Natural Capital Project Presentation
64
IT PAYS TO BE NICE Economic models to encourage social and environmental responsibility Katie Arkema April 10, 2009 Mills College
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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
Transcript of Natural Capital Project Presentation
IT PAYS TO BE NICEEconomic models to encourage
social and environmental responsibility
Katie ArkemaApril 10, 2009Mills College
True costs and benefits
Links between economics and nature
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
InVEST2. Link this information to policy &
management decisions
Decisions
Ecosystems
ServicesValue
Institutions
Biophysical Models
Economic Models
Incentives
Information
Actions & Scenarios
Ecosystem ServicesEcosystems provide a wide array of goods and services
of value to people
SeafoodCrops & LivestockForest Products
Provisioning Services
Climate storage & sequestration
Water pollution regulation
Sedimentation controlFlood Control
Regulating Services
Water for hydropower & irrigation
Nursery habitat for fishPollination
Supporting Services
Spiritual ValuesKnowledge SystemsEducational Values
InspirationAesthetic ValuesSocial RelationsSense of Place
RecreationEcotourism
Cultural Services
Appropriate scales for decisionsGLOBAL, SYNTHETIC
60% of global ES in decline (Millennium Assessment)
$33 Trillion/y (Costanza et al. 1997 Nature)
Presenter
Presentation Notes
Value of rainforest: US$ 60,000/year to 1 farm
Appropriate scales for decisionsGLOBAL, 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 decisionsGLOBAL, 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
NEEDED• region/landscape scale
• spatially explicit• multiple services
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 decisionsGLOBAL, 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
InVEST
1) what is InVEST?2) how is a large private
landowner using it?3) how can it inform
incentives?
• Multiple services• Spatially explicit• Flexible and transferable• Biophysical and economic terms• Driven by future scenarios
InVEST Integrated Valuation of Ecosystem Services & Tradeoffs
InVEST 1.0 Beta can map
Biodiversity
Crop pollination
Carbon storage & sequestration
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 (NTFPs)
Tourism and recreation
Management– Water release schedule– Fertilizer application rate
Climate Change– Land cover change – Precipitation and temperature
Population Growth– Land cover change– Increased demand
Scenario Drivers
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
Map of land use/ land cover
Bio
phys
ical
proc
esse
s• Water flow across landscape
• Pollinator abundance
• Crop potentialyield
• Terrestrial carbon storage & sequestration
Supply
Outputs of ecosystem service levelssupplied and demanded
InVEST
Map of land use/ land cover
Bio
phys
ical
proc
esse
s• Water flow across landscape
• Pollinator abundance
• Crop potentialyield
• Terrestrial carbon storage & sequestration
SupplySupply Use
Supply Use
InVEST
Map of land use/ land cover
Bio
phys
ical
proc
esse
s• Water flow across landscape
• Pollinator abundance
• Crop potentialyield
• Terrestrial carbon storage & sequestration
Supply
InVEST
Map of land use/ land cover
Bio
phys
ical
proc
esse
s• Water flow across landscape
• Pollinator abundance
• Crop potentialyield
• Terrestrial carbon storage & sequestration
SupplySupply Use
InVEST
Map of land use/ land cover
Bio
phys
ical
proc
esse
s• Water flow across landscape
• Pollinator abundance
• Crop potentialyield
• Terrestrial carbon storage & sequestration
Supply Use
• Quality water for human use
• Abundance in agriculture or flowering fields
• Crop potential yield
=
InVEST
Map of land use/ land cover
Bio
phys
ical
proc
esse
s• Water flow across landscape
• Pollinator abundance
• Crop potentialyield
• Terrestrial carbon storage & sequestration
Supply Use Value
• Quality water for human use
• Abundance in agriculture or flowering fields
• Crop potential yield
=
Economic ValuationMarket 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
Map of land use/ land cover
Bio
phys
ical
proc
esse
s• Water flow across landscape
• Pollinator abundance
• Crop potentialyield
• Terrestrial carbon storage & sequestration
Supply Use Value
• Quality water for human use
• Abundance in agriculture or flowering fields
• Crop potential yield
=
• Avoided treatment costs
• Market value added from pollinators
• Market valuefrom crops
• Social benefitof avoidedcarbonemissions
InVEST Interface
Download InVEST at http://invest.ecoinformatics.org
Marine InVEST is under development
Fisheries Coastal Protection Recreation & Tourism
China
EasternArc Mtns
US West Coast
Hawai’i
Amazon Basin
MexicoColombia
Ecuador
The Natural Capital Project
EasternArc Mtns
Hawai’i
Amazon Basin
MexicoColombia
Ecuador Sumatra
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
Low Intensity Development
Native Shrubland & Forest
AgricultureInvasive
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
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
Nitrogen ExportRelative Water Quality Score
Current Landscape: Water Quality
Relative Water Quality Score
Active agricultural fields and developed areas are
main sources
Nitrogen Export
Current Landscape: Carbon Storage
Low Storage
High Storage
Current Landscape: Plantation Income
Rental Rate ($/ac)100220400
Current Landscape: Plantation Income
Losing $0.53 M each year
Rental Rate ($/ac)100220400
Most fields not rented yet incurring high property taxes
What is the flow of ecosystem services on today’s landscape?
How might these service flows change in the future?
Questions for InVEST
Scenario Maps: Water Quality (reduced Nitrogen export)
SubdivisionDiv. Ag. & Forestry BiofuelsChange in
Relative Score
Scenario Maps: Carbon SequestrationSubdivisionDiv. Ag. & Forestry Biofuels
Change (tC/ha)
Scenario Maps: Plantation Income
Value ($/ac)
50
250
10,000
17,500
SubdivisionDiv. Ag. & Forestry Biofuels
Summary of Scenario ChangesSubd
ivision
Biofue
lsDiv. A
gr.
&Forestry
Scen
arios
CarbonSeq’n (tC/ha)
Water Quality Score
Plantation Income ($M)
Subd
ivision
Biofue
lsDiv. A
gr.
&Forestry
Scen
arios
Water Quality Score
Plantation Income ($M)
CarbonSeq’n (tC/ha)
Summary of Scenario Changes
Price premiums for “green” products
Legislation is coming- emerging market- inform policy
Fair conditions and payment
63
NatCapChris ColvinMarc ConteGretchen DailyHelen FoxPeter KareivaChuck KatzErik LonsdorfGuillermo MendozaBelinda MorrisRobin NaidooErik NelsonNasser OlweroSteve PolaskyJim RegetzM. SanjayanRebecca ShawHeather TallisChristine TamBuzz ThompsonStacie WolnyMichael Wright
SupportNSF-NCEASLeverhulme TrustPackard FoundationMacArthur FoundationMoore FoundationRoger and Vicki SantPeter and Helen BingBen Hammett
