A future task in good hands Accounting for multiple services: a reflection based on experience in German ecosystem services accounting Burkhard Schweppe-Kraft Unit I 2.1: Legal Affairs, Economics and Ecologically Sound Regional Development Special thanks to Andreas Hauser, Suisse Federal Office for the Environment, and Jan Erik Petersen, EEA, for their valuable remarks and recommendations

Challenges of Natural Capital Accounting What D A CH – countries (Germany, Austria, Switzerland) did so far: Trying to define, calculate and map ►several indicators for specific ecosystem services or ecosystem service capacities like: freshwater supply, erosion control, contribution to recreation etc. (sectoral approach, different „Natural Capitals“) In the case that the capacity to deliver some kind of services increases whereas in the same time others decrease, it would be helpful to have a concept for ►one unifying indicator for „one“ Natural Capital („Natural Capital“ as one additional economic sector) This possibility is also discussed in SEEA Experimental Ecosystem Accounts. A basis for such an indicator could for example be a useful aggregation scheme that would allow to define wether Natural Capital as a whole rises or declines if some capacities fall whereas other rise.

What could be the focus of „one“ Natural Capital Carbon Accounts Ecosystem Accounts „Conventional“ National Accounts (SNA) Water AccountsLand Accounts Could it be reasonable to focus on regulation services (resilience) and cultural services? Biodiversity Accounts

Measuring Natural Capital: Extent and condition versus expected flows of services In SEEA Experimental Ecosystem Accounts two approaches for the measurement of ecosystem assets are mentioned: First, ecosystem assets are considered in terms of ecosystem condition and ecosystem extent. Second, ecosystem assets are considered as the estimated stock of (aggregated) expected ecosystem service flows. “There will not be a simple relationship between these two perspectives, rather the relationship is likely to be non-linear and variable over time.”

A possible way towards one Natural Capital on the basis of extent and condition CLC- Ecosystem ConditionWater retention Erosion control Pollination ∑ / Rank / Value Wood FFH high: █ (4)██ █ █ █(12) semi-natural high: █ (4)█▄ █ █ ▄(11) less intensive high: █ (4)█▄ █ █ ▄(11) intensive moderate: ▄ (3)▄▄ ▄ ▄ ▄(9) Grassland FFH low: ■ (2)■█ ■ ■ █(8) semi-natural low : ■ (2)■█ ■ ■ █(8) less intensive low: ■ (2)■■ ■ ■ ■(6) intensive low: ■(2)■▪ ■ ■ ▪(5) Cropland HNV very low: ▪ (1)▪■ ▪ ▪ ■(4) organic very low: ▪ (1)■■ ▪ ■ ■(5) Soil conserving very low: ▪ (1)■▪ ▪ ▪ ■(4) intensive very low: ▪ (1)▪▪ ▪ ▪ ▪(3) Combining the first perspective with the second: Value of future ecosystem services of selected CLC-Ecosystems with different „conditions“ – surrounding ecological and economic conditions being the same

Two problems – very often discussed, but probably of minor importance CLC- Ecosystem ConditionWater retention Erosion control Pollination∑ / Rank Wood FFH high: █ (4)██ █ █ █(12) semi-natural high: █ (4)█▄ █ █ ▄(11) less intensive high: █ (4)█▄ █ █ ▄(11) intensive moderate: ▄ (3)▄▄ ▄ ▄ ▄(9) Grassland FFH low: ■ (2)■█ ■ ■ █(8) semi-natural low : ■ (2)■█ ■ ■ █(8) less intensive low: ■ (2)■■ ■ ■ ■(6) intensive low: ■(2)■▪ ■ ■ ▪(5) Cropland HNV very low: ▪ (1)▪■ ▪ ▪ ■(4) organic very low: ▪ (1)■■ ▪ ■ ■(5) Soil conserving very low: ▪ (1)■▪ ▪ ▪ ■(4) intensive very low: ▪ (1)▪▪ ▪ ▪ ▪(3) First problem: Is ■ + ■ really = █ ? Is low + low = high? Second problem: The order of ranks can change if weights are introduced. If pollination has a higher importance (weight) for society than water retention, then grasslands get a better value

An interesting finding regarding the relevance of „condition“ CLCCondition∑ / RankMean Wood FFH █ █ █(12) 10,75 semi-natural █ █ ▄(11) less intensive █ █ ▄(11) intensive ▄ ▄ ▄(9) Grass- land FFH ■ ■ █(8) 7,75 semi-natural ■ ■ █(8) less intensive ■ ■ ■(6) intensive ■ ■ ▪(5) Crop- land HNV ▪ ▪ ■(4) 4 organic ▪ ■ ■(5) soil-conserving ▪ ▪ ■(4) intensive ▪ ▪ ▪(3) ►The CLC-Ecosystem type is of major relevance for the provision of most regulating and cultural services. ►The condition of the respective CLC-type is normally of minor importance. ►Condition is especially important for the provision of biodiversity but not so important for the whole bundle of services. ►The idea of „one natural capital“ may give not very much support to additional nature conservation measures (except we will apply some „tricky“ methodologies) ConditionCLC∑ / RankMean best (FFH…) Wood█ █ █(12) 8 Grassland■ ■ █(8) Cropland▪ ▪ ■(4) good (semi- natural…) Wood█ █ ▄(11) 8 Grassland■ ■ █(8) Cropland▪ ■ ■(5) moderate (less intensive…) Wood█ █ ▄(11) 7 Grassland■ ■ ■(6) Cropland▪ ▪ ■(4) low (intensive…) Wood▄ ▄ ▄(9) 5,7 Grassland■ ■ ▪(5) Cropland▪ ▪ ▪(3)

Relevance of ecological and economic conditions of surrounding areas CLC- Ecosystem surrounding conditions Erosion control Wood lowlands▪ highlands█ Grassland lowlands▪ highlands■ Cropland lowlands▪ highlands▪ ► The future value of services is highly dependent on where an ecosystem is situated ► The influence of place on the value of an ecosystem is much more relevant than the influence of the condition of the ecosystem ► Neglecting the influence of place/location could lead to a misinterpretation of landuse changes ► Example: Additional woodland with a high ranking regarding water retention or recreation has minimal or no real (future) welfare effects if it is located in sparsely populated non touristic areas with a minimal influence on flooding events. CLC- Ecosystem surrounding conditions Pollination Wood wood, grassland ▪ insect pollinated crops, orchards ▄ Grassland Wood, grassland ▪ insect pollinated crops, orchards █ Cropland highlands ▪ insect pollinated crops, orchards ▪

Conclusions We should agree upon that this approach is only the beginning of an integration of ecosystems into national capital accounts and needs further refinement. One way of refinement could be the development of ●sectoral natural capital accounts (e.g. for provisioning services, water retention, erosion control, filtration carbon sequestration, different cultural services etc. ●wherever necessary taking into account the special economic and ecological conditions of the specific location (kind of surrounding area). It is important to start with the process. There are good arguments to start with a simple „one capital“ approach. For further development, we could focus first on those ecosystem services which give good opportunities to argue for additional conservation efforts

An example: Concept for the monitoring of recreation-services and recreation capacity in Germany very high high low settlement function of ecosystem mix and disturbance by traffic etc. capacity for recreation: different indicators: ►overall capacity ►capacity within X km distance from settlements ►capacity within X km distance inhabitants ►value of capacity within X km distance inhabitants, taking into account decreasing marginal values of recreation sites

(One) opportunity for a monetary integration into SEEA / SNA Possible approach for economic valuation: Better supply of recreation facilities near or in settlements ►reduces the cost (price) for recreation activities ►and thereby increases real income increased capacity, but a loss where it is needed most increased capacity at the location of highest demand

A pragmatic proposal on accounting for capital, capacity and ecosystem services CLC- eco- system type extent condi- tion relative value of CLC- type with a certain condition to „overall“ ESS relative value of CLC-type with a certain condition to special ESS location within an area with high or low demand / contribution of capacity to human welfare Ecosystem capitalXXX Capacity to deliver services XXXX Capacity to deliver special services XXXX Proxy for amount of „overall“ ecosystem services XXXXX Proxy for amount of special ecosystem services XXXXX

A future task in good hands Many thanks for your kind attention