How much are ecosystems worth?
For What It’s Worth: Ecological Services and Conservation
Tina Butler, mongabay.com
May 4, 2005
For a long time, preserving natural spaces was considered to be a favor to the environment without a true, measurable benefit to businesses, industrial production and productivity. In recent years however, scientists are increasingly producing substantial evidence to support the notion that the natural environment supplies a diverse range of renewable economic benefits beyond timber and fish. These benefits are termed “ecological services” and certain types of
ecosystems provide such valuable functions as water treatment,
pollination and sediment capture, simply by remaining intact.
Ecologists now know a great deal more about how ecosystems work–which habitats deliver what services and benefits and in what number those services are supplied. The science of ecology is helping to bring ecological services to market. The realization that some habitats, particularly wetlands, are most useful in their original condition is changing attitudes about conservation and preservation. The result of this realization is a growing inclination to preserve or restore ecosystems and recover part of what has been lost. This enlightened attitude is helping to transform ecology from an academic science to a practical science, with concrete and economic justifications and results.
Margaret Palmer, a biologist at the University of Maryland, ran a symposium in an attempt to publicize and promote this new theory into practice at a 2002 meeting of the Ecological Society of America and the Society for Ecological Restoration in Arizona. Dr. Palmer described every habitat as having an “envelope” of natural variation in its possible structure and composition. Establishing what lies within this envelope is imperative to knowing what to restore and when to stop. Successful habitat restoration requires an comprehension of theories about population biology, competition between species, biodiversity and the stability and variation of ecosystems.
One scientist from Rutgers University, Steve Handel, tested this theory and demonstrated that desolate urban spaces like landfill and dumps can be restored to mimic old fields with elements of ecological science known as metapopulation theory and patch-dynamics. These principles are based on the premise that populations of plants and animals are not staid, uniform collections of organisms, but are actually comprised of several fluid and dynamic small groups that are partly isolated from each other and often exist only temporarily. By manipulating the sizes of plant patches, Dr. Handel has been able to improve insect pollination and seed dispersal, thus kick starting the restoration process in landfills near New York.
Heterogeneity is essential to improving the odds of restoring an environment to its original functionality, whether it be adjusting soil nutrient content and moisture or ensuring a diversity of particle size in stream sediment. The rate of recovery as well as ultimate biological productivity depend on these conditions. Wetland habitats provide especially valuable ecosystem services such as recharging groundwater, absorbing floodwater and acting as natural filters for removing pollutants.
The transformation in perception of ecological services in the United States began in 1997. In that year, the city government of New York realized that changing agricultural practices would degrade the city’s drinking water unless it took protective measures. One method for achieving this would be to build new water filtration plants at an immediate cost of four to six billion dollars, combined with yearly operating costs of 250 million dollars. Instead, the government opted to pay to preserve large areas of the Catskill Mountains, which are responsible for supplying most of the state’s water. Ultimately, the city spent 250 million dollars buying land to prevent development and it pays farmers 100 million dollars annually to minimize water pollution. Since the New York project many valuation studies have focused on water since it is an obvious ecological service of great value.
Wetlands: more than habitat for the birds
By filtering and purifying water and acting as reservoirs to capture rain and melting snow, wetlands perform functions integral to environmental health and vitality. Experts have calculated that every dollar invested in environmental protection may save $7.50 to $200 on the cost of what would otherwise have to be spent on filtration and water-treatment facilities. In 2003, the Sri Lankan Muthurajawela wetland sanctuary was calculated by the World Conservation Union to be providing services worth 8 million dollars annually, or 260 thousand dollars per square kilometer. These services include the cleaning of sewage and waste water from industry, as well as flood attenuation and the support of downstream fisheries.
Often, restoring previously drained wetlands or even to building completely new ones proves to be cheaper than constructing water filtration plants. The city of Riverside, California knows this well, having saved eight million dollars by constructing wetlands rather than a dentrification plant to meet nitrate effluent standards for its water supply. Applied ecology is also helping to enable a kind of trade in wetlands in the United States. “Wetland credits” are sold by mitigation banks to companies who want or need to destroy wetland habitats as a means of creating funds for restoring wetlands in another region.
Mitigation banks first appeared in the early 1990s, resulting from EPA regulations that granted permits for the removal of wetlands. Today, there are close to 300 of these banks, with many more in the works. It is estimated that 8000 acres worth of credits were issued in 2001. Typically, restored wetland costs between $25,000 – $130,000 per acre, depending on the amount of engineering required, the type of wetland, the price of the land and the outside risk that the restoration project in question may fail. A major factor in the establishment of such organizations and determining these kind of figures has been science’s increased commitment to studying how specific ecosystems impact the greater environment.
Millennium Ecosystem Assessment: valuing ecosystems on a global scale
In March 2004, the Millennium Ecosystem Assessment (MEA) was published, comprising the first global survey of ecological services. While there is significant value in such services, the only way they will be recognized by corporations as such is if the values are clearly delineated and shown to be economically viable. The difficult part is providing a meticulous description of the connections between the structures and functions of various aspects of the environment so that precise and accurate values can be calculated. The more that is known about the ecology of a forest, for example, the better the valuation of the services it provides will be. According to reports from the World Bank at the close of 2004, significant progress has been made toward developing techniques for appraising environmental costs and advantages
Started in 2001 with support from the United Nations, the MEA is the result of a 24 million dollar effort to get a picture of the health of global ecosystems. The assessment involves over 1400 experts in various scientific fields from 95 countries around the world . While results are still coming in, early reports have found that 0.5 percent of the area of natural terrestrial habitats is lost each year. This loss is due largely to land being converted for agricultural use. The goal of the assessment is to fully determine how changes to the environment affect humans through the degradation of the services it provides.
What makes the report unique from other global audits, is the MEA’s focus is not based on surveying biological diversity within any given region, but rather the general stability of the services provided by world ecosystems. Up until recently, the exchange of natural habitat for cultivated land had been largely beneficial to humans. But things are beginning to change, particularly in the oceans, where the assessment found dramatic evidence of damage to marine ecosystems and few gains in food production to offset the loss of these productive fisheries. Overfishing has decimated fish populations, lowered fish weights to less than one tenth or even one hundredth of what it was before the introduction of industrial fishing and transformed and deadened habitats.
Humans have altered ecosystems more rapidly and extensively in the past 50 years than in any comparable period in human history. 25 percent of Earth is now under cultivation. Approximately two thirds of the ecosystems review by the MEA are being degraded or used unsustainably. What is essential in reversing these types of trends is reshaping countries’ and companies’ perceptions of ecosystem functions. Changing the focus from preservation of wildlife and natural habitat to conserving the integrity and health of critical economic services and benefits is perhaps the only way to get through to industries and governments.
One place where this is being attempted is in Panama. In the case of this Central American country, the deforested watershed areas adjacent to the Panama Canal are beginning to falter in providing the necessary amounts of water for operating the canal’s locks. Canal managers are concerned for the health of the watershed since each ship that passes through the canal requires 200 million liters of fresh water.
Scientists at the Smithsonian Tropical Research Institute (STRI) believe that reforesting the Canal’s cleared watershed would both aid in regulating the supply of freshwater and reduce soil erosion that clogs the canal’s channel and stimulates the growth of problematic waterweeds. The researchers concluded that planting forests around the Canal would probably be more effective for controlling these problems than building costly reservoirs and filtration beds.
Since Panama is heavily indebted and its poor credit rating makes it expensive to borrow money for reforestation projects, the government is looking for funding from an unlikely source: London-based forestry insurance company ForestRe. The company’s founder, John Forgach, is planning to use financial markets to recruit and possibly require companies dependent on the Canal to pay for the reforestation project. Collaborating with several insurance and reinsurance agencies, Forgach is working to develop an agreement with these companies in which they would underwrite a 25-year bond that would pay for the watershed to be replanted. The companies would that ask those of their largest Canal-using clients to buy the bond. Corporations such as Wal-Mart as well as a number of Asian car manufacturers, which currently insure against the massive losses they would incur if the Canal were shut down, would see a reduced premium if they bought the forest bonds.
The trick to making these kind of with socially and environmentally beneficial endeavors work is to structure and propose solid business deals that are attractive enough to business owners. To address these issues, the newly planted forest will need to have a wide selection of species that STRI’s scientists have demonstrated to grow well in the local environment, are valuable, and prove useful to local people for food and medicine.
The project will function as a case study for Forgach. If successful, he will apply and employ the same methods in other locales. Forgach believes there is great potential in treating the regulation of water and climate as a utility that provides a service people are willing to pay for. Putting a dollar amount on ecological services is a difficult process, but one that is steadily improving. Effectively, restoration projects of specific ecosystems are investments in a country’s infrastructure and if Forgach can get companies to recognize this and create a successful balance between habitat preservation and the continuation of profitable business, the face of conservation may be changed forever.
Nature works terribly hard to maintain balance. It seems only fair to pay back the efforts.