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Updates in the Valuation of Ecosystem Services


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New Metrics 2012
9/27 15.30 - 16.15
Michelle Lapinski

Published in: Business
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Updates in the Valuation of Ecosystem Services

  1. 1. Updates in the Valuation of Ecosystem Services Moderator:Michelle Lapinski, Director of Corporate Practices, The Nature Conservancy Panelists: Mark Weick, Director of Sustainability, The Dow Chemical Company Diane OConnor, VP Environment, Health, Safety and Sustainability, Xerox
  2. 2. Ecosystem ServicesThe benefits people and businessesderive from ecosystems
  3. 3. Natural Capital Coastal natural hazard protectionFreshwater supply Air pollution mitigation via re/forestation Photos: Jennifer Molnar
  4. 4. Value of nature Company Public Biodiversity & Ecosystems Jennifer Molnar
  5. 5. Business Message…and Action• Nature has value to business – degradation is risk and business opportunity• Natural capital is a productive asset alongside financial and human capital• Leading from the “bottom up” –progressive private sector action – beyond one size fits all• Not waiting for government to act, but ready to collaborate: $500B in commitments
  6. 6. The New Metrics ofSustainable BusinessValuation of Ecosystem Services:Xerox/TNC PartnershipXerox Environment, Health, Safety and SustainabilitySeptember 27, 2012
  7. 7. Xerox TodayWith sales approaching $23 billion, we are the world’s largest enterprise for businessprocess and document management.• Employees: 140,000 worldwide• Headquarters: Norwalk, CT• Chairman and CEO: Ursula M. Burns Services Technology Business Process IT Outsourcing Document Technology Outsourcing and Managed Print Services
  8. 8. Sustainability ProgramFundamentals for SuccessQuantitative Value ChainApproach FocusLeverage CommunicatePartnerships “Wins”
  9. 9. Steps Toward a SustainablePaper CycleResponsible Sourcing Responsible Use Responsible Disposal Environmentally-sound Xerox equipment is Enabling beneficial papers: designed for efficient management: use of paper:• Forestry Practices • Print management • Xerox paper,• Supplier Requirements features packaging, and prints for Paper Mills • Recycled paper runs are recyclable• Environmentally Sound reliably Paper Offerings • On-ramp to digital – (FSC, PEFC, SFI) document management – Recycled Paper • Workflow SW tools
  10. 10. Sustainable Paper Cycle MetricsTNC Provides the Upstream SME for Xerox Goal of a Sustainable Paper CycleResponsible Sourcing Responsible Use Responsible Disposal Environmentally-sound Xerox equipment is Enabling beneficial papers: designed for efficient management: use of paper: • % paper offerings FSC, • Duplex rate (Managed • De- inkability rating SFI, PEFC, recycled Print accounts) • % Suppliers responding to Xerox annual paper survey • % certified fibers in Xerox papers
  11. 11. The Nature Conservancy & Xerox Partnership Progress Report (2006 – 2012 YTD)• High Conservation Value (HCV) Resource Network- promote, train, steer – Global Network – Indonesia Learning Network• Support Implementation of the Canadian Boreal Forest Agreement• Certification- work with Xerox Suppliers and other Land Managers in select regions of North America• Forest Carbon- develop & test broadly applicable methods (domestic & int’l) for quantifying carbon from improved forest management – Serve as a platform for suppliers receiving potential carbon benefits • 20% of tropical forests are • Reduced impact logging slated to be logged rarely achieved • 30-50% of logging impacts • Much work needed can be avoided while • Methodology – critical piece maintaining timber production
  12. 12. A Breakthrough Collaboration: The Economics of EcosystemsMark WeickDirector, Sustainability ProgramsThe Dow Chemical Company
  13. 13. Driving the Next Generation of ChangeDow’s 2015 Sustainability Goals Maintain absolute Reduce our energy greenhouse gas intensity 25% emissions below 2006 levels Achieve at least Publishthree breakthroughs product safetythat will significantly assessments help solve world for all products challenges Achieve on average a Achieve individual 75% improvement of key community acceptance indicators for EH&S ratings for 100% of Dow operating excellence sites where we have a from 2005 baseline Increase the percentage of major presence sales to 10% for products that are highly advantaged by sustainable chemistry 1 October 2012 17
  14. 14. Valuing Nature – A Strategic Fit for Dow •Access to ecosystem services •Product alignment to fit growing need •Project planning and stakeholder buy-in •Expansion/Permitting Process •Green Infrastructure •Remediation •Conservation Activities •Recognition of offsets or payments from ecosystem services on lands Dow owns
  15. 15. Pilot #1:Dow Texas Operations, Freeport • Freshwater • Coastal natural hazard protection • Air pollution mitigation via reforestation Freeport
  16. 16. Future Scenarios: Freshwater 90 80 Temperature (F) 70 60 50 40 2 4 6 8 10 12 Month = current average = potential range in 2050More demand Less supply
  17. 17. Freshwater Analysis
  18. 18. Freshwater: Planning for Future Water• Future value of water• On-site / off-site responses with greatest net benefit Jennifer Molnar
  19. 19. Freeport Coastal Area Brazoria National Wildlife Refuge Stratton Largest Ridge Undeveloped Parcel Lake Jackson Plant B Oyster Creek Freeport Seaside Plant A San BernardWildlife Refuge Outside of levee system
  20. 20. Coastal:Hypothetical Output from Cost-Benefit Analysis
  21. 21. Air QualityAIR QUALITYEvaluating large-scale tree plantingfor air quality improvementExpected output: •Cost-benefit and feasibility analysis of “green infrastructure” project
  22. 22. Air Quality at Freeport: The Issues• Freeport located in Houston-Galveston-Brazoria (HGB) non- attainment area for ground-level ozone (8-hr NAAQS)
  23. 23. Air Quality: Drivers of ozone levels • Precursor emissions (NOx, VOC) • Rising temperatures: – urban expansion/built-up – regional climate change
  24. 24. Air Quality: Reforestation• Trees remove ambient pollutants (ozone, PM, NO2, SO2, CO)• We can quantify this removal• Tree planting is an EPA-approved measure for inclusion in SIPs for ozone
  25. 25. Air Quality: Identify best sites for reforestation• Biggest ozone and precursor removal• Credit/offset generation for Dow• Open land available for reforestation• Suitability for reforestation• Conservation gains• Costs
  26. 26. Pilot #2: Brazil“Project Cabana” Dow-Mitsui JV: Santa Vitória Açúcar e Álcool (SVAA)Polyethylene production from sugarcaneCultivation area: 200,000 hectares• Properties leased from local land owners. Average property size: 200 hectaresCommitment to Brazil Forest Code• Designation of permanent preservation areas (~20% land)• Tree replanting (10 for each tree removed)• Current regulation: Parcel-by-parcel basis (inefficient)Collaboration High-level Goals:• Develop an optimum selection of land for sugarcane and conservation and implement with government approval.• Optimize generation and value of ecosystem services to Dow and external beneficiaries, minimize farming cost
  27. 27. Questions?
  28. 28. Jennifer Molnar