UNEP/IPES 28-29 January 2008 International Payments for Ecosystem Services (IPES) Publication Review Meeting UNEP, Geneva, 28-29 January 2008 Workshop

UNEP/IPES 28-29 January 2008

International Payments for Ecosystem Services (IPES) Publication Review Meeting

UNEP, Geneva, 28-29 January 2008

Workshop on ecosystem accounting

An introduction to ecosystem accounting

Jean-Louis WeberEuropean Environment [email protected]

mailto:[email protected]





SEEA2003: expansion of the System of National Accounts (UN SNA1993) in order to include more environmental aspects

Natural resources EcosystemsEconomic

assets (SNA)Non-economic

assets

Openingstocks

Openingstocks

OpeningState

SNAtransactions

and otherflows

Changes instocks

Changesin stocks

Economicactivities,

naturalprocesses,

etc.

Changesin state

Closingstocks

Closingstocks

Closingstate

Described in SNA

RM HASSAN - UN The System of Environmental and Economic Accounting (UN 2003) - RANESA Workshop June 12-16, 2005 Maputo


Ecosystem approach to SEEA

• SEEA2003 revision by 2010• EEA-UNSD international workshop on land & ecosystem

accounting, Nov. 2006• EEA proposal to UNCEEA and London Group for

developing the ecosystem dimension into the SEEA Clarification paper (LG, Rome, Dec. 2007) Drafting of a specific handbook (first draft LG Brussels, Sept.

2008)

Additional SEEA module + definition of new aggregates “beyond GDP”


The questions behind: Ecological truth & market prices in the SNA (1)

• Risks of unsustainable use of the living natural capital are ignored: – The negative impacts of over-harvesting, force-feeding with

fertilisers or Nitrogen depositions, intoxication with pesticides or pollution, introduction of species, fragmentation by roads, or soil sealing by urban development have no direct monetary counterpart.

– This is the case for private capital and even more for public goods (The tragedy of the Commons).

• The natural capital is not even amortised in the national accounts and in accounting books of companies :– No allowance is made for maintaining ecosystems’ critical

functions and services. – The full cost of domestic products is not covered in many cases

by their price. We don't pay for the full price of our consumption.


Ecological truth & market prices in the SNA (2)

• The price of imported products does not reflect the full costs of ecosystems degradation in originating countries. – Delocalisation of industrial production is de facto recorded as a

“green” performance in importing countries when in many cases it increases the degradation of the global ecosystem (e.g. CO

2

emissions higher because of old technologies, loss of biodiversity because ecosystems are less protected).

• The actual value for people of free ecosystem services is not accounted (the market tells: price is zero). – Increase of wellbeing resulting from economic growth is not

balanced with losses of free services (commercialisation of previously free services, depletion, ecosystem degradation...).


Current situation with SEEA2003

• SEEA2003 fully integrated with SNA but – relations to nature are scattered between chapters and unevenly

developed. • Ecosystems assets are indeed part of SEEA 2003 structure: forest,

water, land and ecosystem accounts, soil (p.m.), fisheries but – few links exist between these assets, considered more as a

collection of inventories than interacting systems.

– “ecosystem service” is not a well identified concept

• Flows between the economic system and the ecosystems are asymmetric, balancing the economic system (backed up by SNA) with a mere interface (“environment” column, “ecosystem inputs”)– No place for feedbacks

• Unclear measurement of the value of nature

Develop the ecosystem approach into the SEEA


Developing the ecosystem approach into the SEEAImproving integration

• Recognize first the interaction of 2 co-evolving systems

• Clarify the concept of natural capital by separating non-renewable resources (where the rent and its reinvestment is the interest) from renewable resource (for which the conservation of critical level of stocks in good functioning state is main issue).

• Full integration vs. dual integration

• Renew approach of valuation with clear distinction of values, costs and their role in decision processes


Logic underlying the Millennium Ecosystem Assessment…

Biophysical structure or

process(e.g. woodland habitat or net

primary productivity )

Service(e.g. flood

protection, or harvestable products)

Service(e.g. flood

protection, or harvestable products)

Function(e.g. slow

passage of water, or biomass)

Function(e.g. slow

passage of water, or biomass) Benefit

(e.g. willingness to pay for woodland protection or for

more woodland, or harvestable products)

Benefit(e.g. willingness to pay for woodland protection or for

more woodland, or harvestable products)

Σ Pressures

Limit pressures via policy action?

Maintenance, restoration

Minimum levels of service

(service limits)

Courtesy Roy Haines-Young


Developing the ecosystem approach in the SEEABack to the 4 questions• is the renewable natural capital maintained over time at the amount

and quality expected by the society? physical measurement of “quantityquality” in reference to stated social norms

• is the full cost of maintaining the natural capital covered by the price of goods and services? measurement of costs not currently covered for maintaining and restoring domestic ecosystems (provision for depreciation) and addition to value of goods and services

• is the full cost of ecosystems services covered by import prices? calculation and addition to value of goods and services

• is the total of goods and services supplied to final uses by the market (and government institutions) and for free by ecosystems, developing over time? measure and value free end use services and add these benefits to GDP


Accounting for full ecosystem benefits & costs

€(A) Final Use of Non-Market Ecosystem

Services

€(C) Full ecosystem cost of imports

€(B) Additional costs

necessary to maintain & restore ecosystems up

to policy objectives

Ignored BenefitsIgnored Costs

€GDP

Ecosystem Services

Ecosystem Assets (Stocks, flows, resilience)

http://upload.wikimedia.org/wikipedia/commons/b/b3/Greek_Letter_Phi.svg


Beyond the GDP with ecosystem accounting (1)

Stepwise approach to inclusive wealth calculation:• Includes socio-economic features but with an ecosystem focus

(human and social capital just partly addressed)

• Costs and benefits recorded separately

Natural capital accounts in physical units:• Stocks, flows, resilience, services

• Ecosystem state benchmarked against stated policy targets

Net Landscape Ecological Potential, HANPP, E. Footprint


From Land cover to ecosystem at macro scale:Net Landscape Ecological Potential 2000, 1 km² grid

Source: EEA/ETCLUSI from GBLI, NATURILIS and MEFF

Methodology: EEA/ETCLUSI

Legend

Net LEP 2000

Value

High : 159

Low : 0

NLEP =(Vegetation+Nature Value)----------------------------------

Fragmentation


Net Landscape Ecological Potential 2000, aggregated by regions

Source: EEA/ETCLUSI from GBLI/CLC, NATURILIS and MEFF


Legend

Net LEP_NUTS2-3

NLEP2000

18 - 32

33 - 46

47 - 59

60 - 73

74 - 87

88 - 101

102 - 115

116 - 129

130 - 143

144 - 157


Change 1990-2000 in Net Landscape Ecological Potential (NLEP), 1 km² grid

Legend

Change Net LEP 1990 to 2000

Value

High : 118.464

Low : -84.664

Source: EEA/ETCLUSI from GBLI, NATURILIS and MEFF



Beyond the GDP with ecosystem accounting (2)

Computation of additional ecosystems maintenance & restoration costs for meeting policy targets• Domestic ecosystems: allowance for depreciation, to be covered

in the next period; virtual domestic debt

• + Ecosystems in countries from which Ecosystem Services originate: hidden costs in imports; virtual foreign debt

Full Cost of Goods & Services

Valuation and integration of non-market end use ecosystem services with GDP

Inclusive Domestic Product


GDP + Final Use of Ecosystem Services = IDP

Final ServicesFinal ServicesIDPIDP

Inclusive Domestic Product

Accounting for environmental benefits & costs

Benefits: the Demand sideBenefits: the Demand side

Cost

s: t

he S

up

ply

sid

eC

ost

s: t

he S

up

ply

sid

e

+

(Intermediate consumption)

+

Additional maintenance cost of the resource

+

Costs of restoration from ecosystem degradation

+

Full ecosystem cost of imports

FCGSFCGS

Full Cost of Goods & Services

Ecosystem Services

Stocks & flows (quantities)

Resilience/Health (qualities)

Ecosystem Services

Stocks & flows (quantities)

Resilience/Health (qualities)

Ecosystem AssetsEcosystem Assets

€ €

CostsCosts€



Ecosystem Assets[stocks and resilience]

Subsoil Assets[stocks]

Environmental Expenditures, Taxes

Additional Ecosystem

Maintenance Costs

Material & Energy Flows

NAMEA

Ecosystem

Services

Natural capital / assets

SNA flows & assets

Additional Ecosystem

Costsin Imports

(less in Exports)

Ecosyste

m

Services

Ecosystem Assets

[stocks and resilience]

Rest of the World

SEEA Integrating Ecosystems Physical flows

Monetary flows/valuation

Assets valuation

Subsoil Assets[stocks]


CORE LAND COVER ACCOUNT

ECOSYSTEM ACCOUNTS

Spatially integrated ecosystem accounts

Soil

Flora & Fauna

Water system

Atmosphere/ Climate

Land use economic & social

functions

Intensity of use & full maintenance

costs

Ecosystem services

Ecosystemassets

Stocks

Material & energy flows

Resilience

Production & Consumption

Economic Assets

Population

Infrastructures & Technologies

Inclusive use of market & non

market ecosystem services


Natural capital• Natural capital stocks, resilience & wealth, distance to objective (physical units, by sectors)• Natural capital consumption/maintenance costs (€)• Ecosystem assets inclusive wealth (€)

Supply & use of ecosystem goods and services(Use of resource by sectors, supply to consumption & residuals, accumulation, I-O analysis, NAMEA)

Ecosystem Services• Marketed Ecosystem Services (€)• Non-market end use ES (physical units, €)

Framework of Ecosystem Accounts

Natural Capital Accounts/ living & cycling natural capital

Accounts of flows of ecosystem goods and services

Ecosystem Stocks & State Accounts

Eco

syst

em t

ypes

Economic sectorsSpatial integration

Economic integration

Counts of stocks diversity / integrity

(by ecosystem types, focus on state, health, resilience,

stress)

Core accounts of assets & flows

(by ecosystem types, raw quantities)

Material/energy flows(biomass, water, nutrients, residuals)


Natural capital• Natural capital stocks, resilience & wealth, distance to objective (physical units, by sectors)• Natural capital consumption/maintenance costs (€)• Ecosystem assets inclusive wealth (€)

Supply & use of ecosystem goods and services(Use of resource by sectors, supply to consumption & residuals, accumulation, I-O analysis, NAMEA)

Ecosystem Services• Marketed Ecosystem Services (€)• Non-market end use ES (physical units, €)

Framework of Ecosystem Accounts

Natural Capital Accounts/ living & cycling natural capital

Accounts of flows of ecosystem goods and services

Ecosystem Stocks & State Accounts

Eco

syst

em t

ypes

Economic sectorsSpatial integration

Economic integration

Counts of stocks diversity / integrity

(by ecosystem types, focus on state, health, resilience,

stress)

Core accounts of assets & flows

(by ecosystem types, raw quantities)

Material/energy flows(biomass, water, nutrients, residuals)

€

€€

€









Stocks & flows• Spatial systems:

– Land cover (units, zones, landscape types)

– Rivers, river reaches, catchments– Coastal systems– Soil

• Biomass (NPP/NEP), Carbon• Nutrients (N,P…)• Water• Species • Other…

Basic ecosystem stock

flows accounts

Basic ecosystem stock

flows accounts


Data infrastructure of land cover accounts

Smallest mapping unit for stock 25ha

Change mapped at 5ha

Smallest mapping unit for stock 25ha

Change mapped at 5ha


LEAC/Land cover accounts’ basic framing


LEAC: from changes to flows of land cover

LCF3

LCF1

LCF2

LCF5

LCF4

LCF7

LCF6

LCF8

Change Matrix(44x43=1932

possible changes)summarized into

flows

LCF9

199

0

2000


Ecosystem health: counts of health/resilience

Ecosystem Distress Syndrome model: 5 types of symptoms– Vigor: e.g. disruptions of nutrients cycling, population

dynamics (loss or excess)

– Organisation, degradation of substrates: e.g. fragmentation, water stress, change in food chain

– Resilience: e.g. change in species composition (invasive…), intoxication

– Dependence of systems from artificial input: e.g energy, water, subsidies

– Capacity of supporting healthy communities: wildlife, human

Source: David J. Rapport


Land Use Functions & Ecosystem Services

LUF analysis and mapping address cross-cutting issues e.g.: Urban/Rural,

Agro/Environment detect & measure ES services = ecosystem

functions which benefit to people, somewhere


Supply of commodities

Stocks & flows, Integrity, BiodiversityFunctional Landscape

RegulatingClimate, floods, soil formation,

carbon sequestration, air quality, water quality, pest and diseases

control, pollination, invasion resistance, habitat provisioning

SupportingPrimary production

Water cycleBiogeochemical cycles

ProvisioningFood, water, fibre, wood, fuel,

medicines

CulturalAesthetics, tourism, spiritual, education, research, traditional

knowledge

Non nature-based sources of goods

and services

Insurance value Market & nonmarket values

Main

ten

an

ce / re

stora

tion o

f natu

ral ca

pita

l

Mostly negative

feedbacks

Adapted from Scholes, 2007, Lomas, 2007

Use of commodities& non-produced services

Ecosystem and servicesEcosystems, functions and services


Internal habitat

functionsLand use

functionsEcosystem

Services Market input

Final use of non

market ES

Provisioning x x x

Cultural x x x x

Regulating x x x x x

Support x

Ecosystem functioning

x

Capital stocks and functions

ServicesNomenclature of ES Market values

Physical measurement and shadow

prices

Ecosystems services


Exemple: ES nomenclature used for wetland accounts – 1st draft

Service-type Category Service

Strong, short term

Medium/ long

term Weak Yes Partly No 1 Provisioning 1.1 Food 1.1.1 Hunting prays x x

1.1.2 Gathering/ picking up goods x x1.1.3 Fishing x x1.1.4 Seafood x x1.1.5 Livestock x x1.1.6 Agriculture x x1.1.7 Aquiculture x x…

1.2 Materials 1.2.1 Fresh water x x1.2.2 Salt works x x1.2.3 Construction materials ("Arids") x x1.2.4 Fiber crops x x1.2.5 Tree plantations x x…

1.3 Forest trees-related 1.3.1 Timber x x1.3.2 Fuel / wood x x1.3.3 Cork x x1.3.4 Pines x x…

1.4 Plant-related 1.4.1 Genetic resources x x1.4.2 Medicinal & cosmetic plants x x…

1.5 Physical support 1.5.1 Communication x x1.5.2 Housing x x…

2 Cultural 2.1 Amenity 2.1.1 Recreation / relax x x2.1.2 Ecotourism x x2.1.3 Landscape beauty x x…

2.2 Identity 2.2.1 Sense of place x x2.2.2 Cultural heritage x x2.2.3 Religious / spiritual x x…

2.3 Didactic 2.3.1 Education / interpretation x x2.3.2 Scientific research x x2.3.3 Traditional Ecological Knowledge x x…

3 Regulating 3.1 Cycling 3.1.1 Soil retention & Erosion control x x3.1.2 Hydrological regulation x x3.1.3 Saline equilibrium x x3.1.4 Pollination for useful plants x x3.1.5 Climate regulation x x…

3.2 Sink 3.2.1 Soil purification x x3.2.2 Waste treatment x x3.2.3 Water purification x x…

3.3 Prevention 3.3.1 Flood buffering x x3.3.2 Pest prevention x x3.3.3 Invasive species prevention x x3.3.4 Air quality x x…

3.4 Refugium 3.4.1 Habitat maintenance x x…

3.5 Breeding 3.5.1 Food web maintenance x x3.5.2 Nursery x x…

Source: Berta Martin, Pedro Lomas et alii, Autonomous University of Madrid, 2007

Biodiversity dependence

Accounted for in the marketWetlands social-ecological systems


Challenges for implementation

• Classification and measurement • Geographical scales

The issue is to play with heterogeneous datasets:• Exhaustive but rather contents-poor geographic datasets,

frequently updated by satellite images• Exhaustive, contents-rich but rather poorly geographically

detailed socio-economic statistics• Scattered in situ monitoring of the physical world• Detailed analysis and modelling of the socio-ecosystems and

valuation of ecosystem services available as case studies

• Time scales• Time series• Nowcasting• Infra-annual accounts when relevant• Ecological “surprises”


ES: several valuation issues

• Services entangled in marketed goods and services:– Under pricing because of externalisation of environmental costs– Under pricing because of low internalisation of environmental benefits– Under pricing because of rent appropriation by buyers (in particular in

imports)

• Free end use ES:– Physical measurement from social statistics– Prices for individual use– Prices for collective use (in particular regulating ES)– Limit to what is not in price/value of commodities (full property right

criteria)

• Additional maintenance & restoration costs of ecosystems– Integrated measurement of quantity & quality of ecosystems– Costs in imports (e.g. when products are re-exported)


Not only issues, achievements

The first phase of GAISP comprises the publication of the following eightMonographs:1 The Value of Timber, Carbon, Fuelwood, and Non-Timber Forest Produce in India’s Forests2 Estimating the Value of Agricultural Cropland and Pasture Land in India3 The Value of India’s Sub-Soil Assets4 Eco-tourism and Biodiversity Values in India5 Estimating the Value of Educational Capital Formation in India6 Investments in Health and Pollution Control and their Value to India7 Accounting for the Ecological Services of Indian Forests: Soil Conservation, Water Augmentation, and Flood Prevention8 Estimating the Value of Freshwater Resources in India

In this monograph, three ecological services of forest ecosystems, namely, prevention of soil erosion, augmentation of groundwater, and reduction of flood damage have been considered.


Perspectives for ecosystem accounting

• Correlated regional projects like Eureca!2012 the ecosystem assessment for Europe (now regional project of the forthcoming MA2 (2015) launched by UNEP)

• “Beyond GDP” developments• Assessment of benefits provided by biodiversity

demanded by the G8+5 in Potsdam, March 2007 as an input to the Convention on Biological Diversity (CBD) – cases studies on wetlands (EEA) and forest (IUCN)

• Ecosystem and carbon accounting, continuation of the “Stern report”

• Possible interest of EA for business (e.g. UNEP Financial Initiative), IPES – can it help?


Work sharing for a fast track implementation/ International level

• UN agencies, WB, IMF, OECD (…?) • MA2 context (e.g. WCMC/UNEP: manual on ES

currently drafted) • GEO/GEOSS (GMES…) (support regional global

monitoring)• International conventions (CBD, IPCC, IGBP, HDP,

Ramsar, Desertification… ) • Regional regulations, agreements, conventions• Key NGOs in the domain (IUCN, WWF, ISEE) • UNEP-IPES, UNEP-FI• London group/subgroup + Eurostat + EEA &

scientific expert panel: issue paper, outline by end 2008


Thanks!


Documents

UNEP/IPES 28-29 January 2008 International Payments for Ecosystem Services (IPES) Publication Review Meeting UNEP, Geneva, 28-29 January 2008 Workshop