patrick ten brink of ieep teeb pes unece meeting 4 july 2011 final
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presentation by Patrick ten Brink of IEEP on Payments for Ecosystem Services PES at UNECE workshop on PES and Green Economy July 2011TRANSCRIPT
The Economics of Ecosystems and Biodiversity
Rewarding benefits through payments and markets
Patrick ten Brink TEEB for Policy Makers Co-ordinator
Head of Brussels Office
Institute for European Environmental Policy (IEEP)
UNECE Workshop, 4-5 July 2011
Payments for Ecosystem Services: What role for a green economy ?
Palais des Nations
Salle VIII, Geneva 4-5 July 2011
1
TEEB‟s Genesis, Aims and progress
“Potsdam Initiative – Biological Diversity 2010”
1) The economic significance of the global loss of biological diversity
Importance of recognising, demonstrating & responding to values of nature
Engagement: ~500 authors, reviewers & cases from across the globe
Interim
Report
India, Brazil, Belgium,
Japan & South Africa
Sept. 2010
TEEB
Synthesis
CBD COP11
Delhi
National
TEEB
Work
Sectoral
TEEB
work
Et al.
Rio+20
Brazil
Climate
Issues Update
Ecol./Env. Economics literature
G8+5
Potsdam
TEEB End User
Reports Brussels
2009, London 2010
CBD COP 9
Bonn 2008 Input to
UNFCCC 2009
CBD COP 10 Nagoya, Oct 2010
TEEB
Books
TEEB Reports: http://www.teebweb.org/ Summaries (in range of languages) and chapters
Valuation and policy making: from valuing natural assets to decisions
“I believe that the great part of miseries of mankind are brought upon
them by false estimates they have made of the value of things.” Benjamin Franklin, 1706-1790
“There is a renaissance underway, in which people are waking up to
the tremendous values of natural capital and devising ingenious
ways of incorporating these values into major resource decisions.” Gretchen Daily, Stanford University
The Global Biodiversity Crisis • Nature’s assets & biodiversity loss
• Economic values and loss
• Social dimension
Transforming our approach to natural capital
Available Solutions • Markets/pricing/incentives :PES • Regulation: standards
• Regulation: planning, protected areas
• Investment (man-made & natural capital)
Measuring what we manage • Indicators
• Accounts
• Valuation
• Assessment
TEEB for Policy Makers
Book announcement: The Economics of Ecosystems and
Biodiversity in National and International Policy Making now
available from Earthscan
Provisioning services • Food, fibre and fuel • Water provision • Genetic resources Regulating Services • Climate /climate change regulation • Water and waste purification • Air purification • Erosion control • Pollination • Biological control
Cultural Services • Aesthetics, Landscape value, recreation
and tourism • Cultural values and inspirational
services
Market values
Potential Market values
– eg REDD & water purification PES
- Avoided cost of purification
Potential Market values
– eg water supply PES; -eg ABS
Lost output or
cost of alternative service provider
Market values – some tourism
Social value – identity et al
Health: social value
Some are private goods (eg food provisioning), others public goods that can become (part) private (eg tourism, pollination), others are pure public goods (eg health, identify)
Ecosystem services - different types of value in our economic and social systems
Many ecosystem services from the same piece of land
Benefits local to global
Benefits are spatially dependent
PES need to take these different dimensions into account
• The underlying principle of PES - „beneficiary / user pays‟ principle + service
providers get paid for their service
• PES aim to change the economics of ecosystem service provision by
improving incentives for land use and management practices that supply
such services
• Instrument growing in applications
– 300 PES programmes globally, range of ecosystem services (Blackman & Woodward, 2010)
– Broad estimate for global value: USD 8.2 billion (Ecosystem Marketplace, 2008)
– USD 6.53 billion in China, Costa Rica, Mexico, the UK and the US alone. (OECD 2010)
– Increasing by 10-20% per year (Karousakis, 2010)
– Dynamic field – new support (e.g. Natural England White Paper), potential solution to challenges (e.g. public payments for public goods and EU CAP reform), new tool flood control (Eg Danube – exploring options)
• Big and small
– E.g. 496 ha being protected in an upper watershed in northern Ecuador
– eg. 4.9 million ha sloped land being reforested by paying landowners China.
See also Chapter 5 TEEB for Policy Makers
PES: They exist, they work, learning by doing
• For Specific services - e.g. provision of quality water (NY, Ec, Mx), protect groundwater (J, D), cleanse coastal waters (Sw), carbon Storage (NZ, Uganda, CR), invasive alien species (SA - WfW), biodiversity (EU,AUS), traditional knowledge for bio-prospecting (India), flood control (exploring Danube)
• Multiple services: e.g. Costa Rica’s PSA - carbon, hydrological services preserving biodiversity and landscape beauty. Germany and Bolivia for biodiversity and water
• Multiple objectives - e.g. Mexico’s PSAH – hydrological services, deforestation, poverty
PES address a wide range of objectives
„Men do not value a good deed unless it brings a reward‟ Ovid, B.C. 43 – 18 A.D.
Public (municipal, reg., nat.) & private (eg Vittel (Fr), Rochefort (B), Bionate (D)
for quality water & mixed
Local (e.g. New York, Quito), Regional (e.g. Niedersachsen) , national (e.g
Costa Rica, Mexico and Ecuador and international (e.g. REDD+, ABS)
Multiple Objectives : PSAH Mexico
PES to forest owners to preserve forest
Manage and not convert forest
• e.g. cloud forest US$ 40 per ha/year;
• e.g. other tree-covered land US$ 30 per ha/year
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
Multiple Objectives : PSAH Mexico
Balance of priorities varied over time
An instrument can evolve and respond to
changing needs
Munoz 2010); Muñoz-Piña et al. 2008
Aquifers
Water scarcity
Deforestation
Poverty
P
A
WS
D
PSAH Mexico
Source Munoz 2010); Muñoz-Piña et al. 2008
Year in which forest is signed into the program …
2003 2004 2005 2006 2007 2008 2009 Total
Surface incorporated into the program (‘ooo ha)
127 184 169 118 546 654 567 2,365
Forest owners participating (individuals + collectives)
272 352 257 193 816 765 711 3,366
Total payment to be made over 5 years (US$ m)
17.5 26.0 23.5 17.2 84.2 100.9 87.4 303
Results: PSAH reduced the rate of deforestation from 1.6 % to 0.6 %.
18.3 thousand hectares of avoided deforestation
Avoided GHG emissions this equates 3.2 million tCO2e.
Private Optimum (in
absence of legal requirements)
Private solution with
legal requirements („reference level‟)
Environmental target (practical /politically feasible environmental optimum at the time)
No impact (i.e. within
assimilative capacity of ecosystem)
No emissions
Reducing emissions/impacts
No control on emissions
PES: Beneficiary pays vs. the polluter pays principle
Pragmatism vs. principle ?
PES are intended to reward good management practices that
go beyond what is legally compulsory
Costs of measures borne by landowner – eg Polluter Pays Principle (partly implemented). Lesser societal costs
PES to foresters/farmers to help pay for measures to meet objectives / targets beyond legislative
requirements
(Damage) Costs to landowners and society
Costs born by society
(eg remaining pollution impacts)
Self-damaging practice
PES
PES
PPP
• PES a tool with a growing track record in use, usefulness, effectiveness
• PES programmes operate in both developed and developing countries and may focus on single or multiple services.
• PES can be applied at different spatial scales
• PES are highly flexible and can be established by different actors - Tools can be tailor-made to address the objective at hand
• Many ways to structure PES schemes, depending on the specific service, scale of application and context for implementation
• PES schemes can be designed to create or support other socio-economic objectives such as employment related to the provision of ecosystem services.
• PES effectiveness and feasibility are closely tied to the regulatory baseline and its enforcement
• Thin line between PES being a true payment for services and a subsidy. Pragmatism needed for progress. But care not to go to “polluters get paid”
Key insights on PES noted in TEEB / summary
• Wide participation in PES-related decisions can help ensure transparency and acceptance and avoid covert privatization of common resources.
• PES are not appropriate everywhere. (e.g. where rights not defined; where major information or asymmetries in bargaining power)
• careful design and preparation to ensure that PES schemes are effective and appropriate for local conditions …. below some OECD insights
– remove perverse incentives;
– clearly define property rights;
– clearly define PES goals and objectives;
– develop a robust monitoring and reporting framework.
– identify appropriate buyers and ensure sufficient and long-term sources of finance;
– identify sellers and target ecosystem service benefits;
– consider opportunities for bundling or layering multiple ecosystem services;
– establish baselines to ensure additionality;
– reflect ecosystem service providers’ opportunity costs via differentiated payments;
– address leakage (displacement of emissions);
– ensure permanence.
What are you‟re your experience? Lessons from practice?
Plans and potentials for PES ?
Thank you
TEEB Reports available on http://www.teebweb.org/
& TEEB in Policy Making now out as an Earthscan book
See also www.teeb4me.com
Patrick ten Brink, [email protected]
IEEP is an independent, not-for-profit institute dedicated to the analysis, understanding and promotion of policies for a sustainable environment www.ieep.eu
Manual of EU Environmental Policy: http://www.earthscan.co.uk/JournalsHome/MEEP/tabid/102319/Default.aspx
PES aim to change the economics of ecosystem service provision by improving incentives for land use and management practices that
supply such services
(Paid) Benefit to
land user -
provisioning
services (eg farm
or forest products)
Intensive land use
Cost to population
of pollution
To date „unpaid‟
ecosystem
services PS
RS CS
Cultural
Services
(eg tourism)
Biodiversity „friendly‟ land use
Regulating
services (eg
water quality)
Potential new
income from
different
payments for
ecosystem
services Additional PS (other products,
pollination)
CO
ST
S
BE
NE
FIT
S
Income foregone
to landowner
(in absence of PES)
Income from
products in
markets
Income
from
provisioning
Services (PS)
Eg Private optimum Eg social optimum
PES help in move to green economy/ improved social
benefit Social Benefit = Private benefit + public good (ESS) – pollution costs