Value of Biodiversity and
Ecosystem Services in
South Asia and India:
Past, Present and Future
Anil Markandya
Bath University (UK) and BC3 (Spain)
December 2012
Biodiversity Is Important
• Between 1981 and 2006, 47% of cancer drugs and 34 per
cent of all `small molecule new chemical entities´ (NCE)
for all disease categories were natural products or
derived directly from them.
• in Asia and Africa 80 per cent of the population relies on
traditional medicine (including herbal medicine) for
primary health care
• But no one has estimated the overall value of the loss of
biodiversity as such and even the concept of biodiversity
is problematic.
• Most work has focussed on valuing the services provided
by natural ecosystems (MEA)
Ecosystems and Biodiversity
• Ecosystem services are derived from the
complex biophysical systems. The MEA
defines ecosystem services under four
headings: provisioning, regulating, cultural
and supporting.
• Ecosystem functioning depends on its
biodiversity. More diverse ecosystems are
more stable and less subject to
malfunction.
• We need a measure of system capability
that includes its biodiversity.
TYPE OF ECOSYSTEM SERVICE
Provisioning Services
Regulating services
Food and fibre
Fuel
Air quality maintenance
Climate regulation (eg temperature and
precipitation, carbon storage)
Water regulation (eg flood prevention, timing
and magnitude of runoff, aquifer recharge)
Erosion control
Water purification and waste management
Regulation of human diseases
Biological control (e.g. loss of natural predator
of pests)
Biochemicals, natural medicines, and
pharmaceuticals
Ornamental resources
Fresh water
Cultural services
Cultural diversity, spiritual and religious values,
educational values, inspiration, aesthetic values,
social relations, sense of place and identity
Cultural heritage values
Recreation and ecotourism
Supporting services
Primary production
Nutrient cycling
Soil formation
Pollination
Storm protection (damage by hurricanes or
large waves)
Fire resistance (change of vegetation cover
lead increased fire susceptibility)
Avalanche protection
Other (loss of indicator species)
Biodiversity and Ecosystem
Habitats are Declining
• Species are estimated to be going extinct
at rates 100 to 1000 times faster than in
geological times.
• The planet has lost 50 per cent of its
wetlands, 40 per cent of its forests and 35
per cent of its mangroves.
• Around 60 per cent of global ecosystem
services have been degraded in just 50
years
These Losses Matter in
Economic and Welfare Terms
• The services that ecosystems provide are of
value, especially to poor people. Thus if they
are lost the impacts are all the more a matter
of concern.
• In this paper we look at changes in the
services from major ecosystems in South Asia
over the last century and see where there
have been major changes.
• We then value the services India currently
derives from its ecosystems and examine
their composition and distribution.
The Methodology
• The method adopted is to measure the size of
an ecosystem taking account of its
biodiversity. This is measured by an estimate
of the Mean Species Abundance (MSA) of
that system.
• The MSA is used to adjust the area of an
ecosystem, so that if the MSA is 50% of the
potential abundance the area is adjusted
downward by an amount that reflects the
lower productivity of a system with 50%
lower MSA.
Changes in MSA Areas
Between1900 and 2000
Table 5. Changes in MSA area by biome and world region, period 1900-2000 (1000ha)
OECD
tundra
nd and steppe
nd and savanna
forests
rate forests
l forests
-18,158
-3,200
0
0
-174,658 -34,955 -33,475 -46,282
-71,234 -135,528 -13,465 -234,860
-118,677
-4,062
0
0
-278,755 -82,342
0 -11,238
-13,590 -191,819
0 -76,072
-42,642
-3,905 -49,790 -44,567
-717,715 -455,812 -96,729 -413,019
-23%
-26%
-9%
-19%
00 levels
CSAM
MEA_
NAFR
Biome
SAFR
RUS_
CASIA
-11,629
-58,187
0
-171,040
-41,840
0
-2,793
-285,489
-14%
SASIA
CHN
Total
-1,627 -19,701
-54,316
-26,498 -76,689
-450,744
-119,254
-118
-574,459
-3,478 -35,195
-332,452
-33,326 -79,433
-526,934
-133,360
-1,579
-416,421
-22,872
-9,321
-175,890
-340,414 -222,036 -2,531,216
-40%
-24%
% on 1900
levels
-6%
-27%
-26%
-16%
-45%
-25%
-8%
-21%
Losses in MSA Between 1900
and 2000
• Of all the world regions South Asia suffered the greatest
loss in the last century (40 per cent).
• In terms of biomes the losses were greatest in
temperate forests (53 per cent) and least for boreal
forests (34 per cent). The other biomes (grassland,
savannah and tropical forests) all suffered losses of
around 40-45 per cent.
• It is striking that all these figures represent higher losses
for South Asia than for any other world region.
• Note that although the numbers are given in hectares
they are not real physical areas: the hectares are
adjusted to reflect changes in mean species abundance.
Losses for India Between 1900
and 2000 (000 MSA Ha.)
% Change
Biome/
Year
1900
1950
Ice and Tundra
53,967
53,967
Grassland and steppe
148,028
143,599
Scrubland and savanna 1,438,857 1,272,787
Boreal forests
44,734
44,734
Temperate forests
261,079
250,105
Tropical forests
91,011
74,990
2000 1900-50 1950-00
47,455
0%
-12%
73,444
-3%
-49%
824,630
-12%
-35%
29,475
0%
-34%
115,709
-4%
-54%
39,130
-18%
-48%
Desert
101,956
Total
158,553
158,553
2,198,130 2,000,685 1,233,799
Most of the losses have been since 1950
0%
-36%
-9%
-38%
Losses in India 1900-2000
1600000
1400000
1,272,787
1200000
1000000
800000
600000
400000
250,105
200000
158,553
143,599
53,967
74,990
44,734
0
Ice and Tundra
Grassland and
steppe
Scrubland and
savanna
Series6
Boreal forests
1950
2000
Temperate forests Tropical forests
Desert
Valuing the Losses in S. Asia
• The analysis of the economic impact is carried out
for those biomes, for which economic data were
available: grasslands and steppe, boreal, temperate
and tropical forests.
• The ecosystem services analysed in the forest
biomes include wood and non-wood forests
products, carbon and cultural services (recreational
and passive use).
• As regards grassland and steppe, the estimates
consist of food provisioning, erosion prevention,
conservation, recreation and amenity.
• The choice of these ES is mainly based on the
availability of physical data and monetary estimates.
Valuing Forest Losses
• Wood and non-wood forest products
• Wood forests products (WFPs) are estimated taking into
account seven economic sectors, including industrial
roundwood, wood pulp, recovered paper, sawnwood,
wood-based panels, paper and paper board, and wood
fuel.
• Valued based on stumpage price, net profit margin and
Volumes. Price takes account of export and domestic.
• Non-wood forest products (NWFPs) include goods and
services of biological origin derived from the forest.
• Estimated using information from FAO, which provide
export values of the total removals of these products by
country.
Valuing Carbon in Forest Stock
• Based on the biome-average carbon capacity in different
forest biomes (various studies).
• The carbon capacity varies a lot by forest type and by region:
for example it ranges from 17 tC/ha in Sub-Saharan Africa
tropical dry forests to 250 tC/ha in Asian tropical equatorial
forests.
• Carbon values: the lower bound based on the marginal costs
of abatement of carbon in 2009, to achieve target reduction
consistent with stabilization of temperature increases at 2ºC.
The upper bound is based on the social costs of carbon, as
calculated across a range of studies.
• A review of the literature, which was conducted as part of the
TEEB study, puts the lower bound at around US$8/ton of CO2
equivalent (Rs.380/ton) and the upper bound at around
US$20.5 (Rs. 974/ton) The corresponding values per ton of
carbon are US$29 (Rs. 1,378/ton) and US$74.4 (Rs. 3,534/ton).
Non Wood Forest Products
Table 6. Non wood forest products
Plant products
Food
Fodder
Raw material for medicine
and aromatic products
Raw material for colorants
and dyes
Raw material for utensils,
crafts & construction
Ornamental plants
Exudates
Other plant products
Animal products
Living animals
Hides, skins and
trophies
Wild honey and
beeswax
Bush meat
Other edible animal
products
Sources: FAOSTAT and FAO/FRA 2005 and Chiabai et al. (2011)
Forest Cultural Services
• Forest cultural services comprise recreational and passive-use
values, which are estimated using meta-analysis, valuetransfer and scaling-up techniques .
• The value transfer function used:
Vs* is the average annual value across the world
(based on the literature), Vp is the value we would
like to estimate which refers to world regions for
which no original value exists (policy sites), P is the
population of the country, I the country GDP per
capita (adjusted for the Purchasing Power Parity.
Grassland and Steppe
• The values of ES in grassland are estimated using the database
values and the coefficients of the meta-regression function as
calculated in Hussain et al (2011).
• The following ES categories are valued within this biome: food
provisioning, recreation and amenity, erosion prevention and
conservation.
• The countries considered in the assessment include Northern
Europe, United States, Asia and Africa.
• The meta-regression function takes the following form:
• V is the annual value provided by grasslands from the existing case
studies, S is the grassland area within 50km radius of the study site,
R is the length of roads within 50km radius of the study site, A is an
accessibility index, I is the country GDP per capita.
Change in Stock Values 1900-2000
• The highest losses in the period 1900-2000 are registered in OECD
region, Central and South America, and South Asia.
• As far as South Asia is concerned we estimate that had the region
maintained the same level of MSA in 2000 as it had in 1900, the
stock value of ecosystems services would have been US$4 to
US$5.6 trillion higher.
Change in Flow Values 1900-2000
• Flow values are derived from the stocks
assuming a 3% discount rate and
sustainable use of the biomes in the future
(to perpetuity)
• At the same time we have to take account
of the value derived from the land which
has been converted from the biomes. We
assume this is all converted to agricultural
land and we value it as a percent of
Agricultural Value Added.
Change in Flow Values 1900-2000
Biome
OECD
LB
-9.1
CSAM
UP
-52
LB
-0.9
UP
-5.1
MEA_NAFR
LB
-0.6
UP
-3
Grassland/steppe
Boreal forests
-101
-117 -0.8 -1.0
0
0
Temperate forests -130 -174 -11.4 -20
0
0
Tropical forests
-4.4
-7.5
-77 -133
0
0
Total flow loss
-244 -350
-90 -160 -0.6 -3.4
Benefit ag. prod.
404
101
2.8
Net loss or benefit 159.7 53.5 11.1 -58.7
2.2 -0.6
% on 2000 GDP 1% 0.3% 0.4% -2% 0.4% -0.1%
SAFR
RUS_CASIA
SASIA
CHN
LB
-0.4
UP
-2.6
LB
-1.6
UP
-9.3
LB
-0.5
UP
-3.0
LB
-3.8
UP
-22
0
0
-37
-50
-4.3
-4.7
-57
-59
-2
-4
-6.6 -10.3
-10.1
-17
-31
-36
-80
-107
-104
-142
-0.3
-0.5
-83
-113
11.29
-71.5 -101.4
-15%
-21%
0
0
-45 -69
49
3.4 -20.5
-119 -167
572
453.5 405.6
-92 -118
167
75.3 49.6
0.3% -1.6%
11% 10%
1.6% 1.0%
• Results show an impact at the worldwide level ranging from a net loss of
0.16 per cent to a net loss of 1.0 per cent of 2000 GDP.
• South Asia (SASIA) and China (CHN), however, report a small net benefit.
South Asia shows a net gain of between 10 per cent and 11 per cent of
GDP.
Conclusion on 1900-2000
• We find significant gross losses in ecosystem services
between both dates. The gross loss of natural capital
between 1900 and 2000 is estimated at between US$22
trillion and US$33 trillion, which range from around 41
per cent and 61 per cent of world GDP of 2000 (this is a
capital loss).
• If one compares the losses in terms of flows, the total
loss between 1900 and 2000 was between US$674 billion
and US$980 billion, which is around 1.8 and 2.7 per cent
of the GDP of 2000. However, against this loss we also
have to account for the gain made by the conversion of
forest and grassland to agriculture. This gain more or
less cancels out the loss in the case of the lower bound
figure and more than cancels it for South Asia.
Some Qualifications
• Not all ecosystem services are covered. Data limitations only
allow us to look at carbon, recreational and passive use, and
wood and non-wood services derived from forests; and
ecosystem services derived from grasslands.
• While the links between biodiversity and ecosystem services
are partly captured through the use of MSA, this measure has
several limitations.
• Comparison between the ecosystem services in 1900 and
2000 is based on the thought experiment that assumes the
level of ecosystem services of 1900 to be available in 2000 at
the prices for these services that actually prevailed in 2000.
• The agricultural value of land converted from other biomes is
equal to the average value of agricultural land in the region.
This may overestimate the output of such land, especially if it
is far from markets and its use is on an open access basis.
THE VALUE OF
ECOSYSTEM
SERVICES IN IINDIA
TODAY
Services Considered
•
•
•
•
•
•
•
•
•
•
•
Timber services of forests
Non-timber and fodder services of forests
Recreation and Ecotourism services of forests
Water recharge services of forests
Contributions of forests to prevention of soil erosion
Carbon sequestration of forests.
Non-use values associated with dense primary forests
Services derived from grasslands
Services derived from wetlands
Services derived from mangroves
Services derived from coral reefs.
Features of the Study
• Valuations are based as much as possible
on India studies
• Valuations for non-forest services are
based on a bottom up approach where the
value of each “patch” in India is valued.
• Forest service values (except for carbon
sequestration and passive values) are
taken from existing Indian study (“Green
Accounting for Indian States and Union
Territories Project (GAISP) (2005-2006)”
Forest Values $Mn. (Exc. Carbon)
Direct
Timber
Non timber values
Fodder
Ecotourism
Total direct
Per hectare, US$.
Indirect
Soil erosion
Water recharge
Total indirect
Per hectare, US$
Low
High
358
442
1,979
1,074
3,874
136
358
442
3,979
1,074
5,853
187
337
126
463
6.6
337
126
463
6.6
Forest Carbon Values $Mn.
Stock Values
Flow Values
Lower
Bound
191
Upper
Bound
489
Lower
Bound
-0.9
Upper
Bound
-0.3
Past India Trends
197
504
1.1
2.7
GoI
Proposed
Trends
Average as % of
GDP
200
511
1.8
4.7
19.9
51.0
0.1
0.2
World Trends
Forest Values: Total
• Direct use values range from Rs. 184 to 278 billion ($3.9
billion to $5.9 billion) and indirect use values amount to
around Rs. 22 billion ($460 million)
• Carbon stock values are very high: between Rs.9,072
billion (US$190 billion) and Rs.24,311 billion (US$510
billion). The annual increment to the stock depends on
scenarios. Values could be negative if world trends
prevail. But with the other two scenarios there is a gain
of between Rs.51 billion (US$1.1 billion) and Rs.224
billion (US$4.7 billion) using the upper bound. As a per
cent of 2009 GDP the additions to carbon amount to
between 0.1 and 0.2 per cent.
• Finally there are non-use values. These were valued
using the international literature on such values. They
amount to between Rs.14.25 billion and Rs.17.1 billion
($300 and $360 million annually).
Services from grasslands, wetlands,
mangroves and coral reefs
• These have been valued using a meta analysis in
which values are a function of site characteristics
as well as economic variables. The analysis was
carried out as part of the TEEB
• Each patch is valued using these functions.
• The number of patches in India that are
individually assessed in the benefits transfer
were:
•
•
•
•
Grasslands: 66,928
Wetlands: 3,768
Mangroves: 89;
Coral reefs: 281
Some Qualifications
• Area of each patch are adjusted to account for
MSA.
• Separating “India” from South Asia was done
manually in the database; in most cases it is clear
but in some an approximation is made for patches
close to the border.
• It assumed that coral reefs or mangroves straight
in front of the coast of India belonged to India and
otherwise to the surrounding countries and vice
versa.
• It also assumed that coral reefs / mangroves
around islands belonging to India also belong to
India. As a consequence coral reefs / mangroves
that cross national borders were split up in
different parts on the location of the presumed
border.
Grasslands in India: Ca. 67,000
Grassland Values Rs./Ha.
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0-480
480-1425
1425-2380
2380+
The total value of ecosystem services from grasslands in India is estimated to be
Rs.95 ($2) billion per annum.
The average is Rs.1,805 ($38) per hectare, with 3 per cent having a value of less
than Rs.480 ($10) per hectare and 31 per cent having a value of more than
Rs.2,380 ($50) per hectare.
Wetlands in India: Ca. 192,000
Wetlands in India Rs. 000/Ha.
The total value of ecosystem services from wetlands in India is estimated
to be Rs.665 billion ($14 billion) annually
The average is Rs.38,000 ($800) per hectare. Although many of the sites
have a value per hectare greater than that, the largest sites have much
lower values with the result that the average comes out as indicated.
Mangroves in India: Ca. 89
Mangroves in India Rs.000/Ha
The total value of ecosystem services from mangroves in India is estimated
to be Rs.25.5 billion ($537 million).
The average is Rs.37,860 ($797) per hectare. The commonest group is
Rs.9,500-19,000 ($200-400) per hectare
Coral Reefs in India: 281 Sites
Coral Reef Values Rs 000/Ha
53.0%
23.5%
<50
23.5%
50-200
>200
The average is Rs.711,455 ($14,978) per hectare.
The total value of ecosystem services from coral reefs in
India is estimated to be Rs.299 billion ($6.3 billion).
Summary of Values: $Mn.
Biome/Service
Forest Carbon Sequestration
Timber Services
Non-Timber Forest Services
Fodder
Forest Recreation Services
Water Recharge Services of Forests
Prevention of Soil Erosion by Forests
Non-Use Services of Forests
Total Services from Forests
Grasslands
Wetlands
Mangroves
Coral Reefs
Lakes and Rivers
Total
Central
Value
854
362
442
2,981
1,078
326
135
330
6,508
1,988
14,020
537
6,318
n.a.
29,371
Lower
Bound
-344
362
442
1,987
1,078
326
135
300
4,286
994
7,010
269
3,159
n.a.
15,718
Upper
Bound
1,840
362
442
3,975
1,078
326
135
360
8,518
3,976
28,040
1,074
12,636
n.a.
54,244
Central as %
of Total
2.9%
1.2%
1.5%
10.1%
3.7%
1.1%
0.5%
1.1%
22.2%
6.8%
47.7%
1.8%
21.5%
n.a.
100.0%
Summary of Values
• The total value amounts to Rs.1.4 ($29)
billion in 2009 as a central estimate, or about
3.0 per cent of the country’s GDP in that year.
• The upper and lower bounds are Rs.746 ($16)
billion and Rs.2,577 billion ($57) respectively
or 1.6 to 5.5 per cent of GDP.
• Of the total value, forests account for 22 per
cent and within the forest service category
fodder is the largest. Of the other services
wetlands are the largest and coral reefs next.
Some Qualifications
• The total value as a %of GDP may seem small
but it is misleading to see it only in that light.
Another way of looking at the role of
environmental resources is in terms of the
“GDP of the poor” (a share of Agriculture,
forest and fishery they make up about 7%)
• Lakes and rivers are not included.
• A more accurate assessment of who benefits
from these ecosystem services is warranted.
More work to be done!