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IUCN - Holcim partnership

Ecosystem Valuation Case study

Ripon Quarry in UK

Nathalie Olsen (IUCN)

Gerard Bos (Holcim)

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Outline

1. Relevance of Biodiversity to our sector

2. Why Ecosystem Services Evaluation?

• Introduction to WBCSD tools • ESR - Ecosystem Services review

• CEV – Corporate Ecosystem Valuation

3. Results of the Ripon case study (UK)

• Background

• Methodology

• Study

• Results

4. What next at sector level?

5. Questions and Answers

1. Ecological balance is one of the three pillars of SD and

without this, business cannot function

2. All businesses depend and impact on ecosystems and

their services – either as part of their core operations or

through their supply chain

3. Ecosystem degradation can undermine the business

license to operate by posing significant risks to

companies, their suppliers, customers and investors

4. Sustainable ecosystem management can create new

business opportunities and markets

Why are ecosystems and ecosystem

services important to companies?

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Quiz – What is this?

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Water filtration plant

www.zenon.com

Source: Craig Hanson, WRI

Quiz – What is this?

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Storm protection system

www.magazine.noaa.gov

Source: Craig Hanson, WRI

Quiz – What is this?

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A playground

Source: Craig Hanson, WRI

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© Holcim Group Support Limited 2010

Ecosystem services – an overview

ProvisioningGoods or products produced by

ecosystems

RegulatingNatural processes regulated by

ecosystems

CulturalNon-material benefits obtained

from ecosystems

SupportingFunctions that maintain all other services

A few definitions

Ecosystem

services• The benefits people obtain from

ecosystems

• The “goods and services of nature”

Biodiversity • The variability among living organisms

–Within species & populations

–Between species

–Between ecosystems

Ecosystem • A dynamic complex of plant, animal,

and micro-organism communities and

the non-living environment interacting

as a functional unit

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Businesses impact on ecosystems and

ecosystem services

Businesses rely and depend on

ecosystems and ecosystem services

Consequence of ecosystem change for

business

Ecosystem change creates

business risks and

opportunities

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© Holcim Group Support Limited 2010

The Ecosystem Landscape

Our sector has a visible impact on almost

ALL ecosystems

Quarrying and raw

material preparation

Clinker

production

Cement grinding and

distribution

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Biodiversity CMS MT mtg.ppt

© Holcim Group Support Ltd 2009

Biodiversity Management to be considered throughout the

complete lifecycle

Biodiversity and

Social Risk

Assessment

Permits

Environmental

& Social Impact

Assessment

Go / No-Go

Decision

Quarry / Site

Lifecycle

Rehabilitation

& Biodiversity

Management

Plan

Steps in a

corporate ecosystem services

review

Corporate Ecosystem Service Review

Tool (ESR)

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5. Develop

strategies

4. Identify

business risks

and

opportunities

3. Analyze

trends in

priority

services

2. Identify

priority

ecosystem

services

1. Determine

scope

World Resources Institute

Step 3:

Evaluate trends

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1. Trends in ecosystem services

• Supply and demand

• Quantity, quality and/or timing

2. Direct drivers

• Land-use change

• Over-consumption

• Climate change

• Pollution

• Invasive, non-native species

• Other

4. Activities of

others

• Who

• How

• Where

• To what degree

5. Indirect drivers

• Demographic

• Economic

• Governmental

• Technological

• Cultural and religious

3. Company

activities

• How

• Where

• To what degree

World Resources Institute

Measuring, managing and mitigating one’s ecosystem

impacts and dependencies requires incorporating

environmental externalities into core management

decisions

WBCSD tools that help do that include:

The Global Water Tool

The GHG Protocol

Measuring Impact Framework and…

CEV….Corporate Ecosystem Valuatation

Measure, manage and mitigate

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Valuing business risks and opportunities

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Direct values Outputs that can be

consumed directly, such

as fish, medicines, wild

foods, recreation, etc.

Option valuesThe premium placed on

maintaining resources and

landscapes for future possible

direct and indirect uses, some of

which may not be known now.

Existence valuesThe intrinsic value of

resources and land-scapes,

irrespective of its use such

as cultural, aesthetic,

bequest significance, etc.

Indirect values Ecological services,

such as catchment

protection, flood control,

carbon sequestration,

climatic control, aesthetics,

etc.

NON-USEUSE

Value ecosystem services

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Ecosystem valuation is ONLY a means to

an end

Placing monetary values on

ecosystem services is not an end

in itself

The aim is to provide information

to make better and more informed

decisions:

- Better meeting targets and goals

- Avoiding costs and losses

- Maintaining/Increasing revenues

- Finding cost-effective means of

complying with obligations and

managing environmental footprints

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Outline

1. Relevance of Biodiversity to our sector

2. Why Ecosystem Services Evaluation?

• Introduction to WBCSD tools • ESR - Ecosystem Services review

• CEV – Corporate Ecosystem Valuation

3. Results of the Ripon case study (UK)

• Background

• Methodology

• Study

• Results

4. What next at sector level?

5. Questions and Answers

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WBCSD Ecosystem Valuation Initiative

• Recognise and manage

dependencies and

impacts

• Guide provides step by

step guidance:– why

• Saving costs

• Assessing liability

– how to identify ecosystem

impacts

– how to value

dependencies/impacts

– how to incorporate results into

business decisions

www.wbcsd.org/web/evi.htm

The 15 EVI road testers

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Ecosystem Valuation Initiative - Aggregate Industries UK Road Test

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EVI Road Test - Background

• Legally required to restore after quarrying

• Business concern– Access to minerals in sensitive areas

– Perceived costs of restoration and aftercare on extraction sites

– Public opinion and corporate reputation

• Valuation to assess benefits of quarry extension and restoration in North Yorkshire– Wetland restoration

– Establishment of artificial lake

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Objectives of study

• To investigate the value of restoration to wet meadows vs.

reedbed and the distribution of benefits between stakeholders

• To quantify and value significant change in biodiversity and

ecosystem services following mineral extraction on the site

• To be able to negotiate appropriate levels of restoration and

level and duration of aftercare/management costs

• To value the contribution of the site to additional flood control

in the landscape and region

• To understand the practice of ecosystem valuation in order to

anticipate future planning requirements

Processing plant

Exhausted extraction area

Proposed reedbed

Recreational lake

Area of study

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Methodology – valuing ecosystem benefits

• Biodiversity – Willingness to Pay of local

population for conversion of agricultural land to

wetlands for wildlife habitat (£/household)

• Recreation- use WTP of individuals for additional

boating opportunities (£/household)

• Flood control – average value of avoided damage

estimates (£/hectare)

• Carbon storage – estimates of carbon

sequestered in newly established wetlands (tons

CO2e/hectare) * £/ton CO2e

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Methodology – estimating costs

• Restoration costs– Labour, material, survival rates

• Aftercare costs– Based on annual returns from £200,000 fund provided up-

front

• Opportunity costs– Value of foregone agricultural and livestock production

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Value of ecosystem service - benefits and

costs of supply

£224,079

£58,819£4,702

£117,598

£1,415,917

£721,761

£356,330

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

Pre

sen

t va

lue

£

Value of ecosystem service benefits and costs

Carbon sequestration

Flood storag

Biodiversit Recreation Restoration Aftercare costs

Value of lost food production

BENEFIT COST

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Present value of ecosystem service benefits

and costs of supply

Flood controlRestoration costs

Carbon sequestration

Aftercare costs

Biodiversity

Foregone food production

Recreation

£0

£500,000

£1,000,000

£1,500,000

£2,000,000

£2,500,000P

rese

nt

valu

e £

Types of ecosystem service benefits and costs

BENEFIT COST

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Aggregate Industries UK

Key findings

• Significant benefits due to wetland restoration and creation of lake (£1.1m)

– habitat (£1.4 million)

– recreational (£350,000)

– flood control (£224,000)

– carbon (£4,700)

• Costs of restoration and aftercare relatively small and do not affect financial bottom line

• Compensation for environmental damage can deliver improvements in ES at modest expense

• Economic gains much greater on marginal land due to opportunity cost

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Aggregate Industries UK

How to use results?

• Internal audience:– To improve decision-making

– To assess costs of legal liabilities

• External audience– To develop restoration and aftercare plans in

application process

– To ensure future access to minerals by demonstrating net benefits to society and net biodiversity gain

– for planning restoration based on uses with greatest benefits

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Outline

1. Relevance of Biodiversity to our sector

2. Why Ecosystem Services Evaluation?

• Introduction to WBCSD tools • ESR - Ecosystem Services review

• CEV – Corporate Ecosystem Valuation

3. Results of the Ripon case study (UK)

• Background

• Methodology

• Study

• Results

4. What next at sector level?

5. Questions and Answers

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Next steps

• Broaden access to ESR/EVI:– UEPG workshop, Paris (Sept)

– CBCSD - ESR training, Shanghai (Sept)

• CDB COP 10 in Nagoya – EVI guide will be published

– Business and Biodiversity Day - Oct 26, 2010

– Release of the IUCN-Holcim Biodiversity Management

System

• Share these tools and good practices with CSI

biodiversity task force

• Q&A

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Thank you