International Payments for Ecosystem Services (IPES)
Publication Review Meeting
UNEP, Geneva, 28-29 January 2008
Workshop on ecosystem accounting
Jean-Louis Weber
European Environment Agency jean-louis.weber@eea.europa.eu
UNEP/IPES 28-29 January 2008

SNA transactions and other flows

Natural resources
Economic assets (SNA)
Non-economic assets
Opening stocks
Opening stocks
Changes in stocks
Ecosystems
Opening
State
Changes in stocks

Economic activities, natural processes, etc.
 Changes in state
Closing stocks
Closing state
Closing stocks
Described in SNA
RM HASSAN - UN The System of Environmental and Economic Accounting (UN 2003) -
RANESA Workshop June 12-16, 2005 Maputo
UNEP/IPES 28-29 January 2008

• SEEA2003 revision by 2010
• EEA-UNSD international workshop on land & ecosystem accounting, Nov. 2006
• EEA proposal to UNCEEA and London Group for developing the ecosystem dimension into the SEEA
 Clarification paper (LG, Rome, Dec. 2007)
 Drafting of a specific handbook (first draft LG Brussels, Sept.
2008)
 Additional SEEA module + definition of new aggregates
“beyond GDP”
UNEP/IPES 28-29 January 2008

• Risks of unsustainable use of the living natural capital are ignored:
– The negative impacts of over-harvesting, force-feeding with fertilisers or Nitrogen depositions, intoxication with pesticides or pollution, introduction of species, fragmentation by roads, or soil sealing by urban development have no direct monetary counterpart .
– This is the case for private capital and even more for public goods (The tragedy of the Commons).
• The natural capital is not even amortised in the national accounts and in accounting books of companies :
– No allowance is made for maintaining ecosystems’ critical functions and services .
– The full cost of domestic products is not covered in many cases by their price. We don't pay for the full price of our consumption.
UNEP/IPES 28-29 January 2008

• The price of imported products does not reflect the full costs of ecosystems degradation in originating countries.
– Delocalisation of industrial production is de facto recorded as a
“green” performance in importing countries when in many cases it increases the degradation of the global ecosystem (e.g. CO
2 emissions higher because of old technologies, loss of biodiversity because ecosystems are less protected).
• The actual value for people of free ecosystem services is not accounted (the market tells: price is zero).
– Increase of wellbeing resulting from economic growth is not balanced with losses of free services (commercialisation of previously free services, depletion, ecosystem degradation...).
UNEP/IPES 28-29 January 2008

• SEEA2003 fully integrated with SNA but
– relations to nature are scattered between chapters and unevenly developed.
• Ecosystems assets are indeed part of SEEA 2003 structure: forest, water, land and ecosystem accounts, soil (p.m.), fisheries but
– few links exist between these assets, considered more as a collection of inventories than interacting systems.
– “ecosystem service” is not a well identified concept
• Flows between the economic system and the ecosystems are asymmetric, balancing the economic system (backed up by SNA) with a mere interface ( “environment” column, “ecosystem inputs”)
– No place for feedbacks
• Unclear measurement of the value of nature

Develop the ecosystem approach into the SEEA
UNEP/IPES 28-29 January 2008

Developing the ecosystem approach into the SEEA
• Recognize first the interaction of 2 co-evolving systems
• Clarify the concept of natural capital by separating nonrenewable resources (where the rent and its reinvestment is the interest) from renewable resource
(for which the conservation of critical level of stocks in good functioning state is main issue).
• Full integration vs. dual integration
• Renew approach of valuation with clear distinction of values, costs and their role in decision processes
UNEP/IPES 28-29 January 2008

Biophysical structure or process
(e.g. woodland habitat or net primary productivity )
Limit pressures via policy action?
Maintenance, restoration
Σ
Pressures
Function
(e.g. slow passage of water, or biomass )
Minimum levels of service
(service limits)
Service
(e.g. flood protection, or harvestable products)
Benefit
(e.g. willingness to pay for woodland protection or for more woodland, or harvestable products)
Courtesy Roy Haines-Young
UNEP/IPES 28-29 January 2008

Developing the ecosystem approach in the SEEA
• is the renewable natural capital maintained over time at the amount and quality expected by the society?
 physical measurement of
“quantityquality” in reference to stated social norms
• is the full cost of maintaining the natural capital covered by the price of goods and services?
 measurement of costs not currently covered for maintaining and restoring domestic ecosystems
(provision for depreciation) and addition to value of goods and services
• is the full cost of ecosystems services covered by import prices
 calculation and addition to value of goods and services
?
• is the total of goods and services supplied to final uses by the market (and government institutions) and for free by ecosystems, developing over time?  measure and value free end use services and add these benefits to GDP
UNEP/IPES 28-29 January 2008

Ignored Costs Ignored Benefits
€ (B)
Additional costs necessary to maintain & restore ecosystems up to policy objectives
€
GDP
(A)
Final Use of
Non-Market
Ecosystem
Services
€
Ecosystem
Services
(C)
€
Ecosystem Assets
(Stocks, flows, resilience)
UNEP/IPES 28-29 January 2008

 Stepwise approach to inclusive wealth calculation:
• Includes socio-economic features but with an ecosystem focus
(human and social capital just partly addressed)
• Costs and benefits recorded separately
 Natural capital accounts in physical units:
• Stocks, flows, resilience, services
• Ecosystem state benchmarked against stated policy targets
 Net Landscape Ecological Potential, HANPP,
E. Footprint
UNEP/IPES 28-29 January 2008

From Land cover to ecosystem at macro scale:
Net Landscape Ecological Potential 2000, 1 km² grid
NLEP =
(Vegetation+Nature Value)
----------------------------------
Fragmentation
Legend
Net LEP 2000
Value
High : 159
Low : 0
Source:
EEA/ETCLUSI from GBLI,
NATURILIS and
MEFF
Methodology:
EEA/ETCLUSI
UNEP/IPES 28-29 January 2008

Net Landscape Ecological Potential 2000, aggregated by regions
UNEP/IPES 28-29 January 2008
Legend
Net LEP_NUTS2-3
NLEP2000
18 - 32
33 - 46
47 - 59
60 - 73
74 - 87
88 - 101
102 - 115
116 - 129
130 - 143
144 - 157
Source:
EEA/ETCLUSI from GBLI/CLC,
NATURILIS and
MEFF
Methodology:
EEA/ETCLUSI

Change 1990-2000 in Net Landscape Ecological Potential
(NLEP), 1 km² grid
Legend
Change Net LEP 1990 to 2000
Value
High : 118.464
Low : -84.664
Source:
EEA/ETCLUSI from GBLI,
NATURILIS and
MEFF
Methodology:
EEA/ETCLUSI
UNEP/IPES 28-29 January 2008

 Computation of additional ecosystems maintenance
& restoration costs for meeting policy targets
• Domestic ecosystems: allowance for depreciation, to be covered in the next period; virtual domestic debt
• + Ecosystems in countries from which Ecosystem Services originate: hidden costs in imports; virtual foreign debt
 Full Cost of Goods & Services
 Valuation and integration of non-market end use ecosystem services with GDP
 Inclusive Domestic Product
UNEP/IPES 28-29 January 2008

Benefits: the Demand side
GDP
+
+ Final Use of Ecosystem Services = IDP
IDP
Inclusive Domestic Product
(Intermediate consumption)
Final
Services
+
FCGS
Additional maintenance cost of the resource
+
Costs of restoration from ecosystem degradation
+
Full ecosystem cost of imports
Full Cost of Goods &
Services
Costs
Ecosystem
Services
Stocks & flows
(quantities)
Resilience/Health
(qualities)
Ecosystem
Assets
UNEP/IPES 28-29 January 2008

Physical flows
Monetary flows/valuation
Assets valuation
Natural capital / assets
Rest of the World
Subsoil Assets
[stocks]
Ecosystem Assets
[stocks and resilience]
Material & Energy Flows
Ecosyste m
Services
Subsoil Assets
[stocks]
Ecosystem
Assets
[stocks and resilience]
NAMEA
Ecosystem
Services
Environmental
Expenditures, Taxes
UNEP/IPES 28-29 January 2008
SNA flows & assets
Additional
Ecosystem
Maintenance
Costs
Additional
Ecosystem
Costs in Imports
(less in Exports)

Production &
Consumption
Economic
Assets
Infrastructures
& Technologies
Population
Inclusive use of market & non market ecosystem services
Land use economic & social functions
Intensity of use & full maintenance costs
Ecosystem services
Ecosystem assets
Stocks
Material & energy flows
Resilience
Atmosphere/
Climate
Water system
Flora & Fauna
Soil
ECOSYSTEM ACCOUNTS
CORE LAND COVER ACCOUNT
UNEP/IPES 28-29 January 2008

Spatial integration
Core accounts of assets & flows
(by ecosystem types, raw quantities)
Accounts of flows of ecosystem goods and services
Material/energy flows
(biomass, water, nutrients, residuals)
Ecosystem Services
• Marketed Ecosystem Services (€)
• Non-market end use ES (physical units, €)
Supply & use of ecosystem goods and services
(Use of resource by sectors, supply to consumption & residuals, accumulation, I-O analysis, NAMEA)
Counts of stocks diversity / integrity
(by ecosystem types, focus on state, health, resilience, stress)
Ecosystem Stocks &
State Accounts
Natural capital
• Natural capital stocks, resilience & wealth, distance to objective
(physical units, by sectors)
• Natural capital consumption/maintenance costs (€)
• Ecosystem assets inclusive wealth (€)
Natural Capital Accounts/ living & cycling natural capital
Economic integration
UNEP/IPES 28-29 January 2008

Spatial integration
€
Core accounts of assets & flows
(by ecosystem types, raw quantities)
Accounts of flows of ecosystem goods and services
Material/energy flows
(biomass, water, nutrients, residuals)
Ecosystem Services
• Marketed Ecosystem Services (€)
• Non-market end use ES (physical units, €)
Supply & use of ecosystem goods and services
(Use of resource by sectors, supply to consumption & residuals, accumulation, I-O analysis, NAMEA)
Counts of stocks diversity / integrity
(by ecosystem types, focus on state, health, resilience,
Natural capital
• Natural capital stocks, resilience & wealth, distance to objective stress)
(physical units, by sectors)
• Natural capital consumption/maintenance costs (€)
Ecosystem Stocks &
State Accounts
€
• Ecosystem assets inclusive wealth (€)
Natural Capital Accounts/ living & cycling natural capital
Economic integration
€
UNEP/IPES 28-29 January 2008

– Land cover (units, zones, landscape types)
– Rivers, river reaches, catchments
– Coastal systems
– Soil
UNEP/IPES 28-29 January 2008
 Basic ecosystem stock flows accounts

Smallest mapping unit for stock 25ha
Change mapped at 5ha
UNEP/IPES 28-29 January 2008

UNEP/IPES 28-29 January 2008

2000
Change Matrix
(44x43=1932 possible changes) summarized into flows
LCF8
LCF1
LCF2
LCF3
LCF5
LCF4 LCF6
LCF7
LCF9
UNEP/IPES 28-29 January 2008

Ecosystem Distress Syndrome model: 5 types of symptoms
– Vigor: e.g. disruptions of nutrients cycling, population dynamics (loss or excess)
– Organisation, degradation of substrates: e.g. fragmentation, water stress, change in food chain
– Resilience: e.g. change in species composition
(invasive…), intoxication
– Dependence of systems from artificial input: e.g energy, water, subsidies
– Capacity of supporting healthy communities: wildlife, human
Source: David J. Rapport
UNEP/IPES 28-29 January 2008

LUF analysis and mapping
 address cross-cutting issues e.g.:
Urban/Rural, Agro/Environment
 detect & measure ES services = ecosystem functions which benefit to people, somewhere
UNEP/IPES 28-29 January 2008

Non nature-based sources of goods and services
Use of commodities
& non-produced services
Supply of commodities
Insurance value Market & nonmarket values
Provisioning
Food, water, fibre, wood, fuel, medicines
Cultural
Aesthetics, tourism, spiritual, education, research, traditional knowledge
Mostly negative feedbacks
Regulating
Climate, floods, soil formation, carbon sequestration, air quality, water quality, pest and diseases control, pollination, invasion resistance, habitat provisioning
Supporting
Primary production
Water cycle
Biogeochemical cycles
Stocks & flows, Integrity, Biodiversity
Functional Landscape

Ecosystems services
Capital stocks and functions
Nomenclature of ES
Market values
Services
Provisioning
Cultural
Regulating
Support
Ecosystem functioning
Internal habitat functions
Land use functions x
Ecosystem
Services Market input x x
Final use of non market
ES x x x x x x x
Physical measurement and shadow prices x x x x
UNEP/IPES 28-29 January 2008

UNEP/IPES 28-29 January 2008
Wetlands social-ecological systems
Biodiversity dependence
Accounted for in the market
Service-type
1 Provisioning
Category
1.1 Food
Service
1.1.1 Hunting prays
1.1.2 Gathering/ picking up goods
1.1.3 Fishing
1.1.4 Seafood
1.1.5 Livestock
1.2 Materials
1.1.6 Agriculture
1.1.7 Aquiculture
…
1.2.1 Fresh water
1.2.2 Salt works
1.2.3 Construction materials ("Arids")
1.2.4 Fiber crops
1.2.5 Tree plantations
…
1.3 Forest trees-related 1.3.1 Timber
2 Cultural
1.4 Plant-related
1.5 Physical support
2.1 Amenity
2.2 Identity
2.3 Didactic
1.3.2 Fuel / wood
1.3.3 Cork
1.3.4 Pines
…
1.4.1 Genetic resources
1.4.2 Medicinal & cosmetic plants
…
1.5.1 Communication
1.5.2 Housing
…
2.1.1 Recreation / relax
2.1.2 Ecotourism
2.1.3 Landscape beauty
…
2.2.1 Sense of place
2.2.2 Cultural heritage
2.2.3 Religious / spiritual
…
2.3.1 Education / interpretation
2.3.2 Scientific research
3 Regulating 3.1 Cycling
3.2 Sink
3.3 Prevention
3.4 Refugium
3.5 Breeding
2.3.3 Traditional Ecological Knowledge
…
3.1.1 Soil retention & Erosion control
3.1.2 Hydrological regulation
3.1.3 Saline equilibrium
3.1.4 Pollination for useful plants
3.1.5 Climate regulation
…
3.2.1 Soil purification
3.2.2 Waste treatment
3.2.3 Water purification
…
3.3.1 Flood buffering
3.3.2 Pest prevention
3.3.3 Invasive species prevention
3.3.4 Air quality
…
3.4.1 Habitat maintenance
…
3.5.1 Food web maintenance
3.5.2 Nursery
…
Source: Berta Martin, Pedro Lomas et alii, Autonomous University of Madrid, 2007
Strong, short
Mediu m/ long term Weak Yes term x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
Partly x x x x x x x x x x x x
No x x x x x x x x x x x x x x x x x x

• Classification and measurement
• Geographical scales
The issue is to play with heterogeneous datasets:
• Exhaustive but rather contents-poor geographic datasets, frequently updated by satellite images
• Exhaustive, contents-rich but rather poorly geographically detailed socio-economic statistics
• Scattered in situ monitoring of the physical world
• Detailed analysis and modelling of the socio-ecosystems and valuation of ecosystem services available as case studies
• Time scales
• Time series
• Nowcasting
• Infra-annual accounts when relevant
• Ecological “surprises”
UNEP/IPES 28-29 January 2008

• Services entangled in marketed goods and services:
– Under pricing because of externalisation of environmental costs
– Under pricing because of low internalisation of environmental benefits
– Under pricing because of rent appropriation by buyers (in particular in imports)
• Free end use ES:
– Physical measurement from social statistics
– Prices for individual use
– Prices for collective use (in particular regulating ES)
– Limit to what is not in price/value of commodities (full property right criteria)
• Additional maintenance & restoration costs of ecosystems
– Integrated measurement of quantity & quality of ecosystems
– Costs in imports (e.g. when products are re-exported)
UNEP/IPES 28-29 January 2008

Not only issues, achievements
The first phase of GAISP comprises the publication of the following eight
Monographs:
1 The Value of Timber, Carbon, Fuelwood, and
Non-Timber Forest Produce in India
’s Forests
2 Estimating the Value of Agricultural Cropland and Pasture Land in India
3 The Value of India ’s Sub-Soil Assets
4 Eco-tourism and Biodiversity Values in India
5 Estimating the Value of Educational Capital
Formation in India
6 Investments in Health and Pollution Control and their Value to India
7 Accounting for the Ecological Services of
Indian Forests: Soil Conservation, Water
Augmentation, and Flood Prevention
8 Estimating the Value of Freshwater Resources in India
In this monograph, three ecological services of forest ecosystems, namely, prevention of soil erosion, augmentation of groundwater, and reduction of flood

• Correlated regional projects like Eureca!2012 the ecosystem assessment for Europe (now regional project of the forthcoming MA2 (2015) launched by UNEP)
• “Beyond GDP” developments
• Assessment of benefits provided by biodiversity demanded by the G8+5 in Potsdam, March 2007 as an input to the Convention on Biological Diversity (CBD) – cases studies on wetlands (EEA) and forest (IUCN)
• Ecosystem and carbon accounting, continuation of the
“Stern report”
• Possible interest of EA for business (e.g. UNEP
Financial Initiative), IPES – can it help?
UNEP/IPES 28-29 January 2008

• UN agencies, WB, IMF, OECD (…?)
• MA2 context (e.g. WCMC/UNEP: manual on ES currently drafted)
• GEO/GEOSS (GMES…) (support regional global monitoring)
• International conventions (CBD, IPCC, IGBP,
HDP, Ramsar, Desertification… )
• Regional regulations, agreements, conventions
• Key NGOs in the domain (IUCN, WWF, ISEE)
• UNEP-IPES, UNEP-FI
• London group/subgroup + Eurostat + EEA & scientific expert panel: issue paper, outline by end 2008
UNEP/IPES 28-29 January 2008

UNEP/IPES 28-29 January 2008

UNEP/IPES 28-29 January 2008