In October 2010 the Economics of Ecosystems and Biodiversity (TEEB) study published a groundbreaking series of reports, which presented governments, local authorities, and businesses with a powerful economic case for protecting the natural world. The reports, initiated in 2007 by the G8+5 major nations, urged governments and companies around the world to account for the value of ecosystem services in their decision making and activities. And we have seen progress worldwide: China has invested more than $90 billion on market-based programs for ecosystem services, particularly projects that pay farmers to reforest degraded cropland; Australia has committed $29 million through the carbon offset program REDD+ to help Indonesia preserve 70,000 acres of peat swamp forests (carbon emissions from the conversion of peatlands to agriculture account for roughly half of Indonesia’s total emissions); and the Mexican government runs one of the world’s largest payment for ecosystem services programs, in which local communities are paid to conserve valuable forests.

Although conceived of as a global initiative, the TEEB studies drew attention to the importance of thinking about biodiversity and ecosystems at the local level. Around the world, local government leaders are working to provide for their communities in an environment of increasingly scarce human, financial, and natural resources. In many cases, growing levels of unemployment and poverty add an additional sense of urgency to this challenge. Understanding and valuing how ecosystem services can improve urban quality of life and cut costs will help local policymakers make better decisions for their cities.

To date, however, ecosystem services have played only a minor role in local policymaking. In a report aimed specifically at local and regional policymakers, the TEEB initiative examined how ecosystem services valuation can help local policymakers overcome environmental management challenges. The TEEB study argues that for local governments to make the most efficient, cost-effective, and responsible decisions, they first must assess the effects of different policy options on ecosystem services and then balance the trade-offs between environmental impacts and economic and urban development. Ecosystem services can generate savings on future municipal costs, boost local economies, and enhance urban quality of life. Understanding the full range and value of ecosystem services makes trade-offs more visible and helps policymakers make more informed choices.

The TEEB Stepwise Approach to Incorporating Nature in Local Decision Making:

  1. Specify and agree on the problem. Before a problem can be addressed, key stakeholders must come to an understanding of what the problem is, what caused it, and whether it may be solved through consideration of ecosystem services. This will help prevent serious misunderstandings during the decision-making process and during implementation. Early engagement of stakeholders is particularly important in promoting cooperation and consensus.
  2. Identify which ecosystem services are relevant. Next, it is important to identify which ecosystem services are most relevant in order to focus the analysis. The most relevant ecosystem services should be prioritized with special consideration given to those services upon which stakeholders depend.
  3. Define the information needs and select the appropriate assessment methods. The better defined the information needs are beforehand, the easier it is to select the right analytical method for assessment. Assessments differ in terms of which services are considered, the depth of detail required, timelines, spatial scope, monetization of the results, and other factors. The particular assessment methodology used, whether a qualitative assessment, quantitative assessment, or monetary valuation, will dictate the data and skills required.
  4. Assess expected changes in the ecosystem services. After identifying the most appropriate assessment methodology, it is necessary to put that methodology into practice. Ideally, this step looks into the current values of the relevant ecosystem services and how they might change under different policy scenarios. Given the data requirements, this step in the process can be time consuming and expensive. Expert input is invaluable. It is also important to draw on field work and documented experience from analyses in comparable settings.
  5. Identify and appraise policy options. Based on the analysis of the values and expected changes in the ecosystem services, potential responses for addressing the challenge can be identified. These should be appraised in terms of their legal and political feasibility as well as their potential for reaching the quality, quantity, and combination of ecosystem services sought.
  6. Assess distributional impacts of policy responses. Changes in the availability or distribution of ecosystem services affect people differently. The social impact of different policy responses should be assessed to ensure that the identified response does not lead to any unforeseen consequences.

A number of local and regional governments have been working to incorporate an ecosystems-based approach to local planning and management decisions. For example, environmental authorities in Jaipur, India, a city of 3.3 million people, have launched an ambitious urban greening program to replenish the city’s water supplies. Groundwater levels have been severely compromised due to water withdrawal from thousands of borehole wells and increased surface water runoff from the clearing of land for urban development, agricultural production, and the provision of fuelwood. In response, the city of Jaipur initiated a policy to enlarge urban green spaces as a cost-effective way to reduce water runoff and allow groundwater supplies to recharge during the monsoon season. It is anticipated that the greening of the city will also ultimately lead to other benefits for its residents, including additional recreational areas and improved air quality.1,2

Likewise, local authorities in Canberra, Australia, are putting ecosystem services to work to improve air quality and sequester carbon. Canberra’s ecological footprint is sizable, at around 8.5 hectares per person—above the Australian average of 7.8 hectares and nearly four times the world average of 2.7 hectares. And, until recently, Australian Capital Territory emissions were increasing at a rate more than double the Australian average. Despite these challenges, city authorities have committed to making their city the greenest and most sustainable in Australia. One of their key actions was to initiate a program to plant one million trees. Besides making the city greener, the trees are expected to regulate the microclimate, reduce pollution, and thereby improve urban air quality and reduce energy costs for air conditioning as well as store and sequester carbon. Combined, these benefits are expected to amount to the equivalent of U.S.$20–67 million for the period 2008–2012 in terms of the value generated or savings incurred by the city.3

By investing in and securing ecosystem services, city officials can reduce public management costs. This is particularly relevant in times of fiscal constraint and for countries with limited financial resources. For instance, the results of a valuation exercise for the city of Kampala, Uganda, showed that the nearby Nakivubo Swamp provided an economic value of between U.S.$1 million and U.S.$1.75 million a year in wastewater purification and nutrient retention services. Researchers concluded that the services provided by the Nakivubo Swamp created a much cheaper means of treating Kampala’s wastewater than the expansion and maintenance of new wastewater facilities. Moreover, public funds were simply not available to replicate the natural ecosystem services provided by the swamp.4 Despite these findings, policymakers have been slow to protect the area and the wetland’s ability to remove nutrients and pollutants has been greatly reduced over the past decade. However, in 2008, the Kampala Sanitation Programme proposed a new plan to reduce the pollutant load by expanding existing sewage treatment facilities in Kampala and rehabilitating and increasing the Nakivubo wetland area in order to reestablish its original ecosystem services.


Mauroof Khaleel
On a visit to Canberra, Australia, Mohamed Nasheed (right), the president of the Maldives, planted a tree (the endangered Wollemi pine) with Shane Rattenbury, the speaker of the Australian Capital Territory Legislative Assembly. Local authorities in Canberra, Australia, have initiated a program to plant one million trees to improve urban air quality and sequester carbon.

As more policymakers start to factor the environment into their planning decisions, there is a growing need for tools to aid them in their efforts. The TEEB studies highlight a number of currently available planning instruments. For example, ecoBUDGET is a planning tool that can be used by local governments to control, monitor, and evaluate the consumption of natural resources and ecosystem services. It allows traditional local budgeting systems to be complemented by an environmental budget.5 Additionally, the City Biodiversity Index (CBI), another example of an ecosystem-based management tool, allows local authorities to monitor biodiversity, ecosystem services, and environmental policy responses. The index assists national governments and local authorities in benchmarking biodiversity conservation efforts in the urban context, measuring the ecological footprint of cities, and preparing a plan of action for their conservation efforts. The CBI is a set of 23 indicators organized according to native biodiversity in the city, the governance and management of this biodiversity, and the ecosystem services it provides. Today, more than 30 cities, including London, England, Curitiba, Brazil, and Nagoya, Japan, have either completed or are currently trialling the index. For individual cities, the ability provided by the CBI to chart their score over time will be critical in developing their planning and policy responses to local conservation needs, while the international rankings created through the comparative data will also motivate cities to improve their performances.

As the pressure on ecosystem services mounts, new tools and refined methodologies for reflecting their value in decision making will continue to develop. From a TEEB perspective, such ecosystem service assessments are a powerful feedback mechanism for a society which has distanced itself from the natural world upon which its very health and survival depend.

Decision makers at the local level are strategically placed to make a significant impact on our ability to create a sustainable future. As thinking starts to move in this direction it is the early adopters who will gain wide recognition for their efforts, not only creating benefits for their own communities, but also leading the effort to tackle our shared, global challenges.


The 2010 TEEB for Local and Regional Policy Makers report, which provides the basis for this article, and a subsequent TEEB Manual for Cities: Ecosystem Services in Urban Management, produced by ICLEI-Local Governments for Sustainability, are available on the TEEB website ( Further information on the stepwise approach and a range of case studies of local level action in different fields of application can also be found in TEEB for Local and Regional Policy Makers. The views expressed here are the authors’ and do not necessarily reflect the opinions of the United Nations Environment Programme.


Georgina Langdale

Georgina Langdale has over 20 years experience in international marketing, communications, and media. Langdale was TEEB’s communications manager and now continues to manage TEEB’s communications activity...


Benjamin Simmons

Benjamin Simmons is an international lawyer specializing in the interaction between environmental and economic law and policy. In addition to his overall responsibility for TEEB management and implementation,...

Leave a comment

Your email address will not be published. Required fields are marked *