Day 1 - Valuing Nature Conference

23 Jul 2013

Keynote speakers

  • Pavan Sukhdev

    Study Leader of the G+5 commissioned report on "The Economics of Ecosystems and Biodiversity (TEEB)". This was followed by a panel discussion, which Kim Hill facilitated, including Dr Girol Karacaoglu (Chief Economist, Treasury), Jonathan Boston (Victoria University), James Palmer (Ministry for the Environment and Dr Marjan van den Belt (Massey University).
  • Marlene Laros

    From ICLEI – local government for sustainability.  This was followed by a panel discussion including Professor Bruce Clarkson (Waikato University), Sir Bob Harvey (former mayor of Waitakere City), Devon Mclean (Director Project Janszoon) and Kevin Prime (te Runanga o Ngatihine)

Pavan Sukhdev

 

Capital is anything that can have value and grow income in the future. That includes nature.

 

– Pavan Sukhdev

Pravan Sukdev

The Hon Nick Smith (Minister for Conservation) opened the day. He told the audience that NZ is more dependent than any other nation on wise stewardship of the environment for the economy.  He acknowledged that alongside GDP, we need regular comprehensive environmental reporting on the state of our natural capital. This is why the Department of Conservation is developing a new way of monitoring and reporting on biodiversity.

Pavan Sukhdev was introduced as an international leader on the links between nature and our prosperity. He used to work for Deutsche Bank and he's advised the UN on the greening of economies.

The Economics of Ecosystems and Biodiversity study he led for the G+5 looked at the loss of biodiversity as a consequence of inaction.  The study projected that by 2050 we can expect welfare losses equivalent to 7% of GDP globally.  The natural capital lost every year is equivalent to between $US 1.35 to $3.1 trillion. See here for The Cost of Policy Inaction (COPI), The case of not meeting the 2010 target. Pavan sees this is equivalent to the global financial crisis.

He is encouraging countries to develop "natural accounts" to keep a check on the value of natural wealth. Currently, the services provided by ecosystems are not taken into account in GDP.  The negative effects of business on natural capital are also largely ignored.

The ideas within the TEEB studies are starting to gain traction around the world. All EU countries & India are now working towards including natural capital in their national accounts. In China,  ecosystem services mapping & modeling tools are being used to plan development zones that avoid areas of high ecosystem service provision.

Pavan acknowledged that markets can't put a price on things like a bee. However, they can assess the value of many services nature provides, such as pollination services. The estimated cost of losing this service – under threat by from colony collapse disorder - is $200 billion a year.

He described the Amazon rainforest as a "rainforest factory' which puts out 20 billion tonnes of water and feeds an agriculture sector worth US$240 billion a year.  Newly planted mangroves in coastal Vietnam have saved annual dyke maintenance costs of US$7.3million.

A challenge for TEEB is how to bring this information to decision makers. Some of the implementation strategies it uses are:

  • Recognizing value – eg change regional plans & legislation
  • Demonstrating value – eg certification
  • Capturing value – eg payments for ecosystem services such as the US wetland market

The role of business was also discussed.  Two thirds of resource use is driven by the private sector. Pavan argued that if we want a greener economy and resource efficiency, "the private sector needs to go there.  You need transformative leadership in the business community. Citizens need to appreciate that".

In the TEEB for business coalition, which the World Business Council for Sustainable Development is involved in, businesses like Puma, Ernst & Young & Deloitte are working with the World Bank and the UN on how to value nature in corporate accounts.  Pavan stressed that businesses need to measure the externalities of business, manage them, disclose them and reduce them.

In 2011, PUMA disclosed its negative environmental effects. By factoring such things as greenhouse gas emissions, land use change, air pollution & waste generation, PUMA found the cost of its annual environmental impact was almost as high as its profits. It is now looking for ways to make its supply chain more environmentally friendly.

Pavan explained how companies also need to look at having ticks in multiple capitals (financial, natural, human). "We need to grow capital but not necessarily volume. Capital is anything that can have value and grow income in the future. That includes nature. Corporations in 2020 will need to be seekers of total value".

He also explained how the direction of the economy is influenced by where the banks place finance. "We need to start thinking of them as drivers of the economy. Improved transparency of companies would encourage governments to take different accounting seriously".He also sees an important role for consumers. When Kim Hill asked about greenwash, he said that consumers have to pick up on the greenwash and push companies to show what they are achieving. "We need to take disclosure to the next level.  Disclosure & public scrutiny are critical. Citizens are really important".

In his master class, Pavan was asked for his thoughts on the primary challenges to making progress. He sees them as:

  • Justifying a response to an environmental problem that people & corporations believe in. How questions are framed is important – eg not just that biodiversity matters & we need to do something, but we have an issue with floods/droughts and how do we address that? The response might be restoring ecosystems upstream.
  • Need to recognize incentives & disincentives for different policy decision makers (national/local).
  • Politicians are followers.  They are looking over their shoulder for the 'ok' from the private sector. This is why business leadership is so important.

Further information can be found here:


Marlene Laros

 

By 2050 we will have had to build the same urban capacity that has taken the last 4000 years to build.

 

– Marlene Laros

Marlene Laros

Marlene Laros from ICLEI – Local Governments for Sustainability – outlined the global network of cities moving towards incorporating biodiversity and ecosystem services in their decision-making. 

She used the The Economics of Ecosystems and Biodiversity (TEEB) stepwise approach to give an overview of how local authorities can start to look at how to include an ecosystem approach to their decision-making. This underlines the need for social equity, stakeholder engagement and the consideration for values that cannot be monetised to be made visible in decision frameworks.

She showed that by 2050 we will have had to build the same urban capacity that has taken the last 4000 years to build. This implies that New Zealand too has to consider its growing urbanisation and ensure that growth is managed in a sustainable way.

Marlene's masterclass session dug deeper into identifying the services nature supplies that are essential to cities – such as water quality, carbon sequestration, air quality and recreation provided by green spaces. She showed how local governments are essential actors in sustainability as they deal with environmental issues, and opportunities, at the local level. She emphasized their role as both regulator and enabler of communities and business to adopt an ecosystem approach.

Further information and case studies can be found at www.iclei.org and www.teebweb.org.

Top picks from the panel discussions were: 

  • Girol – Chief Economist at the Treasury talking about their Living Standards work. Treasury wants to focus on prosperity. This involves looking at building, protecting & sharing human, social & natural capital.  "Good growth expands our wider capital growth".  Wants to move away from policies focusing on tradeoffs to policies that are mutually reinforcing. Wants to focus on growth that will expand the "cobweb" within the living standards work. This is a huge shift. The challenge is to operationalize it. The expectation is for all Treasury analysts to think about wider Living Standards framework to guide what they do.
  • Devon McLean – Project Janszoon and previously project Crimson, talked about key lessons picked up in his work. "People want to do the right thing but don't know how. If you can show them how to do it locally, they can go out & do amazing things". 
  • Bob Harvey talked about the need to set up more mentoring between older leaders & young people in corporations.
  • Kevin Prime – the scale of the problem with NZ's biodiversity is that everyone has to contribute.

**The New Zealand Government Natural Resources Sector comprises the Department of Conservation, Department of Internal Affairs, Land Information NZ, the Ministry of Business, Innovation and Employment, Ministry for the Environment, Ministry for Primary Industries, and Te Puni Kokiri.