�Ecosystem and Species Appreciation – Measuring Service Flow, Biodiversity Wealth and Biodiversity Debt�27th meeting of the London Group on Environmental Accounting (27-30 September and 4 October 2021)�

Beyhan Ekinci, Burkhard Schweppe-Kraft

Unit I 2.1: Legal and Economic Affairs of Nature Conservation

Germany

A future task in good hands

London Group 2021

SEEA EA (2021: 6.5.1) as well as CICES 5.1 (No. 3.2.2.1 and 3.2.2.2) are stating that „Ecosystem and species appreciation“

• is an ecosystem service
• belonging to „non-use values“

SEEA EA (2021: 6.7.2, 6.7.3) however sees a principle difference to other services like visual amenity services arguing that there is no need for a physical transaction between ecosystems and individuals - except information flows – to gain benefits through this service. Instead, this service (only) leads to well-being instead of benefits and thus is not to be captured in the core ecosystem accounts

Certainly, the collection of information is also associated with physical transactions and visual amenities are nothing else than information coming to our brain. However, we do not want to argue against this view of SEEA, here.

We just want to show that we see a practical way to comprehensively calculate the appreciation of ecosystems and species services in both physical and monetary terms for a whole country in line with basic accounting principles, regardless of whether this is then included in the core ecosystem accounts or in complementary valuations according to SEEA EA Chapter 12

Background and aim

London Group 2021

Step 1: Measuring Appreciation Services by Biotope Value Points from the National Compensation Ordinance

Comprehensive and consistent system of nation wide data on ecosystem extent and condition based on:

• Satellite data of the German Land Cover Model LBM-DE, compatible with Corine Land Cover data
• Land use and agricultural land use data from the Federal Statistical Office
• Line based cadastre data for hedges, tree rows, streams, paths, traffic lines etc.
• Federal Forest Inventory
• Reporting on the EU Habitats Directives, Water Framework Directive and Marine Framework Strategy Directive
• Monitoring of High-Nature-Value farmland

Biotope Value Points from the National Compensation Ordinance

based on criteria like:

• naturalness
• age of an ecosystem
• occurrence of endangered species
• threat to the ecosystem type itself

used like ratios (can add or divide)

for defining the extent of compensation measures

• Delivering numbers between 0 (paved ground) and 24 (intact peat bogs, old (semi-) natural forests) for more than 1000 ecosystem (condition) types

combined with

One number (physical similiar to dBA, Bq or CO₂ eq) for the services of ecosystems for nature conservation and a proxy for the biodiversity wealth of Germany

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Step 2: Choosing appropriate pricing alternatives

Costs or prices from compensation markets

Market (near)

Can differ significantly due to reasons unrelated to biodiversity (was a caterpillar already at place?)

Pros

Cons

No representative survey data available

Willingness to pay (CV or Choice Analysis) for restoration measures

Reflect individual preferences

CV data for comprehensive set of measures (programmes to stop biodiversity decline) available

Validity of CV studies highly controversial

Willingness to pay can be higher than restoration costs

Costs for restauration measures

Detailed estimate of costs to reach the goals of the European Habitat Directives are available

Political price that need not match with individual preferences

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Step 3: Calculating average restoration cost to gain one additional Biotope Value Point

How done?

Cost of measures to reach the aims of Habitat Directives divided by biotope value points that will be created by these measures.

How hereby dealing with biotope development times?

Assuming a linear development of biotope value points after the begin of restoration measures and calculating the present value of the future biotope value development.

Are these average cost per biotope value point good proxis for prices and marginal values based on individual preferences?

Cost / value point ratios differ substantially between different restoration measures

Therefore one could argue for much higher (marginal) prices. But political decisions that (should) reflect individual and social preferences decide on the basis of the cost / value ratio of programmes rather than of each measure within the programmes.

Biotope values created by the measures are marginal compared to total biodiversity (6% of total)

Calculation based on willingness to pay for restoration programmes leads to prices for each biotope value point created that are about twice as high as the result of the cost-based estimation.

London Group 2021

Wealth, services, debt and annual expenditures for nature conservation in Germany

Biodiversity wealth:

Total number of biotope value points multiplied with average cost rate per additional biotope value point (2018: € 1.395 billion, marginal change with regard to 2012 and 2015)

(Implicit) appreciation services:

Wealth multiplied by an appropriate interest rate: €1,095 per household and year at an interest rate of 3%

Biodiversity debt:

Difference of biotope value points between now and after reaching the (Habitat Directive) aims multiplied with the above average cost rate: € 60 billion in 2018

Biodiversity wealth and biodiversity debt by 2018

(Implicit) appreciation services and expenditures for nature conservation

(billion euros)

Biodiversity debt (Habitat Directives only)

Biodiversity wealth

Direct and indirect public and private expenditures for nature conservation by 2016 (direct public expenditures about 0.7 billion per year)

Implicit flows of ecosystem and species appreciation services 2018

(billion euros per year)

Biodiversity and nature conservation is a tiger when measured by biodiversity wealth and implicit appreciation services but a European harvest mouse, Micromys minutus , (direct translation from German: dwarf mouse) when measured by nature conservation expenditures

1,395

3.9

45.3

London Group 2021

Applicability to other countries – �next steps and further possible refinements

Other countries use similar metrics, e.g. Dutch NCI, Norwegian NI; the metric of German biotope value points is rather similar to the scientific hemeroby scale. Cost estimates for a broad range of restoration measures should now be available throughout the EU.

Next steps:

Further possible methodological refinements:

Recalculation with the latest version of the biotope value list

More detailed consideration of marine ecosystems

Enhanced method to calculate the condition of habitats protected by the EU Habitat Directives

Calculation for 2021 LBM-DE data;

.... Integrating new data from the upcoming Forest Inventory and WFD - reports

Applicability restricted to German biodiversity value points?

Explicit integration of species data

Broadening the cost basis (e.g. by representative, sample based surveys on compensation and restoration cost and prices)

Looking for ways to continuously adjust the biotope value points to changes in the scarcity of ecosystems.

... etc.

Many thanks for your kind attention

Germany

© Institut für ökologische Raumentwicklung, Dresden

A future task in good hands

• Development of a method to account for appreciation of ecosystems and species services in physical and monetary terms as close as possible to accounting principles.
• Calculation for 2012, 2015 and 2018 was possible on existing data.
• Value of appreciation of ecosystem and species services calculated using this method is far higher than public and private expenditures for nature conservation.
• The method was also used to calculate the biodiversity debt, estimated at 60 billion euros by 2018.

Questions:

Main findings:

• What possibilities exist to adapt the methodology even more closely to the existing accounting principles?
• How do other countries see the possibility of transferability and the development of a common standard inspired by the methodology presented?
• What changes are proposed to the methodology for this?
• Are there similar or alternative applicable and tested methodologies for quantifying ecosystem and species appreciation services for integration into ecosystem core accounts or supplementary valuations under SEEA Chapter 12?

Ecosystem and Species Appreciation – Measuring Service Flow, Biodiversity Wealth and Biodiversity Debt�

Main findings and questions for discussion�

Germany