Nature and its role in the Transition to a Green Economy

A contribution to Rio + 20

Patrick ten Brink TEEB for National and International Policy Makers Co-ordinator

Head of Brussels Office Institute for European Environmental Policy (IEEP)

TEEB Day at the ISEE 2012 Conference

Windsor Guanabara Palace Hotel, Conference Annex, Velasquez Hall. Rio de Janeiro, Brazil, Monday 18th June

3.15-4.45 pm

Presentation overview

Nature and the Green Economy Project

1. Nature in a green economy

2. Nature , well-being and development

3. The multiple benefits of valuing nature

4. Challenges and Commitments

5. Achieving the transition to a green economy

Next Steps & Panel questions

Nature and its role in the Transition to a Green Economy

TEEB’s Genesis and Developments

Interim

Report

India, Brazil, Belgium,

Japan & South Africa

Sept. 2010

TEEB

Synthesis

Climate

Issues Update

Ecol./Env. Economics literature

TEEB End User

Reports Brussels

2009, London 2010

CBD COP 9

Bonn 2008 Input to

UNFCCC 2009

BD COP 10

Nagoya, Oct 2010

TEEB

Books

Nature and GE

TEEB W&W

`TEEB Oceans

TEEB studies

The Netherlands,

Germany, Nordics,

Norway, India, Brazil

Nature and the Transition to a Green Economy

• Need for a transition towards a “green” economy that promotes social equity, poverty eradication and human well-being.

• Increasing appreciation of biodiversity and ecosystem services and the value of nature.

• Healthy and resilient ecosystems are necessary for long-term socio-economic development

• Efforts to build a green economy should be based on an appreciation of the values of nature.

1. Nature in a Green Economy

• Nature is essential to the health and growth

of economies, societies and individuals, through the provision of ecosystem services.

• Nature is more than “natural capital” - but, NC is a useful metaphor to communicate the value of nature to people and economy

• Nature is also more than the flow of

ecosystem services - however, an understanding of the ecosystem services can offer an important additional evidence base to inform decisions and motivate action.

What is a green economy?

“one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.

In its simplest expression, a green economy can be thought of as one which is low carbon,

resource efficient and socially inclusive.”

(UNEP Green Economy Report)

Nature Capital’s contribution to the Economy

NATURAL CAPITAL

Biodiversity (genes, species, habitats,

ecosystems) and other natural

resources (e.g. water, air & climate, soil)

HUMAN CAPITAL

Learning and skills, health, wellbeing

and happiness

SOCIAL CAPITAL

Social cohesion, trust, civic society,

judiciary, education, health services &

social services

PUBLIC SECTOR

HOUSEHOLDS

DEMAND

Domestic & Exports

PRIVATE SECTOR

IMPACTS from production, use, investment

DIRECT FLOW OF SERVICES - BENEFITS

Source: adapted from ten Brink et al (2011) in TEEB (2011a)

THE FOUR CAPITALS INTERMEDIATE CONSUMPTION

SECTORS OF THE ECONOMY (examples)

- Agriculture, hunting, forestry & fishing

- Food products, beverages & tobacco

- Textiles, textile products & leather

- Wood and wood products

- Pulp, paper & paper products

- Rubber & plastics products

- Research & development

- Mining & quarrying

- Hotels & restaurants

- Chemicals - Pharmaceuticals

- Recycling - Manufacturing

- Electricity - Water supply

- Real estate - Construction

- Education - Finance & insurance

Outputs from one sector can be

intermediate inputs to another

FINAL CONSUMPTION

INP

UT

S

OU

TP

UT

S

MAN MADE CAPITA`L

Manufactured, Fixed capital : factories,

power plant, transport and environmental

infrastructures, buildings &

Financial capital: money and equivalents

INVESTMENT

Key sectors include:

Primarily investing in natural capital

• Agriculture • Fisheries • Water • Forests • Energy • Manufacturing • Buildings • Transport • Tourism • Waste management + Cities Source: UNEP Green Economy Report

Primarily investing in energy and resource efficiency Also working with nature can lead to cost-effective solutions and multiple benefits

All sectors important – whether due to their dependency/benefits from nature’s services, their impacts on the environment, or their opportunities for action. Also pharmaceuticals, food and drink, education, health...

Human and societal well-being depends on nature.

Where natural capital is degraded and lost, there is a risk that communities are undermined and humans suffer.

Efforts to conserve, restore and sustainably use natural capital can

• improve human well-being, address poverty, support livelihoods and increase intergenerational equity

• increase ecological resilience - a life insurance policy for many communities.

Nature contributes to local, regional and national development and prosperity

2. Nature , well-being and development

Working for Water (WfW): SA The Manalana wetland (near Bushbuckridge, Mpumalanga) • Severely degraded by erosion that threatened to consume the entire system

• WfW public works programme intervened in 2006 to reduce the erosion and improve

the wetland’s ability to continue providing its beneficial services

Results • The value of livelihood benefits from degraded wetland was just 34 % of what could be achieved after investment in ecosystem rehabilitation;

• Rehabilitated wetland now contributes provisioning services at a net return of 297 EUR/household/year;

• Livelihood benefits ~ 182,000 EUR by the rehabilitated wetland; x2 costs

• The Manalana wetland acts as a safety net for households.

Sources: Pollard et al. 2008; Wunder et al 2008a; http://www.dwaf.gov.za/wfw/

Recognising and demonstrating the values and potential for increased value critically important.

Sourc

es: T

EE

BC

ases for

TE

EB

for

local and r

egio

nal polic

y

Tanzania - Nihili woodland restoration

• Restoration using traditional knowledge.

• An increase in the provision of ecosystem services from the woodland (e.g. fuel, fruit, building timber, honey, medicines and fodder)

• Time needed to collect fuel wood & non-timber forest products fell by several hours.

• The sale of tree products has helped pay for children’s schooling &

• More time for education and productive work, thus creating enabling conditions for development (TEEB 2012b).

Nature and its role in the Transition to a Green Economy

3. Values of Working with Nature – evidence base

• USA-NY: Catskills-Delaware watershed for NY: PES/working with nature saves money (~5US$bn)

• New Zealand: Te Papanui Park - water supply to hydropower, Dunedin city, farmers (~$136m)

• Mexico: PSAH to forest owners, aquifer recharge, water quality, deforestation, poverty (~US$303m)

• France & Belgium: Priv. Sector: Vittel (Mineral water) PES & Rochefort (Beer) PES for water quality

• Venezuela: PA helps avoid potential replacement costs of hydro dams (~US$90-$134m over 30yr)

• Vietnam restoring/investing in Mangroves - cheaper than dyke maintenance (~US$: 1m to 7m/yr)

• South Africa: WfW public PES to address IAS, avoids costs and provides jobs (~20,000; 52%♀)

• Germany : peatland restoration: avoidance cost of CO2 ~ 8 to 12 €/t CO2 (0-4 alt. land use)

Sources: various. Mainly in TEEB for National and International Policy Makers, TEEB for local and regional policy and TEEB cases

Critical to assess where working with nature saves money for public (city, region,

national), private sector, communities and citizens & who can make it happen

‘ ‘We never know the worth of water 'til the well is dry’.

English proverb

‘Men do not value a good deed unless it brings a reward’

Ovid, B.C. 43 – 18 A.D., Roman Poet

Solution: Mexico PSAH: PES to

forest owners to preserve forest:

manage & not convert forest

Result

Deforestation rate fell from 1.6 % to 0.6 %.

18.3 thousand hectares of avoided deforestation

Avoided GHG emissions ~ 3.2 million tCO2e

Hydrological services: Aquifer recharge;

Improved surface water quality, reduce

frequency & damage from flooding`

Munoz 2010); Muñoz-Piña et al. 2008; Muñoz-Piña et al. 2007.

Reduce Deforestation Address Poverty

Investment in good spatially relevant data critical to develop an evidence base for policy instruments

Multiple Objectives : PSAH Mexico

Balance of priorities varied over time

Munoz 2010); Muñoz-Piña et al. 2008

Aquifers

Water scarcity

Deforestation

Poverty

P

A

WS

D An instrument can evolve and respond to changing needs

4. Challenges

• Feeding the 9 billion; Water; Poverty alleviation, Urbanisation, Jobs, Climate change, Financial crisis etc

• The rising level of consumption and production will put increasing stress on the planet’s resources and ecosystems – limits, scarcity, price volatility, critical (ecological and social) thresholds...

Commitments

• Rio Conventions: CBD; UNFCCC and UNCCD

• Subsidy reform: Aichi targets, G20, EU, countries

• Natural capital Accounts/SEEA: WAVES, SNA/SEEA, Gabarone Declaration

• Finance and business: Natural capital declaration and EP&Ls

• Science policy interface: IPBES

• Proactive investment in natural capital (restoration) : Aichi targets

• Sustainable Development : MDGs (poverty, nutrition, education , equity, health, environment)

Over $ 1 trillion per year in Subsidies

Source TEEB for policy Makers - Chapter 6 www.teebweb.org

Most sensible use of funds? Reform win-wins ? eg budget, climate, energy security, water, biodiversity & social?

Need identification of subsidies, assessment of potential benefits of reform

Sector Region

Agriculture OECD: US$261 billion/year (2006-8) (OECD 2009)

Biofuels US, EU and Canada: US$11 billion in 2006 (GSI 2007; OECD 2008b)

Energy World: US$557 billion/year in 2008 (IEA 2010)

Fisheries World: US$15-35 billion/year (UNEP 2008a)

Transport World: US$238-306 bn/yr; EHS ~ US$173–233 bn/yr (Kjellingbro and Skotte 2005)

Water World: US$67 bn/year; EHS estimated at US$50 bn/year (Myers & Kent 2002)

the “good”

still relevant, targeted, effective, positive impacts, few negative effects

the “bad”

no longer relevant, waste of money, important negative effects

the “ugly”

badly designed – eg inefficient, badly targeted, potential for negative effects

We need an inventory and assessment of EHS to identify

Need to understand which subsidies are which.

Where benefits of reform might lie.

Develop a road map for EHS Reform.

Sou

rce:

bu

ildin

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n S

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aila

an

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200

7

Phase 0: Screening of sectors / impacts

1) What are the threats to

biodiversity, and how do these relate

to key economic activities / sectors?

Can sectors / activities by identified which are

harmful to biodiversity?

Phase 1: Screening of incentives

2) Are there incentives related to

these sectors / activities?

3) Does the incentive lead to potential direct / indirect

biodiversity impacts? (if positive inform Q10)

Has an incentive been identified which may be harmful to biodiversity?

4) Are these potential impacts limited by existing

‘policy filters’?

Phase 2: Potential for reform

6) Does the incentive lead to socio-

economic issues?

7) Are there more benign alternatives?

5) Does the incentive fulfil its objectives and are these still

valid?

Is the removal or reform of the incentive

needed?

8) Are there pressures to reform?

Phase 3: Reform scenarios

10) What are the expected costs and benefits (economic,

environmental, social)?

12) Is the reform understandable,

practical and enforceable?

9) Are there suitable reform option(s)?

Can options for reform or removal be

identified, and are they advisable?

Phase 4: Opportunities for

action

14) Is there a (potential) policy

champion to drive reform?

15) Is there public/ political support to reform or can it be

developed?

13) Is there a window of opportunity for

reform or can one be created?

Is the removal or reform of the incentive timely

& should it be prioritised?

Prioritise reform / removal of the incentive harmful to biodiversity

No Yes

No need to currently take further action – regular review is however advised

No Yes No Yes No Yes No Yes

Yes: negative impacts

Yes +

+

+

+ +

+

Yes

Yes 11) Are there

obstacles to reform?

No

Develop conditions for success and plan for future reform

Tools to support national commitments: UK Subsidy reform

Source: ten Brink et al 2012

5. Achieving the transition to a green economy

Key components and building blocks

Go

od

go

vern

ance

Go

od

Go

vern

ance

Current Situation

Declining Sustainability in a Brown Economy

Resource over-exploitation & pollution pressures

Climate Change

Biodiversity and natural capital loss

Critical ecological and resource thresholds passed

or at risk

Resource scarcity and limited access to a clean

environment

Health impacts and man-made natural disasters

An economy that is not resource efficient, low carbon

and socially inclusive

Ambitions for the Future

A Green Economy

Improved human well-being and social equity, while significantly

reducing environmental risks and ecological scarcities

Staying within a ‘safe operating space’: using resources within the planet’s regenerative capacities &

avoiding critical ecological thresholds

No net loss of biodiversity and climate change within ‘acceptable’

limits

Sustainability for future generations and business:

available natural capital and a clean environment

Health and livelihoods for citizens and communities

An economy decoupled from environmental impacts and

resource use

Building Blocks in the

Transition to a Green Economy

Business-as-Usual

Approaches

Avoiding Unsustainable Trade-offs

+ Environmental compliance &

infrastructure

Active environmental

management Active Risk Management

+

Proactive Investment in Natural Capital

Pursuing environmental

sustainability Eco-efficiency

+ Decoupling via Radical

Innovation & Demand change

+

+

Source: Patrick ten Brink & Leonardo Mazza, own representation

The Transition to a Green Economy

Examples of actions A: Assessment to understand the whole picture – winners/losers,

impacts & response in project design and selection

B: Investment in water and waste infrastructures

C: Flood risk mapping, taxonomy and pathways for invasive species

D: Restoration of ecological infrastructure, e.g. wetlands, peatlands, flood plains & Conservation, protected area management

E: EHS reform, positive incentives, polluter pays, fiscal reform

F: Research and development for new products/applications – pharmaceuticals, biomimicry & Information for Demand changes

G: Indicators and Environmental accounts

Transitions to green economies

Path dependent on national contexts

Which combination of building blocks are priority will vary over time and place – though all necessary for the transition

Financing the transition challenge

Governance for a green economy

Accelerating efforts

Go

od

Go

vern

ance

Building Blocks in the

Transition to a Green Economy

Business-as-Usual

Approaches

Avoiding Unsustainable Trade-offs

+ Environmental compliance &

infrastructure

Active environmental

management Active Risk Management

+

Proactive Investment in Natural Capital

Pursuing environmental

sustainability Eco-efficiency

+ Decoupling via Radical

Innovation & Demand change

+

+

Conclusions

1. Nature, in all its diversity, provides a wide range of benefits and values to society and the economy referred to as natural capital.

2. A green economy aims to incorporate these values from ecosystem services and biodiversity into decision-making across all levels of governance.

3. There are both opportunities and risks involved in transitions to green economies in regards to human welfare and development. Transition management is critical for success.

4. Leading by example, cooperation and partnerships essential to achieve the transition.

5. Rio - a window of opportunity , a window of necessity.

Panel questions & discussion

Q: What role can nature play in improving wellbeing of people/communities, poverty alleviation and local development? And what governance solutions for mainstreaming (e.g. links of strategies and plans)?

Q: How can commitments of working with nature (e.g. CBD NBSAPs) be mainstreamed with and other commitments (e.g. climate change, green economy, development)?

Q: Where can we save money via working with nature, and where can we get wider benefits and how can we identify and seize these opportunities?

Q: Who can lead the transition to a green economy?

Thank you

TEEB Reports available on http://www.teebweb.org/

See also www.teeb4me.com

Patrick ten Brink

ptenbrink@ieep.eu

IEEP is an independent not for profit institute dedicated to advancing an environmentally sustainable Europe through policy analysis, development and dissemination.

For further information see: http://www.ieep.eu Follow us on twitter: IEEP_EU

Or PtenBrinkIEEP

The new Manual of European Environmental Policy: http://www.europeanenvironmentalpolicy.eu/