Wednesday, April 17, 2013

Measuring and Marketing Ecosystem Services, Functions, and Values in Oregon

I've linked to my presentation from the Blue/Green Economies session at the recent Association of American Geographers meeting in LA. The text of the talk is below and each paragraph corresponds to a slide. It's about how regulators, conservationists, and entrepreneurs in an ecosystem services market in Oregon are assessing the landscape ecological aspects of restoration sites. Similar to my talk on "Code/Nature," I argue that state environmental agencies like the Oregon Department of State Lands (DSL) and conservationists including the Willamette Partnership are pushing for stronger ways of planning for, choosing, and evaluating sites and that this may prove constraining to mitigation bankers.

1. Today I want to tell you about the social relations and spatial logics motivating environmental regulators, conservationists, and eco-entrepreneurs in Oregon plan as they choose, and evaluate where in the landscape to do wetland and stream restoration for a cap and trade-type market. I’ll show how the state’s and conservationists’ efforts to map priority locations for restoration and to point out these places to entrepreneurs are market-constraining, but perhaps only in the short-term. The takeaway here is that many of the new or revamped markets in ecosystem services we are seeing may not be about ecosystem commodification and commercialization so much as they are about state formation, power, and legitimacy.

2. Let’s start here. Welcome to the Half Mile Lane site in exurban Portland, Oregon. It provides a number of ECS.

3. The wetland you see stores and delays water, which mitigates flood impacts for downstream homes.

4. The stream provides habitat for salmon that migrate into the foothills of the Coast Range.

5. A couple of years ago, state environmental agencies like the Oregon Department of State Lands (DSL) and conservationists including the Willamette Partnership undertook ecological restoration on the site, turning old farmland and a straightened ditch into a productive wetland and stream. This work was done for a market where developers purchase offsets for impacts to wetlands and streams. HML also serves a demonstration project for what regulators and conservationists see as stronger metrics for the market, both of what counts as successful restoration, as well as what locations in the watershed are worthwhile to do restoration projects.

6. As global ECS pundit Pavan Sukhdev explains to us, these markets are supposed to be about valuing nature.

7. Well, what does that mean? For him – and we hear this quote a lot - “we cannot manage what we do not measure,” which means measuring the nature’s benefits and doing so as a $ price.

8. Price itself, however, is not an ecological measure. Lest you think the focus on “value” is the domain solely of pundits like Sukhdev, consider what the Oregon DSL – one of the environmental agencies – has to say. For DSL, it means the opportunity to provide an ecological function.

9. Importantly, this opportunity is location-based; it’s spatial, contextual, embedded.

10. HML has the opportunity to mitigate flood impacts, because it is upstream of homes

11. and downstream of logging and mining operations that increase runoff.

12. So the question is: how do Oregon’s market actors measure the value of ecosystem services? Put more concretely - where in the landscape do they plan and choose to do restoration for the market and why? Sukhdev makes the challenge of resource protection sounds so easy when he says that all that needs to be done to prevent environmental degradation is to “put a value on” nature. But the task of valuation has not been so effortless in Oregon.

In the rest of this talk I want to walk you through the assessment of restoration sites in Oregon’s market, and how they become valued as places to do restoration. There are three moments to this, but they are moments that put the interests of regs and cons against the interests of entrepreneurs. I want to demonstrate an at least short-term strength of state agencies against entrepreneurs in constraining a kind of accumulation by restoration. New ventures in market governance may not deepen ecosystem commodification and commercialization as much as they throw up roadblocks. While these may only be short-term constraints, we should pay attention to them as potential moments where the market collapses under its own contradictions.

13. I first want to take a second to make sure we’re on the same page about how these markets work. In US markets for wetland and stream ecosystems, state and federal environmental regulatory agencies – ACOE, EPA, DSL - allow developers to make up for resource degradation by compensating entrepreneurs (or, “mitigation bankers”) who speculatively restore ecosystems. A good example: Early last year DSL authorized the trade of four salmon habitat credits to the Tualatin Hills Parks and Recreation Department (THPRD).

14. DSL did not sell the Half Mile Lane (HML) property itself, where it had restored salmon habitat. Instead, it dealt THPRD ECS credits. These credits are a measure of both the quality and quantity of habitat functions “uplifted” after DSL replaced a culvert and performed other stream and wetland restoration work at HML.

15. THPRD wanted these credits so it could tell environmental regulators that it had adequately compensated for a trail bridge it is building that will degrade habitat elsewhere in the watershed. Note that in this case a state agency, DSL, was the one selling credits, but more often it is a private entrepreneur.

16. Either way, the idea is to ensure some kind/degree of ecological equivalence, and this is the art and science of assessment.

17. There is at once a strictly ecological assessment, which measures ecological functions on a site, but also these kinds of trade demand an assessment of the value of the ecosystem services in question. Value scores are 1-10 rankings of each function’s (e.g. water storage and delay) ability to provide some service (e.g. flood mitigation).

18. In the assessment moment, restoration bankers hire ecologically-trained consultants to use several online mapping utilities to gage how ecological processes occur across the landscape and affect the site where bankers have chosen to do restoration.

19. Here’s one of the key mapping utilities consultants use, called Oregon Explorer. It’s bringing a lot of data from beyond the boundaries of the site together, and showing it to the user in one frame. Hydric soils are the orange/yellow, but we also see the 100 year floodplain downstream of the site. Consultants have to answer questions about landscape context by using OE to, for instance, draw a 2 mile radius circle around the site to see how many other similar habitats the site is connected to in the area, or what sources of ecological stress are nearby, like the quarry. The key point here is that the value score of a banker’s site is relational to the site’s surroundings – but these are things which the banker has no or little control over.

20. Bankers and their consultants then have to take their scores to regulators. Agency staff judge the offsite stressors and risks consultants find in their assessment in the regulatory moment when they approve, deny, or modify a banker’s choice of where to do restoration.

21. For instance, regulators often focus on reed canary grass, an invasive species that can spread rapidly on a restoration site from without and foil a project. They question whether a site and its landscape surroundings will, in the end, prove valuable if there is too much RCG around. Environmental agencies can in this moment modify a banker’s proposal to work on a certain piece of ground that is particularly susceptible to weeds by asking them to put more money into a long-term management.

22. Bankers then finally have to sell their credits. This is a market moment to value’s measure. What non-profit conservationists like WP want to see happen in the market is that when a banker brings a site to the market, to get their credits to sell, the amount they get depends in large part on the location of their project.

23. These are “priority areas” - habitat sites mapped by state environmental agencies, and collated by TNC.

24. The idea is that bankers would get the full amount of credits if they were doing restoration in a priority area and less if they were not. The problem is that if a banker had to do work in a priority area lest they not get as many credits as they expected, they’d be incentivized to work on land they might not normally restore. But being driven to work in priority areas would mean a narrower range of landowners they could work with. And all else equal, bankers want to work on sites where they can get the most credit bang for their restoration buck. This system means having to work on sites with higher costs of restoration and potentially higher land prices, both of which would cut into their profits.

To be clear: this isn’t how the market currently works, but regulators are using GIS to see/check whether bankers are siting in priority areas, and conservationists are pushing for this trading ratio protocol to be adopted. It is still part of the discussion on the ground in Oregon, about what the market should and will look like.

25.In general, then, through all three moments, how state agencies in Oregon - with help from the conservationists who have helped map priority areas and author market protocols - how they assess ecosystem service value in site selection proves constraining to entrepreneurs.

26. Assessment – the landscape context they have to look at weighs bankers down

27. Regulatory – bankers have to put more capital into long-term management

28. Market – they will not get full credit, have to work in different places

29. Bankers are in fact rather unhappy about this way of valorizing restoration – and question regulators’ authority to do it. It’s come to the point where entrepreneurs may take state agencies to court on the issue and stop doing more restoration for the market. And so what we see here is not the state rolling out the conditions for market success, but genuine market constraints.

30. I do want to caution that this only holds for the current political moment. We know that every crisis can become an opportunity. In the long-term, what we might see is bankers getting used to regulators’ expectations about where it is valuable to do restoration. Indeed, the way state agencies have mapped out priorities might only serve as sort of visual aids to bankers, making it easier for them to find sites. This would facilitate the commodification and commercialization of ecosystem restoration and provide more opportunities for developers to just buy credits for their resource impacts.

31. And so, to wrap up, what I think this case does for us is two-fold. First, it reminds us to pay attention to the spatial logics of these markets, asking what sort of notions of spatial efficiency and prioritization constitute these markets, besides the idea that there is a difference in opportunity costs between global north and south. Kathy McAfee has called efficiency “the holy grail of environmental economics.” I agree, but I’d add that spatial efficiency, which economists would think about as equimarginality, is a similar crusade.

32. Also, while the search for value might be what makes attempts at ecosystem markets and payments look similar across the globe (Robertson 2012), this case suggests a need to keep paying attention to change over time, within specific historical-geographical contexts to see the moments where neoliberal conservation confronts its own contradictions, and what happens.

33. In the short-term, we might see moves by the state and conservationists to implement new measures of restoration success not as a deepening of commodification and commercialization, but as having the effect of slowing the market.

In the long-run, it might only enhance capitalist investment in restoration in particular places at the expense of others, in what several scholars have named as the variegation of neoliberal natures or conservation.

Either way, demarcating the difference between the two can tell us a lot how about market-oriented conservation projects succeed and fail, and to what effect.