November 6, 2008

Using computers to preserve Mother Nature

  • Software that documents ecosystem service credits helps prioritize today’s projects while setting the stage for a future marketplace to trade the credits.


    Trading carbon credits — where companies buy the right to produce greenhouse gases — is big business, generating about $60 billion a year. A similar concept of trading “ecosystem service” credits shows enormous potential, and visionaries are already taking steps to “bank” the natural ecosystem services that they’re restoring for future monetary gain.

    A big stumbling block, however, has been quantification of these assets. How do you calculate the amount of lost riparian habitat or erosion damage that comes from clear-cutting an acre of old-growth timber?

    Valuing views, vulture nests

    To understand the need for quantifying natural services, consider recent changes in wetlands theory. In the 1980s, we assumed that the impact of developing a marsh could be mitigated by creating a new marsh elsewhere. But man-made wetlands often under-performed or dried up. So engineers and scientists began studying the human benefits, or ecosystem services, that lands provide, and developing methods to put a unit value on services.

    Photo courtesy of Parametrix
    Located in the Columbia River Gorge, Mirror Lake is designed to provide wetland, ESA and water-quality mitigation credits for Oregon Department of Transportation projects. The 390-acre area was the pilot bank for ODOT’s comprehensive mitigation/conservation strategy.

    Engineers and scientists have now developed software that assigns units of measure to ecosystem services. The software uses a wide array of indicators collected in the field to calculate changes in such natural functions as pollination, biodiversity, flood mitigation, soil development, or even scenic views. Already, the metrics are having a positive impact.

    Superior streams

    A case in point comes from the not-for-profit Oregon Trout, a group that restores the health of freshwater ecosystems. As part of its StreamBank program, private landowners and local environmental professionals can apply for stream restoration and permitting assistance by entering project information through a Web-based tool. The technology accelerates the process of stream restoration by finding qualified projects and facilitating implementation.

    Oregon Trout wanted to improve potential project assessment and modeling, and then measure ecological benefits. So it piloted EcoMetrix, an eco-asset calculation software from Parametrix, at four of its 20 StreamBank projects this summer. Starting with six distinct stream functions, the system measured: aquatic connectivity, aquatic cover, bank stability, habitat formation, streambed stability and temperature regulation. Using data collected during on-site surveys, the software calculated a value for each function, creating a total score per acre.

    Bang for the buck

    Oregon Trout found the software could dramatically improve site selection. Naturally, the organization seeks to restore waterways where the greatest gain is achieved for the least cost and effort. EcoMetrix determined that one of the streams being monitored was already functioning at a high level. The relative upgrade of planned restoration efforts would be small, compared with targeting streams in worse condition.

    The software could also improve project design. Another StreamBank restoration achieved only moderate gains due to a landowner’s restrictions on proposed improvements. The software indicated that a different design offered much greater potential for restoration. Had the owner been offered credits for a more aggressive design, both he and the ecosystem would have benefited.

    “Our StreamBank tool and methodology radically reduce project completion time,” said Joe Whitworth, president of Oregon Trout. “But we also need to ensure that speed goes hand-in-hand with quality improvements. EcoMetrix’s analysis makes this possible.”

    Mitigation reserves

    King County has been hard at work developing a credit program that will help applicants for development permits offset the environmental impacts of their projects. Called Mitigation Serves, the program uses a roster of county-owned natural areas to satisfy wetland, stream and wildlife mitigation requirements. Applicants can expedite the permitting process and relieve their mitigation liability by buying credits.

    Credits are determined by the county’s Functional Equivalency Evaluation System, which measures impacts resulting from development, then relates them to the ecological benefit generated by a conservation project. The county pools these weighted-acre credits. Contractors pay into the pool based on the services they’ve impacted.

    “It’s a tool that quantifies the balance of ecosystem services before and after, measuring loss or gain in units of credit,” explained Jon Sloan, senior ecologist at King County.

    “Most permit applicants have little interest in building and maintaining a conservation project, which is why so many mitigation projects failed in the past. Eco-crediting programs transfer responsibility for habitat projects to those with the experience, incentive, scale efficiencies and mandate to do it better,” he said.

    Cashing in on eco-assets

    The rush is on to measure and document eco-assets, not just for the environmental value but also for long-term monetary gain. If eco-assets can be measured, then they can also be banked and sold. Industry experts predict that ecological metrics will soon have recognized economic value and will be traded like carbon credits.

    Unlike carbon credits from China that can be sold in Europe, these credits would only have value within a local service area. Still, this mass of smaller markets could make up the “long tail” of a new eco-asset marketplace.

    Developers in particular are interested in the concept of stocking up on eco-assets. Let’s say that you own a large tract that could be a subdivision. You’re also considering improving the land for more passive use as a park, bird habitat and open space for endangered native plant species. By deciding not to develop your property and instead banking environmental commodities that can be documented with tools like EcoMetrix, you may realize a much larger return on your investment 10 years from now. Your decision would also benefit your neighbors by maintaining the ecosystem services your land provides.

    Savvy environmental insiders are already trying to ensure maximum long-term benefit from planned environmental improvements. As Whitworth noted, “Eco-asset calculation software not only helps drive how we prioritize projects today, but also sets the stage for an ecosystem marketplace down the line.”

    Sloan said, “Quantifying ecosystem services, and accounting for them in the economy through eco-crediting systems, can transform the same capitalistic free-market efficiency that created the problem into a practical and politically viable solution.”

    Damon Hess works in the ecosystem marketplace team at Parametrix, an engineering, planning and environmental sciences firm.

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