Natural Capital Project Presentation

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Presentation 10Apr2009 to conference "It Pays To Be Nice: Economic Models To Encourage Social & Environmental Responsibility, Center For Socially Responsible Business, Lokey Graduate School of Business, Mills College

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Natural Capital Project Presentation

  1. 1. IT PAYS TO BE NICE Economic models to encourage social and environmental responsibility Katie Arkema April 10, 2009 Mills College
  2. 2. True costs and benefits Links between economics and nature
  3. 3. True costs and benefits Links between economics and nature
  4. 4. The Natural Capital Project
  5. 5. 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
  6. 6. Decisions Actions & Incentives Scenarios Ecosystems Institutions Biophysical Information Models Services Value Economic Models
  7. 7. Ecosystem Services Ecosystems provide a wide array of goods and services of value to people
  8. 8. Provisioning Services Seafood Crops & Livestock Forest Products
  9. 9. Regulating Services Climate storage & sequestration Water pollution regulation Sedimentation control Flood Control
  10. 10. Supporting Services Water for hydropower & irrigation Nursery habitat for fish Pollination
  11. 11. Cultural Services Spiritual Values Knowledge Systems Educational Values Inspiration Aesthetic Values Social Relations Sense of Place Recreation Ecotourism
  12. 12. Appropriate scales for decisions GLOBAL, SYNTHETIC 60% of global ES in decline (Millennium Assessment) $33 Trillion/y (Costanza et al. 1997 Nature)
  13. 13. 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
  14. 14. 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
  15. 15. 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?
  16. 16. 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
  17. 17. 1) what is InVEST? 2) how is a large private landowner using it? 3) how can it inform incentives?
  18. 18. InVEST Integrated Valuation of Ecosystem Services & Tradeoffs • Multiple services • Spatially explicit • Flexible and transferable • Biophysical and economic terms • Driven by future scenarios
  19. 19. InVEST 1.0 Beta can map Biodiversity Water pollution regulation Carbon storage & sequestration Managed timber production Crop pollination Avoided reservoir sedimentation
  20. 20. The next version of InVEST will add Tourism and recreation Agricultural production Flood mitigation Hydropower production Irrigation Open access products (NTFPs)
  21. 21. Scenario Drivers Management – Water release schedule – Fertilizer application rate Climate Change – Land cover change – Precipitation and temperature Population Growth – Land cover change – Increased demand
  22. 22. InVEST Map of land use/ land cover
  23. 23. Data inputs on natural capital Land Use Soil type Topography
  24. 24. Data inputs on built capital Roads Cities Infrastructure
  25. 25. InVEST Supply • Water flow across landscape Biophysical processes • Pollinator Map of abundance land use/ • Crop potential land yield cover • Terrestrial carbon storage & sequestration
  26. 26. Outputs of ecosystem service levels supplied and demanded
  27. 27. InVEST Supply Use • Water flow across landscape Biophysical processes • Pollinator Map of abundance land use/ • Crop potential land yield cover • Terrestrial carbon storage & sequestration
  28. 28. InVEST Supply Use • Water flow across landscape Biophysical processes • Pollinator Map of abundance land use/ • Crop potential land yield cover • Terrestrial carbon storage & sequestration
  29. 29. InVEST Supply Use • Water flow across landscape Biophysical processes • Pollinator Map of abundance land use/ • Crop potential land yield cover • Terrestrial carbon storage & sequestration
  30. 30. 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
  31. 31. 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
  32. 32. 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
  33. 33. 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
  34. 34. InVEST Interface
  35. 35. Download InVEST at http://invest.ecoinformatics.org
  36. 36. Marine InVEST is under development Fisheries Coastal Protection Recreation & Tourism
  37. 37. The Natural Capital Project US West Coast Mexico Hawai’i China Hawai’i Colombia Sumatra Ecuador Eastern Eastern Amazon Arc Mtns Arc Mtns Basin
  38. 38. Kamehameha Schools Land Assets
  39. 39. An approach that balances Economic value Environmental value Cultural value Educational value Community value
  40. 40. Land Use Planning on the North Shore, O’ahu Island of O’ahu
  41. 41. Current Landscape Agriculture Invasive Forest Low Intensity Development Native Shrubland & Forest
  42. 42. But, what should this landscape look like in the future to meet all these goals? ?
  43. 43. Developing future scenarios Status Quo Diversified Agriculture  and Forestry Biofuels (sugar cane) Residential subdivision
  44. 44. Growing a biofuels feedstock Sugarcane
  45. 45. Expanding residential development Subdivision
  46. 46. Cultivating diversified agriculture & forestry Reforestation Food crops for local markets
  47. 47. Questions for InVEST What is the flow of  ecosystem services on  today’s landscape? How might these  service flows change in  the future?
  48. 48. Current Landscape: Water Quality Relative Water  Quality Score Nitrogen Export
  49. 49. Current Landscape: Water Quality Relative Water  Quality Score Nitrogen Export Active agricultural fields  and developed areas are  main sources
  50. 50. Current Landscape: Carbon Storage High Storage Low Storage
  51. 51. Current Landscape: Plantation Income Rental Rate ($/ac) 100 220 400
  52. 52. Current Landscape: Plantation Income Rental Rate ($/ac) 100 220 400 Most fields not  rented yet incurring  high property taxes Losing $0.53 M  each year
  53. 53. Questions for InVEST What is the flow of  ecosystem services on  today’s landscape? How might these  service flows change in  the future?
  54. 54. Scenario Maps: Water Quality (reduced Nitrogen export) Div. Ag. & Forestry Biofuels Subdivision Change in  Relative Score
  55. 55. Scenario Maps: Carbon Sequestration Div. Ag. & Forestry Biofuels Subdivision Change  (tC/ha)
  56. 56. Scenario Maps: Plantation Income Div. Ag. & Forestry Biofuels Subdivision Value ($/ac) 50 250 10,000 17,500
  57. 57. Summary of Scenario Changes CarbonSeq’n  Water Quality  Plantation  (tC/ha) Score Income ($M)  Subdivision Scenarios Biofuels &Forestry Div. Agr. 
  58. 58. Summary of Scenario Changes CarbonSeq’n  Water Quality  Plantation  (tC/ha) Score Income ($M)  Subdivision Scenarios Biofuels &Forestry Div. Agr. 
  59. 59. Price premiums for “green” products Fair conditions and payment Legislation is coming - emerging market - inform policy
  60. 60. 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
  61. 61. www.naturalcapitalproject.org Katie Arkema karkema@stanford.edu

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