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The  Economic  Benefits  of  
Environmental  Protec5on:    An  
Overview  
 
Tom  Arsuffi  
Llano  River  Field  Sta5on  
1969 Perspective!


ecosystem is
a dynamic
complex of plant, animal and
micro-organism communities
and their non-living
environment interacting as a
functional unit
z


2
nd
most cited article in the last
15 years in the Ecology/
Environment area according to
the ISI Web of Science.


NATURE |VOL 387 | 15 MAY 1997
253!
The value of the world
`
s
ecosystem!
services and natural capital!
Robert Costanza, Ralph d
`
Arge, Rudolf de Groot, Stephen
Farber, Monica Grasso, Bruce Hannon, Karin Limburg,
Shahid Naeem, Robert V. O
`
Neill, Jose Paruelo, Robert G.
Raskin, Paul Sutton

& Marjan van den Belt
!
*
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .!
The services of ecological systems and the natural capital
stocks that produce them are critical to the functioning of
the Earth
`
s life-support system. They contribute to
human welfare, both directly and indirectly, and therefore
represent part of the total economic value of the planet.
We have estimated the current economic value of 17
ecosystem services for 16 biomes, based on published
studies and a few original calculations. For the entire
biosphere, the value (most of which is outside the
market) is estimated to be in the range of US$16–54
trillion (10
12
) per year, with an average of US$33trillion
per year. Because of the nature of the uncertainties, this
must be considered a minimum estimate. Global gross
national product total is around US$18 trillion per year.!
Ecosystem  Services  


SERVICE  –  (n)  act  of  help  or  
assistance  (v)  to  supply  with  
assistance  
 


20  dic?onary  meanings  –  La?n  
servus
 =  slave  

 
1.  Background  Informa5on  
Ecological view of economics


Human economies
exist within, and
depend on, the
environment


Without natural
resources, there
would be no
economies
Valuing ecosystems goods and services


Our society mistreats the very systems that sustain it
-

the market ignores/undervalues ecosystem values


Nonmarket values
= values not included in the price of a
good or service
Source:
Adapted from R. Costanza
et al.
, “The Value of
the World’s Ecosystem Services and Natural Capital,”
Nature
Vol. 387 (1997), p. 256, Table 2
.

1.  Background  Informa5on  

Estimates of various Ecosystem Services

Ecosystem services

Value
(trillion $US)

Soil formation

17.1

Recreation

3.0

Nutrient cycling

2.3

Water regulation and supply

2.3

Climate regulation (temperature and
precipitation)

1.8

Habitat

1.4

Flood and storm protection

1.1

Food and raw materials production

0.8

Genetic resources

0.8

Atmospheric gas balance

0.7

Pollination

0.4

All other services

1.6

Total value of ecosystem services

33.3

Assumption: Resources are
infinite


Economic models treat resources as
substitutable and interchangeable


a replacement resource will be found


But…Earth
`
s resources are limited


nonrenewable resources can be depleted


renewable resources can also be depleted


for example, Easter Islanders destroyed their
forests
EPA  Healthy  Watersheds  Approach  
I.  EPA  HW  Approach  


Maintenance of aquatic ecological integrity by protecting
our highest quality watersheds or those intact
components of watersheds


A
systems approach
that includes landscape condition
(eco green infrastructure), water chemistry, biotic
condition, and critical watershed functional attributes
(
hydroecology
, geomorphology, & natural disturbance
patterns)


Identification of Healthy Watersheds state-wide


Implementation of state-wide strategic protection
priorities that leverage programs and resources across
state agencies


Inform priorities for ecological restoration
 
I.  EPA  HW  Approach  
 


Habitat
 of  
sufficient  size
 and  
connec?vity
 for  na5ve  aqua5c  
and  riparian  species  


Green  infrastructure  network
 of  na5ve  vegeta5on  in  the  
landscape  that  maintains  natural  hydrology  and  nutrient  and  
organic  maKer  inputs  to  aqua5c  ecosystems  


Bio5c  
refugia
 or  
cri?cal  habitat
 (e.g.,  deep  pools,  seeps  &  
springs  for  survival  during  droughts)  


Natural  hydrology
 (flow  regime,  lake  water  levels)  that  
supports  aqua5c  species  and  habitat  


Natural  transport  of  sediment
 and  stream  geomorphology  
that  provide  natural  habitat  


Func5oning  
natural  disturbance  regimes
 (floods,  fires)  


Water  quality
 that  supports  bio5c  communi5es  &  habitat  


Healthy,  self-­‐sustaining  aqua5c  
biological  communi?es  
13  
What are the Characteristics of a Healthy
Watershed?
Benefits  of  a  Healthy  Watersheds  
Approach  


Reduces  costs  to  communi5es  by  minimizing  vulnerability  to  
floods,  fires,  and  other  natural  disasters      


Reduces  or  eliminates  costs  of  water  treatment  for  drinking  
water  by  protec5ng  aquifer  recharge  zones  and  surface  water    


Ecosystems  store  carbon  which  can  help  offset  carbon  
emissions  


Minimizes  ecological  impacts  of  future  land  use  


Facilitates  ecological  restora5on  downstream    


Helps  target  and  priori5ze  ecological  restora5on  
opportuni5es  


Reduces  vulnerability  to  invasive  species  


Sustains  future  genera5ons  
I.  EPA  HW  Approach  
 
Current  Market  System:  
How  we  value  ecosystem  services
 


Healthy  watersheds  provide  ecosystem  
services  at  liKle  to  no  cost  


Systems  are  under  valued,  their  role  not  
understood  


Services  provided  by  intact  watersheds  are  
costly  to  replicate  (if  possible)    


Conserva5on  of  healthy  watersheds  can  not  
only  serve  as  a  wise  investment,  but  can  also  
provide  a  variety  of  monetary  and  non-­‐
monetary  benefits  
II.  Background  Informa5on  
Benefits  of  Protec5ng  Healthy  
Watersheds
 
Reduced  Flood  Risk  (and  other  natural  
disasters  )  
Increased  Property  Values  
Lower  Restora5on/regulatory          
compliance  costs
 
 
Lower  drinking  water  treatment  costs  
Decreased  health  care  costs  
Decreased  stormwater  flows,  treatment    
and  infrastructure  costs  
Tourism  and  Recrea5on  spending  
Decreased  infrastructure  maintenance  and  
costs  
 
 
 
Timber/Farm  products  (working  
landscapes)  
Nutrient  Cycling  
Carbon  Storage  
Increased  biodiversity  (gene5c  variability)  
Wildlife  movement  corridors  
Water  storage  
Micro-­‐climate  regula5on  
 
 
 
 
 
Restora5on  is  not  an  easy  answer  
The  cost  of  repairing  damaged  ecosystems  is  
high  and  restora5on  has  a  low  success  rate  
EPA Region 3, 2006
Restora5on  is  Costly  
 
II.  Background  Informa5on  
Impairment
Miles
Cost
Avg Cost/mile
Corsica River, MD
Nutrients
7.6
$17,500,000
$2,300,000
Little Laurel Run, PA
Metals
3
$1,048,013
$349,338
Conewago Ck, PA
Nutrients
17
$4,300,000
$252,941
Bear Ck, PA
Metals
5
$964,000
$192,800
Catawissa Ck, PA
Metals
57.9
$3,500,000
$60,440
Thumb Run, VA
Bacteria
17
$2,450,000
$144,117
Willis River, VA
Bacteria
30
$2,794,160
$93,138
Muddy Creek, VA
Bacteria
9
$2,612,000
$290,222
The estimated costs range for pollutant cleanups ranges from $4/lb for Iron
reduction from acid mine drainage to $66/lb for phosphorous reduction in the
Chesapeake Bay. (Estimated cost of $29 billion to meet nutrient/sediment
goals.) (EPA Region 3)

Investment  in  Ecosystem  Service  
Replacements    


Freshwater  supply:  Desalina5on  technologies  can  replace  water  supplied  through  
ecosystems,  but  the  energy  requirements  make  this  technology  expensive  and  a  poten5ally  
substan5al  generator  of  carbon  emissions.  (
Brauman
 et  al  2007)  


Water  filtra5on:  billions  of  dollars  to  invest  in  filtra5on  plants  


Water  storage:  expensive  to  build  and  repair  (DC  Clean  Rivers  project:    es5mated  14  miles  of  
tunnels  to  hold  storm  water  and  $2.6  billion)  


Nutrient  cycling:  removal  of  organics  (membrane  technology  and  chemical  precipita5on)  
 
Wastewater treatment plant, East Tennessee
Technology Park
Percent  forest  cover  and  predicted  water  
treatment  costs  based  on  27  US  water  supply  
systems    
Postel
and Thompson 2005
Cost  avoidance:  Benefits  of  Green  
Infrastructure  
III.  Types  of  Valua5on  
Hanson et al. 2011
Cost  Avoidance  


“Floods  cause  an  average  of  $4  billion  in  
damage  every  year  in  the  United  
States”  (Turner  and  Daily  2008)  
This  is  a  very  
conserva4ve  es4mate  


 A  healthy  watershed  will  reduce  the  area  and  
impact  of  a  flood,  minimize  the  economic  
burden  on  public  drainage  infrastructure,  
reduce  erosion  and  water  treatment  costs  and  
can  increase  groundwater  recharge  (Johnson  
et  al.  2006).      
III.  Types  of  Valua5on  
Cost  Avoidance  
Protec?ng  healthy  watersheds  can:  


Lower  regulatory  compliance  costs,  TMDL  
implementa5on  costs  


Avoid  restora5on  costs  


Lower  energy  costs  


Lower  stormwater  treatment  costs  


Enhance  pollu5on  preven5on  efforts    
III.  Types  of  Valua5on  
Cost  Avoidance:  Health  and  Quality  of  
Life  Benefits  


Social  and  health  benefits  related  to  proximity  
of  people  to  parks/trails  
(
Donjek
 2009)  


Healthy  people  have  fewer  insurance  claims,  
economic  benefit  to  society  


Students  have  lower  stress  and  ADD  levels  
when  they  have  access  to  nature  
(Wells  2000)  
NRCS Photo
Gallery:http
://
photogallery.nrcs.usda.gov
/JPG/CO/
NRCSCO01047.JPG
Case  Studies:    Tourism/
Recrea5on  


30  million  anglers  generate  
$45  billion  in  retail  sales.  
More  Americans  fish  than  
play  golf  (24.2  million)  and  
tennis  (10.4  million).      


More  than  one  million  jobs  
are  supported  by  anglers  


The  na5on’s  30  million  
anglers  invest  hundreds  of  
millions  of  dollars  every  year  
in  fisheries  conserva5on  and  
management,  substan5ally  
more  than  any  other  group.    
Much  of  this  comes  from  
fishing  license  sales  which  
are  a  primary  funding  source  
for  most  state  fish  and  
wildlife  agencies.      
Southwick  Associates  2008  
WILDLIFE  AS  A  SOURCE  OF  INCOME  


It  is  difficult  to  apply  economic  
principles  to  wildlife  and  
wildlife  habitat:  


Direct  expenditure  


Market  value  of  harvest  


Cost:    unit  day  value  


Willingness  to  pay  


In  1996,  Americans  spent  $101  billion  for  hun5ng,  
fishing,  and  other  outdoor  recrea5on;  $87.8  billion  
directly  aKributable  to  wildlife  
HUNTING LEASES
Income:


May exceed that from cattle or

o t h e r t r a d i t i o n a l s o u r c e s

C o s t s:


C o m p e t i t i o n b e t w e e n g a m e a n d

c a t t l e f o r f o r a g e


H a b i t a t m a n a g e m e n t


F e n c i n g
WILDLIFE  AS  A  SOURCE  OF  INCOME  
(NONCONSUMPTIVE)  


Widespread  interest  in  nature  


Aesthe5cs  can  improve  quality  of  life  


Ecotourism,  backpacking,  camping,  etc…  


$500  million/year  spent  on  bird  seed  in  the  U.S.  
 


$25  million/year  spent  on  whale  watching  in  Hawaii,  
California,  and  New  England  
 


Bird  watching  has  a  greater  economic  impact  than  the  citrus  
industry  in  the  Lower  Rio  Grande  River  Valley  
RANK THE IMPORTANCE

Hunting



F i s h i n g
W i l d l i f e w a t c h i n g



W h a t i s t h e r a n k i n g o f e x p e n d i t u r e s a s s o c i a t e d
w i t h t h e s e v a r i o u s a c t i v i t i e s? R a n k f r o m l e a s t t o
g r e a t e s t v a l u e.
Hunting


$20.6 billion
Fishing


$37.8 billion
Other


$13.5 billion
TOTAL


$101.2 billion
Activity


E x p e n d i t u r e s
W i l d l i f e w a t c h i n g


$29.2 billion
FISHING IN TEXAS:
ECONOMIC IMPACTS
Total anglers 16 and older


2,612,743
Expenditures


$2,869,558,423
Economic output


$6,366,580,439
Earnings


$1,647,197,166
Jobs




80,282
State sales tax


$179,347,401
Sport Fish Restoration $

$9,856,845

Combined  state  and  federal  taxes  generated  by  
recrea5on  ac5vity
 
IV.  Revenue  Genera5ng  Aspects  of  
Conserva5on  
(Outdoor Recreation Foundation 2003)
Ecosystem  goods  and  services  on  public  lands    

A fee
commonly
is charged

A fee
commonly
is not charged

Mineral and fossil fuel extraction

Watershed protection

Wood products
(
timber harvest, fuel wood
gathering, Christmas tree cutting
)

Wildfire suppression

Livestock gra
zing

Wildlife
and fish
habitat protection

Easements and rights of way (e.g., roads,
dams, power lines)

Biodiversity of plants and animals

Developed recreation use (e.g.,
campgrounds)

Carbon sequestration

Access to national parks and monuments

Dispersed
recreation on national forests


Conclusions  
Restora5on  alone  will  not  protect  ecosystems  
Protec5on  provides  many  economic  and  
ecological  benefits  
Protec5ng  highly  func5oning  aqua5c  
ecosystems  and  their  suppor5ng  landscapes  is  
a  cost-­‐effec5ve  way  to  provide  cri5cal  
ecosystem  services  
Long-­‐term  economic  benefits  of  natural,  intact  
systems  far  exceed  short-­‐term  economic  gains  
from  land  conversion  
VII.  Conclusions