History and Background
The Economics of Ecosystems and Biodiversity (TEEB) is a global initiative focused on “making nature’s values visible”. Its principal objective is to mainstream the values of biodiversity and ecosystem services into decision-making at all levels. It aims to achieve this goal by following a structured approach to valuation that helps decision-makers recognize the wide range of benefits provided by ecosystems and biodiversity, demonstrate their values in economic terms and, where appropriate, suggest how to capture those values in decision-making.
In March 2007, environment ministers from the G8+5 countries meeting in Potsdam, Germany proposed to initiate the process of analyzing the global economic benefit of biological diversity, the costs of the loss of biodiversity and the failure to take protective measures versus the costs of effective conservation. In response to this proposal, a global study was jointly initiated that same year by the German Federal Ministry for the Environment (BMUB) and the European Commission (EC), to be led by Pavan Sukhdev.
Interim Report – Phase I
As Study Leader, Pavan Sukhdev brought together various experts and organizations as part of an inclusive, ‘open architecture’ approach to addressing the needs for ‘Phase I’ of this study, i.e. the establishment of ‘The Economics of Ecosystems and Biodiversity’ (TEEB), and the drafting of an “Interim Report”. The objective of this report was to present a narrative and set the context for further phases of work. To do so, it laid a broad foundation where evidence and examples of valuation were collated, elements of a biodiversity/ecosystem valuation framework identified, and long standing issues such as ethics in making choices regarding future values were re-emphasized.
The report and its findings were presented at a High-Level Segment of the Ninth Conference of the Parties to the Convention on Biological Diversity (CBD COP-9) in Bonn, Germany in May 2008.
The launch of the Interim Report stimulated further interest in the TEEB initiative and led to calls for additional economic analysis and the production of a series of reports for specific stakeholders.
The TEEB initiative responded to the call for additional analysis by producing four key publications, targeting specific end users, which were presented at CBD COP-10 in Nagoya, Japan in October 2010:
- TEEB Ecological and Economic Foundations: A report on the fundamental concepts and state-of-the-art methodologies for economic valuation of biodiversity and ecosystem services;
- TEEB in National and International Policy Making: A report providing analysis and guidance on how to value and internalize biodiversity and ecosystem values in policy decisions;
- TEEB in Local and Regional Policy: A report providing analysis and guidance for mainstreaming biodiversity and ecosystem values at regional and local levels, copiously illustrated with case study examples; and
- TEEB in Business and Enterprise: A report providing analysis and guidance on how business and enterprise can identify and manage their biodiversity and ecosystem risks and opportunities.
In order to clearly communicate the key findings of these reports, and to provide useful policy recommendations for mainstreaming the economics of nature into decision-making, a TEEB Synthesis Report was launched simultaneously.
Capitalizing on the momentum created from the TEEB reports and growing network of partners, the initiative has moved into an ongoing phase of implementation, where study findings and the ‘TEEB approach’ are sought to be applied at different levels of policymaking as well as integrated into different biomes and sectors.
At the country level, this shift responds to numerous requests and interest by governments to build national, regional and local government capacity to produce tailored economic assessments of ecosystems and biodiversity, and support to mainstream this information into policy-making. TEEB offers support in various forms, including developing guidance material, organizing capacity-building workshops, providing technical expertise, and much more in order to ensure effective implementation.
Building on the initial findings of the TEEB reports, another major component of TEEB’s work is to focus on providing a deeper analysis of specific sectors and biomes. In general, these initiatives will seek to recognize the myriad values provided by biodiversity and ecosystems, either at the biome level such as oceans or wetlands, or more globally to better assess their value to specific economic sectors, such as agriculture, and wider impacts on ecosystem and human well-being.
The TEEB study follows a tiered approach in analyzing and structuring valuation guided by three core principles:
1.- Recognizing value in ecosystems, landscapes, species and other aspects of biodiversity is a feature of all human societies and communities and is sometimes sufficient to ensure conservation and sustainable use. For example the existence of sacred groves in some cultures has helped to protect natural areas and the biodiversity they contain.
2.- Demonstrating value in economic terms is often useful for policy makers and others such as business in reaching decisions that consider the full costs and benefits of an ecosystem rather than just those costs or values that enter the markets in the form of private goods. An example would include calculating the costs and benefits of conserving the ecosystem services provided by wetlands in controlling floods compared to building flood defenses. The demonstration of an economic value even though it does not result in specific measures is an important aid in achieving efficient used of natural resources.
3.- Capturing value involves the introduction of mechanisms that incorporate the values of ecosystems into decision-making through incentives and price signals. This can include payments for ecosystem services, reforming environmentally harmful subsidies or introducing tax breaks for conservation.