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“Revaluing” Ecosystems to Include Nature’s Value on Balance Sheets

Awareness is growing – in communities, in governments and in the private sector – of the many valuable benefits ecosystems provide to people and to our economy. Bees are vital pollinators; oceans support productive, lucrative fisheries; forests and wetlands filter pollutants and regulate flooding; and coastal ecosystems, such as mangroves, coral reefs and sand dunes, mitigate waves and reduce flooding during storms.

Yet this awareness is not growing quickly enough to stem current rates of ecosystem degradation and loss. Bee populations are declining due to Colony Collapse Disorder, with pesticide use being one possible cause. Three-quarters of the world’s marine fish stocks are fully or over-exploited. Forests and wetlands are being converted for food production and urban development. And, as coral reefs degrade and mangroves are cut or converted, we lose protection against storm-driven waves.

Decision-makers all-too-often treat ecosystem services as a free benefit. A new issue brief outlines ways to “revalue” ecosystems to account for their full worth. This valuation can help create incentives for the public and private sectors to protect and restore ecosystems to ensure their sustainable use.

Hurricane Sandy Spurs Natural Infrastructure Investment

Hurricane Sandy provides an excellent example of how ecosystems can benefit people, economies and the planet.

Like many communities around the world, New York City’s coastlines have been radically altered over the years, with conversion of natural habitat to hard or “built” infrastructure, such as sea walls. This built environment proved inadequate when Hurricane Sandy hit the area in 2012. The storm tide approached 14 feet, with surge overwhelming beaches, bulkheads and seawalls and flooding homes, subways, tunnels and other infrastructure.

Yet in other areas, natural infrastructure such as intact sand dunes and wetlands protected communities. Those located behind restored sand dunes experienced less damage than those without protective dunes. A restoration project in Queens that had reconstructed 148 acres of salt marsh islands provided storm buffering for communities and infrastructure around Jamaica Bay, reducing wave energy and slowing the current.

Planning commissions in both New York City and New York State recognize these benefits. They recommended expanded investment in natural infrastructure and in hybrid combinations of both natural and traditional built infrastructure to protect New York’s shoreline. The recommendations include investing in restoration of sand dunes, tidal wetlands and oyster reefs —each having economic, environmental and risk-reduction benefits. A 3 meter-wide tidal wetland, for example, can reduce wave energy by one-half, protecting shores from floods and erosion. In addition, if there is a sufficient supply of river sediment, wetlands can grow to keep up with rising sea level. Natural infrastructure is more adaptive than built infrastructure, and from an economic perspective, has lower maintenance and management costs.

A Growing Movement to Revalue Ecosystems

It is not only city and state governments that are waking up to the benefits ecosystems provide:

  • Some corporations, such as those in the food and beverage sector, are increasingly aware of both their influence and dependence on ecosystems for their main ingredients, water and food. They now conduct systematic ecosystem dependence and impact assessments on their operations and supply chains. AB InBev, for example, is using such assessments to inform watershed protection measures at all of their facilities in priority areas in South America and China.

  • Some countries, including Botswana, Colombia, Costa Rica, Guatemala, Indonesia, Madagascar, the Philippines and Rwanda, are augmenting their national economic accounts (the base for calculating GDP) to keep track of changes in “natural capital,” the stock of natural ecosystems that provide benefits to people and the economy. These more comprehensive indicators provide valuable insights into whether current trajectories of ecosystem condition and resource use undermine future economic development.

  • An increasing array of tools for ecosystem assessment, coupled with advances in information and communication technologies, make it easier to examine ecosystem trends and link them to changes in the benefits available to humans. For example, advances in satellite data allow high-resolution mapping of ecosystems, while smart phones support crowdsourcing resource use information..

Scaling Up Ecosystem Value in Decision-Making

Despite these promising trends, the value of ecosystems to humans is often not known or considered in investment, development, planning and policy decisions.

In November 2013, WRI and the Rockefeller Foundation—in collaboration with Forum for the Future and the Economist Intelligence Unit—convened a meeting in Bellagio, Italy on “The Future of Revaluing Ecosystems.” The meeting brought together 32 participants from the public, private, nonprofit and research sectors to consider how society can better incorporate the full range of benefits that ecosystems provide in public and private decisions.

The issue brief, Revaluing Ecosystems: Pathways for Scaling Up the Inclusion of Ecosystem Value in Decision Making, summarizes six of the critical ideas discussed, including mainstreaming ecosystem values in national economic accounts; building capacity for more pragmatic ecosystem assessments; highlighting the benefits of investing in natural infrastructure; investing in ecosystems to reduce risk in the food and beverage sector; using financial tools similar to green bonds to restore ecosystems in agricultural landscapes; and using knowledge and communication tools to promote more resilient communities, particularly after disasters.

These pathways can help decision-makers recognize ecosystems for their full value. Nature’s assets are, after all, what all life depends on.

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