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The Economics of Ecosystems and Biodiversity (TEEB) - final report

This report will emphasise the vital importance of ecosystems and biodiversity for our economies (inspired by the Stern Review´s findings on the economic importance of fighting climate change).

13. listopadu 2009
The Economics of Ecosystems and Biodiversity (TEEB) - final report

At Friday (13th November) The Economics of Ecosystems and Biodiversity (TEEB) Study´s final report will be published in Brussels. This will take place in the presence of:

- Pavan Sukhdev - TEEB Study Leader

- Stavros Dimas - EU Environment Commissionner

- Ursula Heinen - Parliamentary State Secretary at the Federal Ministry of Food, Agriculture and Consumer Protection of Germany

A press release will be sent out from the Commission´s RAPID press release service on Friday 13th at 12pm. You will find this here

Below you will find some background information about the TEEB report.

The Economics of Ecosystems and Biodiversity

This report will emphasise the vital importance of ecosystems and biodiversity for our economies (inspired by the Stern Review´s findings on the economic importance of fighting climate change).

The increasing loss of biodiversity and ecosystems is not just a conservational issue, but also one that has implications for a wide range of concerns including food supply to the world´s poorest and the sourcing of new medicines.

Loss of biodiversity can be assessed economically. Failure to halt biodiversity loss on land could cost $500 billion by 2010 (based on the estimated value of ecosystem services that would have been provided if biodiversity had been maintained at 2000 levels). At sea, unsustainable fishing reduces potential fisheries output by an estimated $50 billion/year.

Launched on behalf of the G8 at the meeting of environment ministers in Potsdam in 2007, under the German presidency of the European Council, The Economics of Ecosystems and Biodiversity (TEEB) is an independent study that assesses the economic impacts of the ongoing loss of biodiversity and degradation of ecosystems. It highlights the benefits of early intervention and outlines its economic and political context.

An interim report emphasised the link between the loss of ecosystems and biodiversity and poverty. It showed how several Millennium Development Goals were at risk due to the neglect and deterioration of ecosystems and biodiversity. The final report, which was published in late 2009, continued to focus on the world´s poorest populations, setting out areas for targeted action and highlighting their benefit.

Economic incentive

'Ecosystem services' are the benefits that people derive from biodiversity and ecosystems. Nearly two thirds of ecosystem services, however, have been degraded over the last fifty years. Recognition of these benefits is a vital first step towards sustainable management of natural resources.

Resource management based solely on market prices, however, rarely provides incentives for sustainable use of biodiversity. Values that are not overtly part of a financial equation are too often ignored in decision-making. To combat this problem, a TEEB for Policymakers findings document can be downloaded from the website (www.teebweb.org/). An appreciation of the value of biodiversity helps decision-makers to make more efficient, cost-effective and fair choices and to justify the need for taking action.

TEEB assessed the long-term, social value of key biomes (tropical forest, forest, and wetlands) to give an indication of the monetary value of ecosystem services. For example,
tropical forests provide ecosystem services worth almost 6000$/ha/year based on common estimates of carbon values. At current rates of development, however, forestry degradation and loss is expected to lead to global welfare losses of around 5% of GDP by 2050 (Braat and ten Brink, 2008).

Rainforests are a good example of a key finding of the study. Traditional trade-offs between land conversion and ecosystem management are often unacceptable when the value of ecosystem services is taken into account. The cost of acting to sustain biodiversity and ecosystem services can be significantly lower than the cost of inaction. However, an imbalance between private gain and public loss runs through most of today´s policy failures. Incentives are not in place to encourage sustainable practices or to distribute costs and benefits efficiently and fairly.


TEEB suggests several ways in which decision-making can be improved:

The use of economic information to improve public policies:
Economic analysis needs to make visible and explicit the full value of ecosystem services and biodiversity to society, in order to expand understanding and integration of the issues at all political levels and demonstrate the risks and costs of inaction. Economic information should be fed into each stage of the policymaking and review process to:

o Identify opportunities to build on successful practices developed elsewhere;
o Evaluate and improve existing biodiversity policies so that they reach their full potential;
o Prioritise and guide the design of new policies;
o Provide a solid basis to reform policies and consumption patterns in other areas that are shown to cause damage to ecosystem services and biodiversity.

The use of guiding principles for policy change:
Policymakers need to consider four key factors to maximise social acceptance and meet policy objectives efficiently and fairly:

o Address the right actors and balance diverse interests among and within different groups, sectors and areas, supported by robust co-ordination mechanisms;
o Pay attention to the specific cultural and institutional context when designing policy to ensure that proposed solutions are appropriate, timely, harness local knowledge and can deliver policy goals efficiently;
o Take property rights, fairness and equity into account and consider distributional impacts of costs and benefits, including on future generations, throughout the policy development process;
o Base all policies on good governance - economic information leads to increasing transparency and supports good governance practices, while good governance opens the field for economic information.

Progress has been made over the last two decades regarding awareness of the value of biodiversity. However, gaps still remain. Measuring benefits is particularly hard where these are widely dispersed or accrue mainly to future generations. The report highlights the importance of increasing our knowledge of how ecosystems function, their carrying capacity and critical damage thresholds in order to inform better decision-making.

It also emphasises the need for investment in natural capital to combat climate change, support local economies and create jobs. Natural capital supports not only the primary sectors of economy like agriculture, forestry and fisheries, but it also contributes to manufacturing (food sector, fabrics and pharmaceuticals) and to services (tourism, recreation, training, water purification). All these sectors have a strong interest in preserving biodiversity.

Biodiversity is especially important for the poor, who often rely directly on local ecosystem services for food, shelter, income, fuel, health, quality of life and community. An assessment of who benefits from natural capital is a powerful way of jointly addressing social as well as environmental concerns, the report concludes. Smart policy responses combine a range of instruments, including regulation, design of property rights and incentive systems such as payments for ecosystem services. The report also concludes that incentive systems for conservation need to be sensitive to the process and specific to the setting, for achieving both social and environmental goals.

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