Recent UK developments in the application of Ecosystem Services in

policy

Presentation to the ACES and Ecosystem Markets Conference

December 12, 2012

Helen Dunn Senior Economic Advisor, Ecosystems Unit

UK Department for Environment, Food and Rural Affairs

Outline

• Evidence on the value of nature and the UK National

Ecosystem Assessment

• Towards policy implementation: the UK Natural

Environment White Paper 2011

• Conclusions

• Evidence on the value of nature and the UK National

Ecosystem Assessment

• Towards policy implementation: the UK Natural

Environment White Paper 2011

• Conclusions

Outline

There is an increasing body of evidence on the economic value of ecosystems and the services they provide...

2005 2010 2011

Why did we do a National Ecosystem

Assessment?

The UK NEA was the first analysis

of the UK’s natural environment in

terms of the benefits that it provides

to people.

The objectives of the UK NEA were to:

1. Produce an independent and peer-reviewed National Ecosystem

Assessment for the whole of the UK.

2. Raise awareness of the importance of the natural environment to

human well-being and economic prosperity.

3. Ensure full stakeholder participation and encourage different

stakeholders and communities to interact and, in particular, to foster

better inter-disciplinary cooperation between natural and social

scientists, as well as economists.

The NEA looked at 8 UK Broad Habitats reflecting data availability...

Mountains, moors and heathlands

Semi-natural grasslands Enclosed farmland Woodlands

Freshwaters - Openwaters, Wetlands

and Floodplains Urban Marine Coastal Margins

It then assessed historical trends, current

status and direction of change of ecosystem

services from these habitats

Marked changes over the

past 60 years

30% of ecosystem services

currently declining, many

others in a reduced or

degraded state

Past drivers: habitat

change, pollution,

exploitation.

Future drivers: climate

change and invasive

species

Valuation of ecosystem services 1 Valuing Ecosystem Services

Valuation of ecosystem services 1 Valuing Ecosystem Services

Key messages of the UK NEA

The natural world is critical to our well-being and

economic prosperity, but is consistently undervalued

in decision making.

Significant changes over past 60 years in ecosystems

and the ways people benefit from them.

UK’s ecosystems currently delivering some services

well, but others in long-term decline.

Changing and growing demands of UK population +

climate change, likely to increase pressures on

ecosystem services.

Decisions now will have consequences far into the

future for ecosystems and human well-being.

Need appropriate mix of regulations, technology,

financial investment and education; behaviour

change and more integrated approach.

• Evidence on the value of nature and the UK

National Ecosystem Assessment

• Towards policy implementation: the UK Natural

Environment White Paper 2011

• Conclusions

Outline

The Natural Choice:

securing the value of nature

Natural Environment White Paper 2011: the first in 20 years

White Paper: from theory to

practice

• Reflecting the value of nature in decision making

o Accounting for environmental impacts in policy appraisal

o Natural Capital and Ecosystem Accounting

o Natural Capital Committee

• Protecting and enhancing the natural environment

o Landscape scale partnership initiatives

o Biodiversity offsets

• Capturing the value of nature through markets

o Payments for Ecosystem Services

o Ecosystem Markets Task Force

Reflecting the value of nature in policy decisions: Green Book Guidance

UK Treasury ‘Green Book (2003): Sets out basic principle of project and policy assessment and evaluation

Supplementary guidance on accounting for environmental impacts (2012): High level guidance on identifying and valuing impacts

Gateway for more detailed technical guidance, e.g. On value transfer

Reflecting the value of nature: Ecosystem Accounting

‘We will put natural capital at the heart of Government

accounting. We will work with the Office for National

Statistics to fully include natural capital in the UK

Environmental Accounts, with early changes by 2013….

we will publish a roadmap for further improvements up to

2020.’

NEWP, 2011

UK work aims to join up with international developments on

experimental ecosystem accounts (UNSEEA-led)

The way forward on ecosystem accounts

• Office for National Statistics (ONS) to

finalise roadmap for development of

UK ecosystem accounts between now

and 2020, working closely with Defra.

• Feasibility studies to support

towards roadmap, for example,

pilot study to produce forestry

account in 2013

• ...early wins in terms of

demonstrating feasibility and policy

relevance will be key to preserve the

momentum behind ecosystem

accounts

Reflecting the value of nature in economic planning : Natural Capital Committee

• Independent advisory body reporting to Economic Affairs Committee and providing expert advice on state of England’s natural capital

• help the Government better

understand how the state of the

natural environment affects the

performance of the economy and

individual well-being; and

• advise the Government on how to

ensure England’s ‘natural wealth’ is

managed efficiently and sustainably.

What is the NCC’s work programme?

Sustainable Use

• An annual State of Natural Capital Report, starting in 2013. This will provide information for Government on where our natural capital is being used unsustainably;

Natural Capital Accounting

• Work with Defra and the Office for National statistics (ONS) to ensure the timely development of experimental natural capital / ecosystem national accounts;

• Work with businesses (including land owners and managers) to explore the development of corporate natural capital accounting

Research Agenda

• Work with academics and Research Councils to identify research priorities that will improve future advice on managing our natural assets.

Cross-cutting Activities

• Land Use: reform of Common Agricultural Policy (CAP); forestry; future implementation of habitats & wild birds directives

• Engage with financial institutions

Protecting and enhancing nature: an

integrated approach seeking multiple

benefits

New partnership initiatives: Nature Improvement Areas

Development of coherent and resilient ecological network. Recommendation from “Making Space for Nature “(Lawton Review).

12 initial NIAs to act as pathfinders to inform how approach could be rolled out more widely.

Part of a range of landscape scale initiatives

currently being trialled by Defra and delivery bodies.

Initial funding commitment from government (50% of funding), remaining funds from public, voluntary and private sources.

Capturing value through markets: Payment for Ecosystem Services

•Provide opportunities for linking more directly those who benefit to those who deliver ecosystem services, and generate new financing streams • A growing number of innovative pilots and schemes in England, e.g., Sustainable Catchment Management Programme • Supporting and expanding the use of PES, including publishing best practice, identifying additional opportunities, new PES research fund to support early stage pilots

Supporting small scale PES pilot research projects

We are currently funding a series of exploratory research studies to support those seeking to develop PES on ground: -Defra/Natural England place based PES project in uplands - Developing a pilot peatland carbon code & testing out peat and carbon metrics - water company piloting and implementing a reverse auction approach for diffuse pollution - applying PES in context of sewage treatment works/constructed wetland - flood risk management & natural solutions in an urban context

…..to review the opportunities for UK business from expanding green goods, services, products, investment vehicles and markets which value and protect nature’s services. It will report back to Government in 2012-13, through the Green Economy Council.”

Available estimates point to significant potential for long-term growth in the emerging markets in biodiversity and ecosystem services

Capturing value through markets: Ecosystems Markets Task Force

A practical, business led, independent review of the business

opportunities arising from valuing nature correctly aiming to:

identify the most promising opportunities for business that

might be realised through an enhanced approach to the natural

environment;

make clear, actionable recommendations to Government about

where things need to change; and,

provide a compelling narrative for business.

Capturing value through markets: the Ecosystems Markets Task Force

Business narrative – why nature

matters to business • Business depends on nature. Goods and services that nature provides – water,

crops, biodiversity, pollination, air quality and more – underpin the success of

every business.

• The natural world is under pressure. We are already experiencing increasing

stress on energy, resources and the wider natural environment. By valuing

nature properly these risks can be better managed.

• Governments are beginning to value nature differently. The services that

nature provides have been undervalued in decision-making in the past, but this is

changing. In future, public policy decisions are likely to open up fresh

opportunities and risks for business in new and existing markets.

• Forward-thinking businesses will be the winners. Businesses that engage

early will reap the rewards from an altered competitive landscape in years to

come.

Interim report from Task Force, November 2012

Scope for business related

ecosystem market opportunities in the UK

Potential opportunity areas?

Biodiversity offsets including through conservation banking

Peatland carbon code (& woodland carbon code)

Woodland enhancement through larger market for woodfuel

Developing the UK ecosystems knowledge economy

Layered PES – public private partnerships for the natural environment

Carbon sequestration as an ‘allowable solution’

Expanding the reach and value of sustainability certification

Optimizing the benefits of sustainable tourism

Global centre of excellence for ES certification

Water reuse technologies

Reducing risks for insurers through investment in green infrastructure

Developing environmental bonds as vehicles for investments in nature

Source: EMTF/VNN phase 1 research report

Conclusions

• Increased momentum in the evidence, literature and

policy discussion on the value of nature

• In the UK the NEA was a very significant step forward

with a very direct impact on policy direction through the

Natural Environment White Paper

• UK policy implementation is still at an early stage, but

there have been important developments in the past year

• More evidence & decision support tools will be needed

going forward (NEA follow-up study).

• A key challenge is to make value real in markets.

For more information:

UK National Ecosystem Assessment

http://uknea.unep-wcmc.org/

Natural Environment White Paper

http://www.defra.gov.uk/environment/natural/whitepaper/

Natural Capital Committee

http://www.defra.gov.uk/naturalcapitalcommittee/

Ecosystems Markets Task Force

http://www.defra.gov.uk/ecosystem-markets/

Thank you