A proposal for the allocation of SBT for biodiversity
Draft paper for the SBTN translation workshop – Drafted by Pierre Andrieux & Paul Chatelin (Ponts ParisTech) and reviewed by Joshua Berger (CDC Biodiversité) – 19/04/2021
This document suggests allocation approaches based on several potential allocation systems to build budgets of biodiversity losses or gains at the sectoral level (the same principle could be used to build business level budgets) in line with science-based targets. It is meant as food for thought for the SBTN.
The central trajectory and budget of gains/losses to be allocated to business
A “Central Trajectory” for biodiversity and a global budget of maximum biodiversity lost (from 2020 to 2030) or minimum biodiversity gained (from 2030 to 2050) at the global level are defined as follow, based on an interpretation of the CBD’s Zero draft:
In 2020, the global remaining terrestrial biodiversity was 65.4% MSA which means that 34.6% of the MSA had already been lost (= static impact or stock of impacts). The dynamic impact (or additional flow of impacts) on that year was 0.27% MSA.
In the Central Trajectory, between 2020 and 2030, MSA net loss is reduced by 10% (of the 2020 value) each year to finally reach no net loss in 2030.
In the Central Trajectory, from 2031, biodiversity is gradually restored. The restoration budget increases by 17.9% every year (exponential increase) and is negative (by convention, losses of biodiversity are accounted as positive figures).
This effort allows to reach an annual dynamic gain of 2.28% in 2050 and the global remaining terrestrial biodiversity reaches around 78% MSA.
Table 1 – Budget of "allowed losses" from 2020 to 2030
Year Global remaining MSA (%)
Budget (MSA.km2)
Budget (% of 2020 budget)
2020 65.40 359 100 100%
2021 65.13 323 190 90%
2022 64.89 287 280 80%
2023 64.67 251 370 70%
2024 64.48 215 460 60%
2025 64.32 179 550 50%
2026 64.19 143 640 40%
2027 64.08 107 730 30%
2028 64.00 71 820 20%
2029 63.94 35 910 10%
2030 63.915 0 0%
Allocation systems & assumptions
Four allocation systems are used to build the sectoral budgets, following works by the PBL1 and CDC Biodiversité.
SOVEREIGNTY:
This allocation system is based on a grandfathering approach, i.e. the obligations of industries (or companies) is based on their 2020 biodiversity dynamic impact.
Between 2020 and 2030, all industries will be asked to reduce their 2020 dynamic impact by the same proportion, maintaining the distribution of impacts as it was in 2020. An industry’s share of efforts corresponds to its share of the 2020 global dynamic impact. Thus, an industry that contributes to up to 60% of the dynamic impact in 2020 will be asked to make 60% of the reduction effort.
CAPABILITY:
This allocation system is based on industries or companies’ ability to pay.
It allocates the budget between industries according to their turnover (other indicators of capability were also considered, such as the amount of taxes paid). The efforts asked to industries, would be computed based on their share in the global (2020) turnover. Thus, sectors with high turnovers compared to other sectors will be asked to contribute more to both biodiversity loss reduction and biodiversity gains.
EQUALITY:
This allocation system is based on the idea that each person has the same “rights” and thus the rate of efforts should be the same per capita.
1 Lucas and Wilting, ‘Towards a Safe Operating Space for the Netherlands’.
The allocation is based on the number of people employed in each sector. The more people the sectors employ, the higher their biodiversity budget.
EFFICIENCY:
This allocation system is based on a principle of cost-effectiveness: the sectors that can perform restoration actions at the lowest cost will be asked to do more. This system minimises overall costs for a given budget achieved.
The cost of restoration of each sector is the indicator used to allocate efforts. All sectors have to spend the same amount of money each year in order to restore biodiversity. These expenses will have different impacts on biodiversity as the costs of restoration vary by sector, especially due to technologies used.
Fictitious dataset used to illustrate the allocation approached proposed
A, B and C represent three different sectors, respectively Manufacturing, Construction and Trade. In this fictitious example, they are considered to be the only existing industries in the world (so there is no Agriculture, Oil & gas, etc.). Real French data from the INSEE (the French National Institute of Statistics and Economic Studies) on turnover and employees were used while 2020 net yearly dynamic impacts and restoration cost were chosen arbitrarily. However, the total fictitious 2020 yearly dynamic impacts are set equal to the actual 2020 dynamic impact2, that is to say 330,000MSA.km2.
Table 2: description of the three fictitious industries
A (Manufacturing)
B
(Construction) C (Trade) Total
Turnover (in k€) 1 214 000 000 305 000 000 1 355 000 000 2 874 000 000 Proportion of global
turnover 42% 11% 47% 100%
Number of employees 3 098 407 1 355 479 2 639 937 7 093 823 Proportion of global
number of employees 44% 19% 37% 100%
2020 net yearly terrestrial dynamic impact (MSA.km
2/year)
20 000 210 000 100 000 330 000
Proportion of global 2020 terrestrial dynamic impact
6% 64% 30% 100%
Restoration cost
(€/MSA.m
2)
5 20 1 -Ratio of the restoration 5.0 20.0 1.0 -
2 The total global terrestrial biodiversity impacts in 2020 was between 330 000 and 360 000 MSA.km2.
cost (C taken as reference)
Comparison of the budgets by allocation system
The following results are obtained by sector.
♦ For Manufacturing:
Zoom between 2020 and 2030,
Between 2020 and 2050,
The Manufacturing sector has thus a lot of effort to make under the Capability and Equality allocation systems. This is consistent with the share of turnovers and numbers of employees of this sector which are respectively 42% and 44%.
♦ For Construction:
Zoom between 2020 and 2030,
Between 2020 and 2050,
The Construction sector accounts for two-thirds of the total impact on biodiversity hence the steepness of the Sovereignty curve. However, it represents only a limited fraction of turnover and employees: its share of efforts under the Capacility and Equality systems is more limited.
♦ For Trade:
Zoom between 2020 and 2030,
Between 2020 and 2050,
The Trade sector has really close Sovereignty, Capability and Equliaty allocations due to the fact that it has around the same proportion of employees, sales and impact in 2020 compared to the global amounts.
General comments:
Not all sectors reach a net zero impact in 2030 but globally the world (here only the private sector) reaches net zero impact by that time.
Given the results in 2050, choosing one particular allocation instead of another will ask firms to make really different efforts. It does not change anything globally though, as the global budget is the same regardless of the allocation used.
Bibliography
Caractéristiques des secteurs marchands par activité en 2018:
https://www.insee.fr/fr/statistiques/2498421 Wikipedia:INSEE
https://en.wikipedia.org/wiki/Institut_national_de_la_statistique_et_des_études_économiques Lucas, Paul, and Harry Wilting. ‘Towards a Safe Operating Space for the Netherlands’, 2018.
