The New York Times today has an update on the work of Gretchen Daily at Stanford University and others to bring the idea of natural capital — the services nature provides that we rarely consider — to the forefront of our thinking. The story is centered on Daily’s work in Costa Rica, a country that has recognized the value of its ecosystems and how they drive not only the tourism so vital to the economy but other economies as well.
Here’s a snippet of the story:
In recent years, Dr. Daily has expanded her research to include a global focus. She is one of the pioneers in the growing worldwide effort to protect the environment by quantifying the value of “natural capital” — nature’s goods and services that are fundamental for human life — and factoring these benefits into the calculations of businesses and governments. Dr. Daily’s work has attracted international attention and has earned her some of the world’s most coveted environmental awards.
Part of Dr. Daily’s interest in natural capital emerged from her research in Costa Rica, where she became intrigued with an innovative government initiative known as Payment for Environmental Services. The program, initiated in the 1990s, pays landowners to maintain native forest rather than cut it and has contributed to a significant reduction in Costa Rica’s deforestation rate.
The Costa Rican program helped inspire Dr. Daily to co-found the Natural Capital Project in 2006. NatCap, as the program is known, is a venture led by Stanford University, the University of Minnesota and two of the world’s largest conservation organizations, the Nature Conservancy and the World Wildlife Fund. It aims to transform traditional conservation methods by including the value of “ecosystem services” in business, community and government decisions. These benefits from nature — like flood protection, crop pollination and carbon storage — are not part of the traditional economic equation.
I first wrote about the value of nature for National Wildlife several years ago. Over the years, I’ve done several stories about Daily’s work. In that first piece, I used New York’s water system as an example of prudent investment in nature.
What’s this ecosystem worth to the city of New York? So far, $1.3 billion. That’s what the city has committed to build sewage treatment plants upstate and to protect the watershed through a variety of incentive programs and land purchases. It’s a lot of money. But it’s a fraction of the cost of the filtration plant—a plant, city officials note, that wouldn’t work as tirelessly or efficiently as nature.
“It was a stunning thing for the New York City council to think maybe we should invest in natural capital,” says Stanford University researcher Gretchen Daily. Daily is one of a growing number of academics—some from economics, some from ecology—who are putting dollar figures on the services that ecosystems provide. She and other “ecological economists” look not only at nature’s products—food, shelter, raw materials—but at benefits such as clean water, clean air, flood control and storm mitigation, irreplaceable services that have been taken for granted throughout history. “Much of Mother Nature’s labor has enormous and obvious value, which has failed to win respect in the marketplace until recently,” Daily writes in the book The New Economy of Nature: The Quest to Make Conservation Profitable.
I live in Norfolk, a city dealing with sea level rise and the destruction of the Chesapeake Bay. Every time an economic downturn threatens federal and state coffers, politicians who can only see to the next election, slash funding to protect the Chesapeake Bay. That’s ridiculously short-sighted The Bay is a huge economic engine, as I wrote about for Port Folio some time back.
There are strands of information scattered about that provide a glimpse of the Bay watershed’s value and what is being lost to its continuing decline.
The Blue Ribbon Finance Panel devoted one page of its 44-page report last year to economic issues. The panel noted that in Maryland, for example, economists have measured recreational boating activity at $2 billion a year. In Pennsylvania, the estimate is $4.7 billion a year for fishing activities across the whole state, resulting in 43,000 jobs outfitting, lodging and guiding anglers. (Interestingly, that means recreational fishing is a bigger industry than agriculture in the state, according to 2001 figures, which totaled $4.4 billion).
“Any way you calculate it, the economic value of the Bay and its rivers is enormous. Homes along the waterfront are often valued in the hundreds of thousands or even in the millions of dollars,” the report added. “Businesses in the region are able to attract top-notch talent because of the lure of the Chesapeake. In fact, from real estate to shipping to seafood and tourism, it would be difficult to identify a major segment of the region’s economy that is not shaped and enhanced by the Chesapeake.”
The report even dipped into ecosystem services, noting that a clean environment has direct benefits for human health by citing the Bush Administration’s claim that health benefits under the Clean Air Act would grow to $110 billion per year by 2020, including 14,000 avoided deaths.
It is past time to consider the value of natural capital and realize what we don’t preserve and protect now will only cost us more in the long run.
(Top two photos are from Costa Rica; the bottom one is from the Alligator River National Wildlife Refuge in North Carolina).