The Natural Capital ProjectThe Natural Capital ProjectHarmonizing People & Nature:Harmonizing People & Nature:

~ Making Conservation Profitable ~~ Making Conservation Profitable ~

A New Business Model

A New Business Model

beyond reserves beyond charitybeyond biodiversity

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USD

$ (bil

lions

) B i o d i ve r s i ty O n l y

G e n e r a l E n v. P r o te c t i o n

T o ta l O D A

biod

iver

sity

climate stabilization

water purification

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A New Business Model: Livelihood Options

agric

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climate stabilization

water purification

water climate

biod

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A New Business Model: Livelihood Options

A New Business Model

• Goal?• Who pays?• How much?• To whom?• For what?• For how long?

NYC ~ Water Purification

PHYSICAL CAPITAL

• FILTRATION PLANT

• US$ 6-8 BILLION

NATURAL CAPITAL

• RESTORATION OF WATERSHED

• US$ 1-1.5 BILLION

Investment in Natural Capital

Investment in Natural Capital

Costa RicaPayment for Ecosystem Services

Climate Stabilization

Water Purification

Biodiversity Resources

Scenic Beauty

US$20 / acre-yr

Our Challenge

To develop the scientific & policy tools

forreplicating & scaling

models of success

Decisions

Ecosystems

ServicesValue

Institutions

Decisions

Ecosystems

ServicesValue

Institutions

Biophysical Models

Economic & Cultural Models

Incentives

Information

Actions & Scenarios

Decisions

Ecosystems

ServicesValue

Institutions

Biophysical Models

Economic & Cultural Models

Incentives

Information

Actions & Scenarios

beyond reserves beyond charitybeyond biodiversity

A New Business Model

Biodiversity in Countryside

Bio

dive

rsity

Land Use Intensity

Bio

dive

rsity

Land Use Intensity

Biodiversity in Countryside

Biodiversity in Costa Rican Countryside

Short-term Outlook: Good

Bio

dive

rsity

Land Use Intensity

India

Long-term Outlook?

Shrub Cashew

ForestProduction Forest

Shrub Cashew

Forest

Arecanut

Production Forest

Spec

ies R

ichn

ess

Spec

ies R

ichn

ess

Spec

ies R

ichn

ess

Spec

ies R

ichn

ess

All BirdsAll Birds Forest BirdsForest Birds

96% of all species detected outside of Forest 86% of forest species in Production Forest & Arecanut

Spec

ies R

ichn

ess

Spec

ies R

ichn

ess

Spec

ies R

ichn

ess

Spec

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ess

All BirdsAll Birds Forest BirdsForest Birds

Great Hornbill Malabar Grey Hornbill Photo credit: D. Behrens Photo credit: M.S. Ashok

Countries withSignificant Arecanut Cultivation

• No substitute for native habitat

Protected areas key

• High potential conservation value in many widespread production systems

Window of opportunity

Beyond Reserves

Mainstream

beyond reserves beyond charitybeyond biodiversity

A New Business Model

Decisions

Ecosystems

ServicesValue

Institutions

Biophysical Models

Economic & Cultural Models

Incentives

Information

Actions & Scenarios

1. Provisioning ServicesSeafood

Crops & LivestockForest Products

2. Regulating ServicesClimate Stabilization

Water SupplyFire PreventionFlood Control

Sedimentation ControlPest ControlPollination

3. Cultural Services

Spiritual Values Inspiration

Aesthetic ValuesKnowledge SystemsEducational Values

Sense of PlaceRecreation Ecotourism

4. Supporting Services & Preservation of Options

Primary Production

Biodiversity Resilience

Photo ~ Tokai no Inaka

Satoyama

ProvisioningRegulating Cultural & Supporting Services

& Options

Valuing Ecosystem Services

Global Global SyntheticSynthetic

Valuing Ecosystem Services

Value of rainforest: US$ 60,000/year

to 1 farm (Ricketts et al. 2004 PNAS)

$$

Local Local SpecificSpecific

Valuing Ecosystem Services

Local Local SpecificSpecific

Value of rainforest: US$ 60,000/year to 1 farm (Ricketts et al. 2004 PNAS)

$ $Global Global

SyntheticSynthetic

The Natural Capital Project

1. Science → new tools2. Demonstration in sites / sectors globally3. Engaging leaders

InVESTIntegrated Valuation of Ecosystem Services & Tradeoffs

Scenario ToolHow will ecosystem service values change…

With climate change?

With population growth?

With a new policy or program?

What is the Return on Investment of restoring riparian habitat, in terms of

agricultural revenues

drinking water quality

erosion control

carbon sequestration

& biodiversity?

InVEST 1.0 Beta can map

Biodiversity

Crop pollination

Carbon sequestration & storage

Water pollution regulation

Managed timber production

Avoided reservoir sedimentation

The next version of InVEST will add

Irrigation

Flood mitigation

Agricultural production

Hydropower production

Open access products

Tourism & recreation

Fisheries, Aquaculture Coastal Protection Recreation & Tourism

Marine InVEST

Data inputs on natural capital

Land Use Soil type Topography

Data inputs on built capital

Roads Cities Infrastructure

Outputs of ecosystem service levels

supplied and demanded

Economic Valuation• Market valuation

– Carbon– Timber

• Avoided damage costs– Water treatment– Flood risk– Reservoir maintenance

• Production economics– Water for irrigation– Crop pollination

ChoicesChange in Management, Climate,

Population

Biophysical Models Maps

Tradeoffs

Balance sheetsEconomic Models

Stakeholder Engagement

Decisions

Ecosystems

ServicesValue

Institutions

Biophysical Models

Economic & Cultural Models

Incentives

Information

Actions & Scenarios

China

EasternArc Mtns

West Coast

Hawai’i

Amazon Basin

MexicoColombia

Ecuador

The Natural Capital Project

Indonesia

Land Use Planning in Oregon

• How to balance goals?How to balance goals?

• How to stabilize climate?How to stabilize climate?

West Coast

O R E G O N

Willamette Basin

Scenarios and Decisions

1990 2050

Population doubling and development in the Basin over the next 50 years:

Change in carbon storage

Loss

Gain

Tonnes C ha-1

No Change

Changes in multiple services

Water Quality

Flood Control

Erosion Control

Carbon Storage Biodiversity

Market Value

Analysis of alternative futures

Status Quo

Development

Conservation

Biodiversity Market ValueWater Quality

Erosion Control

Flood Control

Carbon Storage

Formal Carbon MarketWithout With

0.54

0.55

0.56

0.57

0.58

14.5 15 15.5 16 16.5

Commodity Value (Billions of US$)

Bio

dive

rsity

Sco

re

Conservation

Development

Plan

Conservation

Status Quo

Development

0.54

0.55

0.56

0.57

0.58

14.5 15 15.5 16 16.5

Commodity Value (Billions of US$)

Bio

dive

rsity

Sco

re

Conservation

Development

Plan

Formal Carbon MarketWithout With

Status Quo

Hawai’i

Land Use Planning in Hawai’i

• How to balance goals?How to balance goals?

• How to stabilize climate?How to stabilize climate?

Kamehameha Schools Land Assets

A new approach, balancing

Economic value

Environmental value

Cultural value

Educational value

Community value

Kamehameha Schools Land Use Planning

Island of O`ahu

Current Landscape

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

?

Developing scenarios

Growing a biofuels feedstock

Sugarcane

Expanding residential development

Housing

Diversified agriculture & forestry

Food crops for local markets

Reforestation

What is the flow of ecosystem services on today’s landscape?

How might these service flows change in the future?

Questions for InVEST

Current Landscape: Water Quality

Total Nitrogen ExportRelative Water Quality Score

What is the flow of ecosystem services on today’s landscape?

How might these service flows change in the future?

Questions for InVEST

Biofuels

Subdivision

Ag & Forestry

Carbon Storage

Water Quality

Water Yield

Income

Changes in Ecosystem Services

Bio

fuel

sS

ubdi

visi

onAg

ricul

ture

&

Fore

stry

Scen

ario

sCarbon Storage

Water Quality

Water Yield

IncomeChanges in Ecosystem Services

Diversified agriculture & forestry ~ the desired balance, with income, climate control and clean water benefits.

• Image of Hawaiian islands

State Climate & ES Policy

State of Hawai`i

• Goal?• Who pays?• How much?• To whom?• For what?• For how long?

State of Hawai`i

• Goal?• Who pays?• How much?• To whom?• For what?• For how long?

• ↓ GHG emissions• Consumers• Tax of US$1 / barrel oil• Land managers• C-seq & co-benefits• ???

China

EasternArc Mtns

West Coast

Hawai’i

Amazon Basin

MexicoColombia

Ecuador

The Natural Capital Project

Indonesia

Colombia

Ecuador

• What activities give best returns?

• Where should activities be targeted?

The Natural Capital Project

Quito Water Fund

Colombia

• Where should activities be targeted?

• Where and how much should activities be mitigated?

The Natural Capital Project

Colombia’s Ministry of the Environment

mining

agriculture

transportation

and other major sectors.

China• Ecosystem Function

Conservation Areas

• County Master Planning

• Payment design

The Natural Capital Project

Looking ahead…

Thank you

Photo ~ Tokai no Inaka