Nagoya, Japan, 20 October
2010 The economic importance
of the world's natural assets is now firmly
on the political radar as a result of an
international assessment showcasing the
enormous economic value of forests, freshwater,
soils and coral reefs, as well as the social
and economic costs of their loss, was the
conclusion of The Economics of Ecosystems
and Biodiversity (TEEB) report launched
today by TEEB study leader, Pavan Sukhdev.
"TEEB has documented
not only the multi-trillion dollar importance
to the global economy of the natural world,
but the kinds of policy-shifts and smart
market mechanisms that can embed fresh thinking
in a world beset by a rising raft of multiple
challenges. The good news is that many communities
and countries are already seeing the potential
of incorporating the value of nature into
decision-making," said Mr. Sukhdev,
a banker who heads up the Green Economy
Initiative of the United Nations Environment
Programme (UNEP).
He was speaking at the
launch of the two-year study, which has
involved hundreds of experts from around
the world, at the Convention on Biological
Diversity's 10th Conference of Parties meeting
(CBD COP10) in Nagoya.
The TEEB study calls
for wider recognition of nature's contribution
to human livelihoods, health, security,
and culture by decision-makers at all levels
(local to national and business to citizens).
It promotes the demonstration, and where
appropriate, the capture of the economic
values of nature's services through an array
of policy instruments and mechanisms.
Countries such as India
have already announced plans for implementing
the economic valuation of their natural
capital as well as the value of nature's
services in decision-making.
"TEEB's approach
can reset the economic compass and herald
a new era in which the value of nature's
services is made visible and becomes an
explicit part of policy and business decision-making.
Do nothing, and not only do we lose trillions
worth of current and future benefits to
society, we also further impoverish the
poor and put future generations at risk,"
said Mr. Sukhdev.
"The time for ignoring
biodiversity and persisting with conventional
thinking regarding wealth creation and development
is over. We must get on to the path towards
a green economy," he added.
Nature is crucial to
prosperity and development
In TEEB's final report,
"Mainstreaming the Economics of Nature",
there are three scenarios: a natural ecosystem
(forests), a human settlement (city), and
a business sector (mining), to illustrate
how the economic concepts and tools described
in TEEB can help equip society with the
means to incorporate the values of nature
into decision-making at all levels.
With more than half
of the human population now living in urban
areas, cities have a crucial role to play
in acknowledging the natural capital required
to maintain and improve the well-being of
their residents. Innovative economic instruments
and policies are emerging that reward good
practice. For example, the Japanese city
of Nagoya (host to the COP-10 meeting),
has implemented a new system of tradeable
development rights whereby developers wishing
to exceed existing limits on high-rise buildings
can offset their impacts by buying and conserving
areas of Japan's traditional agricultural
landscape. Discounts on bank loans for buildings
that receive a higher 'star rating' based
on a green certification system designed
by city authorities also create incentives
for more green space within city projects.
An important finding
of many studies reviewed by TEEB is the
contribution of forests and other ecosystems
to the livelihoods of poor rural households,
and therefore the significant potential
for conservation efforts to contribute to
poverty reduction. It has been estimated
that ecosystem services and other non-marketed
natural goods account for 47 to 89 per cent
of the so-called 'GDP of the Poor' (i.e.
the effective GDP or total sources of livelihoods
of rural and forest-dwelling poor households)
in some large developing countries.
"In the past only
traditional sectors such as manufacturing,
mining, retailing, construction and energy
generation were uppermost in the minds of
economic planners and ministers of finance,
development and trade. TEEB has brought
to the world's attention that nature's goods
and services are equal, if not far more
central, to the wealth of nations including
the poor-a fact that will be increasingly
the case on a planet of finite resources
with a population set to rise to nine billion
people by 2050," said Achim Steiner,
UN Under-Secretary General and UNEP Executive
Director.
Failure to account for
the value of natural capital poses significant
business and social risks
The report also drives
home the message that failure of business
to account for the value of natural capital,
particularly in sectors such as mining,
can pose significant business and social
risks. The UK-based consultancy, TruCost,
estimated that the negative impacts, or
'environmental externalities', of the world's
top 3,000 listed companies totals around
US$ 2.2 trillion annually.
Approaches such as Net
Positive Impact, wetland mitigation and
bio-banking can help ensure that developers
take responsibility for their environmental
footprint. As consumers and governments
opt for greener purchasing choices the business
sector also stands to make considerable
gains: by 2020 the annual market size for
certified agricultural products is expected
to be US$210 billion; payments for water
related ecosystem services US$6 billion;
and voluntary biodiversity offsets in the
region of US$100 million a year.
Countries give nature
the green light
Countries are already
taking steps to adopt the TEEB approach.
India's Minister for Environment and Forests,
Mr. Jairam Ramesh, said today that the TEEB
study provides practical guidance for new
economic approaches that India will start
to implement.
"TEEB aims to provide
strong incentives for countries to ensure
decisions are not solely based on short-term
gains, but build foundations for sustainable
and inclusive development. India is planning
a TEEB for India study to assess its natural
capital. We are committed to developing
a framework for green national accounts
that we can implement by 2015, and we are
confident that the TEEB for India Study
will be the key facilitator for the same,"
said Mr. Ramesh.
The European Commission
and Germany saw the benefits of the TEEB
study at the Potsdam G8+5 Environment Ministers
meeting in 2007 and applauded its conclusions.
"The European Commission
has supported the project from the start
and will continue to work on these issues
after COP 10, taking into account the decisions
that will be adopted in Nagoya. We intend
to launch a study to examine more in detail
the evidence available in an EU context
and areas for implementation of the analyses
developed by TEEB in our policies. The Commission
is also willing to support initiatives by
other countries, in particular developing
countries, to demonstrate the benefits and
costs of investing in the management of
biodiversity and ecosystem services. Notably,
we plan to work in partnership with UNDP
for supporting assessments in interested
developing countries and making the links
with economic sectors and development plans,"
said Janez Potocnik, European Commissioner
for the Environment.
Japan, the host country
of the 10th Conference of Parties meeting
on the Convention of Biological Diversity
(CBD COP10), also welcomed the study.
"The Japanese Government
has contributed to the TEEB study, and has
conducted research on economic evaluation
and policy responses on Japan's biodiversity
in close cooperation with TEEB. Japan welcomes
the launching of TEEB at Aichi-Nagoya, Japan,
in the International Year for Biodiversity.
We expect the TEEB study will deliver significant
impacts on global biodiversity policy. To
support this new approach, Japan, as COP10
presidency, would like to proactively contribute
to national, regional and global initiatives
to implement aspects of the TEEB study,"
said Mr. Hideki Minamikawa, Vice-Minister
for Global Environmental Affairs in the
Ministry of the Environment Japan.
Braulio Dias, Secretary
for Biodiversity and Forests of Brazil's
Ministry for Environment, welcomed the TEEB
study saying it offers sound guidance and
a powerful message to reset the economic
compass. "As one of the world's biodiversity
hotspots, Brazil's government and business
sectors are taking the TEEB recommendations
very seriously and can see that the era
of the invisibility of the value of nature
must end. At a national level we are in
discussions to implement a TEEB study of
our natural capital, and the Brazilian business
sector is also planning to move towards
this practical and sustainable approach
to decision-making," he said.
The TEEB study concludes
with the following recommendations:
1. Public disclosure
of -and accountability for -impacts on nature
should be essential outcomes of the biodiversity
assessment.
2. The present system
of national accounts should be rapidly upgraded
to include the value of changes in natural
capital stocks and ecosystem service flows.
3. An urgent priority
is to draw up consistent physical accounts
for forest stocks and ecosystem services,
both of which are required, for example,
for the development of new forest carbon
mechanisms and incentives.
4. The annual reports
and accounts of business and other organizations
should disclose all major externalities,
including environmental damage affecting
society and changes in natural assets not
currently disclosed in the statutory accounts.
5. The principles of
'No Net Loss' or 'Net Positive Impact' should
be considered as normal business practice,
using robust biodiversity performance benchmarks
and assurance processes to avoid and mitigate
damage, together with pro-biodiversity investment
to compensate for adverse impacts that cannot
be avoided.
6. The principles of
'polluter pays' and 'full-cost-recovery'
are powerful guidelines for the realignment
of incentive structures and fiscal reform.
In some contexts, the principle of 'beneficiary
pays' can be invoked to support new positive
incentives such as payments for ecosystem
services, tax breaks and other fiscal transfers
that aim to encourage private and public
sector actors to provide ecosystem services.
7. Governments should
aim for full disclosure of subsidies, measuring
and reporting them annually in order that
their perverse components may be recognized,
tracked and eventually phased out.
8. The establishment
of comprehensive, representative, effective
and equitably managed systems of national
and regional protected areas should be pursued
(especially in the high-seas) in order to
conserve biodiversity and maintain a wide
range of ecosystem services. Ecosystem valuation
can help to justify protected areas policy,
identify funding and investment opportunities,
and inform conservation priorities.
9. Ecosystem conservation
and restoration should be regarded as a
viable investment option in support of climate
change mitigation and adaptation. Within
the UNFCCC process, REDD-Plus should be
prioritized for accelerated implementation,
beginning with pilot projects and efforts
to strengthen capacity in developing countries
to help them establish credible systems
of monitoring and verification that will
allow for the full deployment of the instrument.
10. Human dependence
on ecosystem services and particularly their
role as a lifeline for many poor households
needs to be more fully integrated into policy.
This applies both to targeting development
interventions as well as to evaluating the
social impacts of policies that affect the
environment.
It is envisaged that
the TEEB study will continue with ongoing
work on outreach and capacity building.
The TEEB reports are available at www.teebweb.org.
Notes to Editors:
In addition to the launch
of the final synthesis Mainstreaming the
Economics of Nature, TEEB Ecological and
Economic Foundations is published today
by Earthscan. The volume synthesizes state-of-the-art
knowledge on a range of issues that are
central to applying economic valuation to
ecosystem services and biodiversity. A further
three volumes based on the TEEB reports
will be published by Earthscan over the
next 15 months.
TEEB is an independent
study, led by Pavan Sukhdev, hosted by the
United Nations Environment Programme (UNEP),
with financial support from the European
Commission, Germany, UK, the Netherlands,
Norway, Belgium, Sweden and Japan.
Mainstreaming the Economics
of Nature is the last in a series of interconnected
reports: TEEB Ecological and Economic Foundations,
coordinated by Pushpam Kumar of the University
of Liverpool; TEEB for Policy Makers coordinated
by Patrick ten Brink of the Institute of
European Environmental Policy (IEEP); TEEB
for Local and Regional Policy Makers coordinated
by Heidi Wittmer of the UFZ Helmholtz Research
Centre and Haripriya Gundimeda of the Indian
Institute of Technology; and TEEB for Business
coordinated by Josh Bishop of IUCN. A TEEB
for citizens website can be found at www.teeb4me.com.
US$ 50 billion
The annual loss of opportunity
due to the current over-exploitation of
global fisheries. Competition between highly
subsidized industrial fishing fleets coupled
with poor regulation and weak enforcement
of existing rules has led to over-exploitation
of most commercially valuable fish stocks,
reducing the income from global marine fisheries
by US$50 billion annually, compared to a
more sustainable fishing scenario (World
Bank and FAO 2009).
Euros 153 billion
Insect pollinators are
nature's multi-billion dollar providers.
For 2005 the total economic value of insect
pollination was estimated at Euros 153 billion.
This represents 9.5% of world agricultural
output for human food in 2005. (Gallai et
al. 2009)
US$30 billion US$172
billion
The annual value of
human welfare benefits provided by coral
reefs. Although just covering 1.2% of the
world's continent shelves, coral reefs are
home to an estimated 1-3 million species
including more than a quarter of all marine
fish species. (Allsopp et al. 2009). Some
30 million people in coastal and island
communities are totally reliant on reef-based
resources as their primary means of food
production, income and livelihood. (Gomez
et al. 1994, Wilkinson 2004) Estimates of
the value of human welfare benefits provided
by coral reefs range from US$30 billion
(Cesar et al. 2003) to US$172 billion annually
(Martinez et al. 2007)
US$20 -US$67 million
(over four years)
The benefits of tree
planting in the city of Canberra. Local
authorities in Canberra, Australia, have
planted 400,000 trees to regulate microclimate,
reduce pollution and thereby improve urban
air quality, reduce energy costs for air
conditioning as well as store and sequester
carbon. These benefits are expected to amount
to some US$20-US$67 million over the period
2008-2012, in terms of the value generated
or savings realized for the city. (Brack
2002)
US$6.5 billion
The amount saved by
New York, by investing in payments to maintain
natural water purification services in the
Catskills watershed. (US$1-US$1.5 billion)
rather than opt for the man-made solution
of a filtration plant (US$ 6-8 billion plus
US$300-500 million/year operating costs).
(Perrot-Maitre and Davis 2001).
50
The number of (rupees)
millionaires in Hiware Bazaar, India, as
the result of regenerating 70 hectares of
degraded forests. This led to the number
of active wells in the surrounding area
doubling, grass production increasing and
income from agriculture increasing due to
the enhancement of local ecosystem services
(a TEEB case mainly based on Neha Sakhuja).
Further examples available at www.teebweb.org
