NATURAL CAPITAL: COUNTING IT IN! Allaine T. Baaco Western Philippines University

1. Western Philippines University NATURAL CAPITAL: COUNTING IT IN! Allaine T. Baaco Western Philippines University Puerto Princesa Campus

2. Western Philippines University Overview of presentation • Understanding the environment • Defining economic valuation • SEEA Framework • Significance of economic valuation of natural resources in the National Income Accounting

3. Western Philippines University Environment Composed of different ecosystems.

4. Western Philippines University Ecosystems A dynamic interaction of plants, animals, microorganisms community and the nonliving physical environment as one unit.

5. Western Philippines University Ecosystems Services Benefits people obtain from ecosystems.

6. Western Philippines University Ecosystem Benefits

7. Western Philippines University Economic Values of the Environment Why?

8. Western Philippines University IN A WORLD WHERE MONEYTALKS, ENVIRONMENTMUST HAVE A “VOICE” SO THAT IT CAN BE HEARD.

9. Western Philippines University VOICE ~ VALUE (ECONOMIC) ,$, £, ¥, €

10. Resource Allocation Decisions • Efficient choice in the use of scarce resources • Resource Pricing • Services • Damaging impacts • Distributional Impacts • Gainers • Losers • Awareness Raising • Losses • Opportunities • Measure opportunities from the environmental changes Western Philippines University We consider environmental valuation

11. Western Philippines University Definition Economic valuation techniques re-defines the previous conception of nature as a complex web of inter-related and ever-changing relationships into an image of nature as a provider of measurable services.

12. Western Philippines University Definition Economic valuation can generate estimates of the value of ecosystem services in monetary terms.

13. Monetary valuation of Ecosystem services Monetary valuation via markets, particularly provisioning services, are traded in markets and  Monetary valuation via surrogate markets for services not traded in the market, particularly the regulating and support services

14. Western Philippines University VALUE (Maintaining ecological function) MISSING In Accounting… STOCKS (Natural capital) FLOWS (Ecosystems & abiotic services) VALUE (Goods & Services) VALUE (Nature as nature) MISSING Figure modified from the natural capital protocol.

15. Methodology: • The SEEA • Expanding the Systems of National Accounts (SNA) to the environment • contains the internationally agreed standard concepts, definitions, classifications, accounting rules and tables for producing internationally comparable statistics on the environment and its relationship with the economy.

16. Ecosystems & Biodiversity Environmental Services and human well-being: Human well-being Biophysical Structure or process (functioning) Capacity (function) e.g. growth of biomass Service e.g. photosynthesis e.g. wood that is harvested Benefit(s) e.g. wood supply for furniture Value e.g. value of wood used for furniture Cascade Diagram, modified from Haines-Young and Potschin)

17. Western Philippines University

18. Environmental Services: • Provisioning services: the products that can be extracted from or harvested in ecosystems

19. Environmental Services: • Regulating Services: regulation of ecological, hydrological and climate processes

20. Environmental Services: • Cultural services: the non-material benefits from ecosystems (e.g. recreation, education and research)

21. Environmental Services: • Support services: Ecosystem services that are necessary for the production of all other ecosystem services. Some examples include, production of atmospheric oxygen, and provisioning of habitat.

23. Linking Services to Values Ecosystem Step 1. Specification of boundaries and system to be valued.. Provisioning Services Regulating Services Cultural Services Support Services Step 2. Assessment of ecosystem services in bio-physical terms Step 3. Valuation using monetary or other indicators.. Option Values Indirect use Values Direct use values Non-use Values Step 4. Aggregation of the different values Total Economic Value

24. Ecosystem services and valuing methods:

25. Economic valuation enables agencies to respond more effectively to an unavoidable cost of economic development and growth

26. Western Philippines University Economic Opportunities & Policy Responses Policies Measures Opportunities Taxes Subsidies Regulations Investments Research Innovation Trade Education & Training EconomicActivity Inputs Outputs Labor Capital Resouces Income Goods/Services Residuals (emissions, waste) Natural inputs (rawmaterials) Ameneties, Health & Safety ENVIRONMENTAL ASSETS (Capital stocks, Environmental Quality) ResourceFunction SunkFunction ServiceFunction

27. MaramingSalamatpo!

28. References: Baaco, A. T. , J. M. Javier, H. G. Lagan, B. Montaño, and R. Sariego. 2015. Economic Values of Mount Mantalingahan Protected Landscape. Briones, N. D., A. T. Baaco, J. M. Javier, R. G. Dolorosa and S. Tabayag. 2016. Biodiversity values of Rasa Island Wildlife Sanctuary. Cambridge Conservation Initiative. 2016. Biodiversity at the Heart of Accounting for Natural Capital: the Key to Credibility Dvarskas, Anthony. 2013. SEEA and the Green Economy. United Statistics Division. July 3, 2013. European Union. 2013. Mapping and assessment of ecosystems services: An analytical framework for ecosystem assessment under Action 5 of EU Biodiversity Strategy to 2020. Discussion paper – Final. April 2013. Natural Capital Coalition. 2016. Natural Capital Protocol.

29. References: SEEA CF 2012. System of Environmental-Economic Accounting 2012 – Central Framework. Ed. United Nations, European Union, Food and Agriculture Organization of the United Nations, International Monetary Fund, Organisation for Economic Co-operation and Development and The World Bank. ISBN: 987-92-1-161563-0