Newsletter No 3 September 2013

TEEB Europe: Economic Valuation of Ecosystem Services and Natural Capital

Members of the Department Environmental Economics recently finished a one and a half year study for the European Commission synthesizing approaches to assess, map and value ecosystem services in Europe following TEEB. Guidelines have been developed to support European Member States in harmonizing ecosystem services classifications, valuation and accounting methods.

The report aims to provide guidance on the available options and choices for ecosystem services valuation and accounting, with the intention to support EU Member States (MS) in addressing Target 2, Action 5 of the EU Biodiversity Strategy. That is, to map and assess the state of ecosystems and their services in the national territories of MS by 2014, assess the economic value of such services, and promote their integration in accounting and reporting systems at EU and national level by 2020.

The report takes stock of existing national and international initiatives related to The Economics of Ecosystems and Biodiversity (TEEB), their main objectives, progress, and lessons learned. Besides screening reports, websites and proceedings from workshops, opinions were elicited from policymakers in 15 MS as well as 50 international experts and practitioners.

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One of the main findings is that there does not exist one single standard “TEEB” method or approach. Most efforts focus on the mapping of ecosystem services. A wide variety of approaches exist at different spatial and temporal scales, which are only partly related to ongoing efforts at European level to harmonize the classification of ecosystem services, their assessment and reporting, such as the work by the working group on Mapping and Assessment of Ecosystems and their Services (MAES) or the European Environment Agency's (EEA) Common International Classification of Ecosystem Services (CICES).

The report outlines a conceptual framework for the assessment of ecosystem services, drawing on the UK National Ecosystem Assessment. In applying the conceptual framework for ecosystem service assessments, there are a number of choices to be made between classifications, methods and approaches. The report outlines these choices and describes the strengths and weaknesses of each alternative option. Recommendations are presented in this way to allow MS to choose the information and methods that are of highest relevance to them.

To harmonize efforts between MS and work towards a common reporting format by 2020, existing frameworks recently developed at European level such as CICES and MAES need further integration and implementation within the System of Environmental-Economic Accounting. These frameworks need testing in practice, so they can be refined based on actual empirical experiences and data. Key to the successful integration of ecosystem services in existing, modified or new accounting formats is to establish reliable, scientific links between the biophysical provision of ecosystem services and their economic values. Extensively tested guidelines for environmental accounting over the past decades by statistical offices should be taken into consideration in order to maintain a consistent and coherent System of National Accounts (SNA).

To keep modifications in the SNA traceable, a careful, stepwise approach combining physical satellite accounts and separating out clearly defined ecosystem services inside the SNA is advocated. Existing integrated frameworks such as the National Accounting Matrix including Environmental Accounts developed and applied in statistical offices across MS could serve as a reference example for this. Full integration of the economic value of stocks of natural capital and flows of ecosystem services, including those already part of the financial exchange value underlying GDP, to ‘go beyond GDP’ will require general consensus on appropriate measurement units and valuation approaches and closer collaboration with and between statistical offices.

Contact: Roy Brouwer

Brouwer, R., Brander, R., Kuik, O., Papyrakis, E. and Bateman, I. (2013). A synthesis of approaches to assess and value ecosystem services in the EU in the context of TEEB. Report to the European Commission, 15 May 2013.

Brouwer, R. (2013). Waardering van ecosysteemdiensten en biodiversiteit. Economisch Statistische Berichten (ESB), 98 (4655): 148-151.