Ecosystem Accounting DIMESA Meeting of 17 June 2008 Copenhagen “Global warming may dominate headlines today. Ecosystem degradation will do so tomorrow” Corporate Ecosystems Services review, WRI et al. March 2008

What’s at stake – human and planetary well being Human Well-being and Poverty Reduction Basic material for a good life Health Good Social Relations Security Freedom of choice and action Indirect Drivers of Change Demographic Economic (globalization, trade, market and policy framework) Sociopolitical (governance and institutional framework) Science and Technology Cultural and Religious Direct Drivers Indirect Ecosystem Services Human Well-being Millennium Ecosystem Assessment Life on Earth: Biodiversity Direct Drivers of Change Changes in land use Species introduction or removal Technology adaptation and use External inputs (e.g., irrigation) Resource consumption Climate change Natural physical and biological drivers (e.g., volcanoes) The conceptual framework for the MA posits that people are integral parts of ecosystems and that a dynamic interaction exists between them and other parts of ecosystems, with the changing human condition driving, both directly and indirectly, changes in ecosystems and thereby causing changes in human well-being. (See Figure B.) At the same time, social, economic, and cultural factors unrelated to ecosystems alter the human condition, and many natural forces influence ecosystems. Although the MA emphasizes the linkages between ecosystems and human well-being, it recognizes that the actions people take that influence ecosystems result not just from concern about human well-being but also from considerations of the intrinsic value of species and ecosystems. Intrinsic value is the value of something in and for itself, irrespective of its utility for someone else. Changes in drivers that indirectly affect biodiversity, such as population, technology, and lifestyle (upper right corner of Figure), can lead to changes in drivers directly affecting biodiversity, such as the catch of fish or the application of fertilizers (lower right corner). These result in changes to ecosystems and the services they provide (lower left corner), thereby affecting human well-being. These interactions can take place at more than one scale and can cross scales. For example, an international demand for timber may lead to a regional loss of forest cover, which increases flood magnitude along a local stretch of a river. Similarly, the interactions can take place across different time scales. Different strategies and interventions can be applied at many points in this framework to enhance human well-being and conserve ecosystems.

Accounting for ecosystem costs and benefits at different scales… Amvrakikos, Greece: Wetland management, Water & Fish Global scale Migratory Birds Flyways, Wetlands & Bird Flu Prevention Doñana, Spain: Water, Wetland & Strawberries National & regional government, European market Action level, local scale

… & accounts for connecting different scales LEAC/ Landscape Ecological Potential 1990-2000, 1km² grid (Source: Ecosystem Accounting for Mediterranean Wetlands, an EEA feasibility study for TEEB) Natural Park of Camargue (France) Change 1990-2000 1990

The economic questions behind ecosystem accounting Risks of unsustainable use of the living natural capital are ignored: the negative impacts of over-harvesting, force-feeding with fertilisers, intoxication, introduction of species, fragmentation by roads, or sealing of soil by urban development have no direct monetary counterpart in GDP or corporate accounts. The natural capital is not even amortised in accounting books of companies and in the national accounts – 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. This is as well the case of the price of imported products made from degraded ecosystems: their full cost is not covered by their price. Actual value for people of free ecosystem services is not accounted in their final consumption (the market tells: price is zero).

value of economic assets SEEA2003: enlargement of SNA1993 for a better description of the economy-environment relation Revision  SEEA2012 Impacts on ecosystems & related services/benefits RM HASSAN - UN The System of Environmental and Economic Accounting (UN 2003) - RANESA Workshop June 12-16, 2005 Maputo Volume 1 Statistical Standard NAMEA, expenditure, physical quantities, sub-soil, energy, value of economic assets Volume 2 Non Standard Accounts ecosystems, quality, valuation… Volume 1 Statistical Standard Volume 2 Non Standard Accounts Macro-ecological closure (non-linear feedback, spatial issues)

SEEA Integrating Ecosystems Physical flows Monetary flows/valuation Assets valuation Natural capital / assets Rest of the World Subsoil Assets [stocks] Ecosystem Assets [stocks and resilience] Subsoil Assets [stocks] Material & Energy Flows Ecosystem Assets [stocks and resilience] Ecosystem Functional Services Ecosystem Services NAMEA Additional Ecosystem Maintenance Costs Environmental Expenditures, Taxes Additional Ecosystem Costs in Imports (less in Exports) SNA flows & assets

Application of ecosystem accounting foreseen for… Eureca! 2012 MA follow-up 2015 IPBES, The Intergovernmental Platform on Biodiversity and Ecosystem services IPES, International Payments for Ecosystem Services TEEB, The Economics of Ecosystems & Biodiversity Adaptability to Climate Change Thematic Strategy Sustainable Use of Resource ESEA, European Strategy for Environmental Accounting Data centers related to land and ecosystems (Go4 recommendation) Beyond GDP National initiatives Corporate accounting guidelines for environmental liability