Vraag en antwoord rapport TEEB (en)

MEMO/09/501

Brussels, 13 November 2009

Questions and answers on the "TEEB for Policy Makers" report

What is TEEB?

TEEB stands for The Economics of Ecosystems and Biodiversity (TEEB). The study project is a major international initiative to draw attention to the global economic benefits of biodiversity. It aims to highlight the growing cost of biodiversity loss and ecosystem degradation and bring together expertise from the fields of science, economics and policy to propose practical actions.

The TEEB study was launched by Germany and the European Commission in response to a proposal by the G8+5 Environment Ministers (Potsdam, Germany 2007) to develop a global study on the economics of biodiversity loss.

The study is led by Pavan Sukhdev, a senior banker from Deutsche Bank, and founder-Director of the green accounting project “GIST” (Green Indian States Trust) in India. Mr Sukhdev is currently on secondment with the United Nations Environment Programme. T he TEEB Advisory Board includes leading experts from the fields of science and economics.

What has the study revealed so far?

The TEEB Interim Report (Phase I), released in May 2008, provided strong evidence of significant global and local economic losses and human welfare impacts attributable to the ongoing losses of biodiversity and degradation of ecosystems.

A TEEB Climate Issues Paper was released in September 2009. In support of EU objectives for Copenhagen, the paper underscored the importance of ecosystems for cost-effective climate change mitigation and adaptation and highlighted large-scale impacts of climate change on some ecosystems and their services (highlighting in particular the threats to coral reefs).

The release of "TEEB for Policy Makers" is particularly important as this report is directly connected to the political agenda and aimed at better integrating biodiversity priorities into policy choices.

It is one of a series of five interconnected reports which will culminate in a final study report in October 2010.

Why is the Commission supporting TEEB?

2010 is the UN International Year of Biodiversity and a very important year for biodiversity policy. In January the Commission will present a proposal for a new EU post-2010 biodiversity target. An international target will hopefully be adopted in 2010 under the Convention on Biological Diversity and the UN General Assembly. The EU will develop a new post-2010 biodiversity policy aimed at achieving the new global and EU targets. To start reflections on this, the Commission organised a major stakeholder conference in Athens in April this year, which adopted the so-called "Message from Athens" (See IP/09/649 ).

The need to fully take into account the value of ecosystem services into a post-2010 biodiversity policy framework and the strong links between biodiversity and climate change were highlighted at this meeting.

It will be essential to better integrate the value of ecosystem services in our strategies and the instruments we use - complementing, not in any way replacing, the more traditional approaches to biodiversity conservation. The Commission will certainly take these into account in developing a post-2010 biodiversity policy.

The TEEB study will be essential in providing the economic evidence needed to underpin this policy development and strengthen the case for ambitious commitments on biodiversity both at EU and international level.

What is the aim of "TEEB for Policy Makers"?

The aim of the Report is to highlight the relevance of biodiversity and ecosystems to mainstream policy making and show that the failure of markets to adequately consider the value of ecosystems is relevant not just for the environment but also for broader economic and social considerations.

What does the report say?

The lack of market prices for ecosystem services and biodiversity means that the benefits we derive from these goods (often public in nature) are often neglected or under-valued in decision-making. This in turns leads to actions that do not only result in the loss of biodiversity, but also have a negative effect on human well-being.

The report points out that failing to account for the value of ecosystems and biodiversity will lead to the wrong choices being made in responding to global challenges such as long-term food security and the fight against poverty. It demonstrates that understanding the value of ecosystems can lead to better informed and possibly different decisions: accounting for such value can result in better management; investing in natural capital can yield high returns; and sharing the benefits of these actions can deliver real benefits to the most disadvantaged in society. This evidence and the arguments developed in the report provide a strong case for broad policy action. Put simply, making the benefits of biodiversity and ecosystem services visible to economies and society is necessary to pave the way for more efficient policy responses.

The report builds on real world examples that show how appreciating the value of biodiversity has led to policy changes, how investment in natural capital can be more cost-effective than man-made solutions, and how conservation can deliver a range of economic advantages.

It provides concrete examples of ways to make policies work, such as reform of subsidies, charges for resource use or payments for ecosystem services. Practical guidance for better managing the transition during policy reform is provided, based on first-hand experience from different counties. The report is a compendium of practice, a synthesis of insights and a source of ideas for ways forward.

What are the Report's key messages to policymakers?

• 1. 

  Valuing ecosystems makes economic sense

Losses in the natural world have direct economic repercussions that we systematically underestimate. Making the value of our natural capital visible to economies and society creates an evidence base to pave the way for more targeted and cost-effective solutions.

• 2. 

  It is essential to measure nature and biodiversity

Developing our capacity to measure and monitor biodiversity, ecosystems and the provision of services is an essential step towards better management of our natural capital. Making relevant information accessible to decision-makers will require not only a wider use of valuation but also progress on indicators of biodiversity and ecosystem services and on the integration of natural capital into macro-economic and societal indicators and accounts.

• 3. 

  Investing in nature pays off

Investing in natural capital supports a wide range of economic sectors and maintains and expands our options for economic growth and sustainable development. Such investments can be a cost-effective response to the climate change crisis, offer value for money, support local economies, create jobs and maintain ecosystem benefits for the long term.

• 4. 

  The social dimension needs to be fully taken into account to develop successful strategies to protect biodiversity

By taking distributional issues into account when using and protecting natural capital, policy makers can simultaneously address social and environmental concerns. This involves making sure the right people pay - both locally and globally. It also means looking at property and use rights and potentially easing any transition pains.

• 5. 

  Nature is an asset in future economic strategies

Biodiversity and ecosystem services are natural assets with a key role to play in future economic strategies seeking to promote growth and prosperity. Developing and further strengthening policy frameworks to manage the transition to a resource-efficient economy is the way forward.

When it comes to concrete measures, what does the report recommend?

The report makes it clear that there is no single solution as each country is different. Each economy relies on nature in a different way and each country starts with a different set of policies already in place. However, in all cases, the policy response should not be limited to environmental policy-making processes but should also come from other sectoral policies. And while the application of single policy instruments may sometimes work, more often the appropriate policy response will involve a flexible and ‘smart’ policy mix.

What is essential is to follow a two-step approach: start by considering what ecosystem and biodiversity means for a given economy; and evaluate current policies to identify potential improvements.

Specific solutions include:

• - 

  Payments for ecosystem services (PES) in order to stimulate ecosystem provision.
• - 

  Reforming subsidies that are harmful to biodiversity and ecosystem services to correct negative economic signals.
• - 

  Addressing losses through regulation and pricing. Many threats to biodiversity and ecosystem services can be tackled through robust regulatory frameworks that establish environmental standards and liability regimes. These are already tried and tested and can perform even better when linked to pricing and compensation mechanisms based on the ‘polluter pays’ and ‘full cost recovery’ principles to alter the status quo which often leaves society to pay the price.
• - 

  Adding value through protected areas. The global protected area network covers around 13.9% of the Earth's land surface, 5.9% of territorial seas, and only 0.5% of the high seas. Nearly a sixth of the world’s population depends on protected areas for a significant percentage of their livelihoods. Increasing coverage and funding, including through payment for ecosystem services (PES) schemes, would boost their potential to maintain biodiversity and expand the flow of ecosystem services for local, national and global benefit.
• - 

  Investing in ecological infrastructure. This can provide cost-effective opportunities to meet policy objectives in particular (but not only) in the context of climate change. Up-front investments in maintenance and conservation are almost always cheaper than trying to restore damaged ecosystems.

What does the Report say on the link between climate and biodiversity?

The report shows that climate and biodiversity are irrevocably linked. On the one hand, biodiversity is profoundly affected by climate change. As already demonstrated in TEEB's Climate Issues Paper, projections are that rising temperatures and the acidification of the oceans will destroy 60% of coral reefs by 2030 under a business as usual scenario.

On the other hand, strong and resilient ecosystems are a crucial ally in the fight against climate change. Investing in well-functioning ecosystems can be a very cost-effective response to the climate challenge and offer value for money. Not only are "green" carbon policies - tackling the natural storage capacity of terrestrial ecosystems - a must in helping to tackle climate change, they are also more cost-effective than many technological fixes.

The report argues that ensuring the Copenhagen climate agreement addresses the issue of tropical deforestation is paramount - for the 80 to 90% of terrestrial biodiversity they contain as much as for stopping the 20% of global carbon dioxide emissions caused by deforestation.

Are there immediate policy priorities arising from the report?

The immediate priority is to make Copenhagen deliver both for climate and biodiversity - through an agreement on tropical forests. Copenhagen provides a unique opportunity to tackle the deforestation challenge. The EU is therefore working towards reaching an agreement on the establishment of a mechanism for Reducing Emissions from Deforestation and forest Degradation (REDD).

The second priority is to develop a knowledge base at global level that underpins the delivery of biodiversity policy. The Commission is actively supporting the setting up of a platform on biodiversity and ecosystem services similar to the Nobel Prize-winning Intergovernmental Panel on Climate Change (IPCC), whose regular assessment reports represent the most authoritative global scientific consensus on climate change. An Intergovernmental Panel on Biodiversity and Ecosystem Services (IPBES) would greatly enhance the credibility of future biodiversity strategies. Intergovernmental consultative meetings took place in November 2008 and October 2009. Both meetings have contributed to developing a shared vision on what kind of mechanism is needed for biodiversity. The Commission hopes an agreement to establish an IPBES will be reached in 2010.

This report provides analysis and recommendations but does not present big numbers. Will TEEB provide such numbers and "put a price" on biodiversity?

Making a systematic analysis of the evidence available on the economic benefits derived from biodiversity and the costs of its loss, and building a global picture of these benefits and the costs of conservation, are part of the objectives of another TEEB report - The Ecological and Economic Foundations. Tod ay's report provides many illustrative figures (for example on the benefits and costs of ecosystem restoration, or of protected areas) but not this systematic analysis. A large database of values estimated for the main types of ecosystem services is being built. This on-going work will take several more months. The Commission is looking forward to the results.

The quantitative assessment of the costs of biodiversity loss versus the costs of conservation is a very challenging exercise, due to ecological complexity and the multiple dimensions of ecosystem services. The state of scientific knowledge on biodiversity and ecosystem services is less advanced than on climate change (this is also why the successful establishment of an Intergovernmental Platform for Biodiversity and Ecosystem Services is so important in order to stimulate progress). There is no single global model able to cover the main dimensions of the problem (the links between biodiversity change and the economy, and the various ecosystem services), thus any global assessment has to put together information from different sources and use a variety of tools.

It is also important to remember that an economic assessment of the significance of biodiversity loss cannot be reduced to a single figure. By nature, ecosystem benefits are felt at different levels: many of them are local public goods (protection against erosion), while others are regional (regulation of regional climate) or global. Both the benefits and the costs of maintaining ecosystem services vary widely across ecosystems, world regions, and socio-economic conditions. For scientific accuracy and also for policy relevance in general, the question is not what the economic case is for conserving all the wetlands in the world, or half of them, but what types of wetlands need to be protected. For this reason, the on-going work aims to analyse the benefits and the costs as a complement to building a big picture, which will necessarily remain very crude. Instead of producing a big figure, it will more likely produce several large figures and a large number of smaller figures.