Interim Report - TEEB

Figure 3.2: Valuing ecosystem services
Non-specified
Monetary: e.g. avoided water purification costs,
value of food provision, value of carbon storage
Monetary valuation
Quantitative: e.g. cubic metres of water purified, tonnes
of carbon stored, share of population affected by
loss of food provisioning
Quantitative assessment
Qualitative review
Qualitative: range and materiality of various ecosystem
and biodiversity benefits provided by the ecosystem
instance being evaluated, and knowledge gaps
Full range of ecosystems services underpinned by biodiversity
Source: P. ten Brink, Workshop on the Economics of the Global Loss of Biological Diversity, 5-6 March 2008, Brussels
In one of the accompanying papers of Phase I (IUCN 2008),
approximately 200 valuation studies on forests have been
examined. Many of these included some discounting of
annuity flows in order to calculate an aggregate value for
natural capital. We found that most studies used social
discount rates of 3-5% or higher, and that none were below
3%. Our intention in Phase II is to leverage off this body of
work, but to recalculate its results with different discounting
assumptions.
Thus in Phase II we will propose a conceptual framework
for the economics of biodiversity and ecosystem
valuation which includes assessments of the sensitivity
of ecosystem values to ethical choices. Our intention is
to present a discrete range of discounting choices
connected to different ethical standpoints, enabling endusers
to make a conscious choice.
THE EVALUATION CHALLENGE
Economic evaluation can shed light on trade-offs by
comparing benefits and costs and taking account of risks,
and this can be applied to alternative uses of ecosystems.
But there are many difficulties, which we set out in this
section, and which we will address in Phase II.
Before economic valuation can be applied it is necessary
to assess ecosystem changes in biophysical terms. Most
benefits provided by ecosystems are indirect and result from
complex ecological processes that often involve long lag times
as well as non-linear changes (see Figure 3.1). Pressures may
build up gradually until a certain threshold is reached, leading
to the collapse of certain functions. A typical example is forest
die-back caused by acidification. The impacts of pressures
on ecosystems, including the role of individual species, the
importance of overall levels of biodiversity, the relationship
between the physical and the biological components of
the ecosystem, and the consequences with regard to the
provision of services, are difficult to predict.
Economic valuation builds on the biophysical understanding
and aims to measure people’s preferences for the benefits
from ecosystem processes. These benefits may accrue to
different categories of population over different geographical
and time scales.
Our ability to assess the benefits provided by ecosystems, or
the costs from their loss, is limited by lack of information at
several levels. There are probably benefits that we have not
yet identified, so we are able to assess, even in qualitative
terms, only part of the full range of ecosystem services. We
will probably never be able to assess the full range. It will be
possible to make a quantitative assessment in biophysical
terms only for part of these services – those for which the
ecological “production functions” are relatively well understood
and for which sufficient data are available. Due to the
limitation of our economic tools, a still smaller share of these
services can be valued in monetary terms.
Towards a valuation framework
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