27th Meeting of the London Group on�Environmental Accounting, October 2021���UN SEEA EEA implementation and applications �����Aggregation of the ecosystem service values in urban ecosystem account, application of the principles of gross ecosystem product (GEP) �

� ��Kaia Oras (Statistics Estonia), Sjoerd Schenau (Statistics Netherlands), Patrick Bogaart (Statistics Netherlands), Kätlin Aun (Statistics Estonia), Grete Luukas (Statistics Estonia), Üllas Ehrlich and Aija Kosk (Tallinn University of Technology)�

Purpose for presenting the work to the London Group

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As CBD (Convention on Biological Diversity) has selected the UN SEEA EA based gross ecosystem product (GEP) as a candidate for one of the lead indicators and it has been listed in “Proposed headline indicators of the monitoring framework for the post-2020 global biodiversity framework”(goal B, page 5) we have tried it out

1.Get a feedback on the logic of the compiled test case of gross ecosystem product GEP indicator

2. Can we (LG) define the needs of improvement of GEP indicator:

• How the broader range of values could be considered?
• Feasibility, problems and possible meaning behind the aggregation of the ecosystem service values as proposed by UN SEEA EA.

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Aggregate measure gross ecosystem product (GEP)

1. GEP can be derived by summing across columns (i.e., to estimate the total supply or use of a single service) and by summing across rows (i.e. to estimate the total supply by an ecosystem type or the total use by type of economic unit).

2. GEP is equal to the sum of all final ecosystem services (i.e., used by economic units) at their exchange value supplied by all ecosystem types located within an ecosystem accounting area over an accounting period less the net imports of intermediate services. (SEEA EA (chapter 9.17 on page 190).

Although not stated explicitly in the SEEA EA, GEP can be based on exchange values (which is the focus of SEEA EA) but also on welfare values.

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Urban ecosystem thematic account as a test case for GEP

We used the urban ecosystem account as the example for the aggregation of ecosystem values because:

1. The alternative use of the land e.g ecosystems is more often in question in case of urban ecosystems and also how to capture the service values provided by ecosystems
2. Ecosystem services are amplified in urban area due to the close proximity of the provisioning areas and beneficiaries of the ecosystem service
3. The aggregations to a scale has added value as urban ecosystems comprise different asset types and lot of non-market ecosystem services

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Aggregation dimensions in GEP: our test case

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In case of our urban ecosystem accounts there are at least two major dimensions at play while compiling ecosystem services supply:

1. service provisioning assets (urban green, urban grey and natural ecosystems within urban area)
2. ecosystem services that make up the basket

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Inside the services array there are different valuation approaches which ask for the agregation to a single dimension:

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1. first approach provide the exchange values, which is the focus of the SEEA EA, (market price, cost-based and revealed preferences methods)
2. the second approach provides welfare values: stated preferences (CVM).

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First dimension of the gross ecosystem product: spatially explicit urban extent account

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• Criteria for defining urban area – an area of at least one square kilometre with a population density of two hundred or more people per square kilometre or with a share of infrastructure (buildings, road network, production yards) of ten percent or more. The areas are formed on the basis of one hectare grid.
• Reference for the framework for thematic account –extent account that uses individual asset approach (table 13.7, p 292) which split urban area into urban ecosystem assets and natural ecosystem types

Framework allows to allocate both the services provided by

1. green artificial areas (on the left)
2. natural ecosystems (on the right)

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Second dimension of the gross ecosystem product: urban ecosystem services supply account�

• Regarding the methods we have a „mixed basket“ due to the fact that we have both natural and urban green areas represented in urban area and also certain ecosystem services „cultural“ have a specific nature in urban areas.
• We have the ecosystem services which are mainly provided by natural ecosystems that happen to be located in urban areas and in another hand we have services unique for urban environments.
• Parallel valuation techniques were applied:
• Exchange based market based methods: expenditure transfer, expenditure based , time use based approach, travel cost approach etc. depending on the service.
• In addition we used the results of the 4 CVM studies (just completed by Tallinn Technical University)

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Ecosystem services and applied parallel valuation methods

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Supply table of ecosystem services in urban areas: aggregated and detailed levels and GEP, million euros

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Total GEP amounts to 42.5 million.

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Table above displays the results of the aggregation of the values of the ecosystem services

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Three tables on the bottom right accommodate the studied flows of ecosystem services: the separate blocks of the monetary valuation with exchange value based methods, CVM study in urban ecosystems alongside with natural/semi-natural ecosystems.

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Be noted that identical explicit ecosystem extent is used for allocation (slide 6) .

Exchange based values

CVM, natural ecosystems

Urban CVM

Illustrated insight to the supply table of ecosystem services in urban areas

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Vertical dimension displays ecosystem types. On a left side in pink colours the values measured by exchange based methods and on a right side in blue colours the services values measured by contingent valuation methods are displayed. Enlarge for the details.

Exchange based

CVM

Observations

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1. Gathering all valuation results in one framework shows the gaps and probable quality issues of the measurement of the values of the ecosystem services in supply matrix by ecosystem types (for example rainfall infiltration and provisioning of the compost). Are these dominating services most important as well or is this dominance just the artefact caused by the properties of the valuation? The considering only the real benefits should be included in future.

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• If to aggregate, the link to the supply tables of the services is important and needs to be maintained for the sake of transparency. The inclusion of the important components of the ecosystem services needs to be observable in order not to be missed if the figures would be used in practical decisions.

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• Total values derived by both methods (exchange based and CVM) give the results to a certain degree of the comparable scale but the distribution of detailed valuation results on urban ecosystem assets shows that different services are captured and these value distinctive phenomena. So the aggregation seems to be justified.

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• The definition of GEP requires a correction for the net import of ecosystem services. This correction has not been taken into account here.

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Conclusions

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Aggregation of the monetary values of ecosystem services is important by various reasons (balance sheets do this, need for simplification, capture of a whole picture). The link to the supply tables of the services is important as well and needs to be maintained for the sake of transparency when the figures would be used in policy.

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More understanding is needed how GEP could be used and the feedback from the users is important.

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For calculating GEP all services and ecosystems should be included for the ecosystem accounting area. This means including both exchange and welfare values. The concept of aggregate measure of ecosystem services needs further investigation in the sense of summing across columns (i.e., to estimate the total supply of an ecosystem asset). In particular more guidance is needed how exchange values and welfare values can be compared / aggregated, as these values may (partially) overlap.

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Current effort has been a first attempt for us to compile indicator GEP and it opens up questions on the coherent valuation methods, correction for the net import and aggregation.

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We consider this effort as a beginning of the longer processes in compiling aggregated indicator of the flow of the ecosystem service values. We could work further on the logic applied and feedback to be received and return to this topic in the next LG.

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Thank you!

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Name

Kaia Oras, Üllas Ehrlich and Kätlin Aun; Sjoerd Schenau, Patrick Bogaart, Aija Kosk, Grete Luukas

E-mail

Kaia.oras@stat.ee

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STATISTICS ESTONIA

www.stat.ee

Tatari 51, 10134 Tallinn,

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The pilot aggregation of GEP was based on the data produced in a frame of Eurostat grant 881542— 2019-EE-ECOSYSTEMS, more details are described in the methodological report “Development of the ecosystem accounts”.

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