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Disclaimers The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the United Nations Environment Pro- gramme concerning the legal status of any country, territory, city or area or of its authorities, or concerning delimitation of its frontiers or boundaries. Moreover, the views expressed do not neces- sarily represent the decision or the stated policy of the United Nations Environment Programme, nor does citing of trade names or commercial processes constitute endorsement. We regret any errors or omissions that may have been unwittingly made. © Images and illustrations as specifi ed. Citation This document may be cited as: UNEP and WWF, 2013. TEEB Scoping Study for Georgia. United Nations Environment Programme (UNEP), Geneva, Switzerland A digital copy of this report can be downloaded at http://www.teebweb.org Acknowledgements: This document is a joint effort of Ministry of Environment and Natural Resources Protection, Government of Georgia, United Nations Environment Programme (UNEP), and WWF-Caucasus. We are grateful for the valuable contributions of the following experts to the writing of this report: Irakli Matcharashvili (Green Alternative/Ilia State University), Malkhaz Adeishvili, Salman Hussain (Scottish Agricultural College), and Kavita Sharma (UNEP TEEB Offi ce). Ioseb Kartsivadze (Ministry of Environment and Natural Resources Protection); Giorgi Sanadiradze and Tamaz Gamkrelidze (WWF-Caucasus); Nicolas Bertrand and Ivonne Higuero (UNEP) coordinated the project on behalf of their respective institutions. We are indebted to Yolanda Kakabadse for initiating this project. We are also grateful to the Project Advisory Group for its guidance throughout the project. Finally, we would like to give special thanks to the many stakeholders for their contributions to the two project workshops. We are also grateful to the Project Advisory Group for its guidance throughout the project (for members of the PAG, see Annex II). Finally, we would like to thank the many stakeholders for their contribution to the two project workshops (for a list of meeting participants, see Annex III). 2 Table of Contents EXECUTIVE SUMMARY ................................................................................................................................ 6 PART I – BACKGROUND ............................................................................................................................... 9 PART II – INTRODUCTION: TEEB FOR GEORGIA ..................................................................................... 12 2.1. TEEB ........................................................................................................................................................ 12 2.3 TEEB Scoping Study: objectives and methodology .......................................................................... 13 PART III: CONTEXT ....................................................................................................................................... 15 3.1 Georgia: Bio-physical overview ............................................................................................................ 15 3.2 Georgia: Economic overview ................................................................................................................ 18 PART IV: SECTOR ANALYSES ....................................................................................................................... 19 4.1 Hydropower Sector ................................................................................................................................ 19 4.2 Tourism Sector ........................................................................................................................................ 25 4.3 Agriculture Sector .................................................................................................................................. 29 4.4. Forestry sector ....................................................................................................................................... 34 PART V: CONCLUSION AND WAY FORWARD .......................................................................................... 40 5.1 Sector findings: summary and recommendations ............................................................................ 40 5.2 Way forward: TEEB for Georgia ............................................................................................................ 42 REFERENCES ................................................................................................................................................. 46 ANNEXES ....................................................................................................................................................... 49 Annex I: Valuation exercises done thus far in Georgia ............................................................................. 49 Annex II: TEEB Project Advisory Group Members .................................................................................... 52 Annex III: Members of the second stakeholder workshop ...................................................................... 53 Annex IV: Objectives of a Scoping Study .................................................................................................. 54 Annex V: Classification of Ecosystem Services .......................................................................................... 55 Annex VI: Biodiversity Offsets ..................................................................................................................... 56 Annex VII: TEEB, WAVES and United Nations Committee of Experts on Environmental-Economic Accounting (UNCEEA)..................................................................................... 58 1 Abbreviations APA Agency of Protected Areas BKNP Borjomi-Kharagauli National Park CBD Convention on Biological Diversity BAU Business as Usual BPS Biodiversity Protection Service CWR Crop wild relative EC European Commission ESS Ecosystem services EBRD European Bank of Reconstruction and Development ECP Ecoregion Conservation Plan EIA Environmental Impact Assessment EIB European Investment Bank ESCO Electricity System Commercial Operator GDP Gross domestic product GMO Genetically modified organism GNEWSRC Georgian National Energy and Water Supply Regulatory Commission GNTA Georgian National Tourism Agency GSE Georgian State Electrosystem HPP Hydropower plant HVDC High voltage direct current KfW KfW Entwicklungsbank IUCN International Union for Conservation of Nature MCPFE Ministerial Conference on the Protection of forests in Europe ME Ministry of Energy MESD Ministry of Economy and Sustainable Development MoENRP Ministry of Environment and Natural Resources Protection MOA Ministry of Agriculture MOU Memorandum of Understanding MNP Mtirala National Park NBSAP National Biodiversity Strategy and Action Plan NTFP Non-timber forest product SEA Strategic Environmental Assessment SEEA System of Environmental-Economic Accounting SEM Sustainable Ecosystem Management TEEB The Economics of Ecosystems and Biodiversity TPP Thermal power plants UNEP United Nations Environment Programme WAVES Wealth Accounting and the Valuation of Ecosystem Services WWF Worldwide Fund for Nature 2 Foreword by Hon. Khatuna Gogaladze - Minister of Environment and Natural Resources Protection, Georgia The Economics of Ecosystems and Biodiversity (TEEB) Initiative aims at promoting a new economy in which the values of natural capital, and the ecosystem services this capital supplies, are fully reflected in public and private decision-making. Georgia is a country of the Caucasus Eco-region, belonging to one of 34 globally significant “biodiversity hotspots” identified by Conservation International. So the global importance of the eco-region, the necessity of its protection and conservation is internationally recognized. The richness of our species and landscape diversity is our treasure and pride. But these resources are not limitless and they need to be cared after and preserved for future generations. Considering the transitional phase and rapid development in Georgia’s economy, TEEB initiative is exactly one of those effective instruments, which could successfully be applied for preserving ecosystems, and at the same time promoting sustainable growth of the economic sector. Therefore it was excellent timing to declare Georgia as one of the pilot countries for implementation of TEEB Initiative in 2011. The present scoping study identifies five core sectors of Georgian economy applicable for the TEEB Initiative; these are Energy, Tourism, Agriculture, Mining, and Forestry.