Investment in ecosystems will reap rewards - UNEP

* Investment in restoring ecosystems can bring high returns
* Subsidy reform, REDD actions need to be endorsed
Nina Chestney, Reuters 13 Nov 09;

LONDON, Nov 13 (Reuters) - Nations that take into account natural resources in their investment strategies will have higher rates of return and stronger economies, a report backed by the United Nations' Environment Programme said on Friday.

With less than one month until a U.N. climate summit in Copenhagen, the report urges policymakers to reform their economic policies to stop the destruction of natural resources such as forests and oceans.

"Repairing the ecosystem by replanting forests, restoring mangroves along coastlines or rebuilding coral reefs are very smart ways of doing adaptation. People going into Copenhagen are not necessarily aware of these things," Pavan Sukhdev, the leader of the study prepared by UNEP's Economics of Ecosystems and Biodiversity Initiative, told Reuters.

For example, planting and protecting nearly 12,000 hectares of mangroves in Vietnam costs over $1 million but it saves over $7 million in dyke maintenance expenditure.

The report estimates that investment in mangrove and woodland restoration could achieve rates of return up to 40 percent, tropical forest investment up to 50 percent and grassland investment 79 percent.

"We studied the economics of using nature better -- through adaptation and restoration. In each case we found the benefits exceed the cost, typically between 3 and 75 times," Sukhdev said.

Brazil, India and Indonesia emerged as leaders in leveraging natural capital, while Korea has also got good plans, Sukhdev added.

"Governments need to pay attention to this report and start looking at nature in a more holistic way," WWF director Gordon Shepherd said. "With smarter approaches to economics this can change but right now we are paying for their ignorance."

SUBSIDIES

The report also calls for reform to subsidies which harm the environment. The worst subsidies are for fossil fuels, which total between $240 billion and $300 billion a year globally.

Global fishery subsidies, which amount to $34 billion out of a $90 billion market, should also be reformed to prevent the collapse of fisheries around the world.

Measures to combat deforestation, which accounts for almost 20 percent of current greenhouse gas emissions, should also be given priority.

Under a U.N.-market based forestry scheme called Reduced Emissions from Deforestation and Forest Degradation (REDD), rich countries reward developing nations for preserving forests to prevent emissions through the use of an expanded carbon market.

REDD+ expands the idea to protection, restoration and sustainable management of forests.

Several nations want to see REDD incorporated into a new global climate agreement.

"REDD+, as well as ecological restoration, need to be given a bit of a fillet through the Copenhagen process. These are the first two steps on the ladder. When these get going then a lot else will fall in place," Sukhdev said.

(Editing by Sue Thomas)

Policy makers urged to look at role environment plays in supporting communities
IUCN 13 Nov 09;

The importance of biodiversity and ecosystems to economies around the world is the focus of a series of five reports from the Economics of Ecosystems and Biodiversity (TEEB) study. The latest TEEB report, tailored for policy makers, is released today.

TEEB is a major international initiative, of which IUCN is an integral part, which brings together expertise from the fields of science, economics and policy to draw attention to the economic benefits of biodiversity and the financial impact if we don’t protect species and the natural world.

This latest report is geared towards national and international policy makers, to make them aware of the critical role that environmental systems play in supporting communities, be they large or small.

Joshua Bishop, IUCN’s Chief Economist, says “with the global economic crisis, the time is right for policy makers to look for new ways to kick start their economies and to renew employment whilst, at the same time, protecting the environment. The TEEB report should show them how to do that."

An interim report, released in May 2008, showed how the degradation of biodiversity and ecosystems can significantly compromise economic growth and efforts to reduce poverty.

IUCN's Chief Economist Joshua Bishop explains latest TEEB report (2.76MB PDF)

The Economics of Ecosystems and Biodiversity (TEEB) website

EEB report released on the Economics of Ecosystems and Biodiversity for National and International Policymakers
UNEP 13 Nov 09;

Brussels, 13 November 2009 - Policy-makers who factor the planet's multi-trillion dollar ecosystem services into their national and international investment strategies are likely to see far higher rates of return and stronger economic growth in the 21st century, a new report issued today says.

Some countries have already made the link to a limited extent and are glimpsing benefits in terms of jobs, livelihoods and economic returns that outstrip those wedded to older economic models of the previous century.

* In Venezuela, investment in the national protected area system is preventing sedimentation that otherwise could reduce farm earnings by around US$3.5 million a year (Pabon-Zamora et al.2008).

* Planting and protecting nearly 12,000 hectares of mangroves in Vietnam costs just over US$1 million but saved annual expenditures on dyke maintenance of well over US$7 million (Tallis et al. 2008).

* One in 40 jobs in Europe are now linked with the environment and ecosystem services ranging from clean tech 'eco-industries' to organic agriculture, sustainable forestry and eco-tourism.

* Investment in the protection of Guatemala's Maya Biosphere Reserve is generating an annual of income of close to US$50 million a year, has generated 7,000 jobs and boosted local family incomes (CBD 2008).

The new report, prepared by The Economics of Ecosystems and Biodiversity (TEEB) initiative hosted by the UN Environment Programme (UNEP), calls on policy-makers to accelerate, scale-up and embed investments in the management and restoration of ecosystems.

It also calls for more sophisticated cost benefit analysis before policy-decisions are made. The report cites a study on mangroves in south Thailand on the conversion of mangroves into shrimp farms.

Subsidized commercial shrimp farms can generate returns of around US$1,220 per hectare by clearing mangrove forests. But this does not take into account the losses to local communities totaling over US$12,000 a hectare linked with wood and non-wood forest products, fisheries and coastal protection services (Barbier 2007).

Nor does the profit to the commercial operators take into account the costs of rehabilitating the abandoned sites after five years of exploitation - estimated at over US$9,000 a hectare.

Speaking at a press conference in Brussels today, Pavan Sukhdev, TEEB's Study Leader, said: "Nature's multiple and complex values have direct economic impacts on human well being and public and private spending. Recognizing and rewarding the value delivered to society by the natural environment must become a policy priority.

The economic invisibility of ecosystems and biodiversity is increased by our dominant economic model, which is consumption-led, production-driven, and GDP-measured. This model is in need of significant reform. The multiple crises we are experiencing - fuel, food, finance, and the economy - serve as reminders of the need for change.

It is now up to governments to provide fiscal or other incentives to move us from short-term opportunism to long term stewardship. The right policies can help us move toward a resource efficient economy."

The report comes in advance of the UN climate convention meeting in Copenhagen where governments are expected to give the green light to funding developing countries to maintain forests.

Close to 20 percent of current global greenhouse gas emissions are linked with deforestation. Reduced Emissions from Deforestation and Forest Degradation (REDD) aims to counter this while also generating financial flows from North to South.

REDD and REDD+, which includes not only maintaining forests but planting and recovering forest systems, secured the backing of close 15 presidents and prime ministers at a special meeting hosted last month by UN Secretary General Ban Ki-moon.

Achim Steiner, UN Under-Secretary General and UNEP Executive Director, said:

"Paying developing countries under REDD marks a fundamental step forward in terms of bringing the huge financial importance of ecosystems and biodiversity into the centre of economic activity."

"It could open the door to more creative and forward-looking funds and mechanisms covering other nature-based infrastructure such as peatlands and wetlands en route to support for the services generated by coastal and marine ecosystems such as coral reefs to mangroves," he said.

The report outlines a ten-point plan aimed at catalyzing a transition to more ecosystem savvy economies able to meet the multiple challenges and deliver the multiple opportunities on a planet of six billion people, rising to nine billion by 2050.

The report has a number of key recommendations for policymakers to consider:

1: Invest in ecological infrastructure: This can provide cost-effective opportunities to increase resilience to climate change, reduce risk from natural hazards, improve food and water security, and contribute to poverty alleviation. Up-front investments in maintenance and conservation are almost always cheaper than trying to restore damaged ecosystems, and the social benefits that flow from restoration can be several times higher than the costs. Preliminary TEEB estimates suggest that the potential rates of return can reach 40 percent for mangrove and woodlands/shrublands, 50 percent for tropical forests and 79 percent for grasslands when the multiple ecosystems services are taken into account.

2: Reward benefits through payments and markets: Payments for ecosystem services (PES schemes) from local (e.g. water provisioning) to global (the REDD-Plus proposal for Reduced Emissions from Deforestation and Degradation, as well as from afforestation, reforestation, and effective conservation).

3: Reform environmentally harmful subsidies: Reforming subsidies that are inefficient, outdated or harmful makes double sense during a time of economic and ecological crisis.

4: Address losses through regulation and pricing: The cost of losses of biodiversity and ecosystem services should be tackled through regulatory frameworks that establish environmental standards and liability regimes. Designing a robust instrumental and market framework to confront resource users with these costs is a key priority for policy makers.

5: Recognise that protected areas are a cornerstone of conservation policies and provide multiple benefits: The global PA network covers around 13.9 percent of the Earth's land surface, 5.9 percent of territorial seas, and only 0.5 percent of the high seas: nearly a sixth of the world's population depend on protected areas for a significant percentage of their livelihoods. Investing US$45 billion in protected areas could secure vital nature-based services worth some US$5 trillion a year, including the sequestration of carbon, the protection and enhancement of water resources and protection against flooding (Balmford et al. 2002). There are also employment incentives, for example, in Bolivia protected-area tourism generates over 20,000 jobs, indirectly supporting over 100,000 people (Pabon-Zamora et al. 2009)

The TEEB study shows that benefits of reform are multiple. It also reinforces the growing evidence that there are a number of urgent strategic ecosystem priorities that require policy shifts to address them:

6: Halt deforestation and forest degradation should be an integral part of climate change mitigation and adaptation focused on 'green carbon'. It has the added benefit of preserving the huge range of services and goods forests provide to local people and the wider community;

7: Protect tropical coral reefs - and the associated livelihoods of half a billion people - through major efforts to avoid global temperature rise;

8: Save and restore global fisheries, which are currently under threat of collapse from over fishing;

9: Recognise the deep link between ecosystem degradation and the persistence of rural poverty and align policies across sectors with key Millennium Development Goals.

10: Agree to a forest carbon deal at Copenhagen.

Over 100 experts from science, economics and policy from across the globe have been involved in the research, analysis and writing of the TEEB for Policy-makers Report, which has been co-ordinated by Patrick ten Brink of the Institute of European Environmental Policy in Brussels.

TEEB is an independent study, lead by Pavan Sukhdev, hosted by United Nations Environment Programme (UNEP) with financial support from the European Commission; Germany, United Kingdom and the Netherlands, and recently joined by Norway and Sweden.

TEEB for policy-makers is one of a series of five interconnected reports. These include the Report on Ecological and Economic Foundations (parts of which were published online in September 2009) and targeted end-user outputs for local and regional administrators, business and citizens. These will be released in the coming months until the final TEEB synthesis report in October 2010. Work is also taking place to analyse a large number of economic values for the main types of ecosystem services around the world and these findings will also be available in 2010. Further information is at www.teebweb.org.

Economists fail to account for ‘natural capital’ – report
WWF 13 Nov 09;

Gland, Switzerland: Many economists are failing to assess the value of their countries’ natural resources, putting billion’s of people’s well-being at risk and contributing to catastrophic species loss, according to a new United Nations Environment Programme report.

The Economics of Ecosystems and Biodiversity for National and International Policy Makers 2009 (TEEB), released today, states that governments must adopt better accounting systems that measure the true value of natural resources, and integrate them in government decision-making.

WWF welcomed the report, urging governments to heed the call to reform their economic policies to halt the destruction of natural resources.

“Governments need to pay attention to this report and start looking at nature in a more holistic way”, said WWF Director of Global and Regional Policy Gordon Shepherd, “With smarter approaches to economics this can change but right now we are paying for their ignorance.”

Investing in conservation, management and restoration of ecosystems will provide economic returns and services to society that outweigh the immediate monetary returns of unchecked use of natural resources, such as the clear-cutting of forests or overfishing, according to the report.

“We are running down our natural capital stock without understanding the value of what we are losing” the report states.

“Degradation of soils, air, water and biological resources can negatively impact on public health, food security, consumer choice and business opportunities. The rural poor, most dependent on the natural resource base, are often hardest hit,” according to the report.

“The problem is that economists do not give market prices for ecosystem services and biodiversity,” according to the study. “This means that the benefits we derive from these goods (often public in nature) are usually neglected or under-valued in decision-making.” “This in turn leads to actions that not only result in biodiversity loss, but also impact on human well-being.”

The report also makes several recommendations for policy-makers.

They include, for example, that policy must address reforming environmentally harmful subsidies – up to a third of which currently support fossil fuel use – and invest in ‘ecological infrastructure’. The latter “can provide cost-effective opportunities to meet policy objectives, such as increased resilience to climate change, reduced risk from natural hazards, and improved food and water security as a contribution to poverty alleviation.”

In addition, Shepherd said businesses must likewise re-evaluate their use of the natural resources on which they depend to ensure their long-term profits. In doing so, they can be part of the solution to current environmental crises, such as species loss and deforestation.

“Ultimately, this must be a wide-ranging effort to re-evaluate natural resources and it must involve everyone, including private industry, governments, international agreements like the Convention on Biological Diversity, and indigenous and local people,” said Shepherd. “It will take a concerted effort to make our planet healthy again.”

TEEB’s study on The Economics of Ecosystems and Biodiversity was launched by Germany and the European Commission in response to an earlier G8+5 Environment Ministers proposal to develop a global study on economics of biodiversity loss.