PtB of IEEP Presentation on The Economics of Ecosystems and Biodiversity TEEB The Science and Economics 22 September 2008 Prague

1. The Economics of Ecosystems
and Biodiversity (TEEB)
Part A:
Ecological losses to Economic losses
(Issues and values in TEEB Phase I)
Patrick ten Brink
Senior Fellow and Head of Brussels Office
Institute for European Environmental Policy (IEEP)
Building on the work of:
COPI Team: Alterra, IEEP, MNP, Ecologic, GHK, FEEM, W&B, UNEP-WCMC, &
TEEB Core team (Pavan Sukhdev, EC, BMU, EEA, UFZ, IEEP, UoL, IIT)
and other experts
22 September 2008
Prague
ptenbrink@ieep.eu
9/25/2008 1

2. Presentation Structure
1. Biodiversity and Ecosystem losses – The Ecological Case
for the Urgency of Action
2. Ecosystems and Ecosystem services – benefitting society,
the economy, business and individuals.
3. The Valuation Challenge – attributing monetary values to
the value of ecosystem services
4. COPI / TEEB Phase 1 numbers – The Economic Case for
the Urgency of Action
Then Presentation by Pavan Sukhdev, TEEB Study Leader
On
TEEB Phase II: The Aims & Ambitions, Focus and Process
9/25/2008 2

3. The Urgency for Action
The Ecological Case
9/25/2008 3

4. Past Losses
Global Forest Area has shrunk by approximately 40% since 1700. Forests have
completely disappeared in 25 countries [1].
Since 1900, the world has lost about 50%of its wetlands. [2].
Some 20% of the world’s coral reefs - have been effectively destroyed by
fishing, pollution, disease and coral bleaching and approximately 24% of the
remaining reefs in the world are under imminent risk of collapse through human
pressures.[3]
In the past two decades, 35% of mangroves have disappeared. Some countries
have lost up to 80% through conversion for aquaculture, overexploitation and
storms.[4]
The rate of species extinction is estimated to be 100 to 1,000 times more rapid than
the “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
9/25/2008 4

5. Source: MEA 9/25/2008 5

6. Running down our natural capital
The Demise of Global Fisheries
40 %
40 %
20 %
2010
Source: Sea Around Us project 9/25/2008 6

7. 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 9/25/2008 7

8. Biodiversity loss
From 1700 to 2050
73%
62%
Richer Ecosystems
Poorer Ecosystems
9/25/2008
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. 8

9. Changes in Ecosystem Services
due to loss of Biodiversity
Pristine Original
forest species
Extensive use Extensive use
Plantation Subsistence
agriculture
Degraded Fossil fuel
land subsidized
Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study 9/25/2008 9

10. Level of Biodiversity in the World in 2000
Using Mean Species Abundance (MSA) indicator
Remaining MSA in %
9/25/2008 10
Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.

11. Level of Biodiversity in the World in 2050
One Scenario of the future : OECD/Globio
Remaining MSA in %
MSA loss from 71% to 60% - not evenly spread
Natural Areas decline by 7.5 Million Sq. Km.
Most lose; the poor generally affected more strongly
9/25/2008
Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium. 11

12. The Global Loss of
Biodiversity
2000
Source: L Braat presentation COP9 Bonn May 2008 on the COPI Study; building on MNP data 9/25/2008 12

13. 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 9/25/2008 13

14. Ecosystems and Ecosystem services
The Ecosystems in which we live and in which our economies
operate, provide a range of services that benefit:
• Individuals
• Society
• Firms
• The economy
9/25/2008 14

15. Ecosystem Services - The
Millennium Ecosystem framework
Source: MEA 9/25/2008 15

16. Different Biomes,
different (level) of services
Provisioning services: Food & fibre, Water, Fuel (biofuel)…
Forests Regulating services: Air quality maintenance;
• Boreal forest Climate regulation (local, regional, global) – carbon storage;
• Temperate forests Water regulation (e.g. flood prevention, runoff …);
• Mountain forests Erosion control
• Etc. Natural hazards control (e.g. Fire resistance, storm & avalanche protection
Cultural & Supporting services – ALL (recreation, tourism et al)
Provisioning services: Food & fibre, Water, Fuel …
Wetlands
• Coastal wetlands Regulating services: Climate regulation (local, regional, global);
• Floodplains Water regulation (e.g. flood prevention, runoff …);
• Swaps, bogs, Water purification and waste management;
moors …
Erosion control; Natural hazards control …
• Etc.
Cultural & Supporting services – ALL
Source: From presentation by Marianne Kettunen of IEEP; based on MA 2005 classification 9/25/2008 16

17. Ecosystems, land-use & human well-
being : the extent of this relationship
Services 1.1 1.2 1.3 1.4 1.5 2.1 2.2 2.3 3.1 3.2 3.3 3.4 3.5
Plant-related
Forest trees-
Prevention
Refugium
Materials
Breeding
Physical
Amenity
Didactic
support
Cycling
Identity
related
Food
Sink
Land cover types
Artificial surfaces/
Urban
Arable land &
permanent crops
Grassland & mixed
farmland
Forests & woodland
shrub
Heathland,
sclerophylous veg.
Open space with
little/ no vegetation
Wetlands
Water bodies
Source: Jean-Louis Weber (EEA) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium
9/25/2008 17

18. 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
9/25/2008 18
March 2008, Brussels, Belgium

19. Land-uses and trade offs
for ecosystem services
1natural Climate
regulation
2 extensive Climate
regulation
Food Energy Food
Energy
Soil
protection
Soil Climate
protection Freshwater Freshwater
regulation
Food
Energy
-
Upon closer analysis
Net value may be less
Soil
protection
Freshwater
3 intensive
Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium.
9/25/2008 19

20. Ecosystem service production & use
It can be a complex relationship; benefits sharing?
Source: Andrew Balmford & Ana Rodrigues 2008 Scoping the Science report. Contribution to TEEB Report 9/25/2008 20

21. ESS service provision & spatial relation
Example: carbon storage
t C/ha
Production rates, flows and values all vary spatially
Services produced and enjoyed in different places
Costs and benefits of conserving services accrue in different places
Source: Andrew Balmford & Ana Rodrigues 2008 Presentation within the Scoping the Science work 9/25/2008 21

22. The Evaluation Challenge
What should we measure to understand
and communicate the problem?
How can we go about doing this?
9/25/2008 22

23. Measuring Benefits of Ecosystem services
What can be said in what terms and what was explored?
Non-Specified Monetary: eg avoided water purification
Benefits costs, avoided flood damage, tourist value,
value of medicines / pharmaceuticals from
Increasing up the natural products
benefits Monetary Value
pyramid Quantitative: eg number people
benefiting from wood from forests,
# of avoided health impacts;
The Benefits Quantitative Review of Effects 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 9/25/2008 23

24. Interest and evidence
Level of information Level of press/interest
Quantitative /
qualitative
Monetary
There are different audiences, and different messages are needed for each.
Different types of messages have different power and different reach.
The overall aim is to get the message across to the (range of) key audiences – in a
manner that is representative of the facts and that engages interest. Hence, we need
to work out how best to combine monetary and non-monetary information.
Source: P. ten Brink: presentation at March 2008 workshop Review of Economics of Biodiversity Loss, Brussels 9/25/2008 24

25. Press Echo to TEEB I, May 2008
Source: Dr Carsten Neßhöver, Heidi Wittmer & Christoph Schröter-Schlaack, Presentation in Vilm, 26.8.2008 9/25/2008 25

26. COPI Results
Based on the Report to the European Commission, May 29, 2008
The Cost of Policy Inaction: Not Halting Biodiversity Loss
L. Braat & P. ten Brink (eds.)
with
J. Bakkes, K. Bolt, I. Braeuer, B. ten Brink, A. Chiabai, H. Ding, H. Gerdes, M. Jeuken, M.
Kettunen, U. Kirchholtes, C. Klok, A.Markandya, P. Nunes, M. van Oorschot, N. Peralta-
Bezerra, M. Rayment, C. Travisi, M. Walpole.
Wageningen / Brussels, May 2008
9/25/2008 26

27. Mapping changes : from Biodiversity &
Ecosystems to Economic Values
OECD
Baseline
scenario Change
Change in
in Change
Economic
Land use, in
Change Value
Climate, Biodiversity
Pollution, In
Water use Ecosystem
International Services
Policies Change
in
Ecosystem
functions
Source: L. Braat & P. ten Brink (eds.) 9/25/2008 27

28. Biodiversity loss - 1700 to 2050
73%
62%
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. 28
9/25/2008

29. Change of Landuse (area coverage)
across all biomes – Global Total
Actual 2000 2050 Difference
Area million km2 million km2 2000 to 2050
Natural areas 65.5 58.0 -11%
Bare natural 3.3 3.0 -9%
Forest managed 4.2 7.0 70%
Extensive agriculture 5.0 3.0 -39%
Intensive agriculture 11.0 15.8 44%
Woody biofuels 0.1 0.5 626%
Cultivated grazing 19.1 20.8 9%
Artificial surfaces 0.2 0.2 0%
World Total * 108.4 108.4 0%
Natural areas loss is 7.5m km2 - broadly equivalent to the area of the Australia.
Losses: natural, bare natural areas & extensive agriculture broadly equals the USA
Source: L. Braat & P. ten Brink (eds.) 2008 COPI 9/25/2008 29

30. Loss of Quality
Global total
Loss of quality - due to pollution, fragmentation, infrastructure and climate
impacts (Global average all biomes)
Mean Species Abundance indicator
Mean species abundance change for different land use
categories MSA loss 2000 to 2050
Natural areas 11%
Bare natural 8%
Forest managed 20%
Extensive agriculture 8%
Intensive agriculture -2%
Woody biofuels 0%
Cultivated grazing 14%
World Total 18%
Source: L. Braat & P. ten Brink (eds.) 2008 COPI 9/25/2008 30

31. Valuation and Ecosystem service losses
COPI calculation: A
Annual Loss of economic value of ecosystem services that would have been
Relative to 2000 available had biodiversity remained at 2000 levels. Estimate for 2050.
Services that would
have been there, had
biodiversity been A
Ecosystem halted.
service level
Losses
continue
into the
future
2000 2010 2030 2050
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study 9/25/2008 31

32. 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 9/25/2008 32

33. Global COPI
Loss of Ecosystem services from land based ecosystems
All land based biomes*
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 9/25/2008 33

34. Global COPI
Loss of Ecosystem services
Forestry biomes
Forest biomes Partial Estimation Fuller Estimation
Boreal forest -163 -1999
Tropical forest -536 -3362
Warm mixed forest -249 -2332
Temperate mixed forest -190 -1372
Cool coniferous forest -47 -701
Temperate deciduous forest -133 -1025
Forest Total -1317 -10791
Natural areas -1552 -12310
World GDP in 2050 (trillion (10^12) EUR)* 195.5
Losses of ESS from forests as share of % GDP -0.7% -5.5%
Losses of ESS from natural areas in forest biomes as share of %
GDP -0.8% -6.3%
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study Building on FEEM forestry per hectare values9/25/2008 34

35. What ESS could already be
included (forests)?
Included - (8 services) Not included - (10 services)
Provisioning services Provisioning services
Food, fiber, fuel Biochemicals, natural medicines,
Regulating services pharmaceuticals
Air quality maintenance Ornamental resources
Soil quality maintenance Fresh water
Climate regulation (i.e. carbon storage) Regulating services
Water regulation (i.e. flood prevention,, Temperature regulation, precipitation
aquifer recharge etc.) Erosion control
Water purification and waste Technology development from nature
management Regulation of human diseases
Cultural services Biological control and pollination
Cultural diversity, spiritual and religious Natural hazards control / mitigation
values, educational values, aesthetic and
cultural Cultural services
Recreation and ecotourism • Living comfort due to environmental
amenities
Source: L. Braat & P. ten Brink (eds.) 2008 COPI Study 9/25/2008 35

36. COPI – Forestry Biome
Different ways of calculating the loss
A : 50-year impact of inaction B : Natural Capital Loss every year
Lost Welfare equivalent Natural Capital Lost from
to 5.5 % of GDP (from forest USD 1.35 x 10 12 to 3.10 x 10 12
(@ 4% Discount Rate) (@ 1% Discount Rate)
biomes overall) … or…
Source: P ten Brink in L. Braat & P. ten Brink (eds.) 2008 COPI Study for DGENV 9/25/2008 36

37. Valuation and Ecosystem service losses
GDP, with feedback on
GDP (OECD Scenarios) economic losses from
Relative to 2000 2.8%/year biodiversity losses integrated -
illustrative
GDP: 41.4$ trillion (PPP) (10^12)
Population
GDP/capita: 680$ (PPP)
9100 million
Population: 6092 million
GDP adjusted for impact of
biodiversity loss - illustrative
Services that would have been there,
had biodiversity been halted
Ecosystem
service level
2000 2050 9/25/2008 37
Source: Patrick ten Brink (IEEP), Leon Braat (Alterra), Mark van Ooorshot (MNP), Matt Rayment (GHK)

38. Summary
Biodiversity arguments for action – eroding our natural capital
Social arguments for action – services lost hit all, and poor hardest.
Economic arguments for action – we risk undermining future growth
and prosperity by undermining our natural capital
Need to understand and communicate the Values of Ecosystems and
Biodiversity and the risk of their loss
Need to understand and communicate what can be done to respond
more effectively – across all “end user” types.
The Economics of Ecosystems and Biodiversity: Phase II
Presentation by Pavan Sukhdev, TEEB Study Leader
9/25/2008 38

39. Thank You
Patrick ten Brink
Institute for European Environmental Policy (IEEP)
ptenbrink@ieep.eu
www.ieep.eu
IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and
Now to how the TEEB will respond to these challenges
promotion of policies for a sustainable environment in Europe
Presentation by Pavan Sukhdev, TEEB Study Leader
Brussels Office
55 Quai au Foin/Hooikaai London Office
B-1000 Brussels 15 Queen Anne's Gate,
London SW1H 9BU
Belgium
UK
Tel: +32 (0) 2738 7482
Tel: +44 (0)207 799 2244
Fax: +32 (0) 2732 4004 Fax: +44 (0)207 799 2600
www.ieep.eu
9/25/2008 39

40. Study Authors and Contributors
COPI, and Scoping the Science Studies
9/25/2008 40

41. Study Authors & Contributors (cont.)
9/25/2008 41