Ecosystem Services – A Framework for Thinking about Sustainability

By Kevin Halsey

In recent years, sustainability has become a widespread concern, and there are many efforts to help move towards sustainability. For instance, we are told to “reduce, reuse, recycle”—very good advice. Businesses increasingly manage their operations to meet a triple bottom line of economic, social, and ecological accountability, which should be encouraged and rewarded. Indeed there are efforts at many levels, from LEED certification standards for new buildings to carbon trading, to reduce harmful emissions.

All of these efforts are laudable and necessary to help reduce the footprint of our presence on the planet, and they should be rewarded and encouraged. However, as valuable as they are, they currently represent steps towards an unknown endpoint. The question remains: how do we think about what it means to be sustainable? What is a sustainable footprint, and how might we measure our progress toward that critical goal?

Ultimately, we know that to be sustainable we must be able to exist without depleting the planet’s available resources (theoretically, in perpetuity). It is also generally accepted that sustainability requires us to balance economic health, social equity, and ecological stewardship. This suggests that to be sustainable, we must live in a manner whereby our total landscape, both natural and human, is able to perform the entire suite of social, economic and ecological functions we need for survival and quality of life. Furthermore, these functions must be performed at adequate levels, with appropriate distribution, and at a non-consumptive rate that will allow these functions to continue over time.

If the adequate performance of the full suite of economic, social, and ecological functions is truly the target, then there are several important ramifications that we must face as we seek to reach that target. First, we must understand that the full suite of functions is vast and all these functions must be

performed in a limited amount of space. Thus, we must make efficient and effective use of the space available to us. Second, we need to greatly improve our ability to understand and track the functions performed on the landscape. Third, we can no longer think of the economy, social equity, and the ecosystem as separate, isolated concerns, but as intricately interconnected parts of a whole. And finally, we must never forget that the natural world is the ultimate foundation of our continuing existence on the planet.

We have learned some hard lessons as a society about what happens when we ignore the interdependence of social, economic, and ecological systems (Figure 1). But we still struggle to perform the fully integrated analysis that is needed to properly balance the management of functions from the landscape. Accordingly, we still face the challenge to imagine what a sustainable future might look like and how to achieve it.  

Enter the concept of ecosystem services. While this concept is only now gaining widespread currency, it is not really new—the basis for the concept is apparent in writings from Henry David Thoreau to Aldo Leopold. The foundational concepts of the ecosystem services concept are quite basic: 1) nature—both as a whole and in the form of ecosystems of varying size and complexity—performs a wide variety of functions, and 2) we rely on those functions for our survival and quality of life. Because of this reliance, ecosystems theorists call these functions services.

These simple concepts provide a powerful framework for understanding the nature and challenges of sustainability. To understand the application of the concept to decision-making, imagine the following scenario:

There is a single individual, living and thriving alone in the wilderness. Everything that person needs for survival—food, water, shelter—is provided by nature, with a modicum of effort on the human’s part, of course. Now, imagine that a community develops: the population grows, the population density increases, permanent structures are built. As the landscape is changed, the community finds the landscape is no longer performing many of the functions they rely on, which is impairing services they need. Likely access to clean water will be the first impaired service they notice, but this is just the most obvious. The community cannot forego these lost functions, which they rely on for survival and quality of life. At this point they face a choice, the community must either shrink to a size that the surrounding ecosystems can support, or find alternative (i.e., technological) means of performing these function (food supply chains, water distribution systems, and the like). Over time, then, the community becomes accustomed to replacing natural systems with technological substitutes, just to provide the functions needed to survive. The concept of ecosystem services has many uses, but perhaps the most important from a sustainability standpoint is that the concept helps us understand the ramifications of that choice between natural and technological solution.

Of course, this scenario describes precisely what has happened in our own society and our global community. The difficulty, however, is that in replacing natural systems with technological solutions there are hidden costs. The enduring lesson of ecological studies is that we can never do just one thing—and that the side effects of an action are often extremely well-hidden. For example, logging a tract of forest produces valuable lumber, an obvious economic benefit. But if done poorly, it will also affect the local environment’s ability to regulate stormwater runoff, destroy species habitat, and impair an areas ability to provide recreational opportunities such as camping. Of course, it may take years to feel the full impact of these changes.

If the ecosystem service concept allows us to understand the ramifications of choosing between natural and technological solutions, then ecosystem service based decision-support tools help us to conceptualize and to capture the economic and social costs associated with the transition from natural to artificial performance.

How is this relevant to sustainability?  Recall the three conclusions that resulted from our definition of sustainability, above. One, with many functions required in a limited space, we need to use that space as efficiently as possible. Two, we need to better understand and track functions—i.e., services—that a given landscape or ecosystem provides. And three, we must always remember that the economic, social, and ecological systems we rely on are interconnected. Let us examine each of these, in turn, applying the ecosystem services framework to our analysis.

Efficient, Effective Use of Space

It is important not to oversimplify the issues as we apply this new approach to the challenges of sustainability. Solutions to these challenges fall along a spectrum of possible responses, from purely natural to purely technological. Consider a green roof, for example—a splendid creation that incorporates many natural elements into a constructed, otherwise non-natural structure.

Conceptualizing solutions within this spectrum provides an opening to consider the trade-offs between the benefits and costs of each solution. At the purely natural end of the spectrum, ecosystem functions are provided not one at a time, but in an intricate array of multiple benefits (see Figure 2). Restoring a wetland to provide stormwater treatment, for example, also enhances songbird habitat, nutrient cycling, organic matter production, and a host of other functions not provided by a purely technological solution such as a water treatment plant. These “co-benefits” make natural solutions an efficient means of obtaining or enhancing the functions we need performed. We also get the function performed at a very low cost: if the wetland is already there and functioning, then we get it essentially free (not counting opportunity costs, of course).

In contrast, while technological solutions typically provide only one or a small number of benefits, they generally perform these functions quite effectively, often much more effectively, in fact, than natural solutions. We cannot simply ignore this fact in wholesale favor of natural solutions. As population densities continue to increase, we are often forced to rely on more effective, single-benefit technological solutions for replacing essential ecosystem functions. However, when we do this, we seldom pay attention to the myriad of “co-benefits” that are lost when natural systems are replaced. And because these functions are hidden, it is too easy to simply write them off until something catastrophic happens.

Using the concepts and insights of ecosystem services, we have the opportunity to seek ways to incorporate natural components into our project designs, and thereby be more efficient at obtaining the broad array of services we rely on. Furthermore, where nature is already providing necessary functions, we should be mindful of the costs of having to replace them. This is really at the heart of the ecosystem services concept.

Understanding and Tracking Functions

Until we become aware of the ecosystem functions we rely on and develop a fuller understanding of how nature provides them, the goal of sustainability will elude us. Every development activity we engage in changes the array of functions performed by a given landscape. As discussed above, a hard infrastructure project may increase the performance of one function, but it may do so at the cost of many other functions. We know that every action entails trade-offs, but we have typically done a poor job of tracking these trade-offs.

Figure 3What we do track effectively are those natural resources that are in some way regulated. Unfortunately, we do not always track those resources in a useful, coherent fashion. For instance, as much as we continue to discuss the importance of wetland functions in a §404 context, we still measure mitigation in acres, not in functional acres. But even if every regulatory process were “getting it exactly right,” it would not change the fact that we work within a patchwork of landscape regulations, not within an integrated, holistic framework. When we perform an action, do we know what functions we are losing from the landscape? Do we know where each function falls below an adequate level of service? Do we know the social consequences of the action? The answer, simply, is No.

To properly track the social, economic, and ecological functions we rely on, we need to combine regional ecosystem services assessments with assessments of the services provided by hard infrastructure. These assessments should cover all ecosystem services, and should provide an indication of the current level of each service within the region. We would next need to establish regional performance goals for each of these services.

Once performance goals are established, the next step would be to track how proposed projects would affect those goals by assessing the ecosystem services consequences of project actions. This may sound unrealistic, but more and more decision-support tools are being developed to answer these very questions. Furthermore, many of these tools require no more effort than does the patchwork of analytical approaches currently being used. For more information on decision-support tools, visit Business for Social Responsibility at BSR is a non-profit organization that is active in identifying, testing, and evaluating ecosystem service decision-support tools.   

Integrated Analysis of Economic, Social Equity, and Ecological Needs

Sustainability can only be achieved when we have adequately balanced social, economic, and ecological needs. That is basic sustainability theory. However, what is not always recognized is that social equity, economic, and ecological responsibilities cannot be balanced independently. They are instead three interdependent aspects of sustainability, and impacting any one of these components inevitably affects the others. An ecosystem services approach recognizes this interdependence, and an ecosystem services analysis of a project that impacts a natural area will describe not just the ecosystem impacts, but the social and economic impacts, as well.

Of course, ecosystem services focuses conceptually on how impacts to natural processes affect social, economic, and ecological needs. There are interrelationships between social equity and economic factors that are not addressed by this approach. However, an ecosystem services analysis highlights one critical aspect of sustainability that would otherwise be missed and, by its very nature, continually reminds us to be mindful of all interrelationships in assessing project impacts.

Using Eco-Assets as Sustainability Tool

The ecosystem services approach suggests a further perspective on sustainability: if impacts to the ecosystem have economic consequences, then the obvious next step is to conclude that preserving or enhancing ecosystem functions has economic value. This in turn has led to the creation of a new asset class—eco-assets. Instead of valuing the landscape only for its real estate potential or resource extraction opportunities, people are beginning to assign economic value to the conservation and enhancement of land.

Eco-assets come in a variety of forms. One obvious form consists of the credits created by mitigation and conservation banks, by which a conservation action creates a tradeable commodity. The Willamette River basin in Oregon is particularly fertile ground for the development ecosystem credits. Organizations such as the Willamette Partnership, Defenders of Wildlife, and The Freshwater Trust are at the leading edge in the push to create the infrastructure and necessary conditions for ecosystem trading to occur.

While ecosystem markets create an obvious eco-asset, there are other value propositions associated with ecosystem services. In Ruidoso, New Mexico, an innovative Payment for Ecosystem Services (PES) program is in the early stages of development. Located in south-central New Mexico, the Village of Ruidoso experienced a severe flood in 2008 that resulted in over $40 million in damages. The source of the flooding was the Ruidoso watershed, which lies almost entirely within the Mescalero Apache Reservation.

Ironically, while the 2008 flood was caused by an extreme, 500-year storm event, the upper watershed is currently ranked as one of the highest risks for catastrophic fire in the entire United States. According to hydraulic studies, after a catastrophic fire in this watershed, a 2-year storm event would result in the same level of flooding as the recent 500-year event. Obviously, the Village has a significant financial and social interest in seeing ecosystem services restored to the upper watershed, and would be the direct beneficiary of those services being restored. However, the Mescalero Apache Tribe would realize limited benefit at best, and had no funding to undertake the necessary restoration activities.

Enter the Payment for Ecosystem Services program. The Village, the Tribe, and adjacent federal land managers are working to create a field-based metric to define the conditions needed for a healthy forest that will provide natural flood protection. The metric will provide a unit of measure to enable the Village and the Tribe to quantify an ecosystem services transaction. This essentially entails the Village paying the Tribe to manage the Tribe’s reservation land for the Village’s benefit. The Tribe is essentially selling the production of ecosystem services and the metric is used to measure the transaction of those services. For the Village, this is more cost-effective than building a new levee system, while for the Tribe it provides income for foregoing other uses of their land and managing it instead for the benefit of their downstream neighbors.

With the PES program, eco-assets provide an important opportunity to restore natural functions on the landscape, provide revenue for land owners, and provide a mechanism for better sharing the costs of environmental stewardship. However, the PES program will also raise interesting legal issues: who owns ecosystem benefits, and what rights and obligations does a property owner have with regard to those eco-assets?

Future Directions

Adopting an ecosystem services framework for thinking about sustainability—what it is and how we can achieve it—provides an opening to alternative approaches that can help businesses and communities balance economic health, social equity needs, and environmental stewardship. In particular, as the ecosystem services approach matures and gains wider acceptance, it can provide a viable mechanism to achieve the following goals that are critical to our survival and quality of life.

Using Conservation Outcomes to Improve Social Equity

Low-income communities have a disproportionate reliance on ecosystem services that goes far beyond basic sustenance. Consider the various ways we overcome the loss of ecosystem services through purchasing power: we ensure our good health by paying for extensive healthcare coverage; we engineer slope stabilization and flood protection solutions and implement other means of protection against natural hazards; we install water filters to make sure our drinking is pure. Without that purchasing power, lower income community members must rely instead on natural pest and disease vector controls, pollutant removal, and hazard mitigation.  

Using Conservation Outcomes to Improve Economic Efficiency

The Village of Ruidoso’s experience epitomizes this concept. There are many other opportunities in many other contexts that we could be pursuing. For example, by performing better analyses of the ecosystem service opportunities associated with open space, it is possible that a relatively small investment in additional open space could enhance the local environment’s water restoration function, saving the cost of expanding a treatment facility. This is one example among many of how taking an ecosystem services approach can open new possibilities for more efficient, more sustainable solutions to local challenges.

Using Conservation Outcomes to Improve Ecosystem Health

For those who find intrinsic value in natural systems and resist reducing nature simply to economic value, the ecosystem services approach is a continual reminder that the end result of all these efforts is to restore ecosystem health, enabling it to provide those unique combinations of benefits that only natural systems and landscapes can provide. While the motivation for ecosystem preservation and restoration may not be entirely altruistic, trust me: the other species that share the planet don’t care about our motivations. They just want us to get it right.

Parametrix is a Northwest based multi-disciplinary consulting firm.  Kevin Halsey is a senior member of the firm’s Ecosystem Services Group, which focuses on development and implementation of ecosystem services decision support tools.  The tools are designed to improve project planning and permitting processes, inform development of sustainability programs, and provide corporate risk reduction strategies.  Kevin is also an adjunct professor at Lewis & Clark Law School and is a faculty member for the University of Oregon Sustainability Leadership program.
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