Linking Biodiversity and Natural Ccapital to CE Opportunities and policies for using B&NC sustainably Mark van Oorschot – PBL Netherlands Environmental Assessment Agency 6 March 2019

Opportunities to include NC in circular business models A circular economy is no perpetuum mobile. Input of natural Capital to the CE cycle is crucial to “fuel” the whole process (bio-based resources and energy). Link between CE and NC – it is a two-sided relationship with dependencies and impacts (see presentation Wijnand) Ecosystems provide economy with resources Production exerts impacts on ecosystems Opportunities for business - Bio-based renewable resources - Substitution of fossil and non-renewable (for instance plastics and biofuel) - Efficiency gains in processing bio-based material for re-use Benefits for nature and society - Efficiency gains result in lower need for primary resources Less expansion of resource production areas (deforestation-free supply-chains) Maintain nature’s benefits for people (multiple societal benefits of natural capital) All such opportunities and benefits can be used in product value proposition So Biodiversity & Natural Capital (B&NC) are to profit from CE an vice versa => But how? Proper policy incentives required to make circular business models based on natural capital viable. Take care that inputs from ecosystems are sustainable and within boundaries. 6 March 2019

Government provides the Enabling environment Clear position motivating policy targets and norms Infrastructure determines routines support market standards for sustainable NC use Use of financial instruments reward resource-use efficiency and carbon-benefits (taxes, carbon price, natural capital account) Show progress transparent reporting on supply-chains and resource-use (business and national) Dynamic regulation for each phase of the transition from niche to mainstream Government incentives to include B&NC in CE initiatives: Rethink tax system: tax resource-use and CO2-performance (instead of tax on labour) Make sustainable production the new normal – let prices reflect the full ”societal” costs Promote use of (voluntary) market standards for sustainable production Transparent reporting on environmental dependencies, circular resource use and impacts: both business and national accounting From niche to mainstream - level-playing-field for all producers in the EU Mark van Oorschot PBL - Nov 6th 2013

Policy targets and action for B&NC in CE EU – Closing the loop (2015) Reduce environmental pressure Secure supply of renewable resources (bio-based) Link to “Living within planetary boundaries” NL – Program / National accord / Action agenda (2016 - 2019) Central target: increase resource efficiency and reduce use of raw resources Co-benefits for climate change ambition Promote sustainable use of natural capital Transition agenda’s: construction; biomass & food; plastic; consumption; industry Monitoring and reporting Actions – transition process – effects Resource use – natural capital accounting - footprints - supply-chain risks So where are we now? European package clearly reflected in Dutch national policy approach Still in early phase of circular thinking 6 March 2019

Case: Wood use for building and construction Innovation and substitution Recycling & re-use of building materials Wood instead of concrete CO2-reduction from substitution Availability of primary resources Tropical wood use Substitute with new wood types ‘Use them or loose them’ Certified forest management Require use of market standards Deforestation-free supply-chain The case of wood use shows the interplay between business initiatives for more circular and bio-based production and the government role in setting the right enabling environment 6 March 2019

www.pbl.nl or #PBLNL mark.vanoorschot@pbl.nl 6 March 2019

Dependencies: Nature’s benefits to society Earth matters ! Production services Wood Food Fibres Water Provisioning services Soil fertility Pollination ……. Cultural services 6 March 2019