Defining the biodiversity economy with a view to developing a Biodiversity Economy Satellite Account: progress from South Africa

Amanda Driver, Riaan Grobler, Yuval Tchetchik, Aimee Ginsburg, Gerhardt Bouwer

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27^th meeting of the London Group on Environmental Accounting

27-30 September and 4 October 2021

Overview

• Why measure the biodiversity economy?
• Why take a satellite account approach?
• Definition and conceptual framework for the biodiversity economy
• Linking to industry and product classifications
• Some principles
• Initial results
• Next steps
• Lessons

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Why measure the biodiversity economy?

• South Africa has a wealth of biodiversity assets and ecological infrastructure that can contribute to inclusive growth and development
• Policy interest and relevance, including National Biodiversity Economy Strategy

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• Helps to make the case for investment in biodiversity
• Including in managing and conserving the biodiversity and ecosystem assets that underpin the biodiversity economy

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Building on previous work on quantifying biodiversity related employment

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Based on combination of administrative data, existing research on particular sub-sectors, and extracting data from annualized Quarterly Labour Force Survey data

Why take a satellite account approach?

• Based on the traditional set of national accounts data
• Enables direct links to be drawn to economic growth, employment, government debt and deficit, foreign trade, etc
• Compelling for policy makers

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• Complements SEEA Ecosystem Accounting

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Defining the biodiversity economy

From South Africa’s National Biodiversity Economy Strategy:

The biodiversity economy consists of businesses and other economic activities that either directly depend on biodiversity for their core business or that contribute to conservation of biodiversity through their activities

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Adapted from a WWF definition proposed in 2012

Conceptual framework �for the biodiversity economy

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Biodiversity-related economic activity

Focus is on natural or semi-natural ecosystems and indigenous species

How does this differ from related concepts?

• Narrower than green economy
• Which includes e.g. renewable energy, recycling, green buildings, sustainable transport
• Overlaps with the Classification of Environmental Activities in SEEA Central Framework (used to define the Environmental Goods and Services Sector)
• Group I Class 6 Protection of biodiversity and landscapes links closely to Subcategory A1 Protecting and managing biodiversity assets
• Group II Resource Management could be expanded to include Subcategory A2 Maintaining and restoring ecological infrastructure
• Not all ecosystem services are related to the biodiversity economy
• Ecosystem services from (most) intensively modified ecosystem types aren’t considered part of the biodiversity economy based on our definition

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Linking to industry and product classifications

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Supply and Use Tables from the national accounts cover

118 products and services across

213 industries

Approach

For each industry and product code at the 3-digit level, we assessed:

• Included in the biodiversity economy? (yes or no)
• Degree of inclusion (indicated as a percentage range)
• Rationale for inclusion, with examples
• Category and sub-category of the biodiversity economy into which is best fits
• Areas of research for further refinement or increased certainty

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Approach

Each code assigned to one of four groups based on an estimate of the proportion of activities/products related to biodiversity:

• All or most (> 80%)
• Some (between 20% and 80%)
• Few (< 20%)
• None (0%)

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Broad bands reflect uncertainty

– not possible to be precise

– can refine over time with targeted research

Similar to the approach used in Eurostat’s EGSS accounts

Principles

1. Use the definition of the biodiversity economy, and keep coming back to it!
2. Where an activity is considered part of the biodiversity economy, no part of that activity is excluded because it has a negative environmental impact
3. All economic activities related to indigenous species are included
4. All economic activities that depend on natural ecosystems are included
5. Non observed activities in the biodiversity economy are included (inclusive of subsistence, informal and illegal activities)
6. Activities are included even where the proportion related to biodiversity is currently estimated to be negligible (less than 5%)
7. Activities that may be considered to be part of the green economy more broadly, but that are not directly related to biodiversity, are excluded

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In Category B Using biodiversity:

• Activities or products that depend either on natural ecosystem types or on indigenous species, or both, are considered part of the biodiversity economy.
• Activities or products that depend on exotic species in intensively managed ecosystem types are not considered part of the biodiversity economy.

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Indigenous species in intensively modified ecosystems

e.g. intensive ostrich farming, rooibos tea cultivation

Indigenous species in natural ecosystems

e.g. wild harvesting of medicinal plants

Exotic species in intensively managed ecosystems

e.g. intensive livestock farming, timber plantations

Exotic species in natural ecosystems

e.g. grass-fed livestock in natural rangelands

Indigenous

species

Exotic

species

Natural

ecosystem type

Intensively managed

ecosystem type

✔

✔

✔

×

Initial results from linking to industry and product classifications

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Very few codes fall in “All or most” or “Some”

“Few” is the most challenging group – further research needed to firm up judgement calls

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🡨 Industries

Products 🡪

Next steps

• Extract data from SUTs to compile the satellite account

🡪 first draft of the account

• Requires choosing a particular proportion from within the range for each code

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First draft will help to inform research priorities

Lessons

1. Defining the biodiversity economy is a novel and complex task that should be guided by principles developed in consultation with key national experts
2. Having a small core technical working group is essential
3. Hold multiple shorter meetings to avoid fatigue
4. Involve additional experts as needed to help get better estimates
5. Allow time in the process for unpacking concepts (even repeatedly) to get to common understanding
6. Make assumptions based on best available knowledge or expert judgement, take note of gaps and areas for future research but don’t get stuck

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Questions for the London Group

• Is a Biodiversity Economy Satellite Account likely to be a useful tool in contexts other than South Africa?
• Is the proposed conceptual framework for the biodiversity economy, including the distinction between the green economy and the biodiversity economy, useful?
• Is this work relevant to classifications or approaches in the context of the SEEA or the Environmental Goods and Services Sector?

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