WRI Publications Feed: Mainstreaming Ecosystem Services Initiative (MESI)

Coastal Capital: Economic Valuation of Coral Reefs in Tobago and St. Lucia

Payson Schwin — Fri, 13 Jun 2008 13:49:06 -0400

Coral reefs provide many benefits, sometimes called ecosystem goods and services, which are of high value and critical importance to local and national economies in the Caribbean.

These values are frequently overlooked or underappreciated in coastal investment, development and policy decisions, resulting in short-sighted decisions that do not maximize the long-term economic potential of coastal areas.

This project focuses on development of a valuation methodology that will be broadly applicable in countries across the Caribbean, supporting wise, long-term coastal policy and management.

This report provides a comprehensive summary of the valuation methodology as well as valuation results from implementation in two pilot sites in the Eastern Caribbean (St. Lucia and Tobago). Shorter, island-specific summaries of results, along with an Excel-based Valuation Tool for implementing the methodology are available from www.wri.org/project/valuation-caribbean-reefs.

Estimating the economic benefits of coral reefs to local economies is neither easy nor straightforward, due to the range of approaches available and frequent limitations of underlying data. Many valuation methods exist, and results are rarely comparable.

A priority for this project has been the development of a simple, broadly applicable methodology to value coral reef goods and services, based predominantly on commonly available data. Use of a consistent approach should lead to more comparable estimates of value for different places and time periods. An easily replicable methodology can also be applied while varying key assumptions in order to assess the impacts of different development and management options.

This methodology does not assess Total Economic Value (TEV), but rather focuses on three key goods and services: coral reef-associated tourism, fisheries, and shoreline protection services. These goods and services were chosen because of their importance to local economies and because data are available to support estimation of these values.

The method was developed based on literature review, feedback from local partners and examination of coral reef use and data availability in two pilot locations (St. Lucia and Tobago).

The results from the economic valuation of coral reefs in St. Lucia and Tobago—sites with very different coastal management and data richness situations—are presented in this paper. Even assessing only a subset of goods and services demonstrates that the benefits provided by coral reefs are economically significant, particularly with respect to island GDP. These estimates should be viewed as lower bound (partial) estimates of the economic contribution of coral reefs to the economy of these two islands.

The economic impact of coral reef-associated tourism and recreation and fisheries is evaluated using a financial analysis method—tracking the financial flows generated by these two industries, and their wider impact on the economy. Shoreline protection services are evaluated using a modified avoided damages approach, where the value of a reduction in wave-induced erosion and property damage due to coral reefs is estimated.

The methodology, as well as the Valuation Tool, uses a tiered approach, allowing results to be calculated at different levels of detail depending upon the data available.

The Corporate Ecosystem Services Review: Guidelines for Identifying Business Risks & Opportunities Arising from Ecosystem Change

Tim Herzog — Tue, 11 Mar 2008 00:00:00 -0400

WRI developed the ESR in collaboration with the Meridian Institute and the World Business Council for Sustainable Development (WBCSD). Five WBCSD member companies—Akzo Nobel, BC Hydro, Mondi, Rio Tinto, and Syngenta—road-tested the methodology, providing feedback and case examples.

Summary

Ecosystems provide businesses with numerous benefits or “ecosystem services.” Forests supply timber and wood fiber, purify water, regulate climate, and yield genetic resources. River systems provide freshwater, power, and recreation. Coastal wetlands filter waste, mitigate floods, and serve as nurseries for commercial fisheries.

However, human activities are rapidly degrading these and other ecosystems. The Millennium Ecosystem Assessment— the largest audit ever conducted of the condition and trends in the world’s ecosystems—found that ecosystems have declined more rapidly and extensively over the past 50 years than at any other comparable time in human history. In fact, 15 of the 24 ecosystem services evaluated have degraded over the past half century. The Assessment projected further declines over coming decades, particularly in light of population growth, economic expansion, and global climate change. Left unchecked, this degradation could jeopardize future economic well-being, creating new winners and losers within the business community.

Ecosystem degradation is highly relevant to business because companies not only impact ecosystems and the services they provide but also depend on them. Ecosystem degradation, therefore, can pose a number of risks to corporate performance as well as create new business opportunities. Types of risks and opportunities include:

Operational

Risks such as higher costs for freshwater due to scarcity, lower output for hydroelectric facilities due to siltation, or disruptions to coastal businesses due to flooding
Opportunities such as increasing water-use efficiency or building an on-site wetland to circumvent the need for new water treatment infrastructure

Regulatory and legal

Risks such as new fines, new user fees, government regulations, or lawsuits by local communities that lose ecosystem services due to corporate activities
Opportunities such as engaging governments to develop policies and incentives to protect or restore ecosystems that provide services a company needs

Reputational

Risks such as retail companies being targeted by nongovernmental organization campaigns for purchasing wood or paper from sensitive forests or banks facing similar protests due to investments that degrade pristine ecosystems
Opportunities such as implementing and communicating sustainable purchasing, operational, or investment practices in order to differentiate corporate brands

Market and product

Risks such as customers switching to suppliers that offer eco-certified products or governments implementing new sustainable procurement policies
Opportunities such as launching new products and services that reduce customer impacts on ecosystems, participating in emerging markets for carbon sequestration and watershed protection, capturing new revenue streams from company-owned natural assets, and offering eco-labeled wood, seafood, produce, and other products

Financing

Risks such as banks implementing more rigorous lending requirements for corporate loans
Opportunities such as banks offering more favorable loan terms or investors taking positions in companies supplying products and services that improve resourceuse efficiency or restore degraded ecosystems.

Unfortunately, companies often fail to make the connection between the health of ecosystems and the business bottom line. Many companies are not fully aware of the extent of their dependence and impact on ecosystems and the possible ramifications. Likewise, environmental management systems and environmental due diligence tools are often not fully attuned to the risks and opportunities arising from the degradation and use of ecosystem services. For instance, many tools are more suited to handle “traditional” issues of pollution and natural resource consumption. Most focus on environmental impacts, not dependence. Furthermore, they typically focus on risks, not business opportunities. As a result, companies may be caught unprepared or miss new sources of revenue associated with ecosystem change.

The Corporate Ecosystem Services Review (ESR) is designed to address these gaps. It consists of a structured methodology that helps managers proactively develop strategies to manage business risks and opportunities arising from their company’s dependence and impact on ecosystems. It is a tool for strategy development, not just for environmental assessment. Businesses can either conduct an Ecosystem Services Review as a stand-alone process or integrate it into their existing environmental management systems. In both cases, the methodology can complement and augment the environmental due diligence tools companies already use.

The Ecosystem Services Review can provide value to businesses in industries that directly interact with ecosystems such as agriculture, beverages, water services, forestry, electricity, oil, gas, mining, and tourism. It is also relevant to sectors such as general retail, healthcare, consulting, financial services, and others to the degree that their suppliers or customers interact directly with ecosystems. General retailers, for example, may face reputational or market risks if some of their suppliers are responsible for degrading ecosystems and the services they provide.

This publication describes the five steps for performing an Ecosystem Services Review (Figure 1). It provides an analytical framework, case examples, and helpful suggestions for each step. It concludes by highlighting a number of resources managers can use when conducting an ESR, including a “dependence and impact assessment” spreadsheet, scientific reports, economic valuation approaches, and other issue-specific tools.

Global degradation of ecosystems and the services they provide threatens to alter the landscape in which business operates. The Ecosystem Services Review is a proactive approach for companies to manage the risks and opportunities that are emerging. Furthermore, by helping companies make the connection between healthy ecosystems and the bottom line, it will encourage not only more sustainable business practices, but also business support for policies to protect and restore ecosystems.

Background

Ecosystem change as source of business risk and opportunity
Introducing ecosystem services
Linking ecosystem services and business goals: the ESR

Methodology

Step 1: Select the scope
Step 2: Identify priority ecosystem services
Step 3: Analyze trends in priority ecosystem services
Step 4: Identify business risks and opportunities
Step 5: Develop strategies for addressing risks and opportunities
Next steps

Resources

Ecosystem Services: A Guide for Decision Makers

Tim Herzog — Wed, 05 Mar 2008 09:16:28 -0500

Public sector decision makers, such as mayors, planning commission members, and international development officials, often overlook the connection between healthy ecosystems and the well-being of people. As a result, long term goals may be jeopardized for short term gain. In order to enhance some ecosystem services, other important ecosystem services may be degraded, which can have unintended consequences for the people who depend on the degraded services. For example, building a dam may increase power supply to cities and irrigation to croplands, but reduce the river’s capacity to support fisheries or provide shoreline protection. Costs and benefits of these tradeoffs are often inequitably dispersed. The beneficiaries of the increased power supply may live 50 km away while those living on the river will have to bear the cost of decreased fisheries and increased flooding.

WRI and its partners have produced a guide for the public sector on how to take ecosystem services into account in economic and social strategies. The guide provides examples of how the success of projects, plans and policies can benefit from incorporating ecosystem services. It introduces various methods to link ecosystems and development, including an ecosystem services framework, ecosystem service prioritization, trends analyses, ecosystem service mapping, economic valuation, scenario planning, and a portfolio of policy options targeted at sustaining ecosystem services.

The guide can help answer the following questions:

How can an ecosystem services framework be used to organize a decision-making process?
What ecosystem services are supplied by nature?
Which ecosystem services are most important for a particular development goal?
What is known about the condition and trends of these services?
How can their value be communicated?
What risks and opportunities emerge as a result of changes to ecosystem services?
Which services should a city, county, province, or country invest in restoring or sustaining?
What policies can help sustain ecosystem services?

Eutrophication and Hypoxia in Coastal Areas: A Global Assessment of the State of Knowledge

Mindy Selman — Sat, 01 Mar 2008 00:00:00 -0500

Eutrophication – the overenrichment of waters by nutrients – threatens and degrades many coastal ecosystems around the world. The two most acute symptoms of eutrophication are hypoxia (or oxygen depletion) and harmful algal blooms, which among other things can destroy aquatic life in affected areas.

Of the 415 areas around the world identified as experiencing some form of eutrophication, 169 are hypoxic and only 13 systems are classified as “systems in recovery.”

Mapping and research into the extent of eutrophication and its threats to human health and ecosystem services are improving, but there is still insufficient information in many regions of the world to establish the actual extent of eutrophication or identify the sources of nutrients. To develop effective policies to mitigate eutrophication, more information is required on the extent of eutrophication, the sources of nutrients, and the impact of eutrophication on ecosystems.

Recommendations

To improve knowledge of where eutrophication is occurring and its impacts, environmental agencies or coastal authorities worldwide need to proactively assess and monitor water quality, specifically those variables commonly linked to eutrophication such as nutrient levels and dissolved oxygen. In addition, internationally accepted methods and definitions for assessing and classifying eutrophic coastal waters—including proxies for eutrophication—need to be developed.

In Asia, Africa, and Latin America, environmental agencies or coastal authorities should:

Undertake systematic and routine assessments of coastal areas, particularly those exhibiting symptoms of eutrophication.
Develop transparent and public reporting procedures for tracking the occurrence of eutrophication and hypoxia, as well as monitoring their impact on ecosystem health.
Develop and adopt decision-support tools – such as nutrient budgets and water quality models – that can facilitate the development of appropriate local and regional responses to eutrophication.

In the United States, Europe, and Australia, environmental agencies or coastal authorities should:

Continue coastal zone assessments.
Ensure that eutrophication assessment methodologies are being consistently applied.
Enhance existing decision-support tools and develop tools for those areas where none currently exist.

Assessing U.S. Farm Drainage: Can GIS Lead to Better Estimates of Subsurface Drainage Extent?

admin — Wed, 01 Aug 2007 00:00:00 -0400

Extensive agricultural subsurface “tile” drainage in the Midwestern U.S. has important implications for nutrient pollution in surface water, notably the seasonal hypoxic “dead zone” in the Gulf of Mexico.

However, drainage data limitations have constrained efforts to effectively factor tile drainage into regional economic and environmental impact studies.

Better drainage data would be a valuable addition to future modeling applications.

In light of this need, a methodology incorporating a geographic information system (GIS) analysis based on soil and land cover maps was used in addition to existing data to create a set of county-level tile drainage extent estimates.

These estimates are downloadable for review in order to evaluate existing data and the results of this GIS analysis, with the goal of arriving at an improved picture of tile drainage in the U.S.

Conclusions and Recommendations

Map-based GIS analysis using soil and land cover data can provide a good representation of land that would benefit from drainage, and in densely tile-drained regions may be an improvement over previous estimates. Refinements could be made through further exploration of smaller geographic areas using more detailed data and maps.

Improved drainage data will contribute to a better understanding of the large-scale environmental impacts of tile drainage-related nutrient pollution, and the cost-effectiveness of nutrient abatement strategies. To that end, we offer a range of drainage estimates and a revised national county-level database of agricultural tile drainage for collaborative validation and review.

Ultimately, without actual measurements, ad hoc efforts to estimate tile drainage extent will only be stop-gap measures in solving the drainage data problem. Pressing water quality concerns such as Gulf hypoxia highlight the need for another large-scale drainage survey, which could be included in the USDA’s next agricultural census.

DOWNLOAD DATA: County Estimates of U.S. Tile Drainage

Thirst for Corn: What 2007 Plantings Could Mean for the Environment

admin — Fri, 01 Jun 2007 00:00:00 -0400

Thanks in large part to the Renewable Fuels Standard (RFS)—a legislative mandate for increased renewable fuels use that passed as part of the Energy Policy Act of 2005—the corn ethanol industry is expanding at an unprecedented rate in the United States. In its spring planting projections, the USDA projected that corn acreage in the U.S. would increase by 12 million acres, or 15%, during the 2007 planting season alone to meet demands for ethanol and other uses.

This study explores the potential environmental impacts of this surge in corn production, and suggests some policy measures to help make agriculture in general more robust to increased demands for energy production.

Farm Policy Recommendations

Resist the pressure to allow farmers penalty-free “early outs” from their CRP contracts.
Increase funding for working lands conservation programs such as CSP and EQIP.
Extend “sodbuster” compliance requirements for receipt of commodity payments to all acreage in production, not just highly erodible lands.
Create a pilot TMDL project for the Chesapeake Bay with joint USDA/EPA jurisdiction.
Extend compliance requirements for receipt of commodity payments to include nutrient management requirements in TMDL non-attainment watersheds.
Establish a new program in the Farm Bill to encourage riparian buffers.
Require all projects that receive federal funds to explore crop yield improvements to explicitly address the soil, water, and GHG implications of the new production methods.
Promote conservation tillage in corn production and provide research resources directed explicitly at use of slowrelease fertilizers and use of precision nitrogen management in row crop production.
Task the USDA with development of a consistent methodology for calculating the environmental impacts of biofuels feedstock production.

Paying for Environmental Performance: Estimating the Environmental Outcomes of Agricultural Best Management Practices

admin — Tue, 01 May 2007 00:00:00 -0400

This Policy Note outlines how the environmental performance of agricultural BMPs can be estimated, and what steps are necessary for improving these estimations–both important elements for effectively allocating conservation funding. This Policy Note sets forth the following recommendations:

Standardize estimation methodologies to quantify the environmental outcomes of agricultural best management practices.
Conduct site-specific assessments of environmental performance through programs such as the Conservation Effects Assessment Project (CEAP) to:
- increase site-specific research on estimating environmental outcomes and environmental co-benefits;
- Establish a monitoring framework to validate estimation methodologies and test their accuracy; and
- Create a central repository to provide access to estimation methodologies and monitoring data.
Utilize online tools to make standardized estimation methodologies widely available.

Nature's Benefits in Kenya: An Atlas of Ecosystems and Human Well-Being

admin — Tue, 01 May 2007 00:00:00 -0400

This report provides a new approach to examining the links between ecosystem services (the benefits derived from nature) and the poor.

Through a series of maps and analyses, the authors focus on the environmental resources most Kenyans rely on such as soil, water, forest, rangeland, livestock, and wildlife. The atlas overlays georeferenced statistical information on population and household expenditures with spatial data on ecosystems and their services (water availability, wood supply, wildlife populations, and the like) to yield a picture of how land, people, and prosperity are related in Kenya.

While the maps and analyses presented here will not provide easy answers to questions concerning the causes of poverty in Kenya and how ecosystems can best be managed to increase economic growth and improve livelihoods, they are a first step toward stimulating more informed dialogue and provoking questions for which answers may be found.

The final section of the atlas provides general findings about the use of the introduced maps for sociogeographic analysis. It concludes with four recommendations that are expected to advance a more comprehensive accounting of ecosystem services and to improve the understanding of poverty-environment relationships in Kenya.

Restoring Nature's Capital: An Action Agenda to Sustain Ecosystem Services - Restaurando El Capital Natural

admin — Tue, 01 May 2007 00:00:00 -0400

LISTEN NOW: Archived Webcast

Reflecting and Building on the Millennium Ecosystem Assessment

Nature provides the conditions for a healthy, secure, and fulfilling existence. Among the many benefits people receive from nature are fresh water, food, protection from floods, and spiritual enrichment. It is hard to think of a development or investment decision that doesn’t in some way depend upon and affect nature.

Launched in June 2001 and involving more than 1,300 leading scientists from 95 nations, the Millennium Ecosystem Assessment (MA) is a ground-breaking study on how humans have altered ecosystems, and how changes in ecosystem services affect human well-being, both now and in the future.

Integrating findings at the local, regional, global scales and from alternative intellectual traditions, the Millennium Ecosystem Assessment presents a stark account of the mismanagement of these services. Of the 24 ecosystems assessed, only four have shown improvement over the past 50 years. A startling 15 are in serious decline. Five hang in the balance. But we don’t have to continue down this path.

Using the Assessment as its backdrop, Restoring Nature’s Capital proposes an action agenda for business, governments, and civil society to reverse ecosystem degradation.

Drawing on the recommendations of 17 contributing authors, WRI’s own series of World Resources reports, and the good work of many others, it sets out to answer the thorny question of what changes must be made to ensure that ecosystems can meet the needs of today’s and future generations.

The authors contend that governance—who makes decisions, how they are made, and with what information—is at the heart of sustaining healthy ecosystems. With this as their fundamental tenet, the authors present an action agenda for reversing degradation of ecosystems and sustaining their capacity to provide vital services for generations to come. The action agenda identifies how decisions about development projects and investments can be made in ways that lead to healthy ecosystem services. These decisions, made by local and national governments, corporations, and international financial institutions, involve billions of dollars, affect huge swaths of land and water, and affect millions of people.

Agriculture and Climate Change: Greenhouse Gas Mitigation Opportunities and the 2007 Farm Bill

admin — Thu, 01 Mar 2007 00:00:00 -0500

Note: This policy note is the second in a series of policy notes on the 2007 Farm Bill, and the role that U.S. agriculture might play in addressing global warming.

This policy note addresses the following questions:

How can managers of agricultural operations reduce their greenhouse gas emissions?
What opportunities exist under the Conservation Title of the 2007 Farm Bill to enhance climate change mitigation opportunities from the U.S. agricultural sector?

Recommended Actions

Ensure that 2007 Farm Bill legislative language includes greenhouse gases specifically as a resource of concern under air quality.
Ensure that 2007 Farm Bill implementation language for conservation programs includes opportunities for reductions in all agricultural greenhouse gas emissions, including nitrous oxide and methane and enhanced carbon storage as national priorities.
Require that environmental tradeoffs are assessed when evaluating applications for cost-share or incentive payments in the 2007 Farm Bill. Include in the United States Department of Agriculture (USDA) implementation language the need to establish protocols to assess environmental tradeoffs within broader conservation program implementation language, e.g., between enhancing wildlife benefits and reducing greenhouse gas emissions.
Explicitly specify nitrous oxide and methane mitigation opportunities in any existing climate change language.

WRI Publications Feed: Mainstreaming Ecosystem Services Initiative (MESI)

Coastal Capital: Economic Valuation of Coral Reefs in Tobago and St. Lucia

The Corporate Ecosystem Services Review: Guidelines for Identifying Business Risks & Opportunities Arising from Ecosystem Change

Summary

Operational

Regulatory and legal

Reputational

Market and product

Financing

Table of Contents

Background

Methodology

Resources

Ecosystem Services: A Guide for Decision Makers

Eutrophication and Hypoxia in Coastal Areas: A Global Assessment of the State of Knowledge

Recommendations

Assessing U.S. Farm Drainage: Can GIS Lead to Better Estimates of Subsurface Drainage Extent?

Conclusions and Recommendations

Thirst for Corn: What 2007 Plantings Could Mean for the Environment

Paying for Environmental Performance: Estimating the Environmental Outcomes of Agricultural Best Management Practices

Nature's Benefits in Kenya: An Atlas of Ecosystems and Human Well-Being

Restoring Nature's Capital: An Action Agenda to Sustain Ecosystem Services - Restaurando El Capital Natural

Agriculture and Climate Change: Greenhouse Gas Mitigation Opportunities and the 2007 Farm Bill

Recommended Actions