Corporate Ecosystem Valuation (CEV) Road Test Case Study: Lafarge May 3, 2011.
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Transcript of Corporate Ecosystem Valuation (CEV) Road Test Case Study: Lafarge May 3, 2011.
Corporate Ecosystem Valuation (CEV)Corporate Ecosystem Valuation (CEV)
Road Test Case Study: Lafarge
May 3, 2011
Suzanne Ozment, World Resources Institute
Amy Rosenthal, World Wildlife Fund
John Finisdore, The Nature Conservancy
The Presenters
Lafarge Group
• Major positions in three product lines:– Cement– Aggregates and Concrete– Gypsum Wallboard
• Global manufacturing operations• Approx. 80,000 employees worldwide• Approx. 2,000 facilities worldwide• Approx. 720 quarries worldwide
Assess the value of ecosystem services to enhance Lafarge’s land management planning for future quarry reclamation
Better understand ecosystem services, valuation, and how to incorporate ecosystem services into Lafarge business decision-making
The Objective & Partnership
The Plan for Ecosystem Valuation
Tools:• Corporate Ecosystem Services Review
• Wildlife Habitat Benefits Estimation Toolkit
• Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST)
Ecosystem Valuation Partnership
• Major positions in three product lines:– Cement– Aggregates and Concrete– Gypsum Wallboard
• Global manufacturing operations• Approx. 80,000 employees worldwide• Approx. 2,000 facilities worldwide• Approx. 720 quarries worldwide
www.wri.org/ecosystems/esr
5. Develop strategies
4. Identify business risks and opportunities
3. Analyze trends in priority services
2. Identify priority ecosystem services
1. Select the scope
The Corporate Ecosystem Services Review
Huron Watershed Land Use (1996)Forest 66%
Agriculture 22%
Residential/Industrial
10%
Other 2%
PIQ
Step 2: Identify dependence & impacts
Step 3. Trends analysis framework
Condition and trends in ecosystem service
Direct driversActivities
of others
Indirect drivers
Company activities
Ecosystem Valuation Tools
• Corporate Ecosystem Services Review
• Wildlife Habitat Benefits Estimation Toolkit
• Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST)
Wildlife Habitat Benefits Estimation Toolkit
• Spreadsheet-based valuation models• Value databases & peer-reviewed studies of
ecosystems and species• Recreation use model• Technical reports & user’s manual
The WHBE Toolkit
₊ Increases in property value from nearby open space
₊ Outdoor recreation associated with wildlife
₊ Conservation of threatened & endangered species
₊ Some ecosystem services, using ‘benefits transfer’
= Total conservation value
of a site for wildlife + habitat
How the Toolkit works: pros & cons
Pros• Synthesizes information from many studies• Straightforward data needs• Useful for rapid assessment, cheaper than new studies
Cons• Requires some technical expertise • Not specifically designed for business applications• Values derived from other study sites can be inaccurate
Toolkit is Best Used When
• Working in the US context• The area is a commonly
studied habitat type• Studies are available for
characteristics being evaluated
• Coarse estimates are needed
Benefit transfer
Single point
estimate
Avg value
Admin approved value
Use value estimate at site
Natural Capital Project: InVEST
Integrated Valuation of Ecosystem Services and Tradeoffs
• Family of models that enables users to quantify, map and value the ecosystem service impacts of alternative decisions.
• Maps, tradeoff curves, balance sheets
Lands and waters:CarbonHydropowerWater purificationAvoided sedimentationManaged timber productionCrop pollinationOceans and coasts:Wave energyCoastal hazardsAquacultureAesthetic viewsBiodiversity
Ecosystem Services
Measures & Values
• Supply of service
• Delivery of service
• Value
Market valuationAvoided damage costsProduction Economics
InVEST is Best Used When
• Addressing a specific business strategy, question or decision
• Comparing alternative options or scenarios
• Managing land, water or coastal resources
• Considering moderate resolution and scale
Land cover 2000
Conservation 2025 BAU 2025
or
Pros• Spatially explicit results comparing options• Good for addressing multiple benefits & risks
Cons• Requires technical expertise, data & time• Not specifically designed for business
applications• Without reliable, precise input data, values
derived can be inaccurate
How InVEST works: pros & cons
Project Work Flow
Project team• 3 technical team, 2 reporting team, 2 Lafarge
team, review & support from numerous othersTimeline • 6 months
1. kick-off & scoping, 2. planning & valuation,3. review & reporting
Tools• 4 models, 1 reportCost• ~ $60,000
Results: Habitat Benefits
Risks & Opportunities: Water contamination v. purification
Nitrogen pollutant loadPIQ Total: ~2,500 kg/year
Nitrogen regulation services
PIQ Total: over 3,300 kg/year
*In PIQ, nutrient exported goes through sediment settlement system*
Value of Ecosystem Services
Valuation of Erosion Regulation Services PIQ Total: ~$2,000,000 per year
PIQ Total: over 145,000 metric tons retained annually
Challenges & risks successes & opportunities
Complexity Uncertainty Landscape scale
Stakeholders
Data, techniques & costs
Defined business decision
Defined material risks and opportunities
Consistency, conservative, transparency, validation
Physical measurement
Strive for “necessary”
Economic valuation
Engage experts
Data, techniques & costs
Use sensitivity analysis
AcknowledgementsAcknowledgements
Lafarge: Harve Stocke & David Carroll
WRI: Susan Minnemeyer & Andrew Leach
Natural Capital Project: Nirmal Bhagabati, Emily McKenzie, Heather Tallis, Driss Enaanay, Sheri Willoughby