Bridges Trade BioRes Review • Volume 3 • Number 1 • June 2009

BioRes interview: Appraising biodiversity

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How much would you pay for a little biodiversity? While some may call environmental commodification repugnant, the UN Environment Programme’s Green Economy Initiative is banking on the idea that economics holds much potential for biodiversity preservation. The Economics of Ecosystems and Biodiversity, or TEEB, project is looking to put a price on the work the environment does for humanity - such as water and air purification - to motivate biodiversity conservation. BioRes contacted Georgina Langdale at TEEB’s office in Bonn, Germany to get a better understanding of the project.

What is the purpose of the TEEB initiative?

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.

Taking inspiration from ideas developed in the Millennium Ecosystem Assessment, The Economics of Ecosystems and Biodiversity (TEEB) aims to promote a better understanding of the true economic value of ecosystem services and to offer economic tools that take proper account of this value.

In doing this, TEEB will communicate the urgency of action on ecosystems and biodiversity loss by presenting the economic, societal, and human value of the benefits of ecosystems and biodiversity as well as the scale of the benefits lost.

The Study aims to show how we can account for the value of ecosystems and biodiversity in our choices and decision-making processes. For example, one of TEEB’s ultimate goals is to provide policy makers with the tools they need to incorporate the true value of ecosystem services into their decisions.

An interim report of the Study was presented at the 9th meeting of the Conference of the Parties to the Convention on Biological Diversity in May 2008. The second phase of the TEEB study is being led by UNEP with support from the European Commission, German Federal Ministry for the Environment, and the UK Department for Environment, Food and Rural Affairs.

What was accomplished during Phase I?

Phase I’s Interim Report demonstrates the huge significance of ecosystems and biodiversity and the threats to human welfare if no action is taken to reverse current damage and losses.

The interim report showed that the economic size and welfare impact of losses is enormous. It illustrated the tensions between biodiversity loss and the achievement of the MDGs, especially the goal of ending extreme poverty by 2025. For economists, Phase I showed that discount rates are an ethical choice and that we must measure what we manage. Despite the huge complexity of the task ahead, the Study also showed that biodiversity must become the responsibility of all with the power and resources to act.

The report’s release created significant interest from a range of audiences from policy makers to the media. TEEB Study Leader Pavan Sukhdev is increasingly being asked to contribute to a wide range of discussions on the costs and benefits of biodiversity and ecosystems. At a time when traditional market mechanisms have failed, TEEB offers critical insights into how we may not just rebuild market mechanisms, but also improve them.
What has been the greatest challenge so far?

Some of the greatest challenges include the complexity of the subject matter itself, urgency of the task, and the challenge of strengthening the inter-relationships between science, economics and policy. Society struggles to find the ‘value of nature’. Despite nature being the source of much value for us every day, it is mostly bypassed by markets, pricing and valuation tools. This lack of valuation is an underlying cause for the observed degradation of ecosystems and the loss of biodiversity. It’s an enormous problem.

In order to develop practical, flexible, and implementable recommendations, TEEB is inviting input and data from a wide range of sources across the world, which will allow the project to best reflect the range of biomes, trade sectors, ethical issues, and fiscal and policy instruments involved. This challenge also creates a significant opportunity for a truly collaborative and collegiate effort from the scientific, economic, business, political, and civil communities to address these urgent and unavoidable issues.

How does trade fit into your analysis?

Phase II will address the role of business and trade within the context of biodiversity benefit and loss. The study will examine how the context of business and biodiversity is changing; how business opportunities can relate to biodiversity and ecosystems; how business can measure and report impacts on biodiversity; what is needed to improve business-biodiversity relations and how business can manage the risks of biodiversity loss.

There will be a particular focus on businesses directly impacting ecosystems and biodiversity such as mining, oil and gas and infrastructure; those that depend on health ecosystems and biodiversity for productivity such as agriculture and fisheries; the market ‘gatekeepers’ or enablers including commercial banks, asset managers, business services and insurance; and the pioneering markets for ecosystem services and biodiversity-related products such as eco-tourism, eco-agriculture, and bio-carbon. In addition the study will engage with related industry associations, CSR platforms, civil society partners, educators and media.

What do you hope to achieve during Phase II?

Phase II of the TEEB study sets out to continue the work initiated in Phase I and will seek to achieve five important goals:

Firm up a ‘science and economics framework’ integrating ecological and economic knowledge to structure the evaluation of ecosystem services under different scenarios.
Identify ‘recommended valuation methodologies’, applicable under differing conditions and date assumptions to the most tangible and significant economic values of biodiversity and ecosystem services, across the world’s main biomes.
Examine the economic costs of biodiversity decline and the loss of ecosystem services world-wide in a business-as-usual scenario and the costs and benefits of actions to reduce these losses in alternative scenarios, focusing on a medium-to-long-term perspective.
Develop a ‘policy toolkit’ which supports policy reforms and integrated impact assessment at national, regional and local levels, to ensure that all relevant information is considered to analyse the pros and cons of different options, in order to foster sustainable development and better conservation of ecosystems and biodiversity.
Engage key “end-users” at an early stage to ensure that the output of this study is relevant to their needs, accessible, practical, flexible and overall, useful.

In achieving these goals, TEEB hopes to answer some fundamental questions:

How do we reward the benefits of conservation?
What is the optimum way of recasting today’s subsidies to meet tomorrow’s priorities?
How do we reward unrecognised benefits and tax uncaptured costs of ecosystem services and biodiversity?
The majority of the world’s poor depend on natural public goods, so how do we account for this and measure the ‘GDP of the Poor’?
How do we show discounting as an ethical choice?
How do we measure what matters and what we manage?

In seeking answers to these fundamental questions, The Economics of Ecosystems and Biodiversity study will provide a comprehensive foundation upon which to build better ecosystem and biodiversity management.

The Call for Evidence is currently open and contributions are welcomed. Go to www.teebweb.info for further details.