Natural Capital Accounting: TEEB and related initiatives (WAVES and SEEA) UNEP TEEB Office Nick Bertrand 23 May 2013 TEEB Country Studies Learning from Experience and how to Utilize Results Isle of Vilm, Germany

Gothenburg Award for Sustainable Development 2013 “Nature’s services and ingenious solutions”

“Pavan Sukhdev has brought into focus the enormous, elusive values represented by the global ecosystem and biodiversity. He has done this, in part, as leader of the groundbreaking study The Economics of Ecosystems and Biodiversity (TEEB). By promoting a wider perspective that goes beyond the monetary values of the ecosystem to include more elusive aesthetic, spiritual, cultural and recreational values, the work of Pavan and the TEEB group has aroused wide interest among decision-makers. For example, the TEEB provides a key source of reference to the UN in its efforts to get ecosystem services included in national accounts by 2018”.

Thank you for your attention

Overview TEEB and natural capital accounting The System of Environmental-Economic Accounting (SEEA) Wealth Accounting and Valuation of Ecosystem Services (WAVES) Linking TEEB, SEEA and WAVES

TEEB and natural capital accounting Conventional economic aggregates generated through national accounting, such as GDP, do not reflect the values of nature TEEB has been calling for the development of natural capital accounts (see Chapter 4 in TEEB National, TEEB 2010a and 2010b) Generic recommendations on NCA can be taken forward in TCS if this responds to countries’ priorities Natural capital valuation and accounting has emerged as a leading mechanism to include nature’s values in public policy and decision making.

Natural capital accounting in business

“The future we want” – outcome document §47. We acknowledge the importance of corporate sustainability reporting, and encourage companies, where appropriate, especially publicly listed and large companies, to consider integrating sustainability information into their reporting cycle. We encourage industry, interested governments and relevant stakeholders, with the support of the United Nations system, as appropriate, to develop models for best practice and facilitate action for the integration of sustainability reporting, taking into account experiences from already existing frameworks and paying particular attention to the needs of developing countries, including for capacity-building.

Launch of the SEEA Part 1 at Rio+20 National Accounts: Recurrent demands for improved economic indicators and aggregates (a short history) Historical pioneer “green accounting” projects: Norway, Canada, France, Philippines, Indonesia, the Netherlands, Spain… Rio1992, Agenda 21 UN SEEA1993 to “adjust” the UN System of National Accounts. SEEA revised in 2003 New SEEA revision 2012/13, including now a special volume on ecosystem accounts and valuation Recent initiatives: Beyond GDP Conference 2007, TEEB, Stiglitz/ Sen/ Fitoussi report on the measurement of economic performance (2009), Strategic Plan for Biodiversity 2011-2020, WAVES, other projects (Green Economy/Growth, Resource Efficiency) Launch of the SEEA Part 1 at Rio+20 In Europe, new Regulation on Environmental Accounts: Eurostat (the economy-environment interface) and the EEA (ecosystem capital accounts) Adapted from Jean-Louis Weber, 2013 9

Target 2 By 2020, at the latest, biodiversity values have been integrated into national and local development and poverty reduction strategies and planning processes and are being incorporated into national accounting, as appropriate, and reporting systems.

SEEA (System of Environmental-Economic Accounting): What is available in 2013 SEEA Part 1, “Central Framework”: the statistical standard approved by UN Statistical Commission in 2012 (assets and supply & use, SNA satellite account) SEEA Part 2: The experimental ecosystem accounts 2013 SEEA Water: “Interim standard” 2007 Adapted from Jean-Louis Weber, 2013 11

SEEA CF SEEA Central Framework (CF): International statistical standards (applied by c. 50 countries) for recording interactions between the economy and the environment : (a) individual environmental assets (e.g. water resources, timber, mineral and energy resources, aquatic resources, land and soil resources) (b) the flows of natural inputs and residual flows (e.g. emissions) between the environment and the economy and the products within the economy (e.g. flows of water) (c) economic transactions that can be considered environmental (e.g. environmental taxes, subsidies, etc.) Organisation of infromation in both physical and monetary terms.

SEEA Natural capital valuation and accounting has emerged as a leading mechanism to include nature’s values in public policy and decision making. Figure: representation of relationships between economy and environment.

SEEA-EEA SEEA Experimental Ecosystem Accounting: extends accounting principles of CF  guidelines for recording material and non-material benefits from the use of ES (e.g. water purification, storage of carbon, flood mitigation) Modules will focus on measurement (physical and monetary) of:  carbon  nutrients  biodiversity  ES and ecosystem condition

SEEA-Water (examples of current limitations) Accessible water resource not defined  misses a simple indicator of water use stress Quality de facto ignored Implemented for the hydrological system from questionnaire instead of data-mining from water agencie’s databases (meteo, gauging stations…) Starts with annual x national accounts, instead of seasonal x basin accounts SEEA Water: “Interim standard” 2007 Adapted from Jean-Louis Weber, 2013 15

Wealth Accounting and the Valuation of Ecosystem Services

WAVES Objectives:  mainstreaming natural capital accounting in national accounting systems  developing relevant policy perspective for ecosystem management and governance  strengthening national statistical system for NCA Creates demand for SEEA and supports institutional structure for the SEEA Central Framework Policy and Technical Experts Committee helps develop and test methodologies on ecosystem accounting Natural capital valuation and accounting has emerged as a leading mechanism to include nature’s values in public policy and decision making.

WAVES WAVES is a global partnership and multi-donor trust fund Five pilot countries: Botswana, Colombia, Costa Rica, Philippines, Madagascar Countries’ work plans include accounts for natural resources like timber, water, minerals (based on SEEA CF) as well as experimental accounts for ecosystems, e.g. watersheds and mangroves) following Rio+20 plans to expand WAVES to other countries are under development: 62 countries, 90 private sector organizations and 17 NGOs/IOs have expressed support for NCA

Linking TEEB, SEEA and WAVES TEEB encourages engagement in WAVES that was in part catalyzed by TEEB, as well as parallel approaches such as the EU ecosystem capital accounts and other accounts across the SEEA volumes. TEEB country studies and national engagement in WAVES are compatible initiative with significant synergies. The WAVES is likely to be more in-depth in its areas of focus, but TEEB country studies are likely to have an overall wider scope. A WAVES project may be informed by a TEEB assessment and a TEEB Country Study could recommend implementing natural capital accounting. Where there are limits to national resources, countries may wish to engage in these initiative sequentially, starting with whatever is more appropriate for the policy interest and data availability Wider scope of TEEB: may include framing of new regulations, formulating changes in land-use planning, subsidy reforms, investment in ecological infrastructure, PA evaluation, setting up local or national PES schems, etc.

Linking TEEB, SEEA and WAVES… Following the TEEB approach requires questions to be asked such as “What are relevant ES? From which biomes and ecosystems do they emanate? Whom do they benefit and to what extent?”; these questions are also fundamental to SEEA EEA conceptual framework The process of attaining comparable answers will benefit from the adoption of a common conceptual framework, which SEEA offers SEEA CF also supports the development of environmental-economic indicators relevant for tracking country progress toward independent policy goals identified through TCS SEEA CF, supported by the WAVES policy strategy creates a consistent structure for TEEB in advancing its recommendations at the national, regional and global level (e.g. making nature’s values visible, assessing values of ES and integrating ES into decision-making, measuring better to manage better)

…it’s all in the Guidance manual for TEEB Country Studies Launch 28 May 2013

Public profiling CBD COP-11, 8-19 October 2012, Hyderabad, India 3rd WAVES Partnership meeting, 9-11 April 2013, Washington DC Sub-regional Workshop on Valuation and Incentive Measures for Sub-Saharan West Africa, 14-17 May 2013, Ouagadougou, Burkina Faso 6th Trondheim Conference, 27-31 May 2013, Norway Global implementation Programme for the SEEA, UNHQ, New York, 17-19 June 2013

Long established formal, technical platform on NCA In context of WAVES, TEEB, dialogue between relevant agencies, donors, users… Articulate and communicate At the country level, strong potential for project synergies

Acknowledgement Part of this presentation is adapted from material prepared by Jean-Louis Weber, 2013.