CBD COP9: The Economics of Ecosystems and Biodiversity (TEEB) and the Cost of Policy Inaction (COPI)

The cost of losing biodiversity due to policy inaction has been recently quantified in the report on The Economics of Ecosystems and Biodiversity (TEEB), launched on the 29th of May at the CBD COP9 by TEEB Study leader Pavan Sukhdev in Bonn. The study underlines the urgency of action to halt biodiversity loss and continued and increasing losses of ecosystem services, in order to avoid great economic and social costs.

Our planet's ecosystems and biodiversity produce a range of ecosystem services – water supply and purification, climate regulation and carbon capture, food and fibre provision, genetic materials for medicines and crops, cultural and recreation - that our societies, economies, and we individually benefit from. Yet we often take these for granted, and are unaware of the ongoing loss of our natural capital and associated services. We have already lost a very considerable amount of biodiversity – over 40% of our forests have gone, 50% of wetlands, 35% of mangroves, 20 % of coral reefs – and have lost an increasingly important flow of their associated ecosystem services. Some fisheries have collapsed, others are under severe pressure with average catch size falling, yet over 1 billion people rely on fish for their main protein intake. As ecosystems disappear, so does a great share of the livelihoods for many population groups, generally the poor.

Without halting biodiversity loss we stand to lose increasing amounts of our natural capital – coral reefs in places will be destroyed completely due to climate change, affecting important breeding grounds for fish, biodiversity hotspots and important sources of tourism revenue and local livelihoods. Biodiversity rich agriculture risks being increasingly replaced by intensive agriculture, habitats fragmented due to infrastructure encroachment, and populations put at risk from overfishing or hunting. We are, in short, running down our natural capital base, and there are very considerable costs associated.

It is important to understand these costs, their scale, who will be bear them and their causes and communicate the importance of the issues in economic terms – so that this issue is listened to by a wider public, the evidence integrated into decision making and new policies developed. There is a need for greater integration of the benefits of ecosystems and biodiversity into decision making, as well as a need for greater integration of the costs of biodiversity loss into policy design. In short, the inter-action between the ecosystems and our social and economic systems will have to be integrated into out politics, policy and governance processes.

The TEEB initiative has been launched to be a key part in this process. The culmination of the first phase - a scoping-type phase – was launched with the TEEB interim report at COP9. This built on a range of inputs by the German Government, the European Commission, the European Environment Agency, IUCN and the French government, as well as on the findings of a series of studies undertaken by selected institutes and universities. The Institute for European Environmental Policy (IEEP) was part of the TEEB core team contributing to the first phase, part of the study team on three key studies, and responsible for the economic evaluation of the Cost of Policy Inaction (COPI) study, that formed one of the core basis of the TEEB report.

Among its core findings, the COPI study highlighted that:

Currently we lose biodiversity each year that would have produced ecosystem services worth around 50 billion Euros per year, in every subsequent year. By 2010, the loss will 'grow to' 545 billion EUR compared to 2000, for the land based ecosystems alone (ie excluding marine areas, coral reefs and wetlands). This is just under 1% of world GDP in 2010.

This loss is projected to increase every year to 2050, and the opportunity cost from not having preserved biodiversity since 2000 has been estimated to result in a loss in the value of flow of services of $14 trillion (thousand billion) a year. The opportunity costs will continue to rise beyond that as long as biodiversity and ecosystem losses are not halted and, even if halted, the losses would continue long into the future.

In a conservative estimate, the cumulative losses will be equivalent in scale to around 7% of global GDP by 2050. The above COPI results are a first cut estimate. Its key aim was to explore methodological issues to help form a basis for a fuller estimate of the economics of ecosystems and biodiversity in phase 2 of the work, which will be concluded by the end of 2009.

In Download the full report from Europa - Cost of policy inaction (COPI): The case of not meeting the 2010 biodiversity target. Final Report. (ZIP file)

For the wider TEEB work see: http://ec.europa.eu/environment/nature/biodiversity/economics/index_en.htm

For more information from IEEP please contact Patrick ten Brink