WAVES Technical Report Laguna de Bay Basin November 2016 Pilot Ecosystem Account for Laguna de Bay Basin Wealth Accounting and the Valuation of Ecosystem Services www.wavespartnership.org WAVES – Global Partnership for Wealth Accounting and the Valuation of Ecosystem Services Wealth Accounting and the Valuation of Ecosystem Services (WAVES) is a global partnership led by the World Bank that aims to promote sustainable development by mainstreaming natural capital in development planning and national economic accounting systems, based on the System of Environmental-Economic Accounting (SEEA). The WAVES global partnership (www.wavespartnership.org) brings together a broad coalition of governments, UN agencies, non-government organizations and academics for this purpose. WAVES core implementing countries include developing countries Botswana, Colombia, Costa Rica, Guatemala, Indonesia, Madagascar, the Philippines and Rwanda, all working to establish natural capital accounts. WAVES also partners with UN agencies—UNEP, UNDP, and the UN Statistical Commission—that are helping to implement natural capital accounting. WAVES is funded by a multi-donor trust fund and is overseen by a steering committee. WAVES donors include Denmark, the European Commission, France, Germany, Japan, The Netherlands, Norway, Switzerland, and the United Kingdom. www.wavespartnership.org Acknowledgments This report reflects the work of the Laguna de Bay Technical Working Group (TWG), led by Jocelyn G. Sta. Ana of the Laguna Lake Development Authority (LLDA), with the guidance of Secretary J. R. Nereus O. Acosta. The ecosystem accounts were developed by the TWG members from the LLDA, namely: Emiterio C. Hernandez, Alvin A. Faraon, Neil V. Varcas, and Erwin Kim P. Mercado (Land Accounts); Rowena J. Pagdingalan, Brando M. Angeles, Cruzadel T. de la Cruz, Dennis A. Tiongson, Donnie A. Limtian, Sarah Louise S. Yumul, Adelio Rico, and Ma. Carolane P. Gonzales (Water Accounts); Adelina C. Santos-Borja, Bileynnie P. Encarnacion, Ireneo G. Bongco, Rose S. Bonifacio , Beniaflor G. Ada and Marigold M. del Prado (Fishery Accounts). The LLDA Public Information Unit also extended assistance. The work on the Laguna de Bay ecosystem account was coordinated by former Assistant General Manager Dolora N. Nepomuceno, who retired in June 2014, and was supported by the Philippines WAVES Project Coordination Unit at LLDA. The work likewise received technical inputs and advice from the National Economic and Development Authority (NEDA) and the Philippine Statistics Authority (PSA). It also received support from the National Mapping and Resource Information Authority (NAMRIA) through remote sensing analysis and additional datasets. The development of the ecosystem account was supported by the World Bank-led Wealth Accounting and the Valuation of Ecosystem Services (WAVES) project in the Philippines, which provided technical and financial assistance. The Philippines WAVES Team would like to thank and acknowledge the representatives and officials of the various local government units, civil society groups, private sector, non-government organizations, and the academe who were involved in or supported the development of pilot ecosystem account for Laguna de Bay. The GECOMON project of the European Space Agency also supported the development of the ecosystem accounts, which involved technical assistance by two consultancy companies, GeoVille and Argans. It was also supported by Gem Castillo (national expert), Verna Duque (national expert), Arnan Araza (national expert), John Power (Australian Bureau of Statistics), and Lars Hein (Wageningen University). The following peer reviewers provided helpful technical guidance and advice: Yolanda Azarcon (Senior Operations Officer, World Bank), Kenneth Bagstad (Research Economist, US Geological Survey), Christophe Crepin (Practice Manager, World Bank), Vickram Cuttaree (Sustainable Development Program Leader, World Bank), Stig Johansson (WAVES Program Manager, World Bank), Frauke Jungbluth (Lead Agricultural Economist, World Bank), Glenn-Marie Lange (Chief Technical Advisor, World Bank), David Llorito (Communications Officer, World Bank), Carl Obst (Director, Institute for the Development of Environmental-Economic Accounting and Lead Author and Editor, SEEA Ecosystem Accounting Guidelines), Stefano Pagiola (Senior Environmental Economist, World Bank), Agata Pawlowska (Portfolio and Operations Manager, World Bank), Ana P. Santos (Communications Consultant, World Bank), Stefanie Sieber (Task Team Leader, World Bank), Michael Vardon (Adjunct Fellow, Australian National University), and Maya Villaluz (co-Task Team Leader, World Bank). iii Laguna de Bay Basin Technical Report 2016 Note on the Report This final report presents the collective findings of the Technical Working Group for Laguna de Bay ecosystem accounting, a pilot undertaking conducted between January 1, 2014 and December 10, 2015 in the lake region. The Laguna de Bay ecosystem account explores potential pathways to developing specific accounts based on a comprehensive framework called the System of Environmental-Economic Accounting-Experimental Ecosystem Accounting (SEEA-EEA), which shows the interactions between the economy and ecosystems, consistent with the System of National Accounts. Although experimental in nature, the account is replicable across time and geographical scales (e.g., national). It is also useful in policy making. Through this groundbreaking endeavor, substantial capacity has been built locally to produce ecosystem accounts and update them on a regular basis, thus helping ensure effective policy making and sustainable management of natural resources. Case Study Area The pilot ecosystem account covers the physical watershed of the Laguna Lake. The name commonly used for this area in the Philippines is the Laguna de Bay (LdB) basin, which is used throughout this report. ‘Laguna Lake’ refers to the lake itself. iv www.wavespartnership.org EXECUTIVE SUMMARY As the largest inland water body in the Philippines and the third largest in Southeast Asia, the Laguna de Bay has been confronted with growing pressures on its ecosystems. Over the past decades, population expansion, urbanization, industrialization, deforestation, and land conversion have led to degradation of the lake water and its watershed. These are some of the key challenges facing the Laguna Lake Development Authority (LLDA) and other relevant government agencies tasked to manage and protect the lake and its resources. The dire situation affecting the lake today assumes greater significance when one considers that this large freshwater body is a multiple-use natural resource. It supports the fisheries sector and provides livelihood for more than 24,000 fisherfolk including fishermen and people working in the fishing industry; supplies domestic water through water concessionaires; provides irrigation water for approximately 103,000 hectares (ha) of agricultural land; and supports hydropower production. The lake is also used for recreation and industrial cooling and serves as a waste sink for household wastes and industrial and solid, liquid, toxic, and hazardous wastes. The Philippines is taking steps to address these and other ecosystem trends in the Laguna de Bay basin and elsewhere in the country. A vital step in this direction is the national government’s revitalized efforts to mainstream natural capital accounting (NCA), an evidence-based tool that takes stock of the state of a country’s natural resources, into policy making. An integral part of NCA is ecosystem accounting, which links natural capital analysis with economic data, thereby clarifying the contributions of the ecosystem to economic activities. Ecosystem accounts are useful for monitoring trends in natural capital and enforcing resource management policies. Today, the Philippines is one of the core implementing countries of a World Bank-led global partnership called Wealth Accounting and the Valuation of Ecosystem Services (WAVES). This initiative aims to promote sustainable development by mainstreaming natural capital in development planning and national economic accounting systems. As part of the WAVES project, the Laguna de Bay basin was selected as one of two pilot test sites in the Philippines to develop ecosystem accounts (the other being Southern Palawan). The ecosystem account was developed using an adopted standardized system called the System of Environmental Economic Accounting (SEEA) – Experimental Ecosystem Accounting (EEA) framework, which ensures consistency with regularly produced economic statistics at the national and international level. The ecosystem account covers the Laguna de Bay watershed and the Laguna de Bay region, the administrative jurisdiction of the LLDA,1 and comprises the following specific accounts: • a land account containing land cover and changes • a water account providing information on water quantity aspects • an ecosystem condition account indicating various terrestrial and water quality indicators, changes in lake bathymetry, and sediment loading 1 Covering the whole provinces of Rizal and Laguna; the towns of Carmona, Silang, and General Mariano Alvarez, and Tagaytay City in Cavite; the towns of Tanauan, Sto. Tomas, and Malvar in Batangas; the town of Lucban in Quezon; Pateros town; and the cities of Muntinlupa, Taguig, Pasig, Marikina, Quezon, Caloocan, Pasay, and Manila in Metro Manila v Laguna de Bay Basin Technical Report 2016 • an ecosystem services supply and use account indicating the flow