Transcript Expert meeting on Ecosystem Accounting EEA, UNSD and the World Bank Copenhagen 11-13 May 2011 Accounting for ecosystems in Europe Jean-Louis Weber Special Adviser to.

Expert meeting on Ecosystem Accounting
EEA, UNSD and the World Bank
Copenhagen 11-13 May 2011
Accounting for ecosystems in Europe
Jean-Louis Weber
Special Adviser to Economic Environmental Accounting
European Environment Agency
[email protected]
Fast Track Implementation of
Simplified Ecosystem Capital Accounts in Europe (2009-2012)
• Need of a minimum common reference for multiple national initiatives in
35 EEA member countries (and further on, Eastern and Southern
European neighborhoods)
• Feasible with existing data and statistics
• Responding main policy questions:
– “resource efficiency”: sustainable use of ecosystem (agriculture, forestry,
fishery…) – Europe’s 2020 horizon
– Benefits from ecosystem services: starting with the sustainable benefits
supported by ES in agriculture, forestry, fishery, tourism… and their distribution
between all beneficiary sectors (not only the primary producers…); continuing
with selected regulating services, broader human well-being…
– “Beyond GDP”, the macro-economic dashboard: the true price of final
consumption (including consumption of ecosystem capital - CEC), the real
net national income (net of CEC), genuine saving including ecosystems
– Ecosystem capital restoration costs as a measure of depreciation (CEC)
– Europe’s global responsibility: CEC embedded into international trade
• Central indicator: ecosystem capital degradation
Characteristics of ecosystem capital accounts
• Meet the policy demand:
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–
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–
Measure resource efficiency: maximize benefits while maintaining capital
Indicators to supplement and/or adjust sector and macro-economic aggregates
Policy agenda: continuity, annual updates for year t – 1 are needed
National statements, internationally comparable…
• Physical accounts supporting monetary accounts:
– Ecosystem services & sustainable benefits
– Ecosystem capital state/degradation & depreciation (consumption of
ecosystem capital)
• Accounts deep rooted into verifiable observation datasets:
– Socio-economic statistics (agriculture, forestry, fisheries, tourism, population)
– Monitoring by satellites (land cover, biomass, climate variables…)
– Best available in situ monitoring data (water, biodiversity…)
• At the start, relevance matters more than accuracy:
– Modeled or surrogate estimations are acceptable if based on verifiable
datasets
– Estimations need to be transparent and reproducible (for measuring change)
• Accounts need to be compiled at various scales:
– National as well as Global, local government, business
– Implementation: in parallel top-down and bottom-up
Approach to physical accounting of ecosystem
degradation
• First diagnosis based on limited set of indexes:
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–
–
–
–
–
Land cover balances  Landscape Ecological Potential (LEP)
Biomass/Carbon balances  Net Ecosystem Carbon Balance (NECB)
Water balances  Water Stress
Biodiversity balances  Biodiversity Multicriteria Index
Disease prevalence in ecosystems
Ecosystem dependency from artificial inputs
• Multicriteria diagnosis (BBN)  Total Ecosystem Potential
• Ecosystem services: one by one, explicitly related to origin
and uses
Physical accounts for all ecosystems
• All ecosystems:
– Inland systems,
– Seas/oceans
– Atmosphere
• Inland ecosystems include:
– Land systems
•
•
•
•
•
Forests (natural or managed)
Other terrestrial systems (wetlands, shrubland, grassland…)
Agro-ecosystems
Urban systems
Inland water systems (rivers, lakes)
– Below-surface systems functionally related to land
• Soil
• Aquifers
Physical accounts for ecosystems
• Ecosystem capacity to deliver services in a sustainable
way  change matters as much as state
• Ecosystem capital state = quantity*health
• Ecosystem assets: basic balances of surface, length, volume,
mass, energy, number of units…
• Ecosystem health (or distress syndrome): diagnostic
approach based on a limited set of symptoms (David J.
Rapport)
• Ecosystem services: material/energy resources and functional
services
• Ecosystem resource (services) depletion is a subset of
ecosystem degradation
Scales
• In theory, ecosystems can be described at various scales,
from the global to the microscopic.
• SEEA is an extension of the SNA primary focus on the
same typical scales (macro-economic accounting units):
institutional units (e.g companies, households or public
organizations), functional units (e.g. establishments),
commodities and assets.
• Ecosystem accounts = the same + land use units
(ownership) + land cover units + socio-ecological systems…
• Geographical grouping: administrative units (countries,
regions, protected areas), physical regions (river basins,
mountains, coastal zones), bio-climatic zones…
Make it happen? Make it simple! : a “Cubist” approach of physical accounts
Georges Braque – Harbour in
Normandy, 1909
Multi-criteria
rating
Dependency
Index
(land, soil, energy,
water, N,P,K...)
Dependency
Index
(land, soil, energy,
water, N,P,K...)
Biodiversity
Index
Bio-productivity
Index
Landscape
Index
Health Index
(human, wildlife
(rarefaction,
(the Landscape
(carbon, biomass,
and plants
from
loss ofBiodiversitydiversion
Ecological
Landscape populations)
Carbon/Biomass
Health Index
Nature)
adaptability) Index
Potential) Index
Index
(human, wildlife
(rarefaction,
(the Landscape
(carbon, biomass,
and plants
diversion from
loss of
Ecological
populations)
Nature)
adaptability)
Potential)
Water Index
(exergy loss
from evaporation
& pollution)
Water
Total
Ecological
PotentialTotal
(terrestrial
Ecosystem
ecosystems)
Potential
(terrestrial
ecosystems)
Index
(exergy loss
from evaporation
& pollution)
Change in TEP = Ecosystem capital degradation or improvement
All indexes computed by 1 km² grid when possible and then aggregated into
functional units (small catchments, socio-ecological systems, NUTS…)
Refugium
Breeding
Prevention
Cycling
Sink
Didactic
Y
Y
Identity
Y
Y
Amenity
Y
Y
Physical
support
Y
Y
Y
Plant-related
Y
Forest treesrelated
3.5
Y
Materials
3.4
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
W
ater bodies
Y
W
etlands
Y
Openspacewith
little/ novegetation
3.3
Y
Heathland,
sclerophylousveg.
3.2
Y
3.1
Y
2.3
Y
2.2
Y
2.1
Y
Forests&woodland
shrub
1.5
Y
Grassland&m
ixed
farm
land
1.4
Y
Arableland&
perm
anent crops
1.3
Y Y Y
Artificial surfaces/
Urban
1.2
Y
Landcover types
1.1
Y
Services
Food
Supply of ecosystem services by land cover types
Approach to accounts in money
Valuation of ecosystem services: 3 different cases
GDP,
consumption,
trade...
2 - Non valued services:
mostly common goods, tradable,
transferable rights
Services
valuation,
payments for
services
1 – ES incorporated into
commodities &
economic assets:
mostly private goods, market
prices
Payments for
restoring
ecosystem
potential
3 – Ecosystem good state: health, sustainable capacity
of delivering services, life-support functions, Public Good: nonrival, non-exclusive use, non-transferable rights, taxes or lease
with covenants are possible
Wealth is not just about money
…but maintaining
wealth may have a
cost
Paid
maintenance/
restoration
costs
Estimated cost of
repairs (not yet
paid) =
Measurement of
asset depreciation
Invaluable asset
 no monetary
value…
Estimation of ecosystem capital depreciation: 2 possible
ways
Assets j
t1
j
t2
Flows
j
(-)
Physical accounts
of E-services
j
Valuation of E-services
j
Assessment of
remediation costs
Valuation of E-services
€
€
NPV & (+)
Assets €
Degradation of ecosystem capital
Physical accounts
of E-services
j
€
t2 - t1
NPV & (+)
(-)
t2 - t1
€
€
€
(+)
Estimation of ecosystem
capital depreciation…
…based on
assets values
…based on
mitigation costs
€
Ecosystem Capital Consumption or Depreciation
CEC is the monetary estimation of ecosystem depreciation resulting from physical degradation
• alike “fixed capital consumption” (UN System of National Accounts)
• alike “capital depreciation” in financial corporate accounts (International Financial
Reporting Standard)
CEC measures altogether the depletion of the private or common good (the economic resource,
such as timber or managed fish stocks) and the degradation of the public good (such as forest
or fisheries)
“To be reliable, the information in financial statements must be complete within the
bounds of materiality and cost. An omission can cause information to be false or
misleading and thus unreliable and deficient in terms of its relevance”
http://www.ifrs-portal.com/Texte_englisch/Framework/index.htm
Therefore, capital depreciation must be estimated and deducted when calculating profit. This is
of highest importance for shareholders (dividends, stocks value…) as well as for the fiscal
authority…
However, neither IFRS nor SNA record complete Consumption of Ecosystem Capital: IFRS
resource only and SNA, nothing…
CEC is an unpaid cost. An unpaid cost is a debt. CEC is the measurement of the increase
in ecological debts (to future generations) and should be recorded accordingly.
Ecologically sustainable benefits from ecosystem services:
the macro-economic approach
t2
j
t2 - t1
j
(-)
Degradation of ecosystem capital
j
Coefficients of Ecosystem
Services (Un)Sustainability
j
From step 1
Activi ties
S1
Input-Output Tables
S3
S1
∑
EXP
S3
Y
z
y
x
G1
woS2 A
Activi ties
IMP
IMP
G1
GVA
GVA
G3
woS2 T
S3
∑
IO
Fi na l us e
PH
GFC
woS2 Y
EXP
∑
Output
FU
x
IMP
woS2
G1
T
-
woS2
Output
-
xt
xt
∆x
x2
Total Effect
Total effect
xt
woS2 P
GVA
New final use
+
TE =
woS2 x
∑
€
xt
From step 3
S1
FU
x
GVA
G3
Original final use
Output
FU
P
Output
G3
GFC
T
New input coefficients matrix
A
PH
∑
G1
G2
IO
Fi na l us e
G3
IMP
S2
S3
T
G2
Original input coefficients matrix
S1
S2
∑
G1
€
Extraction
j
Physical accounts
of E-services
Flows
Assets j
t1
woS2 x
€
FU
Calculation of total effect on VA of extraction of ES (n)
G2
G1
G3
G3
woS2 y
(Source: Jose Acosta, Wuppertal Inst. and EEA-ETCSCP)
Ecologically sustainable
macro-economic benefit (VA)
supported by ES (n)