Preliminary ECLAIRE findings Budapest, 2 October 2014 Rob Maas, RIVM

1.Changing climate = changing biochemical processes: more ozone formation, more BVOC, more local NH3-deposition, less ozone uptake (dry-EU), reduced efficiency of N&C-uptake by vegetation (wet-EU) 2.Ozone is damaging ‘ecosystem services’ throughout Europe 3.Nitrogen and climate change lead to more forest growth (& C- uptake) in N-limited EU (= N-EU) 4.Nitrogen leads to biodiversity loss (= less resilience to extreme climate events?) 5. Rapid climate change would lead to biodiversity loss 6.Protection of Natura2000 areas legally requires nitrogen reduction 7.Critical thresholds may enable optimizing the probability of occurrence of species as well as long-term wood production 8.Will this change policy? Will the balance between costs & benefits of policy measures change?

Will monetized ecosystem benefits put more emphasis on ozone & nitrogen?

The Economics of Ecosystems and Biodiversity (TEEB) Wood production (easy to monetise) Recreation (WTP clean lakes, seas) Oxygen production is not valued! Carbon sequestration can be valued

Conclusion Monetization of ecosystem & health & crops benefits seems to stimulate further action on ozone Costs MFR : € 45 bn/yr Ecosystem benefits: € 8-80 bn/yr Health benefits: € bn/yr Crop benefits: € 2.5 bn/yr

Nitrogen makes it complex ! Ozone policy requires additional NOx reduction NOx reduction will reduce wood production and carbon uptake (offsetting benefits of ozone reduction) in N-limited forests (Northern Europe) €-benefits of N-reduction on recreation (lakes, seas) are limited €-benefits of N-reduction on groundwater quality are limited Benefits of N-reduction on N 2 O-emissions are ~¼ of reduced C- uptake Conclusion: The ecosystem services approach gives net dis-benefits and will not promote further measures!

Most wood production is in Northern Europe: nitrogen limited + low but increasing ozone damage More than 50% of the European wood production is In Scandinavia. Ozone reduction will increase forest growth, but can only be achieved with NOx reduction, which will reduce forest growth. Regional differences in effectiviness of combined ozone & nitrogen policies

But: N-deposition decreases biodiversity! – Heather  grasses – Undergrowth of forests  grasses, scrubs, nettle – Alpine vegetation  grasses Known Unknowns: – More health risks from insects & viruses? – Less species = less ecosystem resilience? – Impact on uptake of fine particles by trees?

What is biodiversity worth? Ask the public 1. Willingness to pay approach  Are people well informed to appreciate species? What metric? Pictures? Wishful answers? (Does this get the money flowing?) Revealed preference by governments 2. Restoration cost approach What do we have to spend on nature management? Benefits of N-reduction = Less management costs 3. Regulatory elimination cost approach What N-elimination costs were implied in the Bird & Habitat Directives? Benefits of N-reduction = Reduction of the remaining elimination costs.

1. Willingness to pay for 25% restoration of biodiversity €10-30 per household per year = €80-240/ha/yr Benefits of 25% biodiversity improvement of total Natura 2000 > €8 bn/yr Assuming UK-values are representative for all EU: Income level OK, significantly less Natura2000 area per capita in UK WTP for marine protection not included Sources: Laurence Jones et al, in: Ecosystem Services, 2013 Mike Christie et al, in: Ecological Economics, 2006 and Report on UK Biodiversity Action Plan, 2011

1. Willingness to pay for 25% restoration of biodiversity Benefits of 25% biodiversity improvement of total Natura 2000 €8 bn/yr If applied to all nature areas & forests in EU28: > € 80 bn/yr Costs (MFR) : €45 bn/yr

2. Restoration costs approach Is this everywhere applicable? Is frequently managed nature still nature?

Policy action decreases restoration costs For Natura2000 areas a ‘favourable conservation status’ is legally required Restoration costs 2005 according to NEEDS-study (2006) €16 bn/yr Avoided restoration costs in 2030 with clean air policy package € 8 bn/yr (reduction NH3 30%; NOx 70% )

3. Elimination costs approach Legal assumption: Costs of N-elimination needed to meet CL in Natura 2000 areas were already implied in the Bird & Habitat Directives Costs of meeting Critical Loads in all Natura2000 areas = €45 bn/yr (of which: 15% NH3, incl. €4 bn local farming restrictions) Benefits of 2030 Clean Air Policy Package reduction of elimination costs = ~ €8 bn/yr

Policy messages 1.Ozone impacts on forest growth can be significant, but nitrogen has opposite impacts (more N is needed to compensate ozone impacts) 2.Nitrogen and climate change lead to a loss of biodiversity 3.Different valuation methods show the benefit/cost ratio for biodiversity/ecosystem protection is much lower than for health protection PM: will more biodiversity increase the resilience of ecosystems?

Policy messages (2) But: do we really need to monetize ecosystems? Society has already chosen to protect Natura2000 areas! Costs to meet this legal obligation around 2030 = €45bn. But there will be high health co-benefits: € bn! Also ozone damage will be reduced. Improving Nitrogen Use Efficiency (less fertilizer use, less food waste, less meat) and less dependency on fossil fuels will substantially reduce the costs of measures!