Natural Capital TeamNatural Capital Team

Introductory MeetingApril 20th, 2009

Partnership for the Delaware Estuary

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Overarching GoalOverarching Goal• To make smarts investments in restoration,

monitoring and management decisions, using limited resources, which best enhance the health and function of the DE Estuary and its resources

• Better Restoration Decisions• Climate Adaptation• Ranking and Prioritizing Projects• Target Case Study Areas

Natural Capital Team Goals: Natural Capital Team Goals: This YearThis Year

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Climate Ready EstuariesClimate Ready Estuaries• Climate Predictions: 2050 & 2100

• Vulnerability Assessments: Resource response to physical stressors of climate change

• Drinking Water• Bivalve Shellfish• Tidal Wetlands

• Natural Capital• Quantified assessment of resource damage• Quantified intervention by restoration actions

• Management Recommendations• Damages expected• Intervention and Adaptation activities

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Regional RestorationRegional Restoration• Project Registry & Matrix

– Comprehensive list of projects– To be sorted and ranked

• Case Study Areas– Tidal Wetlands– Benthic Species (Bivalve Shellfish)– Urban Waterfront Restoration– Headwater Streams

• Natural Capital– Assessment of restoration options– Tool to rank projects based on ecoservice benefits

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RRWG Only

Shared Case Studies

Climate Only

Partnership Work Group Structure – Partnership Work Group Structure – Natural Capital Team ConnectionNatural Capital Team Connection

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Examples of Ecosystem Service/Natural Capital Valuations

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New Jersey Natural Capital StudyNew Jersey Natural Capital StudyGoal: Impact of resources on human economy

– Even if market doesn’t reflect directly, indirect methods are used to determine economy’s dependence

Benefits– Big, shocking numbers! –Publicly accessible– Closer to true costs of resource to humans

Drawbacks– Incomplete (i.e. wetlands)– Expensive studies– Static Numbers don’t account for: loss, climate impacts, recession,

spatial differences– Missing ecological dimension: system health & function– Unclear how to translate to policy decisions 7

New Jersey’s Natural Capital New Jersey’s Natural Capital The ecosystem services evaluated

1. Climate and atmospheric gas regulation 2. Disturbance prevention:3. Freshwater regulation and supply 4. Waste assimilation:5. Nutrient regulation 6. Habitat refugium 7. Soil retention and formation:8. Recreation 9. Aesthetic and amenity:10. Pollination Non-Market Economic Valuation Techniques

Avoided Cost (AC): services allow society to avoid costs that would have been incurred in the absence of those services; flood control provided by barrier islands avoids property damages along the coast.

Replacement Cost (RC): services could be replaced with man-made systems; nutrient cycling waste treatment can be replaced with costly treatment systems. Factor Income (FI): services provide for the enhancement of incomes; water quality improvements increase commercial fisheries catch and incomes of fishermen. Travel Cost (TC): service demand may require travel, whose costs can reflect the implied value of the service; recreation areas attract distant visitors whose value placed on

that area must be at least what they were willing to pay to travel to it, including the imputed value of their time. Hedonic Pricing (HP): service demand may be reflected in the prices people will pay for associated goods: For example, housing prices along the coastline tend to exceed

the prices of inland homes. Marginal Product Estimation (MP): Service demand is generated in a dynamic modeling environment using a production function (i.e., Cobb-Douglas) to estimate the

change in the value of outputs in response to a change in material inputs. Contingent Valuation (CV): service demand may be elicited by posing hypothetical scenarios that involve some valuation of alternatives; e.g., people generally state that

they would be willing to pay for increased preservation of beaches and shoreline. Group Valuation (GV): This approach is based on principles of deliberative democracy and the assumption that public decision making should result, not from the

aggregation of separately measured individual preferences, but from open public debate.

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University of Delaware – Valuation of University of Delaware – Valuation of the Christina River Basinthe Christina River Basin

Classic Benefit Transfer Analysis– Compilation of literature values applied to Christina Basin– Used studies like New Jersey’s Natural Capital report

Benefits– Cheap, easy, and fast analysis– Attempts more accurate reflection of human economy’s indirect

dependence on natural resources – Could be very useful in Drinking Water Case Study

Drawbacks– Outputs only as good as quality of supporting literature values– Misses ecological health and function component – Danger in $ amounts 9

Valuation of the Christina BasinValuation of the Christina Basin

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Habitat Equivalency Analysis (HEA)Habitat Equivalency Analysis (HEA)

Tool used to assess Damages & Restoration– Climate Impacts as Injury to resource

Benefits– Hits ecosystem health & function– Nationally recognized tool– Can integrate with Cost/Benefit analysis – Easy model to use

Drawbacks– Outputs only as good as the supporting science– Ample room for judgment calls– Isn’t appropriate for all services (i.e. cultural,

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Industrial Economics - DE StudyIndustrial Economics - DE Study

• Example of HEA Application• Supporting Science: SLAMM model & Primary

Productivity• Wetland response to climate for portions of

New Jersey• Potential for expansion to Estuary

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GIS - Priority AreasGIS - Priority Areas• Place-Based Restoration & Conservation

• Examples: InVEST, Smart Conservation Model, The Natural Conservancy – eco-region based portfolios

• Prioritize projects based on areas with highest overlap of eco-services

• Benefits• Great visual product• Spatial relationships very useful

• Drawbacks• Outputs limited by state of science • Overconfidence in maps & layers • Overlap assumes maximization of ecosystem health

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EPA - Ecosystem Services Research EPA - Ecosystem Services Research Program (ESRP)Program (ESRP)

How do we….

1. Engage with ESRP?2. Integrate ORD research into ecosystem service valuation? 3. Adapt new information into our models/analysis?

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Big QuestionsBig Questions

• How much can we accomplish in a year?

• Appropriate Scales?

• Others?

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Thinking in terms of ServicesThinking in terms of Services1 Service 2 Service 3 Service

Provisioning

Food Fisheries Support Algae and invertebrate productionFresh WaterGenetic MaterialsFiber and FuelBiochemical products

Regulating

Nutrient SequestrationSediment Stabilization

Storm Protection/ Wave AttenuationGas Regulation Carbon Sequestration Oxygen production

Flood ProtectionWaste Water Treatment

Water Quality Water clarity, N, PWater Supply

Cultural/ Spiritual/ Human Well Being

Recreation Bird huntingSpiritual and InspirationalEducationalAesthetic Value

Supporting

Habitat Wildlife Habitat/Maintain FaunaBiodiversity Maintain Plant CommunitiesProduction Primary ProductionWater Cycling/Hydrologic Regime

Nutrient Cycling/Biogeochemical Processes16

Wetlands Case StudyWetlands Case Study

• HEA – Assess injury & damages from climate– Assess restoration & adaptation options

• Inputs from IEc Study• Economic valuations of replacement costs of

services???• GIS – modeling service layers???

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Wetlands Case StudyWetlands Case Study

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Shellfish Case StudyShellfish Case Study

• HEA• Economic analysis of harvest industry

impacts?• GIS – mapping of populations/services???

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Drinking Water Case StudyDrinking Water Case Study

• Economic Models– Replacement Costs Analysis– Avoided Cost Analysis

• Potential Use of NRDA process???

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Next StepsNext Steps1. NC Team commitment to case studies2. Refine service lists & vulnerabilities3. Decisions:

– Tools to use for case studies?– How to scale work for coming year?

4. Literature Search – NRDA Settlements– Resource response to stressors & restoration

• Biology, ecology, infrastructure– Restoration & adaptation options– Gaps & Best Professional Judgment

5. Develop plan for GIS components6. Prep for June meeting of Climate Workgroup

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