1. www.developpement-durable.gouv.fr Ministère de l'Écologie, du Développement durable et de l’Énergie Crédit photo : Arnaud Bouissou/MEDDE Using Water & Ecosystems valuation in Decision making to show the benefits of sustainable agricultural practices - Recent works of the Economics & Evaluation Department of the CGDD Olivier Bommelaer Policy adviser, French Ministry of Ecology Bruxelles, October 15th, 2012

2. 2 Presentation outline  A/ Appraisal of farming pollution costs to water  B/ Valuing services provided by wetlands  Wetlands and valuation  Study objectives and methodology  Lessons learnt and lines of work for future studies  C/ Additionality of A & B values  D/ Conclusions  E/ Recent publications of CGDD

3. 3 A 1 : Appraisal of farming pollution costs to water

4. 4 A 2 : Treatment cost of excedentary nitrogen: between € 70 and € 106/Kg This potabilization cost corresponds to national average treatment costs ranging from € 0.40/m3 to € 0.61/m3 for reducing nitrates concentration from about 25mg/liter. It does not include pumping costs nor pesticides removal. This externality of nitrogen removal ranging from € 70 to €106 kg of nitrogen should be compared to the market value of mineral nitrogen, sold in France between € 0.5 and € 1/kg

5. 5 A 3 : The benefits of controlling nitrogen and pesticides within water supplies catchment areas in France are estimated between € 800 and € 2,400 / year / ha of catchment Rain Infiltration from 180 to 300 mm/year: 1,800 – 3,000 m3/ha Nitrates treatment costs in drinking water plants: 0.40 – 0.61 €/m3 Pesticides treatment costs in drinking water plants: 0.06 – 0.20 € /m3 Average treatment potabilisation cost for the utility: 828 – 2,430 € /ha Net benefits amount to the avoided treatment cost minus the PES and others costs (trade_off, … )

6. 6 B 1: Valuing services provided by wetlands (case study by CGDD) 67% of french wetlands have disappeared within XXth century Wetlands provide several services (water purification, flood prevention, recreation, biodiversity, cultural, etc.) A significant part of their value is rarely taken into account by misperception, lack of information and market failures, linked to the “ common good ” nature of these benefits Planning decisions are partly based on economic factors. Assigning an economic value to goods and services provided by wetlands is a necessary step to shed light upon public and private decisions and to justify the preservation of wetlands NB: Monetization does not create a market. Revealing a value does not create a mechanism for trading!

7. 7 B 2: Valuing services provided by wetlands (case study by CGDD) Study objectives To appraise all services provided by wetlands from 3 pilot sites: Regional Natural Park of Cotentin and Bessin, La Bassée on the Seine valley, Oise valley By combining all methods of economic analysis, including a joint analysis on one site (survey) Methodology: the added value of the result relies upon: Ecological analysis: to understand the context, function and roles of the local wetlands (defining the limits of the site with respect to these wetlands and their services, quantifying services, monetizing services) Stakeholders involvement in all steps of the evaluation process

8. 8 Lessons learnt Importance of ecological analysis to understand the services provided by the site Combination of all economic methods - Joint analysis to capture non-use values The bigger the budget of the study is, the more solid and the higher the results : the budget and time scales of the study condition the robustness and scale of its results Lines of work for future studies Improve the identification of people and economic activities affected by the services (including joint analysis): apropriate scale and perimeter of the evaluation are delicate to assess Specify the limits of the monetization scope/ not possible to monetize every value (scientific, inspiration values,...) Base the transfer of values upon types of services rather than globally per land unit B 3: Valuing services provided by wetlands (case study by CGDD)

9. 9 B 4 : Wetlands can provide each year to water supplies an ecosystem service of nitrogen purification estimated between € 2,800 and € 4,200 per hectare Wetlands can remove from water more than 40 kg/ha of nitrogen every year. At the wetland scale, this function is never fully used for human consumption. If this function were fully used, for a piece of wetlands located in the catchment area of a drinking water supply, in an area where raw water concentration exceeds the nitrate limit value of 50mg/l, the ecosystem service of water purification could then reach, for nitrogen removal only:  From 40 kg X €70 = 2800 € /ha/year  To 40 kg X €106 = 4240 € /ha/year

10. 10 C Additionality of the respective benefits of (A) avoided pollution & (B) Ecosystem services Appraising the potential benefits of wetland conservation for nitrogen purification compared to using the same piece of land for intense farming A : A piece of wetland located in a water supply catchment area can save nitrogen pollution costs from € 800 to € 2,400 per ha /year compared to the negative impacts of a scenario where it would be used for intense farming B : The same piece of wetland has a capacity of exogenous nitrogen removal that can save treatement costs estimated at between € 2,400 and € 4,200/ha/year A+B : In certain conditions –if the ecosystem service is actually used by the water supply or by any other water use-, both savings could be added: the benefit of conserving wetlands within water supplies catchment areas for nitrogen purification could therefore reach from € 3,200 to € 6,600 per hectare and per year. That should be compared to average buying price of farming land in France, that was € 5,160 per hectare in 2009.

11. 11 D CONCLUSION  Valuation & monetization of water & ecosystems shed useful light upon development choices, decision and policy making. It shows that green practices such as organic farming preventing water pollution and preserving wetlands do generally benefit to economic growth at basin level  It involves complex, heavy and expensive studies which give partial & contextual monetarised results.  Those values are rarely used in political decision, notably because the overall benefits for the entire basin population and economic activities rarely correspond to benefits for the land owner and/or the farmer. Therefore ownership and understanding of these results by local multistakeholders are essential to successful offsets  Valuation results should not be the sole criterion for public decision and policy making  Under the framework of the OECD WPBWE activities, France will co-organize a workshop dedicated to ecosystem services valuation in Paris on 2013, Feb, 1rst, to share both achievements and pending questions : further cooperation and joint learning is still necessary.

12. 12 E Recent publications of CGDD http://www.developpement-durable.gouv.fr/Les-dernieres-publications-du.html http://www.developpement-durable.gouv.fr/Les-dernieres-publications-du.html The water abstraction tax in France: how could it be used to promote a sustainable quantitative management? (2012) Financing water resources management in France (2012) Valuating services provided by wetlands (2011) Evolution of water withdrawals (2012) Assessing water pollution costs of farming in France (2011) Waste water treatment in France: main data (2011) Evolution of rainwater quality (2011) The new environmental liability mechanism: Equivalence methods for “repairs in kind” (2011)