A marketplace for nature’s services

Posted by on June 27, 2012

In the Willamette River watershed, an experiment in ecosystem economics is underway.

willamette basin

Map of the Willamette River Basin; Temperature Effects of Point Sources, Riparian Shading, and Dam Operations on the Willamette River. Credit, Oregon Water Science Center, USGS.

“What we want to do,” said Bobby Cochran, “Is take the money that we’re spending now and redirect it the way nature would spend it.” Cochran is executive director of the non-profit Willamette Partnership, and he was talking about the limited supply of conservation dollars. How does he think nature would spend them? It’s easier to get him to say what nature would want to achieve: improvements that meet the needs of human and wildlife communities, not just the stipulations of regulatory checklists. But ideals can be difficult to accomplish. He thinks market systems can point the way to efficient solutions by giving people a monetary incentive to get creative.

“Look at all the money we are investing in the environment – we’re spending a lot of money,” Cochran said. Our traditional mechanism for protecting natural resources is to react to visible problems, big problems, burning river-type problems – problems that can be addressed with the regulation of specific industries, or point sources of pollution. The problem of how to make human development sustainable is diffuse, and complex. It is a Wicked Problem with no easily defined solution. And the public mood is turning against disaster narratives.

Cochran doesn’t want the public to think of streams, trees, and fish as obstacles and expenses. They are precious assets. He says framing a natural system as an economic good puts it into a context where decision makers recognize its value.

So the Willamette Partnership is embarked on an experiment in harnessing market forces to protect the watersheds of the Willamette River Basin in northeastern Oregon. Cochran’s plan requires the establishment of a market for “ecosystem services,” the benefits that nature provides to people. The idea of trading ecosystem services has surged in popularity since the 2005 United Nations Millennium Ecosystem Assessment. It translates the beauty and utility of a wetland into pounds of phosphorus removed from agricultural runoff, Joules of heat pulled out of urban wastewater, and inches of floodwater absorbed upstream of riverside communities.

The Willamette Partnership is a coalition of public utilities, academic, agriculturalists, environmental non-profits, and do-gooder for-profits united by an interest in the ecology of the Willamette River Basin in northeastern Oregon. That ecology encompasses the native ecosystems of the coastal Pacific Northwest between the rainshadowed slope of the coastal range and the oceanward slope of the Cascade Mountains, the population of the greater Portland metropolitan area ( and Salem, Corvallis and Eugene), lumber operations, Interstate 5, high tech industries, vineyards and dairies and other traditional agricultural undertakings, and the Confederated Tribes of the Grand Ronde.

When state planners look at the Basin, they don’t see a competition between wild spaces and development; they see a whole nest of competing interests. Cochran says demonstrating the economic value of ecosystems helps nature to get a seat at the table.

“If you don’t put a dollar on it, decision makers are not going to take it seriously,” he said. Reframing conservation in terms of benefits to people helps break down old stalemates between conservation advocates and other economic interests.

“A wastewater utility knows that a riparian community has a value,” said Cochran, but it’s an abstract value. Organizations like the Partnership try to turn abstractions into concrete values. How do you convert an ecosystem to market value – something that can be traded on the market – and who buys? Municipal utilities do.

In 2003, the Oregon Department of Environmental Quality told Clean Water Services that the utility needed to cool the wastewater pouring into the Tualatin River from its 500,000 customers in the Portland area. Salmon do not like warm water. The utility’s managers were looking at a $60 million investment to install refrigeration units at the outflow of their water treatment facility – a solution that was certain to comply with the Clean Water Act, but uncertain in its benefits for fish. Instead, they invested $5 million to acquire “shade credits,” restoring 35 miles of streams in the Tualatin River drainage. They paid farmers to provide access to the banks of the Tualatin’s tributaries, and lined the banks with red alder, Oregon grape, and other native trees.

Not all aspects of ecosystems are as easily quantified. Biodiversity is a historically tricky issue, and unevenly regulated. The Clean Water Act forces people to pay to attention to water quality, but species don’t get attention until they land on the endangered species list. “By the time a species is endangered, the habitat is in pretty bad shape,” said Cochran, and there are not strong incentives to intervene early.

The Willamette Partnership is dedicated to achieving the broadest ecological gain possible rather than the cheapest regulatory compliance, but not all organizations are similarly motivated. If Oregonians only wanted to shade the Tualatin River cheaply and quickly, they could plant the entire river bank in fast-growing poplars. The ecosystems services field is talking about ways to bundle ecosystem services, treating the ecosystem as a packaged deal, “but we’re still tending to look at them one at a time,” said Cochran.

Ecosystems are complex. There is a tendency to try to capture that complexity in similarly complex criteria for participation in ecosystem services markets. It’s tough to balance comprehensiveness with usability. Programs that are unwieldy to execute are not popular with the people who use them.

“Our biggest enemy in the conservation field is lack of trust and credibility,” he says. “The more complicated a program is to implement, the harder it is to breed trust and credibility.” He leans toward simplicity of design.

A vocal contingent of ecologists eyes such simplifications with alarm, objecting strongly to treating nature as a commodity. “Commodity,” in some parts of American society, has happy connotations of wealth and opportunity. But in the social realm of ecologists, its connotation is usually not so positive. Cochran thinks it’s bad.

“I don’t like to use it. Ecosystem services are not commodities. They don’t act like other commodities,” he said. Though “commodity” may be a generic term for goods and services, in practice it describes fungible goods, usually basic resources – corn, copper, salt, and sugar. Cochran says ecosystems services are not truly interchangeable. “They are products that are rooted in place.”

 

SYMPOSIUM 23 – Commodifying Nature: The Scientific Basis for Ecosystem Services Valuation In Environmental Decision Making. Friday, August 10, 2012: 8:00 AM-11:30 AM, Portland Blrm 252, Oregon Convention Center.

Cochran will have the opportunity to make his case for ecosystem services at ESA’s annual meeting in Portland this August, in Symposium 23, organized by Emily Bernhardt, professor at Duke University, and EPA scientist Jana Compton. The organizers have recruited a slate of speakers with opposing views on the effectiveness of compartmentalizing nature into economic services with monetary values.

Competing with “Commodifying Nature” for your attention on Friday morning are:

 

** portions of this article were adapted from Liza’s press release for Symposium 23.

Share this article