Ecosystem Services Valuation

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The Natural Capital Project (NCP) is a non-profit venture started in 2006 between Stanford University, the University of Minnesota, The Nature Conservancy and the World Wildlife Fund. Put in simple terms, NCP strives to quantify the values of “natural capital,” or ecosystem services provided free by nature. Such natural capital or ecosystem services include water purification,storm buffering, and regulating our climate through carbon sequestration. NCP tries to answer an extremely difficult question: What is nature worth?

The idea of natural capital is poorly understood, so this trailblazing venture created tools with the intention to answer the question above by integrating the scientific and economic understanding of natural assets. NCP also engages with leaders and experts from many different sectors across the globe. Named one of Forbes "Names You Need To Know" in 2011, NCP created a tool called Integrated Valuation of Environmental Services and Tradeoffs, or InVEST. The goal of NCP is to present results to environmental decision makers regarding multiple land use planning and investment alternatives. Multiple use conflicts and competing interests can often delay or complicate management decisions, so NCP presents the trade-offs for competing choices. By presenting different scenarios of land use or policy decisions, and thereby different results of gains or losses in ecosystem services, NCP hopes to foster the balance between economics and conservation.

InVEST is a set of openly available tools for use with the Geographic Information System software ArcGIS, and involves multiple models that quantify, map and value ecosystem services. Such models include but are not limited to: coastal vulnerability, marine habitat risk assessment, carbon storage and sequestration, and crop pollination. Each of these models allow for an estimation of changes in services under different climate and management scenarios, along with the capability to consider trade-offs among the different scenarios. InVEST takes an ecological production function approach where key inputs are connected to an estimation of the production of outputs. For example, inputs such as labor or habitat can be used to estimate the output offish yield, if focusing on food yield from fisheries.

The outputs are not only biophysical, but economic as well. An economic value derived from a particular model could be the net present value of something like net revenue from fish sales or the property value change of coastal land around a fish processing plant. The model category of renewable energy is measured through power density or potential energy, the service provided is captured power, and the value of that service is net present value of wave or wind energy. Note that “valuation” outputs not only provide values in economic terms but in social terms as well, if applicable.

In order to make full use of the effectiveness of InVEST, stakeholder involvement in the preliminary stages of the process is critical. Identifying the values and visions for the future held by stakeholders is completed through extensive interviews and surveys. Next, different scenarios are developed as alternative visions for land/marine use in the future. Scenarios can range from conservation to expanding industrial uses. Different zoning choices are presented reflecting potential management decisions, such as setting aside land of ecological significance. After data is compiled and scenarios are developed, it is time to utilize InVEST models and produce various maps of supply, ecosystem services and/or value metrics. Results are then synthesized and evaluated in terms of the stakeholder objectives, with trade-offs identified. Reiteration of the process can follow to further clarify or redefine possible scenarios.

In bringing NCP’s purpose to fruition, demonstration projects were chosen as example field sites designed for replication and scaling in future projects. These sites were chosen based on several factors, such as significant biodiversity, critical ecosystem services and stakeholder will. Coastal Belize is such a site, suffering from multiple use conflict and a delay in creating an Integrated Coastal Zone Management Plan (ICZMP). Belize is home to a productive coral reef system and wants to balance extractive uses, development and business opportunities with activities that sustain delivery of ecosystem services. NCP and the Coastal Zone Management Authority and Institute are working together to consult stakeholders, map and value coastal ecosystem services, and ultimately create a revised ICZMP. The zoning scenarios that are fed into InVEST include conservation, compromise and development. Example models include risk to habitat and coastal protection. The results expose trade-offs that arise from different scenarios. For example, where coastal development expands, risk to habitat increases along with decrease in lobster catch and revenue. However, with that same increase in development comes increased revenue from tourism and recreation. These results are reviewed, commented upon, and possibly revised with the hopes of guiding decision makers. Other sites where NCP is involved include locations in Hawaii and Sumatra.

In order to protect nature and the services nature provides, decisions should factor in nature’s real worth. The biophysical and economic outputs from NCP’s tools are helping to make this happen.

Useful links:

InVEST v. 2.2.2 user guide

What is Nature Worth? (WWF video)