Transcript Slide 1

Central and Eastern European Regional Expert
Workshop on Sustainable Use of Biodiversity
Moscow, 30 May – 2 June 2005
Towards Sustainable use of
Ecosystem Goods and Services:
Economic Issues
by
Dr Renat PERELET,
Research Leader, Institute for Systems Analysis,
Russian Academy of Sciences, Moscow,Russia
[email protected]
The Addis Ababa Principles and Guidelines for the
sustainable use of biodiversity offer a new and
important dimension to newly developing national and
international policies relating biodiversity conservation
and sustainable use. This presentation cuts across
those principles and is based on them.
• Conservation of biodiversity, including rare species,
makes possible its expanded sustainable use.
• The sustainable use of BD consequently opens up
new markets in ecosystem goods and services.
• Two major trends have marked the current decade affecting the
sustainable use of biodiversity.
• First, to allow markets and entrepreneurial activity to make more vigorous
inroads in conservation activity while phasing out government financing.
• Secondly, to mainstream a biodiversity policy at the national and
international level by setting up multi-departmental committees to make
wider use of environmental impact assessments, factoring biodiversity in
their realm, economic tools to support integration through ensuring that
activities incorporate the costs to biodiversity, certification schemes and
developing methods for valuing biodiversity in national accounting systems
• In addition, the government is relied upon to harness markets with
stemming bio-piracy, controlling bio-prospecting and international trade in
ecosystem goods and services, streamlining economic issues of natural
resource property rights, and capture natural rent.
• The second trend is mainly set by scientists, general public, and the
international community urging governments not to make the first trend into
the 'nature for sale' action playing into the hands of TNCs and warrant
conservation and sustainable use of living natural capital for the sake of
future generations.
• At present, many EECCA governments are not efficient enough to
• - counteract its shadow sector of trade in living natural resources and
• - make the biodiversity policy a mainstream one.
• Are these trends meet Addis Ababa Principles 1 and 2?
• These two trends are also prominent in Russia and
other countries of the EECCA region. They appeared
in the work on the New Independent States
Environment Strategy (section on biodiversity
conservation and ecosystem protection).
• For a number of EECCA countries, ecological goods
and services, the value of which stems from
biodiversity values, can become a new currency in
international markets to be exchanged for money and
advanced technologies. These countries have their
national biodiversity conservation strategies.
• For example, Russia has its national Environmental
Doctrine (2002) that stresses biodiversity policy space,
its national biodiversity strategy and, in 2004, it
adopted its national strategy on rare species
conservation prepared with IUCN assistance
(Principles 5,7,9). Russia’s concept of SD of its Arctic
area also envisages the sustainable use of BD.
• The following issues have recently been
made prominent in discussions on the
sustainable use of biodiversity:
• global ecological services and goods (their
notion, definition, taxonomy),
• ecological property rights,
• economic valuation of ecological services and
goods,
• exchanges in ecological services and goods,
including market and market-based instruments
• Global ecological services and goods (their notion, definition,
taxonomy) – Principle 6
• It seems to be useful to make studies and develop practical international
measures in regard to the exchanges of ecosystem goods and services in
the wake of the WSSD recommendations aiming at the alleviation of poverty,
inequity between donors and consumers of ecological services, renewable
and biodiversity resources as well as at development of analytical tools and
policy instruments that put a price (where it is appropriate) on ecological
goods and services, and stimulate their exchange so as to support
sustainable development (Principle 6).
• It would be useful to make an effective taxonomy of ecosystem goods and
services.
• The WSSD stressed the necessity of enlisting indigenous peoples’ expertise
in regard to the use of living natural resources and biodiversity for human life
support. The availability of and access to gene banks could also be
considered.
• The classification could take into account ecosystem values (direct, indirect,
optional, inherited, etc.). The contribution of ecosystems to maintaining the
Earth’s biosphere or regional sustainability could be another criterion for
classification.
• Ecosystem services important nationally and maintained nationally versus
national ecosystem services of international and global importance that
could be treated accordingly can also be considered.
• The classification should be useful for defining ecological property rights and
values.
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Ecological property rights
A spectrum of approaches can be considered based on
ecosystemic, territorial, administrative boundaries or the
ownership of land plots, water bodies, forests, habitats, etc.
One may try to find some similarities with intellectual property
rights, especially applicable for indigenous knowledge and
experience. Protection of local indigenous community rights
to the ecosystem knowledge and expertise; sovereign versus
private ownerships (state, other law subjects, which?).
The Kyoto protocol concentrates on sovereign property rights
for global ecosystem services.
Protection of local indigenous community rights to the
ecosystem knowledge and expertise; sovereign versus
private ownerships (state, other law subjects, which?).
E.g.,The Kyoto protocol stresses the sovereign property
rights for global ecosystem services.
(Principles1, 4,12. AA principles do not seem to be explicit on
ecological property rights?)
• Ecological property rights (cont’d)
• A practical case:
• Washington's refusal in February 2005 to recognise the right of
Andean countries to demand compensation for the commercial use of
their biological resources stood in the way of negotiations for free
trade between the United States, Colombia, Ecuador and Peru.
• Washington was insisting that the trade treaty uphold the patents
registered by U.S. companies, which are developing biotech products
based on the ancestral knowledge of Andean peoples about the
pharmacological, nutritional and industrial properties of the local
plant life.
• The U.S. proposal was included in the chapter on intellectual property
of the draft treaty, establishing free access to claiming patents on
plants and animals, which would be designated as "inventions".
• The demand of the three Andean nations that the pact recognise the
economic value of their great biodiversity was the first such claim that
Washington faced in free trade discussions.
• Economic valuation of ecological services and goods
(Principle10)
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Environmental valuation can be discussed in physical and
monetary terms. How to value non-market ES goods and
services in monetary terms, get social values, especially for
sustainable use of BD by indigenous peoples with their
traditional knowledge of using it? How to take into account
values for future generations?
• lack of economic value of BD resource use leads to inefficient
resource allocation
• Many of the ES important assets are outside the developed
world, including the EECCA countries.
• The Kyoto protocol seems to limit the value of ecosystem
services in time (only after 1990), and covers only carbon
sequestration by new (after 1990) forests.
• Some argue that global ecoservices are equal to 1.1 times the
global GDP in the 1990s.
• Is this indicator real and operationally useful? What levels of
trade in ecosystem goods and services can be expected?
Which valuation methodology should be taken as a basic one –
the UN SEEA ecological footprints, total economic value
• Exchanges in ecological services and goods, including market and
market-based instruments (Principle 8, 10)
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The failure of traditional markets to adequately handle exchanges of
ecosystem services to human produced wealth (goods and technologies) and
money have resulted in the advent of new markets with specific market and
trade instruments and trade commodities.
For example, such a mechanism is envisaged in an agreement on the trade in
CO2 emission quotas and on accounting carbon sequestration by means of
forest planting (the Kyoto Protocol).
Exchanges of ecosystem services for technologies, debt-for-nature
(ecoservices) swaps, selling ecosystem services and goods (monetary
exchanges).
Three major currencies: money, technologies, and ecosystem services and
goods.
Trade in rights to bio-prospecting. Sanctions for eco-piracy? The trade in
ecosystem goods is partially regulated by the CITES and in ecosystem
services by the Kyoto protocol. The CBD does not cover these issues but has
relevance to them. However, pharmaceutical and perfume companies largely
make use of plants and animals that are not covered by the above
conventions. Nowadays, some developing countries have initiated the practice
of concluding agreements with western companies on bio-prospecting activity
and benefit sharing from the activity that make use of biodiversity of the given
country
The role of UNEP and WTO? Is there the need in a convention (a protocol to the
CBD) on ecosystem goods and services? How other ecological goods and
services that are not marketed at present but important for human life support
and transition to sustainable development should be treated? Should a
taxonomy table indicate what trade (exchange) mechanisms exist for different
kinds of ecological goods and services?
• At present there is very little regulation of trade in ecological goods and
services. CITES and the Kyoto protocol represent exceptions rather than the
norm, and the CBD is only a framework, and does not provide actual
regulations for transactions in these goods and services. It should also be
noted that ecosystem services are beneficial to the country (ecosystem) of
their origin, a neighbouring region and the globe.
• Could market based bilateral (multilateral?) agreements between
internationally legal entities be enough to optimize (compensatory)
payments for conserving natural ecosystems? Say, some (post) industrial
countries that have lost their ecosystems (natural capital) for economic
development can invest in conserving ecosystems not on their territory but
concluding agreements with other nature-rich countries in which marginal
ecosystem conservation (equivalent increments in ecosystem areas,
biomass, bio-productivity and biodiversity) is less costly than in their
countries. The cost of such contracts can be considered as a contribution to
maintaining biospheric sustainability while costs per unit of ecosystem
services can give a clue to their economic values. Is such an approach
realistic bearing in mind that debt-for-nature swaps implicitly recognize it?
Could this understanding be expanded beyond the DNS pattern? What other
new ideas can be generated? It is interesting to note that the European
countries did not make use of a compensatory mechanism (did not claim
money) to cover damages to their ecosystems due to acid deposition from
neighbouring countries, though tables of transboundary SO2 movements
(acid rain inter-country balances) were made from which it was clear which
countries and how much affect other (acid deposition recipient) nations.
• Does a sharply broadening use of GMOs in the world fall under the notion of
the sustainable use of biodiversity?
• International efforts towards trade in ES goods and
services:
• In 2001 the Group of Mega-diverse countries was created, and is
composed of Bolivia, Brazil, China, Colombia, Costa Rica, Ecuador,
Philippines, India, Indonesia, Kenya, Malaysia, Mexico, Peru, South
Africa and Venezuela. They claim to represent 75% of the biological
diversity and 45% of the cultural diversity in the world and act as an
advisory and consultative body to promote the common interests
linked to the conservation and sustainable use of biodiversity at the
United Nations and other forums.
• At WSSD, the Venezuela President announced the establishment of an
OPEC-like eco-services cartel that consisted of 12 countries and
wants developed countries and corporations to pay for access to a
wide range of plants, animals and indigenous expertise in using them
for health, food, and life support rather than exploiting them without
recompense.
• The "Mega Diverse" (like minded) countries want a new Protocol to
CBD with rules that regulate how patents of inventions from genetic
material can be used.
• There is an Australia based Katoomba Working Group,
composed of experts from forestry, finance, environmental
research and policy, government officials and other private
and non-profit sectors from all regions of the world Canada, China, Germany, Japan, Netherlands, the UK,
USA, the World Bank, the Ford Foundation, IUCN, WWF,
etc.
• The group promotes the global interest in markets for environmental
services from forests and stresses growing recognition of two
fundamental issues:
• (1) in general, forest degradation and the conversion of forest to
alternative land uses is often more profitable, at least in the short-run,
than forest stewardship; and
• (2) markets, in general, do not recognise or reward forest owners for
the host of environmental services generated by forests that are
beneficial to society, including carbon storage, watershed protection
and biodiversity conservation.
• International trade in ES goods
• A practical case: medical and aromatic plants
• Eastern and Southeast European countries play a significant role within the
European and the global herb trade. In particular, Albania, Bulgaria, Poland,
Hungary and Turkey are important source countries for this commodity. All
Eastern and Southeast European countries are a rich and often also a cheap
source of medicinal and aromatic plants, for both traditional domestic use and
for export. The production of this plant material relies to a large degree on wildcollection with an estimated annual collection of 30,000 - 40,000 t of dry herbs.
• In the 1990s, the reported annual overall importation of medicinal and
aromatic plant material, based on the commodity group SITC.3 292.4
pharmaceutical plants (Source: UNCTAD COMTRADE database, United
Nation Statistic Division, New York), amounted on average to 400,000 t valued
at USD 1,243 million. Over this period, the quantities traded doubled from
1991 (269,000 t) to 1997 (500,000 t). The international trade is dominated by
only few countries: 85% of the worldwide importation was channelled to just 12
countries, and 12 countries were responsible for 82% of the overall world‘s
exportation. Whereas, above all Japan and Korea are real consumer countries,
China, India, Chile and Egypt are important suppliers of this commodity.
• In general, the Eastern and Southeast European countries are a cheap
source for botanical drugs (see above). On export, the average price
per ton amounted to USD 2,078 in 1998 equal to only two thirds of
the European export price of USD 3,225. Moreover, this figure is less
than the half of the German (USD 4,632/t) and French (USD 4,950/t)
export prices, and only 1/5 of the Swiss export price (USD 9,930/t)
which is the highest within Europe. However, there are some
differences between the Eastern and Southeast European countries. In
1998, the value of the plant material exported from Poland was
highest amounting at 2,605 USD per ton. On export, Bulgaria still
achieved USD 2,295/t and Hungary 2,015 USD/t. The lowest prices,
only USD 1,535-1,540/t were payed for the commodities exported
from Turkey and Albania.
• Most exports of the Eastern and Southeast European countries are
destined to Germany. In 1996, Germany imported over 20,000 t of
pharmaceutical plants from these countries, which represented 64% of
the total exports of east and southeast Europe. Germany’s imports
were six times more than those of France or Italy, and 10 times more
than those if Spain.
• Source: Dagmar Lange. Trade in Medicinal and Aromatic Plants: A Financial
Instrument for Nature Conservation in Eastern and Southeast Europe.
(http://www.bfn.de/09/090203.htm)
Thank you for your
patience and attention