 Update / Additional analysis
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 4

5. 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?
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6. TEEB overview
1. TEEB genesis, aims and ambitions
2. Approach to valuing natural capital
3. From value to policy tools
Incentive schemes
Subsidies
Protected areas & other investment in green
infrastructure
Regulation
Policy instrument mixes
4. From value to priorities

7. 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

8. How does the value of ecosystems
and biodiversity help policy makers?
Economic values provide information / evidence to demonstrate:
Importance/Value (and costs) of maintaining natural capital
Opportunities from investments in natural capital
Cost of degradation and loss – past and future
Cost of risks & “what if” scenarios
Value of early action
Value of policy synergies
Understanding social implications
Needs for & design of economic instruments
Note one does not always need extensive valuation to reach the necessary
understanding or progress with instruments. For example for Payments for
Environmental Services (PES), negotiation can also do the job.

9. Importance/Value (and costs) of
maintaining natural capital
Value of services often taken for granted:
Water supply/regulation: Catskills Mountains $2bn natural capital solution
vs $7bn technological solution (pre-treatment plant)
Pollination: 30% of 1,500 crop plant species depend on bee and other insect
pollination. Value of bees for pollination ~ Eur29 billion to EUR 70 billion
worldwide per annum.
Fish stock existence/productivity: Global market $80bn, 1.2 billion people
reliant, stock collapses have major (local/national) implications
Flood control services of floodplain: eg FR River Bassee floodplain: ~ 91.5 –
305 million EUR / year

10. Importance/Value (and costs) of
maintaining natural capital
Value of services: existing, growing and new markets
Existing markets :pharmaceuticals : ~ US$640 billion a year, of which around
25 to 50 percent is derived from genetic resources.
Agricultural seeds: ~$30bn
Growing markets: biotrade: natural cosmetics ~ $7 billion in 2008; Organic
agriculture ~ €30.8 billion in 2006; FSC certified forests ~ 7% of the world’s
productive forest, in 81 countries, with a value ~ US$20 billion
Ecotourism: again $billion industry, growing fast, with significant employment
Biomimicry: growing part of architecture, engineering etc

11. Opportunities from investments in
natural capital
Cost effective measures
- eg water regulation (Catskills), carbon storage – maintenance of peat lands,
protected areas, prevention / early response to invasive alien species (IAS),
biomimicry (boxfish inspired car, 30% more efficient)
Benefits of restoration
eg wetlands and flood control; mangroves, fish breeding groups
Benefits of protected areas
eg multiple: food variety reservoirs for future food security
Benefits of other green infrastructure
eg city climate change adaptation (cooling from green cover)

12. Biodiversity loss
From 1700 to 2050
73%
62%
Richer Ecosystems
Poorer Ecosystems
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.

13. (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

14. Measuring What we Manage:
Towards Proper Stewardship of Our Natural Capital
A. Do we have a measurement problem?
B. The way we currently measure biodiversity and ecosystem services
C. Better macro economic and societal indicators
D. GDP of the Poor
E. More Comprehensive National Income Accounting
Range of opportunities to take natural capital into account
• Biodiversity indicators: needs for measurement/monitoring, modeling and targets.
• Ecosystem services indicators important for instrument design (PES, REDD)
• Ecological footprints valuable for policy targets and communication
• Critical importance of ecosystem services to the poor – refocus poverty policy?
• National policy makers with more comprehensive national income accounts

15. TEEB overview
1. TEEB genesis, aims and ambitions
2. Approach to valuing natural capital
3. From value to policy tools
Incentive schemes
Subsidies
Protected areas & other investment in green
infrastructure
Regulation
Policy instrument mixes
4. From value to priorities

16. Incentive Schemes: Rewarding the
(unrecognised) value of ecosystems and biodiversity
Payments for Environmental Services (PES) – potential to build on experiences of
water purification, carbon storage et al. Economics underlines the potential. Need for
upfront ecosystem service assessments, conditionality, participation, monitoring & governance.
PES-REDD – potentially high value new instrument offering synergies between
biodiversity and climate change (see later speaker)
Access and Benefits Sharing (ABS) – negotiations
Other compensation measures (tax breaks, transfers) and direct payments to secure
benefits
Markets (organic, biotrade, natural cosmetics, FSC, MSC etc) – being
“mainstreamed”. Need for support for certification of producers in 3rd countries.
Green public procurement – making use of market demand (PP 14% of EU GDP). A tool
that can help green the product cycle – leading counties to show the way.

17. Subsidies: Aligning Today’s Subsidies
to Tomorrow’s Priorities
Sector OECD/ world
Agriculture OECD: €204 bn a year (in 2005-7) (OECD 2008)
Biofuels OECD: €10-12 bn in 2006 (OECD 2008)
Fisheries World: USD 15-35 billion (UNEP, 2008)
Energy IEA: $310 billion in the 20 largest non-OECD countries in 2007
(IEA, 2008)
Transport World: €179-230 bn/year – of which EHS €130-175 bn (EEA)
Water OECD: €33.6 bn (Myers and Kent) – incl. irrigation
40 %
40 %
20 %
1950 2010
We are fishing down the foodweb – D. Pauly (UBC, Canada)
9/4/2009 17

18. TEEB overview
1. TEEB genesis, aims and ambitions
2. Approach to valuing natural capital
3. From value to policy tools
Incentive schemes
Subsidies
Protected areas & other investment in green
infrastructure
Regulation
Policy instrument mixes
4. From value to priorities

19. 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;
Combined strategy / policy synergies - biodiversity & climate (+water, food);
Public investment on large scale (PAs, restoration, green infrastructure)
New and better working markets are needed and better economic signals
Regulation still critical part of toolkit to reduce pressures
Subsidy reform – critical to save money, reduce impacts
Priority areas: Fisheries, Forestry, Agriculture, Biomass, Coral reefs
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20. Making the markets signals work better
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, GPP)
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)
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21. Solutions – a Toolkit;
which portfolio of instruments will work for you?
Policy Instruments
New instruments (eg REDD)
Support wider use of good existing tools
Market based: eg PES, resource charges, fine/compensation, markets, GPP
Regulation: waste water treatment, air pollution control, standards et al
Help make existing tools realise their potential (eg EIA, SEAs, PAs);
Help provide information to reform “bad ones” (eg harmful subsidy reform)
Information: Better information to measure to Manage Natural capital.
From ecosystem indicators & footprints, to valuation of natural capital, to more
encompassing macro indicators, GDP of the poor, to more comprehensive national
accounts
New investments (eg green infrastructure, restoration, PAs, green new deal
investments)
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22. Instruments and measures
Contributions to natural capital
Opportunities/benefits of ESS
Past No net loss from 2009 level / Investment in natural capital +ve
degradation halting biodiversity loss change
Subsidy reform `
Better governance/implementation of law
measurement & evidence-based policies
Alternative natural capital Economic measures: PES, REDD, fines
Development path Markets: certification & GPP
Other green infrastructure
Predicted future loss of
natural capital (schematic) Restoration
Investment in natural capital: PAs
Avoided loss eg by regulation
2009 2050

23. Thank You
What measures do you see as offering the greatest
potential? Practical Roadmap?
& looking forward to your questions and feedback
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 23

24. Thank You!
• TEEB for Policy Makers: ptenbrink@ieep.eu
• Further information and Call for Evidence: www.teebweb.info
• Contact Scientific Coordination: teeb@ufz.de
• Further contributors:
24

25. Annex
Supporting / backup slides
25

26. TEEB’s Genesis and progress
“Potsdam Initiative – Biological Diversity 2010”
1) The economic significance of the global loss of
biological diversity
TEEB Interim Report @ CBD COP-9, Bonn, May 2008
Strömstad 7-9 September

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

28. 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.)

29. The link between biodiversity,
ecosystems, their services, and
benefits to mankind…& economics
Maintenance and restoration costs
Natural Capital Also investments in green
infrastructure – PAs, watersheds,
urban environment.
Biophysical Economic and social values
– some market values or to
Structure of
be market values, some
process risk, some non market
eg 1: woodland Function values
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: avoided costs of
eg 3: carbon impacts
storage eg 2: for more woodland
harvestable products
eg3: value of carbon
capture and storage
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

30. Measuring Benefits of Ecosystem services
Answers are needed at all levels
Non-Specified Monetary: eg avoided water purification
Benefits costs, avoided flood damage, tourist
value, value of medicines /
Increasing up the pharmaceuticals from natural products
benefits Monetary Value
pyramid Quantitative: eg level of service,
number people benefiting from
wood from forests, # of avoided
The Benefits Quantitative Review of Effects health impacts; number of visitors
Pyramid
Type of benefits; health benefits
from clean air, social benefits
Qualitative Review from recreation, income from
products, security, wellbeing.
Knowledge gaps
Full range of ecosystem services from biodiversity The “known-
unknowns” and
“unknown-unknowns”
Source: P. ten Brink: presentation at March 2008 workshop Review of Economics of Biodiversity Loss, Brussels

31. 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 31

32. Policy instrument mixes – an
example
Oil Spills: following Exxon Valdez – policy response: a combination of
instruments:
• Technical Regulation: requirement for double hulled ships - 79% of all oil
tankers criss-crossing the globe are now of double-hull design
• Regulatory constraints: single hulled ships not allowed in EU waters.
• Economic incentives: responsibility for clean up fines and
compensation payment for damage - The cleanup effort cost the company
$2.5 billion alone, and Exxon was forced to pay out $1.1 billion in various settlements.
A 1994 federal jury also fined Exxon an additional $5 billion for its "recklessness,"
• Criminal charges: risk of charges for negligence, jail sentences
Policy response: a needed response to an unfortunate “window of opportunity”
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