Valuing ecosystem services toward better environmental decision-making

290 Pages·2005·2.635 MB·English

by  Committee on Assessing and Valuing the Services of Aquatic and Related Terrestrial Ecosystems, National Research Council

VALUING
ECOSYSTEM
SERVICES
TOWARD BETTER ENVIRONMENTAL DECISION–MAKING

Committee on Assessing and Valuing the Services of Aquatic and Related
Terrestrial Ecosystems

Water Science and Technology Board

Division on Earth and Life Studies

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regard for appropriate balance.

Support for this project was provided by the U.S. Environmental Protection
Agency under Award No. X-82872401; U.S. Army Corps of Engineers Award
No. DACW72-01-P-0076; U.S. Department of Agriculture, Cooperative State
Research, Education, and Extension Service under Award No. 2001-38832-
11510; U.S. Department of Agriculture-Research, Education, and Economics,
Agricultural Research Service, Administrative and Financial Management,
Extramural Agreements Division under Award No. 59-0790-1-136. Any
opinions, findings, conclusions, or recommendations expressed in this
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vi
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vi
COMMITTEE ON ASSESSING AND VALUING THE SERVICES
OF AQUATIC AND RELATED TERRESTRIAL ECOSYSTEMS

GEOFFREY M. HEAL, Chair, Columbia University, New York
EDWARD B. BARBIER, University of Wyoming, Laramie
KEVIN J. BOYLE, University of Maine, Orono
ALAN P. COVICH, University of Georgia, Athens
STEVEN P. GLOSS, Southwest Biological Science Center, U.S. Geological
Survey, Tucson, AZ
CARLTON H. HERSHNER, Virginia Institute of Marine Science, Gloucester Point
JOHN P. HOEHN, Michigan State University, East Lansing
CATHERINE M. PRINGLE, University of Georgia, Athens
STEPHEN POLASKY, University of Minnesota, St. Paul
KATHLEEN SEGERSON, University of Connecticut, Storrs
KRISTIN SHRADER-FRECHETTE, University of Notre Dame, Notre Dame,
Indiana

National Research Council Staff

MARK C. GIBSON, Study Director
ELLEN A. DE GUZMAN, Research Associate

v
WATER SCIENCE AND TECHNOLOGY BOARD

R. RHODES TRUSSELL, Chair, Trussell Technologies, Inc., Pasadena,
California
MARY JO BAEDECKER, U.S. Geological Survey (Retired), Vienna, Virginia
GREGORY B. BAECHER, University of Maryland, College Park
JOAN G. EHRENFELD, Rutgers University, New Brunswick, New Jersey
DARA ENTEKHABI, Massachusetts Institute of Technology, Cambridge,
Massachusetts
GERALD E. GALLOWAY, Titan Corporation, Reston, Virginia
PETER GLEICK, Pacific Institute for Studies in Development, Environment,
and Security, Oakland, California
CHARLES N. HAAS, Drexel University, Philadelphia, Pennsylvania
KAI N. LEE, Williams College, Williamstown, Massachusetts
CHRISTINE L. MOE, Emory University, Atlanta, Georgia
ROBERT PERCIASEPE, National Audubon Society, New York, New York
JERALD L. SCHNOOR, University of Iowa, Iowa City
LEONARD SHABMAN, Resources for the Future, Washington, DC
KARL K. TUREKIAN, Yale University, New Haven, Connecticut
HAME M. WATT, Independent Consultant, Washington, DC
CLAIRE WELTY, University of Maryland, Baltimore County
JAMES L. WESCOAT, JR., University of Illinois at Urbana-Champaign

Staff

STEPHEN D. PARKER, Director
LAURA J. EHLERS, Senior Staff Officer
MARK C. GIBSON, Senior Staff Officer
JEFFREY W. JACOBS, Senior Staff Officer
WILLIAM S. LOGAN, Senior Staff Officer
LAUREN E. ALEXANDER, Staff Officer
STEPHANIE E. JOHNSON, Staff Officer
M. JEANNE AQUILINO, Financial and Administrative Associate
ELLEN A. DE GUZMAN, Research Associate
PATRICIA JONES KERSHAW, Study/Research Associate
ANITA A. HALL, Administrative Assistant
DOROTHY K. WEIR, Senior Project Assistant
vi
Preface

The development of the ecosystem services paradigm has enhanced our un-
derstanding of how the natural environment matters to human societies. We
now think of the natural environment, and the ecosystems of which it consists,
as natural capital—a form of capital asset that, along with physical, human, so-
cial, and intellectual capital, is one of society’s important assets. As President
Theodore Roosevelt presciently said in 1907,

The nation behaves well if it treats the natural resources as
assets which it must turn over to the next generation increased
and not impaired in value.1

Economists normally value assets by the value of services that they provide:
Can we apply this approach to ecological assets by valuing the services provided
by ecosystems?
An ecosystem is generally accepted to be an interacting system of biota and
its associated physical environment. Aquatic and related terrestrial ecosystems
are among the most important ecosystems in the United States, and Congress
through the Clean Water Act has recognized the importance of the services they
provide and has shown a concern that these services be restored and maintained.
Such systems intuitively include streams, rivers, ponds, lakes, estuaries, and
oceans. However, most ecologists and environmental regulators include vege-
tated wetlands as aquatic ecosystems, and many also think of underlying
groundwater aquifers as potential members of the set. Thus, the inclusion of
“related terrestrial ecosystems” for consideration in this study is a reflection of
the state of the science that recognizes the multitude of processes linking terres-
trial and aquatic systems.
Many of the policies implemented by various federal, state, and local regu-
latory agencies can profoundly affect the nation’s aquatic and related terrestrial
ecosystems, and in consequence, these bodies have an interest in better under-
standing the nature of their services, how their own actions may affect them, and
what value society places on their services. The need for this study was recog-
nized in 1997 at a strategic planning session of Water Science and Technology
Board (WSTB) of the National Research Council (NRC). The Committee on
Assessing and Valuing the Services of Aquatic and Related Terrestrial Ecosys-
tems was established by the NRC in early 2002 with support from the U.S.
Environmental Protection Agency (EPA), U.S. Army Corps of Engineers

1 Inscribed on the wall of the entrance hall of the American Museum of Natural History,
Washington, D.C.
vii
viii Preface

(USACE), and U.S. Department of Agriculture (USDA). Its members are drawn
from the ranks of economists, ecologists, and philosophers who have profes-
sional expertise relating to aquatic ecosystems and the valuation of ecosystem
services.
In drafting this report the committee members have sought to understand
and integrate the disciplines, primarily ecology and economics, that cover the
field of ecosystem service valuation. In fact, the committee quickly discovered
that this is not an established field—ecologists have only recently begun to think
in terms of ecosystem services and their determinants, while economists have
likewise only very recently begun to incorporate the factors affecting ecosystem
services into their valuations of these services. If we as a society are to under-
stand properly the value of our natural capital, which is a prerequisite for sensi-
ble conservation decisions, then this growing field must be developed further
and this report provides detailed recommendations for facilitating that develop-
ment. Although the field is relatively new, a great deal is understood, and
consequently the committee makes many positive conclusions and recommenda-
tions concerning the methods that can be applied in valuing the services of
aquatic and related terrestrial ecosystems. Furthermore, because the principles
and practices of valuing ecosystem services are rarely sensitive to whether the
underlying ecosystem is aquatic or terrestrial, the report’s various conclusions
and recommendations are likely to be directly, or at least indirectly applicable to
valuation of the goods and services provided by any ecosystem.
The study benefited greatly from the knowledge and expertise of those who
made presentations at our meetings, including Richard Carson, University of
California, San Diego; Harry Kitch, USACE; John McShane, EPA; Angela Nu-
gent, EPA; Michael O’Neill, USDA; Mahesh Podar, EPA (retired); John Pow-
ers, EPA; Stephen Schneider, Stanford University; and Eugene Stakhiv, USACE
Institute for Water Resources. The success of the report also depended on the
support of the NRC staff working with the committee, and it is a particular
pleasure to acknowledge the immense assistance of study director Mark Gibson
and WSTB research associate Ellen de Guzman. Finally, of course, the commit-
tee members worked extraordinarily hard and with great dedication, expertise,
and good humor in pulling together what was initially a rather disparate set of
issues and methods into the coherent whole that follows.
This report was reviewed in draft form by individuals chosen for their
diverse perspectives and technical expertise in accordance with the procedures
approved by the NRC’s Report Review Committee. The purpose of this inde-
pendent review is to provide candid and critical comments that will assist the
institution in making its published report as sound as possible and to ensure that
the report meets institutional standards for objectivity, evidence, and respon-
siveness to the study charge. The review comments and draft manuscript remain
confidential to protect the integrity of the deliberative process. We wish to
thank the following individuals for their review of this report: Mark Brinson,
East Carolina University, Greenville, North Carolina; J. Baird Callicott, Univer-
sity of North Texas, Denton; Nancy Grimm, Arizona State University, Tempe;
Preface ix

Michael Hanemann, University of California, Berkeley; Peter Kareiva, The
Nature Conservancy, Seattle, Washington; Raymond Knopp, Resources for the
Future, Washington, D.C.; Sandra Postel, Global Water Policy Project, Amherst,
Massachusetts; and Robert Stavins, Harvard University, Cambridge.
Although the reviewers listed above have provided many constructive
comments and suggestions, they were not asked to endorse the conclusions or
recommendations, nor did they see the final draft of the report before its release.
The review of this report was overseen by John Boland, Johns Hopkins Univer-
sity, Baltimore. Appointed by the National Research Council, he was responsi-
ble for making certain that an independent examination of the report was care-
fully carried out in accordance with institutional procedures and that all review
comments were carefully considered. Responsibility for the final content of this
report rests entirely with the authoring committee and the NRC.

Geoffrey M. Heal, Chair