Natural Capital Project Presentation

IT PAYS TO BE NICE Economic models to encourage social and environmental responsibility Katie Arkema April 10, 2009 Mills College

True costs and benefits Links between economics and nature

The Natural Capital Project

Natural Capital Project Goals 1. Quantify and value the full set of goods and services from ecosystems under alternative land use scenarios InVEST 2. Link this information to policy & management decisions

Decisions Actions & Incentives Scenarios Ecosystems Institutions Biophysical Information Models Services Value Economic Models

Ecosystem Services Ecosystems provide a wide array of goods and services of value to people

Provisioning Services Seafood Crops & Livestock Forest Products

Regulating Services Climate storage & sequestration Water pollution regulation Sedimentation control Flood Control

Supporting Services Water for hydropower & irrigation Nursery habitat for fish Pollination

Cultural Services Spiritual Values Knowledge Systems Educational Values Inspiration Aesthetic Values Social Relations Sense of Place Recreation Ecotourism

Appropriate scales for decisions GLOBAL, SYNTHETIC 60% of global ES in decline (Millennium Assessment) $33 Trillion/y (Costanza et al. 1997 Nature)

Appropriate scales for decisions GLOBAL, SYNTHETIC 60% of global ES in decline (Millennium Assessment) $33 Trillion/y (Costanza et al. 1997 Nature) LOCAL, SPECIFIC 2 forest patches: $60K/year (Ricketts et al. 2004. PNAS) for pollination of nearby coffee plantations

Appropriate scales for decisions GLOBAL, SYNTHETIC 60% of global ES in decline (Millennium Assessment) $33 Trillion/y (Costanza et al. 1997 Nature) NEEDED • region/landscape scale • spatially explicit • multiple services LOCAL, SPECIFIC 2 forest patches: $60K/year (Ricketts et al. 2004. PNAS) for pollination of nearby coffee plantations

Appropriate scale for land use decisions – How would a proposed dam or logging project affect different ecosystem services and biodiversity? – What landscape pattern would optimize ecosystem services now and under likely scenarios? – How should corporate landholdings be managed to maximize return on assets? – Who should pay whom under a proposed PES program?

Appropriate scales for decisions GLOBAL, SYNTHETIC 60% of global ES in decline (Millennium Assessment) $33 Trillion/y (Costanza et al. 1997 Nature) InVEST LOCAL, SPECIFIC 2 forest patches: $60K/year (Ricketts et al. 2004. PNAS) for pollination of nearby coffee plantations

1) what is InVEST? 2) how is a large private landowner using it? 3) how can it inform incentives?

InVEST Integrated Valuation of Ecosystem Services & Tradeoffs • Multiple services • Spatially explicit • Flexible and transferable • Biophysical and economic terms • Driven by future scenarios

InVEST 1.0 Beta can map Biodiversity Water pollution regulation Carbon storage & sequestration Managed timber production Crop pollination Avoided reservoir sedimentation

The next version of InVEST will add Tourism and recreation Agricultural production Flood mitigation Hydropower production Irrigation Open access products (NTFPs)

Scenario Drivers Management – Water release schedule – Fertilizer application rate Climate Change – Land cover change – Precipitation and temperature Population Growth – Land cover change – Increased demand

InVEST Map of land use/ land cover

Data inputs on natural capital Land Use Soil type Topography

Data inputs on built capital Roads Cities Infrastructure

InVEST Supply • Water flow across landscape Biophysical processes • Pollinator Map of abundance land use/ • Crop potential land yield cover • Terrestrial carbon storage & sequestration

Outputs of ecosystem service levels supplied and demanded

InVEST Supply Use • Water flow across landscape Biophysical processes • Pollinator Map of abundance land use/ • Crop potential land yield cover • Terrestrial carbon storage & sequestration

InVEST Supply Use • Water flow • Quality water across landscape for human use Biophysical • Abundance in processes • Pollinator agriculture or Map of abundance flowering fields land use/ • Crop potential • Crop potential land yield yield cover • Terrestrial carbon = storage & sequestration

InVEST Supply Use Value • Water flow • Quality water across landscape for human use Biophysical • Abundance in processes • Pollinator agriculture or Map of abundance flowering fields land use/ • Crop potential • Crop potential land yield yield cover • Terrestrial carbon = storage & sequestration

Economic Valuation Market valuation – Carbon – Timber – Non-timber forest products Avoided damages – Water treatment – Flood risk – Reservoir maintenance * Social Value * Private cost * Incentives * Optimal and efficient policies

InVEST Supply Use Value • Avoided • Water flow • Quality water treatment costs across landscape for human use Biophysical • Abundance in processes • Market value • Pollinator agriculture or Map of added from abundance flowering fields pollinators land use/ • Crop potential • Crop potential • Market value land yield yield from crops cover • Terrestrial carbon = • Social benefit storage & sequestration of avoided carbon emissions

InVEST Interface

Download InVEST at http://invest.ecoinformatics.org

Marine InVEST is under development Fisheries Coastal Protection Recreation & Tourism

The Natural Capital Project US West Coast Mexico Hawai’i China Hawai’i Colombia Sumatra Ecuador Eastern Eastern Amazon Arc Mtns Arc Mtns Basin

Kamehameha Schools Land Assets

An approach that balances Economic value Environmental value Cultural value Educational value Community value

Land Use Planning on the North Shore, O’ahu Island of O’ahu

Current Landscape Agriculture Invasive Forest Low Intensity Development Native Shrubland & Forest

But, what should this landscape look like in the future to meet all these goals? ?

Developing future scenarios Status Quo Diversified Agriculture and Forestry Biofuels (sugar cane) Residential subdivision

Growing a biofuels feedstock Sugarcane

Expanding residential development Subdivision

Cultivating diversified agriculture & forestry Reforestation Food crops for local markets

Questions for InVEST What is the flow of ecosystem services on today’s landscape? How might these service flows change in the future?

Current Landscape: Water Quality Relative Water Quality Score Nitrogen Export

Current Landscape: Water Quality Relative Water Quality Score Nitrogen Export Active agricultural fields and developed areas are main sources

Current Landscape: Carbon Storage High Storage Low Storage

Current Landscape: Plantation Income Rental Rate ($/ac) 100 220 400

Current Landscape: Plantation Income Rental Rate ($/ac) 100 220 400 Most fields not rented yet incurring high property taxes Losing $0.53 M each year

Questions for InVEST What is the flow of ecosystem services on today’s landscape? How might these service flows change in the future?

Scenario Maps: Water Quality (reduced Nitrogen export) Div. Ag. & Forestry Biofuels Subdivision Change in Relative Score

Scenario Maps: Carbon Sequestration Div. Ag. & Forestry Biofuels Subdivision Change (tC/ha)

Scenario Maps: Plantation Income Div. Ag. & Forestry Biofuels Subdivision Value ($/ac) 50 250 10,000 17,500

Summary of Scenario Changes CarbonSeq’n Water Quality Plantation (tC/ha) Score Income ($M) Subdivision Scenarios Biofuels &Forestry Div. Agr.

Price premiums for “green” products Fair conditions and payment Legislation is coming - emerging market - inform policy

NatCap Chris Colvin Marc Conte Gretchen Daily Helen Fox Peter Kareiva Chuck Katz Erik Lonsdorf Guillermo Mendoza Belinda Morris Robin Naidoo Erik Nelson Nasser Olwero Support Steve Polasky NSF-NCEAS Jim Regetz Leverhulme Trust M. Sanjayan Packard Foundation Rebecca Shaw MacArthur Foundation Heather Tallis Moore Foundation Christine Tam Roger and Vicki Sant Buzz Thompson Peter and Helen Bing Stacie Wolny 63 Ben Hammett Michael Wright

www.naturalcapitalproject.org Katie Arkema karkema@stanford.edu

Natural Capital Project Presentation

0 comments

Notes on slide 1

Favorites, Groups & Events