Where does the value of nature come from?

$125 trillion is no small chunk of change. You could, without a doubt, buy a lot of stuff with that in your pocket. In fact, it's more than the world's gross domestic product (GDP), or the value of all the goods and services produced in the global economy each year - everything from cars to haircuts to World Cup tickets. But according to a recent study led by Bob Costanza, $125 trillion is also the dollar equivalent of what all the work the world's ecosystems do for us - things that aren't normally counted in GDP, like the flood damage a coastal wetland prevents. The $33 trillion mark and other figures like it vary widely while provoking much controversy...and are increasingly taken by world political and business leaders as self-evident, touted as the next big thing in conservation.

$125 trillion is a best guesstimate. It's a follow-up to Costanza's landmark 1997 paper in which he and colleagues suggested the number might be more like $33 trillion. At the time, other researchers had reviewed existing valuation studies, finding that overall an acre of wetlands might be valued anywhere between six cents and over $22,000! Other commentators noted that looking at just one particular ecological function (say, flood prevention), the values researchers came up with could differ by two orders of magnitude from site to site. For many critics, these numbers imply the reduction of nature to something to be bought and sold, which is particularly problematic if they're going to fluctuate so wildly. For others, no matter the range of values, they just aren't helpful - they're all a "serious underestimate of infinity" because we simply can't do without many of things nature does for us, like provide breathable air. Still, for a growing number of conservationists and decision-makers, putting some number - often a dollar value - on ecosystems is exactly what's needed to save it, to show policy makers and businesses the economic importance of nature, in hopes of preventing its destruction and encouraging its conservation.

So where do these numbers come from?

It's appealing to write-off statements like, "the value of an acre of wetland is six cents," as simply the work of ivory tower intellectuals busily justifying their own existence. After all, the scholars who published the most recent study are all affiliated with an academic institution. It's also easy to get the sense that these numbers come from no place in particular. That's the feeling you get reading histories of the ecosystem service concept (see here and here). These papers do important work revealing that the valuation of nature just didn't come along in 1997 with Costanza et al.'s first estimate of the value of the world's ecosystems. But beyond having a history, behind Costanza et al.'s new number and the “modelling sausage” that spit it out is a body of literature, a set of theories, and communities of scholars called environmental and ecological economics. And this community and its history is grounded in place. Valuing nature didn't just appear from out of nowhere. Environmental, and its younger, upstart cousin, ecological, economics and the basis for valuing nature come out of a long-standing engagement with wetlands, especially coastal marshes, and particularly as they faced development pressure, often from the oil/gas industry. When ecologist Eugene Odum and economist Len Shabman sparred in the 1970s over how exactly conceptually and empirically to get at nature's value, their material was Gulf Coast marshes. Today, in a post-Hurricanes Katrina and Sandy world, when we hear prominent arguments for restoring or conserving ecosystem services because of their value, it's coastal places like Mobile Bay, AL that are paraded out as examples of where coastal restoration "show strong returns on dollars invested." It's the US Gulf Coast that has defined nature's valuation as we know it today - its methodology and policy advocacy - and will continue to shape it in the wake of the 2010 Deepwater Horizon oil spill.

The Gulf Coast oil and gas industry's payments to oystermen for access to lay pipelines across harvesting grounds mark economists', conservationists', and others' earliest struggles with valuing nature's goods and services beyond the confines of established markets. The Gulf's hydrocarbon industry grew significantly following World War II in order to meet growing demand from suburban consumers, as Jason Theriot details in his great new book about the twin histories of the industry and wetland loss and protection in the Gulf. But, of course, companies like Tennessee Gas needed to get their products to market - mainly on the rapidly urbanizing east coast - from wells in the middle of Louisiana's marshes. To do so, they laid hundreds of miles of pipelines in canals carved through wetlands. These areas, however, were often the same spots where oystermen had traditionally harvested. At the time, in the 1950s, the ecological consequences of the kinds of hydrological disruptions caused by canals were already to some extent understood by fishermen and scientists alike: the catch would likely be diminished from any nearby canals. In part because many working in the hydrocarbon industry were local oyster experts themselves and in part because of the influence the fisheries community had historically exerted on state regulators, oil and gas companies went out of their way to provide compensation for direct damages from pipelines. What the industry paid was simply what the expected catch would have fetched on the open market. In paying oystermen for losses to their harvest, oil and gas companies were acknowledging:the broader effects of their activities, but still had some market signal to guide them; they were not trying to compensate for things without market prices like water quality that environmental economics pioneers like Dales were first proposing at the time. The industry's payments were ad hoc and not meant to be a systematic assessment of all of the what we would now call ecosystem services a wetland provided. Still, conservationists seemed to be at least considering for the first time about what values the market wouldn't capture. For instance, the chief of the Oyster Division of Louisiana's Wildlife and Fisheries Commission was particularly concerned that compensation would not account for long-term, large-scale effects:

“we feel that the long range effects resulting in permanent ecological changes are by far the most serious and the most difficult to assess damages for. Direct effects are largely a matter of obtaining ROW [right of way] and making adjustments for damages at the time of construction. The area involved is comparatively small and involves only the path of the canal and the immediate vicinity on each side. Ecological and hydrographic changes may be permanent and may affect extensive areas ten miles or more on either side of the canal.” (58)

Into the 60s and 70s, conservationists at Louisiana's state environmental agencies and at Louisiana State University (LSU) continued calling for a more formal recognition of the importance of wetlands, as part of a growing movement nationwide to daylight corporate and government decision-making that had impacts on the environment. As the story goes, in1969, the massive oil spill offshore of Santa Barbara, CA inspired Congress to pass the National Environmental Policy Act (NEPA), which required all federal agencies to undertake a formal review of the costs and benefits of any action with a major effect on the environment. NEPA, however, did not require agencies to monetize these costs and benefits in order to evaluate projects. Ultimately, with executive orders from Reagan and successive administrations requiring more cost benefit analysis (CBA), monetization became the default. Already by the 70s, the Army Corps of Engineers had been conducting CBAs of its projects. As Tennessee Gas looked to the dock price of oysters to account for some of the broader effects of its pipeline canals, the corps might determine whether or not to build a dam based on the cost to fisheries weighed against the benefits, measurable in dollar terms, arising from new recreation opportunities.

CBAs accounted for only so much of what conservationists thought was important about coastal habitats. ← This if anything is the constant refrain throughout the history of nature's valuation, from both advocates and critics: what are we counting? CBA might assess how a levee project would cost in damages made to fisheries, but at the time there were few techniques for accounting for the loss of storm surge protection that came from impounding wetlands. Easily the landmark piece decrying the limits of CBA was James Gosselink, Eugene Odum, and R.M. Pope's 1974 paper, “The Value of the Tidal Marsh”. It was a short white paper written for the LSU Center for Wetland Resources, but nonetheless recieved remarkable national attention from wetland conservationists as they made their case in the 70s for increasing resource protection. Gosselink et al.'s aims were to counterbalance development pressure on coastal ecosystems by expanding what ought to be counted as monetary cost from development. For instance, they valued the waste assimilation capacity of wetlands by looking at what it might cost regions to fully treat their sewage if all wetlands imply vanished and were replaced with wastewater plants. This “replacement cost” was not a market price, but was an existing signal (and it's measures like these that led to some of the most famous examples of institutional payments for ecosystem services, namely New York City's payment to farmers in the city's watershed to conserve natural habitat, which has reduced the region's water treatment costs.) The group, in the end, described wetland value in terms of $/acre/yr, but how they got their was through the concept of "emergy.” Emergy is a neologism for the amount of solar energy embodied in an ecological good or service. This could be converted into monetary terms by comparing the caloric requirements for service production in a wetland to the price to burn calories in things like oil that do have a market price. It may sound a little convoluted today, but the idea still has some traction. What's important about the emergy argument is that it proposes that nature's value is intrinsic; value arises from ecological transfrormations of energy, rather than supply and demand. Not surprisingly, this upset many economists, some of whom thought the idea went against some of the fundamental tenets of their discipline, in which value is fundamentally relative, dependent on the vagaries of supply and demand, and ultimately, how much rational subjects desired certain things. This is precisely what Gosselink et al. were skeptical of: if we believe neoclassical economics, nature has no value because it has no market price. But of course nature has value and so it must reside somewhere in nature. As one research team later put it, “The point that must be stressed is that the economic value of ecosystems is connected to their physical, chemical, and biological role in the overall

system, whether the public fully recognizes that role or not.” (emphasis in original) Politically, this perspective translated into an argument to not leave wetland protection to the whims of the market, but for better government planning. That would be something at least Gosselink would be more involved with in the next decade, contributing to the consolidation of Louisiana's modern oil/wetland regulatory regime while leading environmental reviews of projects like the massive Louisiana Offshore Oil Port.

One student of Howard Odum – Eugene's brother and collaborator - was none other than Bob Costanza, lead author of the 2014 paper valuing the world's ecosystem services at $33 trillion. After graduating from the University of Florida in the late 70s, he got a job at LSU. As he recalls it, he was in part drawn there by the presence of Herman Daly, whose work was moving in similar directions and had been an inspiration, and who happened to show up at his job talk. LSU at the time would have been a hub of activity focused on valuing nature, through coastal marshes, with Gosselink, Costanza, and Daly all pioneering in their own way and Eugene Turner, another freshly-minted student of Odum, making headway on understanding the ecological effects of oil and gas canals on the coast. Throughout the 80s (and to some extent into today) Costanza would publish on the ecological and economic facets of Louisianan and Gulf wetlands. In one paper in particular, 1989's “Valuation and Management of Wetland Ecosystems,” he and his co-authors produced another estimate of Louisiana's wetlands, a follow-up to Gosselink et al. Like Gosselink et al., Costanza, Maxwell, and Farber conducted an emergy analysis. But they also did something different: besides counting calories or looking at the market rate of fish raised by coastal estuaries, they actually hit the pavement (a boat ramp parking lot, actually) and asked people what wetlands were worth to them. The technique is known as contingent valuation. What they were after was people's "revealed" preferences - the amount each person spent on gas to get themselves to a wetland to fish could be considered part of its value, as a provider of a recreational service. The researchers were also interested in "stated" preferences - what people say they would pay to protect a wetland. If you're thinking that preferences sounds a lot more in line with the neoclassical economics approach than with the emergy perspective, you'd be right. We might read Costanza et al.'s paper as a sort of continental divide in the valuation of nature: the first half an emergy analysis focused on elucidating the inherent values of nature, a perspective that was prominent up until that point, the second half all about new techniques to get after how much society desires wetlands in practice, regardless of what nature has to say about it, new and exciting methodolgies that were about to get their trial by fire (see below). And this sort of split reflects where Costanza et al. end up in the paper when it comes to policy recommendations: they suggest that oil and gas companies provide bonds to cover the mitigation of their impacts. The amount of the bond would be based on the predicted extent and nature of the impacts, and depending on the final ecological outcome, the company would get more or less of its bond back. The researchers' argument here was not for better planning to restrict where the oil and gas industry could work, but to modify the industry's accounting practices, something that is all the rage now, with TEEB and TNC working hard at incorporating green accounting in business.

Here's the thing about contingent valuation: it doesn't work. Economists often expect people to behave rationally, but asking people how much they would pay to protect pelicans has presented economists with a number of persistently thorny issues. For instance, when researchers ask people how much they would pay to protect a nearby natural area from a hypothetical development scenario, people regularly act strategically and give “protest” answers. They'll say $0, insinuating that the park is priceless, or offer some absurdly high price, all in the belief that there may be an actual development project in the works and that their answers may stop it. It also turns out that people don't value twice as much wetland at twice the price. It was another “largest to date” oil spill – the Exxon Valdez tanker leak in 1989 - that brought to a head many of the methodological concerns surrounding the use of contingent valuation (in theory and applied to real cases). Economists and regulators alike asked themselves, how do we figure out how much damage the tanker spill has caused to wildlife? What about the value someone in Iowa places on the mere existence of some species in Alaska? NOAA, in charge of the clean-up, commissioned a study led by some of the top minds not just in environmental economnics but economics writ large - Nobel Prize winners like Kenneth Arrow - to see if contingent valuation was a proper method to use. They found that it was, and the courts have affirmed NOAA's prerogative to use it. But rarely it has.

Instead, NOAA has tended to employ good ole replacement cost. If it costs $100 million to buy all the construction equipment, fill, and plants to replace a wetland degraded by a Chevron oil spill, then Chevron must pay that amount. Like contingent valuation, the problem with replacement cost, as practiced in NRDA compensation, is that it doesn't work. The cost of replacing ecological structure doesn't necessarily equal the cost of lost ecological functions. It's one thing to put the right kinds and quantity of plants back in; it's another to make sure that the ecosystem is providing the same kind of flood mitigation service, for instance.

Doubts about the object and goal of compensation are precisely what are haunting economists yet again following the lastest “largest oil spill to date,” the Deepwater Horizon spill. It inspired a revisiting of the contingent valuation question with some authors revising their position from 20 years ago post-Exxon Valdez. Diamond, for instance, is now even more critical of contingent valuation and more skeptical that it could ever be of much use. Some number is not better than no number. Meanwhile, the spill has become a poster child for ecosystem service valuation advocates. In the monumental TEEB synthesis report, the section on “Applying the Approach” begins with the lamentation that if only the value of wetland services had been properly accounted for in business practice, BP would have never let the spill happen.

What is clear from the Deepwater Horizon fallout is that beyond whatever BP ends up having to pay to compensate for affected wetlands, they're going to have to pay separate fines into another fund to be used for large-scale restoration of the coast, beyond specific places the spill reached. This is a (bitter) windfall for conservationists; as one put it -"This is a once in a lifetime opportunity" to do something about Louisiana's land loss problem. BP money, at least in Louisiana, will be funneled into the Master Plan the state's CPRA has developed. The Master Plan lays out restoration principles and priorities (e.g. let nature do the work - harness the Mississippi River to deliver sediments to open water to build new land) and describes a suite of sites selected for restoration. These sites were selected based on their cost effectiveness, which in part has been a question of how many ecosystem services restoration will bring - how much flood prevention or how many alligators, for instance. The question here has is not so much the cash value of these services; the authors of the Plan explicitly note: "We didn't have the time this time around to look at that." As the head of the CPRA noted, however, this kind of analysis is in the works for the next version of the Master Plan, coming in 2017. At the heart of the matter is the development and deployment of economic valuation techniques for evaluating public spending. Economists are hard at work determining what kinds of restoration are most worthwhile: how many acres will $X in sediment diversions bring in over time compared to other methods of marsh creation? So far, acreage - a fairly straightforward metric - has been the target, which makes sense giving land loss is measured in acres, but expect to see ecosystem services migrate into the accounting. The goal in valuing the land building and protecting services provided by coastal wetlands is to spend public money wisely in an era of austerity. These metrics allow decision-makers to evaluate tradeoffs. Already in the master plan, the increase in certain ecosystem services like carbon sequestration were argued to outweigh and justify the decrease in other services, like shrimp habitat. Again, these were not yet $ valued. This time around, it certainly won't be emergy used to derive the value of these public goods. Instead, what we are seeing hints at is a move toward marketizing services. Instead of developing $ metrics to inform planning or to build new public institutions (via bonding a la Costanza), some important Louisiana decision-makers are turning to potential carbon and nutrient markets to help value (and pay for) wetland benefits. There's no need to do contingent valuation of a wetland function like carbon sequestration that is traded in California's cap and trade market at $10 a ton - that's the value right there.

Where does nature's value come from? In no small part, from those working to understand and protect Gulf Coast marshes. The practice of assigning the environment a dollar value continues to evolve and does so as practitioners – regulators, economists, scientists - engage with these ecosystems, providing certain opportunities and obstacles. Indeed, an ongoing question within the field is the role of environmental science and the extent to which ecologists can provide the kind of information about nature economists want and need to do valuation. The complexity of ecological functions - their nonlinearity, dynamsism, etc. - has long been acknowledged as a stumbling block, from Westman's prescient 1977 Science article to the Millenium Ecosystem Assessment to even the most ostensibly gung ho supporters of valuation, TEEB. These difficulties do not mean that the champions of the valuation of nature feel defeated. Just consider how Costanza felt in 1997, "….although ecosystem valuation is certainly difficult and fraught with uncertainties, one choice we do not have is whether or not to do it". Besides environmental economics' struggle with its existential dependence on externally produced knowledge, its practitioners struggle with understanding their own conditions for knowing nature's value. There's still much question about whether contingent valuation will work. We've seen a few here: people don't always act rationally, and they also reject the survey techniques researchers employ to come up with their numbers. This is setting aside what is perhaps the trickiest question, that of benefits transfer, or the practice of taking the monetary values for ecosystems in one part of the world and using them in a different part of the world. After all, as one scholar put it, "An acre of coastal salt marsh seaward of New Orleans is many times more valuable …than an acre of abandoned farm pasture in Nebraska” and it's being able to say how much more valuable and how locally specific to get that troubles many researchers. Finally, what kind of policy angle environmental economists ought to take is still open to debate (the riff between so-called environmental and ecological economists itself is a part of that). Is nature open for business and up for sale? Or is the goal simply better planning and perhaps $ numbers aren't needed? You can expect those questions to be asked if not resolved in any good paper today. Yet, as one group of historians of the ecosystem services paradigm notes, these uncertainties are not the growing pains we might expect from an emerging research perspective. As is clear when we look at the history of coastal marsh protection in the Gulf Coast, nature's valuers have had at least 40 years experience to figure things out. Instead, what lingering questions and simmering debates reflect are genuine obstacles to a rightly controversial practice.

In attempting to answer these questions and close these debates, how economists, regulators, and scientists go about valuing nature will evolve. This of course is happening globally. One only has to follow the Natural Capital Project around the world, from Colombia to British Colombia, to get a sense of the importance of these places to how the vision of nature as capital is being articulated and materialized. But Louisiana and the rest of the Gulf Coast will undoubetedly continue to be a sort of lab for experimenting on the policy, science, and economics behind the valuation of nature - the place where many of the important conversations ongoing about the future of conservation in the face of climate change are worked out. As a senior adviser to America's Wetland Foundation recently put it, “We can test it better than anyone.”

Forever forever? What the heck does permanent mitigation mean?

In a recent op-ed for USA Today, mitigation banker Wayne Walker argues for establishing prairie chicken conservation banks, as a way to prevent the looming "train wreck" between environmentalist and oil/gas industry interests. It's a well-written piece that tries to spell out in basic terms, what mitigation is all about (EcosystemMarketplace renamed it, "How to explain mitigation to your grandmother"). Sometimes, though, it's deceptively simple. A big part of Walker's case is that offsets, like diamonds, are forever. He points to wetland and stream mitigation: "The logic of permanent easements is straightforward: Draining a wetland to build something is permanent -- not temporary -- and therefore the mitigation should also be permanent. The same principle holds true for the chicken. Impacts to it and its habitat are both permanent – the offset should be as well." Problem is, there's a clear difference between a permanent easement and a permanent offset, a difference Walker doesn't sort out. An easement is no guarantee of ecological function. Sure, the Corps will require an easement, but are they going to come back to the site in 50 years and check in to see what's up? To assess whether the wetland, stream, or prairie habitat is in a condition or performs such that it will account for the original impact the site offset? Maybe, but even if the Corps/USFWS did come around, would they require the bank to do anything about it? Should we even care? If the wetlands your local Wal-Mart paved over today are going to dry up or sink into the sea anyway in the next 20 years because of climate change, does it matter that the compensatory mitigation site Wal-Mart buys credits from function in the same way the wetlands currently do? I've walked through similar issues here and here. If, as Walker notes, the goal for all sides is "certainty," these are key questions if mitigation banking is to gain a sense of (ecological) legitimacy in an era of rapidly changing climates.

TEEB and spatially-explicit ecosystem services valuation

I just read the new TEEB report on the state of the world's wetland and water ecosystem services. In case you didn't know, TEEB is The Economics of the Environment and Biodiversity. They're a group led by Pavan Sukhdev, and they're one of the leading champions of ecosystem services accounting out there right now, internationally. Geographers, for one, have had their say about TEEB here and here.

There's a lot going on in the TEEB wetlands report. Let's walk through what they're doing and why and how it might matter to the average practitioner on the ground. What the TEEB report's authors are out to do is to assess the current state of the world's wetlands in terms of the provisioning, regulation, habitat, and cultural ecosystem services they provide. Contrary to what a lot of folks expect from TEEB, there's only so much in this report on monetary valuation - that is, coming up with a price amount on services as an expression of their value (a couple of posts back when I said I'd get to value, I meant it!) Sure there are figures like Table 2.2 (pg. 10) that spell out minimum and maximum values (in International $/ha/year - Int. dollars are basically a standardized unit to account for purchasing power) for different kinds of aquatic ecosystems and different kinds of services. But the TEEB authors are at great pains to show you they recognize that the process of valuation - who participates, who benefits, etc. - matters as well.

The problem is that accounting for the process of ecosystem service valuation is difficult to do in chart form. It's hard for TEEB to keep the pricing cat from getting out of the bag, as it were, since:

...to ignore the economic value (including monetary value) of nature is to reduce the ability to make robust arguments that have a chance of informing decisions for the conservation of important ecosystems. The use of monetary valuation in many cases enhances the social visibility of the benefits brought about by environmental protection and restoration. By doing so, it can act as a counterweight to the pressures causing environmental degradation, which are driven by economic activities where market prices do not take into account negative impacts on health and the environment (sometimes termed “externalities”). (27)

Pricing services, or, as the TEEB slogan goes, "making nature's values visible," means that governmental and corporate decision-makers will and thus stop environmental degradation. They might even promote protection and restoration if they can see the economic benefits of doing so. And so that's why in Table 2.2 we see that, for instance, the value of the regulating services of inland wetlands is somewhere between 321 and 23,018 Int.$/ha/year.

But what are nature's values? Value is something you hear a lot when you're dealing with ecosystem services. For now, I'll offer the following simple definition, and hope you'll come to agree with it: value is the contextual opportunity or constraint to service provision. Ecosystem services and their values are relative, depending on where you are and where you look. The authors of the TEEB report realize this. They write, "Ecosystem functions, the flow of ecosystem services, and the economic value to society and the economy are site specific ...." (TEEB 2013, 08)

Likewise, leading ecosystem services advocate Gretchen Daily said in a recent interview: "We need to be able to pinpoint places on the landscape or on the seascape and say these places are really the most important for supplying these benefits, and if we were to invest in protecting them, we would get this return on the investment."

Lest you think value is an esoteric exercise left to the preserve of global pundits, note that state environmental agencies in the US are considered with ecosystem value as well. The word itself is in many statutes, and here's how Oregon's Department of State Lands, for one, sees it: “[Value is] the importance or worth of a wetland function to societal needs. This includes public attitudes and the wetland’s opportunity to provide a given function based on its location.” Again, value means opportunity to provide a function, and this opportunity is spatial in nature.

Value as opportunity isn't some abstract notion, existing only in the minds of ecosystem services advocates and state environmental regulators. It's getting put into practice. The Natural Capital Project is a global coalition of academics out to valorize services. In particular, they're interested in the spatiality of services. They've come up with this serivcesheds idea (see the figure to the right). The idea is to help people conceptualize where nature's benefits come from. So, as the diagram shows, the benefits of carbon sequestration apparently come from and benefit everyone globally. But clean water for fish is a much more specific value, dependent on people's recreational demands.

What I'm bring this all back to is this: At the same time we see a drive by the Natural Capital Project and some environmental agencies to name value as dependent on where the services are in relation to where the beneficiaries are, we have the TEEB report. TEEB calculates global values. But how can you have one global value for wetlands, when wetland values are always in the eye of the beholder? These global values do just sum up local contextual values, but what good do they do an individual policy-maker? What does it mean that  the value of the regulating services of all inland wetlands is somewhere between 321 and 23,018 Int.$/ha/year? Even US President Obama can take little action to save, in one fell swoop, all the world's freshwater wetlands and their regulating values, much less all the world's wetlands and all their values. Maybe he can save a couple wetlands, say outside of his city, Chicago, but TEEB's numbers don't tell him much about the importance of saving those specific ones. Likewise, for an environmental regulator in say Oregon, TEEB's numbers tell them relatively little about the wetland down the street and its worth. So which way do you think we should we have it - global values a la TEEB, or site specific ones like from the Natural Capital Project?

I'm not sure myself; there's uses to both. Right now, I want to briefly hint that there is a potentially serious discrepancy between local and global values when it comes to climate change in particular. The value of a coastal wetland in New York providing services like water storage and delay that buffer climate impacts like sea level rise is a local value. That local value is only a value because of a global problem. If climate change weren't a threat to New York, there wouldn't necessarily be any value for that wetland to be there. Moreover, the value of a forest sequestration project may be more global than it is local because carbon sequestration benefits everyone.

In the next post, I'll write more about climate change and ecosystem services. Climate change is so often seen as a temporal problem - it will cause ecosystem services to be less "resilient" over time because of extreme events. But it will also raise some serious spatial scale dilemmas.

Figure from "Servicesheds." The Natural Capital Project. http://www.naturalcapitalproject.org/servicesheds.html

Communicating ecosystem services, take two

"The single biggest problem in communication is the illusion that it has taken place." - George Bernard Shaw

I wasn't able to make it to ACES, but I've been reading over some of the reports. Seems like a lot of the conference was focused on how to communicate ecosystem services to politicians, corporations, and the public. As one commentator put it, "...it's high time for the ecosystem services community to get its elevator speech ready."

In an earlier post, I noted that the focus on messaging ecosystem services was kind of ironic since the whole services idea was in large part about getting around the difficulty of communication. In the intro to the 1997 agenda-setting Nature's Services, the rationale was laid out: "[L]ack of understanding of the character and value of natural ecosystems traces ultimately to a failure of the scientific community to generate, synthesize, and effectively convey the necessary information to the public." (xv) Nature was supposed to be a set of functions that provided society with clean air, clean water, etc., and we could count them and maybe even monetize them; the language was supposed to express itself to those in charge.

I could stop here and say, well, we're spinning our wheels when it comes to how to convince policy-makers and businesses to see nature's benefits and that the failure to do so is bad. After all, I shouldn't need to remind anybody about climate change, loss of biodiversity, floods, water supply, etc. But I think spinning wheels right now might in fact be productive. It's at least indicative of an interesting moment. People might be realizing what they're up against, and that ecosystem service advocacy can't just be about communicating.

Memes may be one good communication tool, but deeper down there's a bigger issue here. Craig Hanson put it, "Running numbers only gets you so far. There is a political economy game to be played." As much as advocates might speak in business language to corporations, we see that they're not necessarily interested. Indeed, "Ecosystem services management doesn't necessarily generate any new revenues for business, making it a harder sell."

So people may start trying to figure out how to talk about ecosystem services in a way that doesn't necessarily mean dollars and cents, and that's always a good thing. People have certainly been doing that for a while, but maybe now it's becoming more refined, accepted, and visible. What do you think?

Who didn't start the fire? Some difficulties in (sage grouse) conservation

Apologies for another title with an 80s musical reference. 2012 has been one of the hottest and driest on record and that has meant "wild" fires. While national attention was drawn to Colorado's blazes, I've been more drawn to reports on Oregon's largest wildfire in 150 years. This Oregonian article in particular does a great job of spelling out the politics of the fire. Was it the ranchers, the BLM, or the weather that started it? I'm not sure, but I think the consequences of the fire are intriguing.

That's because the fire has put the sage grouse at risk by burning a large chunk of prime habitat - and that matters because the sage grouse is a keystone species for emerging forms of conservation. The sage grouse is a big and beautiful bird that lives in the western United States and depends on sagebrush for habitat. The decline of the grouse, it seems, has a lot to do with habitat fragmentation cause by new energy development in the West: wind turbines, transmission lines, oil drilling, and mines. The bird does neat things like group mating calls. The grouse and its ways have been at the center of scientific-legal scandal. In 2004 the Bush administration decided it didn't need any protection, but a more recent court ruling, in 2010, noted that the decision-making proccess in that case was faulty. FWS has replied that listing the species is still "warranted" but also thinks that there are bigger fish to fry, er save, at least until 2015 when it will reconsider listing.

So the sage grouse is instead now implicated in an assortment of "new" conservation efforts that aim to pre-empt regulatory burdens in the first place. In part, these efforts stem from the fact that the bird is still a candidate species and not actually listed. In 2010, the same year Interior/FWS called for protecting, but not listing, the bird, NRCS jumped in and created the Sage Grouse Initiative, seeking to do "wildlife conservation through sustainable agriculture." SGI's voluntary approach - via conservation easements and Conservation Innovation Grants - is key. According to SGI itself, it represents an "excellent example of how NRCS is orchestrating a paradigm shift in recovery for at-risk species. Instead of regulatory burdens, the Initiative takes a voluntary approach that benefits agriculture and sage grouse – along with a suite of other wildlife species too, from pronghorn to mule deer." SGI works with ranchers to help them do things like: change grazing patterns, move fences, and remove invasives (junipers) that benefit sage grouse habitat. The hope is that the bird ultimately won't have to be listed and that rancher income can be buffered at the same time.

I'll argue that the other reason why the grouse is a model for new conservation is because of the scale of its habitat and the species's extensive range. The Willamette Partnership has thought long and hard about scaling-up habitat conservation. Along these lines, it's developed a metric for sage grouse/sagebrush, with the idea, I think, that it could be portable to any context where one might want to save sage grouse habitat. It would be much harder for a more localized endangered species like the red-bearded Jackson County lark (fictional bird) or even the fairy shrimp (real!) to get this kind of energy behind it.

Here's what I'm bringing the bird back to: I wonder what the fire can tell us about "new" conservation. For right now, I'll answer with a question: how do conservationists, agencies, ranchers, etc. account for the dynamics of ecosystems within a regulatory, or better yet, a "pre" regulatory ESA? The question certainly goes beyond assessing future climate change, though the uneven effects of climate change, like drought and fire, are undoubtedly a huge source of project risk. I think there are two specific, but interrelated kinds of questions to be asking here: how do you effectively make sage grouse habitat into a credit or unit of sale/funding and what are the rules governing the life of this mitigation credit or best management practice or whatever. I'll start with the latter question. If a rancher signs up to protect the sage grouse, but then a fire comes along and destroys the protected habitat, what do you do as a regulator? What's the rule? Hold the rancher responsible? And what if the rancher had already sold credits to a developer making an impact elsewhere? Is the developer responsible (they would be in TMDL mitigation, but not 404)? In the end, part of the answer is: well whose fault was it anyway? But as the Long Draw fire shows, that's not an easy question to answer.

There's more than a question of liability here too. How do you create a non-linear or a non-equilibrium currency, one that accredits changes in ecosystem states over time? Or do you? As a regulator you probably want verifiable results of sage grouse protection, preferably with a 5-10 year timespan because you are operating within a legal climate that calls for the bird's protection. So you might prefer a set of performance standards that asks for no fire on the conservation site. That sort of conservation might not look like the kind The Society for Sage (fictional) might ask for. That group might say, well fire is a regular component of the sage ecosystem. A rancher might then reply, how can I be certain that fire is going to give me all the sagebrush I need to sell credits?

That's a completely fictional conversation, but a Willamette Partnership report on biodiversity markets raises several of the questions I've asked here. What's clear is that there's going to have to be some sort of balance between what works for sage grouse/sagebrush and what works for regulators and what works for conservationists and what works for ranchers and the politics of that tradeoff will be interesting to watch as climate change burns on all around us.

Her name is Rio and she accounts for natural capital

So apparently a bunch of world leaders got together a couple weeks ago to figure out how to save the world from complete ecological and social collapse. The Rio+20 United Nations Summit on Sustainable Development in Brzail brought together conservationists, select heads of state (notably, not US President Obama), and protesters to negotiate how to fund and govern development, particularly with respect to the environmental aspects of development. Environmentalists hyped the summit as THE opportunity for governments to come to some some sort of binding agreement chock full of actions that would build upon Rio 1992's controversial, but visionary Agenda 21.

And of course that didn't happen. Recent conferences of the save-the-world type (e.g. Copenhagen, Durban, Cancun with maybe the exception of REDD+) have been disappointments to a lot of folks - they just haven't gotten anything done (and even when they do, like with REDD+, it's not often with much consensus from important communities).At the same time, there's probably a good set of people who probably didn't expect much anyway, especially since, as the conference date approached, it was clear to many the draft text was going to be weak.
I don't see much value in repeating lamentations of Rio, so I'll try to dig into the significance of the conference, good or bad. From what I can tell, those who followed Rio closely, or had to see it succeed anyway like the UN, did not see it as a total failure. (Though Secretary General Ban Ki-Moon was on the defensive when, summarizing the conference, he had to say: "“Let me be clear. Rio+20 was a success” There were a host of agreements ("silver linings" of Rio's failure), for example, on oceans, renewable energy funding for developing countries, and mass transit. But the UN's own wrap-up on the conference is pretty telling. The agreements on oceans, energy, and transit aren't on there. Gender equity makes it way into a short paragraph after the major highlights. The highlights, instead, form a suite of agreements on "how the green economy can be used as a tool to achieve sustainable development;vpromoting corporate sustainability reporting measures; taking steps to go beyond gross domestic product to assess the well-being of a country; developing a strategy for sustainable development financing" In other words, agreements on "natural capital accounting" (which I'll abbreviate to NCA).

What is natural capital accounting? The idea is to include the benefits that ecosystems provide to humans into all the standard national (e.g. GDP) and corporate accounting systems, so as to encourage the investment in and management of typical of other kinds of "capital", like factories. Oh, you mean make markets in nature? Nay, responds Rachel Kyte from the World Bank,"we are not talking about "pricing" nature but "valuing" it. By valuing it, you are enabling better economic decisions." For Pavan Sukhdev, star of TEEB, it's similarly: "You cannot manage what you do not measure" These champions of the natural capital approach certainly saw Rio as a success for their agenda. Their respective initiatives, the World Bank's Wealth Accounting and the Valuation of Ecosystem Services (WAVES) and Sukhdev's The Economics of Ecosystems and Biodiversity, seemed to made a splash at Rio. WAVES in particular led an effort to get the leaders of 50 nations and 50 businesses to sign on to a campaign to, well I'm not entirely sure since it's another one of those vague "agreements", but the idea is that these countries and companies will work to develop the scientific, policy and market infrastructure necessary to incorporate the "value" of nature into their accounting books. They got their 50 nations (58), but notably, they got more businesses - 86.

It's hard to argue in principal against trying to understand the condition of environments and the importance of their contribution to society. But what does it mean to value nature, that is, put a number - and in particular, a dollar sign - on nature? It certainly is not a cure-all. Notice how Sukhdev's quote above is so reminiscent of famed statistician Lord Kelvin's: "When you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind." But as geographer Ryan Galt notes in one of his articles, summoning Jacob Viner, "When you can measure it, when you can express it in numbers, your knowledge is still of a meagre and unsatisfactory kind."(Jacob Viner in Galt 2011, cited in Sayer, 1992, 175, from Berelson and Steiner, 1964). The "unsatisfaction" here could be any number of things, but for many, it's that the line between value and price is not a clear as Kyte would have us believe. As certain folks have known for a while now, money is both a measure of values, but also a means of circulation. TAt the same time money expresses the value of, say, your house, it is a means for circulating capital across the world so that when Wall Street crashes and the flow of money slows, so too does the value of your house tank. Or as UK non-profit World Development Movement wrote in response to Kyte, the value of a coral reef gets wrapped up in investors' need to circulate money to where it is most profitable, which may not be the reef, and with negative implications for the poor. It's worth quoting at length from their response to Kyte's post:

And as for the idea that reducing conservation decisions to a financial cost-benefit analysis will lead to better government decision-making, it is wholly possible that the opposite may occur. For example, we already know that coral reefs can protect coastlines from storm surges – but if we express this in a dollar figure, the implication is that it is acceptable to trash it if the profit opportunities are sufficiently high. And this kind of simplistic utilitarianism ignores the fact that, to further develop your example of the coral reef, the benefits of destroying the reef are likely to accrue to investors rather than the poor, who are often the most dependent on free natural resources. So a government or private company may decide to let the reef die because the overall monetary return of preserving it is less, ignoring the fact that the people impacted by the decision will be the poorest.

Does the back and forth between the pro-valuers and the opposition the WDM represents even matter? Is NCA even a thing or just the brightest star to come out of a lackluster conference? And what does it signify for global environmental governance? What does it mean for someone like the fictional landowner I keep referring to on this blog, working in southern Oregon to protect the fictional red-bearded Jackson County lark?

I'm not entirely sure yet, but here's a first whack at it: there's probably a bit of hype to NCA. After all, natural capital was "the new political imperative" already way back when at the Conference of the Parties (COP) 10 in Nagoya (Parties to the Convention on Biodiversity - COBD - signed at Rio+0, that is...) That's where TEEB made its debut in a big way. But for NCA endeavors to make it onto center stage at THE event for sustainable development for the foreseeable future is no doubt something serious for global, high-level biodiversity conservation.

At the same time, the 50/50 campaign is no Protocol (Kyoto or Nagoya) nor even an Agreement (Cancun) or Accord (Copenhagen). It's just that, a Campaign. And Rio's blockbuster was none of these fancy titles either, just "The Future We Want". Some might say that Rio's lack of anything in any way binding or even visionary spells the not-so-terrible end of government's role in saving the world. Maybe so. What it does show is a new era in which governments and businesses together write the visions, goals, and rules that manage environments around the world. Ultimately, what this means is that Farmer Jane protecting endangered lark habitat in Oregon is likely to come more and more into contact with the corporate world's tools for and agents of biodiversity protection (and vice versa), perhaps just as Farmer Jane once upon a time came more and more linked to agro-businesses for farm inputs. It'll be interesting to follow those encounters.

Coming up:
The changing geography of coal in the US: mining, export, and restoration in the West
A follow-up on habitat conservation banking: the Texas Conservation Plan