Using Habitat Equivalency Analysis to

Estimate Ecosystem Services:

A Natural Resource Damage Case Study

Timothy Barber, PhD

ENVIRON International Corp. | 13801 W. Center St. | Burton, OH 44021

What is a natural resource damage claim?

• A natural resource damage claim is a legal

process

• It seeks to collect monetary damages to make

the public whole for lost or diminished natural

resource services releasing from an

unauthorized release of hazardous substance(s)

• Public made whole through restoration or

replacement of the injured natural resource or

through acquisition of an equivalent resource

What are Natural Resources and Ecosystem

Services?

Non-living

• Surface water

• Groundwater

• Sediment

• Soil

• Air

Living

• Aquatic wildlife

• Terrestrial wildlife

• Vegetation

Ecosystem Services

• Provisioning

• Food

• Raw materials

• Regulating

• Water supply

• Nutrient cycling

• Erosion control

• Moderation of extreme events

• Habitat

• Nursery

• Biodiversity

• Cultural

• Aesthetics

• Recreation/tourism

• Spiritual

The Natural Resource Damage Assessment

Process

• Assess baseline conditions but for the

unauthorized release of oil or hazardous

substance

• Determine whether an injury to natural

resources has occurred

• Quantify the spatial and temporal magnitude

and extent injury (lost services)

• Injury estimates are used to scale restoration

actions to ensure the public is made whole

• Preferred restoration project(s) based on

comparison to selection criteria

• The purpose of an NRD assessment is to make the

public whole

• Identification and quantification of ecosystem

services are critical for quantifying injury and

scaling restoration

– Identification of ecosystem services that should be provided

(baseline)

– The relative importance of each service or service category

– Estimation of ecosystem services that are lost or diminished

– Estimation of ecosystem services that will be restored

• Restoration-based valuation focuses solely on

compensating for the habitat, resources, and

services that were injured

NRD and ecosystem services: Injury

quantification and restoration scaling

The fundamental challenge of an NRD claim is:

how do you make the public whole?

Time (years)

0 5 10 15 20 25

Se

rvic

e F

low

(%

)

0

20

40

60

80

100

DEBIT

Time (years)

0 5 10 15 20 25

Se

rvic

e F

low

(%

)

0

20

40

60

80

100

CREDIT

• Use Habitat Equivalency Analysis (HEA) to estimate

value provided by project

• Service-to-service valuation method

• Uses habitat-specific units

• Services flow from the injured or restored habitats

– Injury (debit) calculation

– Restoration (credit) calculation

Debit ≤ Credit

The Habitat Equivalency Analysis (HEA) model

Debit Calculation

• Present year

• Injury start date

• Injured area

• Relative service losses

• Recovery curve

– Time to full recovery

– Shape of recovery curve

• Discount rate

(compound interest)

Credit Calculation

• Restoration start date

• Time to provide benefits

• Area impacted by

restoration activities

• Improvements of services

above baseline

• Duration of benefits

(project lifespan)

• Discount rate

A case study: Background information

• Site in northeastern Ohio

• Adjacent to a river

contaminated by PCBs and

other chemicals of interest

• Federal and state natural

resource Trustees

• Injury claim presented in

terms of discounted

service∙acre∙years (DSAYs)

• Settlement based on

restoration scaled to the

level of injury (lost services)

Lake

Erie

First step: Develop a conceptual restoration

design

• Removal of invasive species

• Construction of a hydraulic

connector and wetland buffer

• Stream bank re-grading

• Stone toe protection

• Re-vegetation of native species

• Five year maintenance and

monitoring

• Evaluation of ecosystem services is necessary to

ensure restoration will offset injury

• Identify each habitat types and the services they

provide, for example:

– Improve quality of stormwater entering the river

– Provide nursery habitat for fish and wildlife

– Improve aesthetics and enhance opportunities for recreation

• Compare pre- and post-restoration services to

estimate a service improvement

– Functional assessment

– Expert opinion, literature review, precedents from settled cases

– Stakeholder survey using a Likert-type scale

– Probabilistic evaluation to bound reasonable best- and worst-case

scenarios

Second step: Inventory and valuation of

ecosystem services

Time (years)

0 5 10 15 20 25 30 35 40 45 50

Se

rvic

e A

cre

Ye

ars

0

1

2

3

4

Third step: Restoration credit analysis

• Project area = 10 acres

• Baseline service level = 40%

• Project service level = 80%

• Relative benefits = 40%

• Maturation curve

– Linear

– 5 years full service flow

• Discount rate = 3%

• Project lifespan = 50 years

Service∙Acre∙Years = 196

Discounted∙Service∙Acre∙Years (DSAYs) = 92

Habitat Translator (unitless)

0.0 0.2 0.4 0.6 0.8 1.0

Connected Upland Forest

Riparian Streambank

Emergent Wetland

• Different habitats provide different services

• Strong preference for in-kind restoration, but

translators can be used to convert between habitats

• Based on a surrogate measure of service

– Productivity, biomass

– Some functional assessment metric

– Expert opinion, literature review, precedents

Restoration of multiple habitat types

may require use of habitat translators

1.0

0.67

0.80

Cost factors for restoration alternatives

analysis

• Design and permitting

• Land acquisition

• Implementation

– Mob/demob

– Site prep (invasives control)

– Excavation/material

handling/disposal

– Plantings/soil amendments

– Temporary control measures

– Abiotic habitat structures

• Maintenance and

monitoring

• Reporting

– Monthly status

– Construction completion

– Annual monitoring

– Final completion

• Agency oversight

Liability may be resolved using monetary or

restoration-based approach. Typically a

premium is added to a cash-out.

Factors considered in the selection of

preferred restoration alternatives

• Technical feasibility and likelihood of success

• Benefits relative to cost (compare $/DSAYs)

• Relationship to injured natural resources and

lost ecosystem services

– Preference for in-kind restoration

• Geographic location

– Preference for in-place restoration

• Consistency with Trustees’ restoration goals

• Compliance with laws and regulations

• Public health and safety

• Public acceptance

Public involvement is required: Restoration alternatives,

including preferred alternative, undergo public review.