Use of Ecosystem Services in Evaluating Biodiversity Offsets and Demonstrating

Environmental Sustainability Prepared for:

Prepared by:

Mark Rockel, CH2MHILLSenior Natural Resource Economist

Joe Nicolette, CH2MHILLEcoValuation Practice Director

December 2008

Ecological Service ValuationEcological Service Valuation

Actions and decisions that affect habitats/land, etc., can substantially affect ecosystem service valuesChanges to these values can be quantified and evaluated

Tools developed and utilized primarily in the NRDA arenaNatural resource economics approachesLitigation tested methodologiesHEA, REA, Benefits Transfer, etc.

Why Formal Quantification is Important?

Why Formal Quantification is Important?

Enables you to:Document the ecosystem value of a parcel of property;Document the ecosystem cost/benefit of an action;Compare ecosystem benefits/costs between actions (i.e., NEBA); andSelect/modify actions that maximize ecosystem benefits

Subsequently, quantified values provide supporting information for decision-makers and other stakeholders

Ecosystem Service Valuation and Ecosystem Service Valuation and Application to SustainabilityApplication to Sustainability

Social

Economic

Environment

Potential to Rank Actions and Alternatives for Comparison

Potential to Rank Actions and Alternatives for Comparison

Economic

Climate ChangeWater/Ground

waterEquity/ Social H&S

Action / Alternative

Ecological Services (dSAYs)

Ecological Risk Profile

Net GHG Emissions (tons/yr) and Carbon

Sequestration (tons/yr)

Water Volume Affected and $

Value

Human Use Value

($)

Human Risk Profile

Property Value

Change

ALT 1ALT 2ALT 3ALT 4

Environment SocialNet Environmental Benefit Analysis Example Table (Measure Net Change in Metric)

Biodiversity/Habitat

Area A - Services Lost (Ecological Loss)

A

% o

f Ser

vice

s

Years

Area B - Services Provided (Ecological Benefit)

B

Demonstrating Environmental Demonstrating Environmental Stewardship and SustainabilityStewardship and Sustainability

(develop net benefit of actions)

Baseline

Action affecting the environment

Offsets: How much is enough?

Biodiversity Offsets

Trends

Biodiversity OffsetsBiodiversity Offsets

Defined: Conservation actions intended to compensate for the residual, unavoidable harm to biodiversity caused by development projects, so as to ensure no net loss of biodiversity

Voluntary or Non-Voluntary

Governments and companies are increasingly using biodiversity offsets

Resource CompensationResource Compensation

United States (US) and in Europe, laws have been enacted to provide for compensation for damage to natural resources. Generally, two approaches have been used to calculate the amount of required compensation:

monetary value of the damages; and calculating the amount of natural resource restorationneeded to compensate for the harm.

Recent European Union (EU) Directives covering environmental compensation state a preference for resource equivalency approaches over monetary valuation.

Laws Requiring Offsets: ExamplesLaws Requiring Offsets: Examples

Wetland Banking in the USConservation Banking in the USNRDA in the USHabitats and Birds Directives and implementing regulations in the EUOffsets in Brazil under the Forest Regulation and National System of Conservation UnitsFederal Law for the Protection of Nature and Landscape in SwitzerlandOffsets in AustraliaNo net loss of fisheries habitat in Canada under the Fisheries Act

Opportunities Using OffsetsOpportunities Using Offsets

Demonstrate Environmental Sustainability and StewardshipMitigation and Mitigation Banking (generate revenue)Liability OffsetPotential Tax BenefitsEnhance planning and project implementation (e.g., EIS, EIA)Cost Effective ConservationCan increase property values

Biodiversity Offsets

Case Study

Tennessee Case StudyTennessee Case Study

Comparative land reuse designsOver 300 parcelsComparing designs as part of the EIS alternative comparison process

EconomicConservationBalanced: economic and conservation

Provide defendable basis for final site reuse design

0200,000400,000600,000800,000

1,000,0001,200,0001,400,0001,600,000

DR EC DR

DR

DR

DR

NR

CD

RD

RD

RN

RC

DR

NR

CD

RN

RC

NR

CN

RC

NR

CN

RC

DR SA SA SA DR

PO DR

DR

PO DR

DR

DR

DR

DR

DR

DR SA EC EC

NR

CD

R EC ECN

RC

DR

SRM

SRM

SRM

SRM EC EC

NR

CEC

SRM

SRM

SRM

SRM EC EC

NR

CEC SA SA SA SA EC EC

NR

CEC

NR

CD

RN

RC

ECN

RC

ECN

RC

EC EC ECN

RC

EC EC ECN

RC

EC DR EC

NR

CEC D

RD

R

Parcel 5

Parcel 9

Parcel 10

Parcel 44

Parcel 47

Parcel119

Parcel120

Parcel121

Parcel12 55

Parcel142

Parcel143

Parcel144

Parcel145

Parcel146

Parcel147

Parcel153

Parcel218

Parcel257

Parcel296

Parcel297

Parcel298

Parcel299

Pa3

$/Ye

ar

Alternative 1 Alternative 2 Alternative 3 Alternative 4

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

DR EC DR

DR

DR

DR

NR

CD

RD

RD

RN

RC

DR

NR

CD

RN

RC

NR

CN

RC

NR

CN

RC

DR SA SA SA DR

PO DR

DR

PO DR

DR

DR

DR

DR

DR

DR SA EC EC

NR

CD

R EC ECN

RC

DR

SRM

SRM

SRM

SRM EC EC

NR

CEC

SRM

SRM

SRM

SRM EC EC

NR

CEC SA SA SA SA EC EC

NR

CEC

NR

CD

RN

RC

ECN

RC

ECN

RC

EC EC ECN

RC

EC EC ECN

RC

EC DR EC

NR

CEC D

RD

R

Parcel 5

Parcel 9

Parcel 10

Parcel 44

Parcel 47

Parcel119

Parcel120

Parcel121

Parcel12 55

Parcel142

Parcel143

Parcel144

Parcel145

Parcel146

Parcel147

Parcel153

Parcel218

Parcel257

Parcel296

Parcel297

Parcel298

Parcel299

Pa3

dSA

Ys

Parcel Service AnalysisParcel Service Analysis

Exhibit ES-4. Ecological, Recreational, and Real Estate Values Per Acre Per Alternative (32 parcels, using Alternative

A as a baseline for comparison)

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

A B C D

Alternative

% D

iffer

ence

Fro

m A

lt A

Ecological Recreational Real Estate

Economic

Conservation

BaselineMgmt Plan

MaximizedAlternative (balanced)

Tennessee Case Study ResultsTennessee Case Study Results

ConclusionConclusion

Ecological and human use services were evaluated to develop and maximize benefits to demonstrate that the recommended alternative was environmentally sustainablewhile managing real estate values.

Alternative Comparisons Using Ecosystem Services

Alternative Comparisons Using Ecosystem Services

Land Re-Use Designs (e.g., Brownfield, greenspace designs)Remedial ActionsNEPA AlternativesLand Management ActionsRestoration, Recreational Area Designs (e.g., eco-tourism)BioDiversity OffsetsAny actions that affect natural resource service values (ecological and human use)

Questions