Interim Report - TEEB

The scenario used was largely developed by the
OECD as its baseline (OECD 2008). It is broadly
consistent with other modelling exercises such as
those by the FAO or other UN agencies. The model
itself forecasts a slowing rate of biodiversity loss in
Europe (compared to an increasing rate worldwide).
ASSESSING CHANGES IN ECOSYSTEM
SERVICES AND APPLYING MONETARY VALUES
Changes in land use and biodiversity are translated
into changes in ecosystem services. The assessment
relies to a large extent on the valuation
literature, and creative solutions have been developed
to extrapolate and fill data gaps. This is an area
where further work is clearly needed in Phase II.
The biggest difficulty has been to find studies to
monetize changes in ecosystem services. While
there are many case studies, not all regions, ecosystems
and services are equally covered, and there
were often difficulties in identifying values per
hectare for use in such a widespread benefit transfer.
Also, most studies are based on marginal losses,
and the values are often location specific.
THE VALUATION RESULTS
In the first years of the period 2000 to 2050, it is
estimated that each year we are losing ecosystem
services with a value equivalent to around EUR 50
billion from land-based ecosystems alone (it has to
be noted that this is a welfare loss, not a GDP loss,
as a large part of these benefits is currently not
included in GDP). Losses of our natural capital
stock are felt not only in the year of the loss, but
continue over time, and are added to by losses
in subsequent years of more biodiversity. These
cumulative welfare losses could be equivalent to
7% of annual consumption by 2050. This is a
conservative estimate, because:
• it is partial, excluding numerous known loss
categories, for example all marine biodiversity,
deserts, the Arctic and Antarctic; some ecosystem
services are excluded as well (disease
regulation, pollination, ornamental services,
etc.), while others are barely represented (e.g.
erosion control), or under-represented (e.g.
tourism); losses from invasive alien species are
also excluded;
• estimates for the rate of land-use change and
biodiversity loss are globally quite conservative;
• the negative feedback effects of biodiversity and
ecosystem loss on GDP growth are not fully
accounted for in the model;
• values do not account for non-linearities and
threshold effects in ecosystem functioning.
CONCLUSIONS AND NEXT STEPS
The study showed that the problem is potentially
severe and economically significant, but that we
know relatively little both ecologically and economically
about the impacts of future biodiversity
loss. Further work is envisaged in Phase II to
address the points mentioned above, and further
elaborate on the framework and methodology in
line with our recommendations.
1. The Cost of Policy Inaction (COPI): The case of not meeting the 2010
biodiversity target (ENV.G.1/ETU/2007/0044) was carried out by a
consortium led by Alterra, together with the Institute for European
Environmental Policy (IEEP) and further consisting of Ecologic, FEEM, GHK,
NEAA/MNP, UNEP-WCMC and Witteveen & Bos.
suitability of these methods to valuate ecosystem services is
provided by the Millennium Ecosystem Assessment (2005b).
But they remain controversial.
Fundamentally, there is the ethical question about the extent
to which some life-supporting functions of biodiversity can
be fully addressed by economic valuation and be considered
as part of possible trade-offs instead of being dealt with as
ecological constraints. Similarly, economic valuation may not
be appropriate to address spiritual values. Keeping these
limitations in mind, substantial progress has been made since
the 1990s by economists working with natural scientists to
improve these methods: there is increasing consensus on
the conditions under which they can be used, and increasing
confidence in the comparability of the results. These
techniques are now commonly applied to measure a wide
range of values, including many indirect and non-use values.
Another set of challenges relates to assessing the consequences
of the loss of biodiversity and ecosystem services
on a large scale. First, valuation methods generally do not
cover second-round effects of the losses on the wider
economy. To assess such effects, the use of economic
models is necessary. While there are already some promising
Towards a valuation framework
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