U.N. study highlights price of nature to mankind

* Role of nature worth trillions of dollars
* U.N. meeting aims to set goal to fight species loss
* Study urges action by governments, businesses
Chisa Fujioka Reuters AlertNet 20 Oct 10;

NAGOYA, Japan, Oct 20 (Reuters) - Governments and businesses need an overhaul of policies and strategies to respond to the rapid loss of nature's riches, worth trillions of dollars but long taken for granted, a U.N.-backed study said on Wednesday.

Damage to natural capital including forests, wetlands and grasslands is valued at $2-4.5 trillion annually, the United Nations estimates, but the figure is not included in economic data such as GDP, nor in corporate accounts.

That "invisibility" needs to change so steps can be taken to save ecosystems that are a vital source of food, water and income, said Pavan Sukhdev, study leader for The Economics of Ecosystems and Biodiversity (TEEB), a U.N.-backed initiative.

"We can not treat this lightly," he told a news conference on the sidelines of an Oct 18-29 U.N. meeting in Nagoya, Japan, where envoys from nearly 200 countries are aiming to set targets for 2020 to fight losses in biological diversity.

"Unfortunately, the lack of an economic lens to reflect these realities, has meant that we have treated these matters lightly, that they are not centre-stage when it comes to policy discussions nor centre-stage when it comes to business discussions."

Sukhdev, on secondment from Deutsche Bank, unveiled the final installment of several TEEB reports that analyse the value of nature, including forests that clean the air, bees that pollinate crops and coral reefs that are home to millions of species.

For example, halving deforestation rates by 2030 would cut damage from climate change estimated at more than $3.7 trillion, while Swiss bee colonies ensured yearly agricultural production worth $213 million by providing pollination, the report said.

SAME COIN

Destruction of coral reefs was not only damaging to marine life but also posed risks to communities, the report said. Some 30 million people are reliant on reef-based resources for food production, incomes and livelihoods.

"It has exacerbated the suffering of human beings, especially of those at the bottom of the economic pyramid," Sukhdev said.

"Development and biodiversity cannot be seen as competing choices. They are not only the same coin but they are literally the same side of the same coin."

The report highlighted recommendations for policymakers, such as the need to include the value of nature and the role of ecosystems in national accounts. Businesses must disclose values in their annual reports and accounts, it said.

Emerging economies Brazil and India threw their support behind the U.N. effort, saying they would use the TEEB findings as a guide.

"At a national level we are in discussion to implement a TEEB study of our natural capital, and the Brazilian business sector is also in planning to move towards this practical and sustainable approach to decision-making," Braulio Dias, secretary for biodiversity and forests at Brazil's environment ministry, said in a statement.

Putting a price on the role of nature has been a major focus at the Nagoya talks on biodiversity, an issue that environmental groups say has so far received far less attention from policymakers and the public than climate change.

"The conservation community has a translation problem," said Andrew Deutz, director of international government relations at The Nature Conservancy.

"We've spent decades talking about habitat degradation and species loss. The people who run the world talk in terms of economic growth and employment rates. This report could be our Rosetta Stone." (Reporting by Chisa Fujioka; Editing by David Fogarty)

FACTBOX-Putting a value on nature to preserve its riches
Reuters AlertNet 20 Oct 10;

Oct 20 (Reuters) - Putting a value on nature and the services it provides is crucial to protect the world's forests, oceans, reefs and rivers from destruction, a major United Nations-backed report said on Wednesday.

The report by The Economics of Ecosystems and Biodiversity, a research initiative also backed by the European Commission, highlights the multi-trillion dollar benefits nature provides to farmers, businesses, cities and entire economies. [ID:nTOE69J05V]

Yet much of these benefits are taken for granted, TEEB says, leading to incentives that are perpetuating the destruction of nature and raising the risks of an environmental crisis that could harm livelihoods, human health and food and water supplies.

Following are examples of the services nature provides and some of the key recommendations from the report released on the sidelines of a major U.N. conference in Japan aimed at combating accelerating losses of plant and animal species. WHAT DOES NATURE PROVIDE?

-- Forests: Cover about a third of the Earth's land surface and are estimated to contain more than half of all land species, mainly in the tropics.

Provide livelihoods to rural communities, help regulate the climate by soaking up large amounts of planet-warming carbon dioxide, control erosion, act as water storages for rivers, filtering water in the process and provide pollination for nearby crops such as coffee and fruit trees.

-- Coral reefs: About 30 million people are wholly reliant on reefs for food and other goods for income. Reefs also provide protection from storms, are valuable for tourism and can boost local real estate prices.

-- Wetlands: Can reduce pollution by acting as filters, boost flood protection from storms, act as breeding grounds for fish.

-- Rivers: Lifelines for agriculture, towns and cities. Used to generate electricity and transport goods and people.

TEEB'S SOLUTIONS

* Make nature visible:

Decision makers need to assess the role of nature's richness and ecosystem services in economic activity. They also need matching analysis of how costs and benefits of ecosystem services are spread across society, with public disclosure and accountability for impacts on nature.

* The bottom line and beyond:

Better accounting of business impacts and benefits from nature can spur change in business investment and operations.

Annual reports and accounts should disclose details such as environmental liabilities and changes in natural assets not currently included in the statutory accounts.

* Mainstreaming the economics of nature:

Full value of biodiversity and ecosystem services in decision making can be achieved if their sustainable management is recognized as an opportunity and not a constraint on development.

The value of nature's services needs to be included in:

Economic, trade and development policies; transport, energy and mining; agriculture, fisheries and forestry; corporate financial and social responsibility management and reporting; development policies and local, regional and national planning; and public procurement and private consumption

* Using nature to fight climate change:

Maintaining, restoring or enhancing services provided by ecosystems, such as mangroves, other wetlands and forest watersheds can compare favourably with man-made infrastructure, such as wastewater treatment plants or dykes, TEEB says.

* Valuing protected areas:

The benefits from setting up and managing protected areas on land and ocean reserves can outweigh the loss of economic activity. Ecosystem valuation can help to justify protected areas, identify funding and investment and guide conservation priorities.

(Editing by Alex Richardson)

Change global economic model to save biodiversity
Karl Malakunas Yahoo News 20 Oct 10;

MANILA (AFP) – The global economy must be radically altered to put a value on forests, reefs and other elements of nature but the financial benefits of doing so will be enormous, a UN-backed report said Wednesday.

The Economics of Ecosystems and Biodiversity (TEEB) report warned that allowing nature to remain unaccounted for within the economy would lead to the continuing rapid extinction of species, and ensuing massive financial costs.

"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," said banker Pavan Sukhdev, who chaired a study that led to the report.

After nearly three years of research, the report aims to raise global awareness about the economic costs of inaction on biodiversity in a similar way to British economist Nicholas Stern's famous 2006 report on climate change.

The TEEB report was released in Nagoya, Japan, where delegates from 193 countries are meeting at a UN summit in an effort to map out a strategy to stop humans from driving species to extinction.

"We hope the next phase after Nagoya... is going to be a change in policy, a change in the matrix, a change in consumer behaviour, a change in business behaviour," Sukhdev told AFP ahead of the report's release.

The report highlighted the broad scope of so-called "ecosystem services" that are generally not valued in the economy.

These included regulation of the environment -- such as through water filtration by wetlands, pollination and disaster protection -- and as a source of medicines and wild foods.

Spiritual and recreational values, as well as the environment's role in nutrient recycling and photosynthesis, also needed to be taken into account, the report urged.

TEEB recommended that businesses and governments reveal in annual reports or national accounts how they depleted or damaged the environment.

This depletion or damage would have an economic value, and businesses would need to compensate for their adverse environmental impacts.

The TEEB reported cited a study by Britain-based consultancy TruCost that found the negative environmental impacts of the world's top 3,000 listed companies were worth 2.2 trillion dollars annually.

But it insisted there were already many examples of how placing a value on natural services would bring economic windfalls.

It highlighted a decision by New York City to pay landowners in the nearby Catskill mountains between 1-1.5 billion dollars to improve farm management techniques and stop run-off of pollutants.

This saved the city from having to build a new water filtration plant, which would have cost 6-8 billion dollars.

It also said fishermen around the world could reap an extra 50 billion dollars a year annually if the current over-exploitation of fish stocks, caused partly by billions of dollars in government subsidies, ended.

The TEEB report said the impacts of not giving economic values to ecosystems was most widely felt in the developing world.

This could be commonly seen when forests were logged, with the economic value placed only on the trees and not the other immense benefits that the ecosystem provided.

Among the benefits are that forests act as water catchments, provide habitats for valuable plants and animals, and store carbon so that it is not released into the atmosphere.

Continuing to log forests at current rates until 2050 would lead to natural capital losses of 2-4.5 trillion dollars annually, according to TEEB.

Sukhdev told AFP that India, Brazil and some other developing countries had already committed to placing values on their natural capital.

"I'm delighted to see the leadership is coming from the developing world, and now it's up to the developed world to walk the talk," he said.

But Sukhdev warned governments and corporations would not make the enormous changes needed unless pressured to do so by people around the world.

"People have to get agitated enough to force their governments to act," he said.

Insects £134bn, coral £109bn – UN puts a value on nature's resources
Pioneering report equates biodiversity to cash in hope of encouraging conservation
Michael McCarthy, The Independent 20 Oct 10;

Nature and the services it provides are worth trillions of dollars annually to human society, and governments and businesses must formally recognise this to halt the continuing degradation of the natural world, a groundbreaking UN report said yesterday.

The enormous economic value of forests, freshwater, soils and coral reefs, as well as the social and economic consequences of their loss, must be factored into political and economic policies in all countries, according to the new study of The Economics of Ecosystems and Biodiversity (Teeb).

It suggests, for example, that the value of human welfare benefits provided by coral reefs is between $30bn (£19bn) and $172bn annually. The destruction of coral reefs is not only damaging to marine life but also poses risks to communities, the report says. Some 30 million people around the world rely on reef-based resources for food production, and for their livelihoods.

In another example, the report reveals that the economic value of insect pollinators in global crop production is worth €153bn (£134bn) every year.

On the other hand, damage to natural capital including forests, wetlands and grasslands is valued at between $2trn and $4.5trn annually, but the figure is not included in economic data such as GDP, or in corporate accounts.

Released at the UN biodiversity conference in Nagoya, Japan, the report is likely to mark a turning point in how the world deals with the growing global biodiversity crisis, with wildlife and ecosystems everywhere under mounting threat of extinction and destruction – a scenario highlighted by the fact that the international community has failed to meet the agreed target of halting the rate of biodiversity loss by 2010.

It is hoped that by underlining its economic value to people, the report will transform the understanding of biodiversity and its disappearance, just as the 2006 Stern Report widened the appreciation of the threat of climate change by stating how much it would cost, and stressing that acting to tackle it would be far cheaper than doing nothing.

Seen by many as the Stern Report for biodiversity, the Teeb report puts cash figures on the value of nature, disclosing that ecosystems such as freshwater, coral reefs and forests account for between 47 and 89 per cent of what the UN calls "the GDP of the poor", meaning the source of livelihood for the rural and forest-dwelling poor.

"This economic invisibility of nature is a problem," said Pavan Sukhdev, the Indian banker who led the Teeb study. "The invisibility needs to change, so steps can be taken to save these threatened ecosystems that are a vital source of food, water and income.

"Unfortunately, the lack of an economic lens to reflect these realities has meant that we have treated these matters lightly, that they are not centre stage when it comes to policy discussions, nor centre stage when it comes to business discussions," he said.

The report in numbers...

£31bn: Overfishing

The report says that £31bn a year is lost due to overfishing. It says that poor regulation and weak enforcement of existing regulations allow industrial fishing fleets to plunder valuable fish stocks without regard for sustainability, thus reducing the potential income from fishing.

£134bn: Insect pollination

The value of insects pollinating crops and flowers can be estimated at £134bn a year, according to the UN. The figure represents 9.5 per cent of all agricultural output used for human food.

£19bn–£109bn: Coral reefs

Home to an estimated three million species. Thirty million people in coastal and island communities are reliant on reef-based resources as their primary means of food production, income and livelihood. The UN report values coral reefs at between £19bn and £109bn annually.

50

Millionaires that have been made in the Hiware Bazaar district of India after 70 hectares of forest were regenerated, leading to the number of wells in the area doubling and grass production increasing. Income from agriculture increased too.

TEEB report puts world's natural assets on the global political radar
Helmholtz Association of German Research Centres EurekAlert 20 Oct 10;

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 Potočnik, 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.

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.

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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