Part VII
government agencies and non‐profits – in ecosystem service analysis should proceed at a rapid pace. Economic benefits provided by ecosystems are important and need to be valued to properly inform public and private investment. These are improvements in economic analysis which promote better investment and are informed by ecosystem services. The mapping of ecosystem services on the landscape, their provisioning, beneficiaries and impediments all inform how institutions should be set up and how incentives and funding mechanisms should be created. By mapping the services parks provide, beneficiary areas can better be understood. For example, communities receive flood protection from park lands. Urban Park characterization should include ecosystem services, which are crucial to solving many biological and economic sustainability issues in Tacoma.
Cost-Benefit Analysis
All federal and state agencies, cities, counties and many private firms utilize cost/benefit analyses to make investment decisions in areas such as health care, levee construction, education, road building, economic development, tax breaks and others. If a cost/benefit analysis is flawed, investments will be flawed. For example, currently a fish-processing plant counts as an asset in cost/benefit analysis, yet federal rules dictate that the system that actually produces the fish does not count as an asset and cannot be valued in the analysis. In the U.S., significant changes in the federal cost/ benefit analysis rules for water and land resources (“Principles and Guidelines”) are currently under consideration. Proposed changes include the valuation of ecosystem services. It is uncertain how long this consideration will take, but it is Earth Economics’ experience that when local and regional jurisdictions factor natural capital into cost/benefit analysis, better-informed decisions result. When working with federal agencies on shared projects, jurisdictions have an opportunity to take
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a leadership role. The Army Corps of Engineers, for example, will grant exemptions to include the values of ecosystems in a cost/benefit analysis to ensure that they are considered along with built infrastructure for a more complete and accurate flood risk management plan and strategy. Local jurisdictions should encourage this during project planning.
Project Prioritization
Criteria for selection and prioritization of capital infrastructure projects need to reflect the goals of the communities and the policies of local jurisdictions. Though not a comprehensive list of criteria, some questions driven by ecosystem services-related policies include: 1. Does the project enhance natural processes? 2. Do the project impacts enhance or degrade associated ecosystem services (such as habitat or water quality) at the site-specific or regional scales? 3. Are the costs and benefits (safety, health, economic and ecological) of this project distributed equitably over time and space?
Environmental Impact Statements
In Washington, environmental impact statements often have an effect on project design, and thus investment, by identifying actions that reduce the negative environmental impacts or enhance restoration. One of the fundamental challenges of environmental impact statements is the lack of an economic interface. In other words, environmental damages can be quantified in scientific terms, but this has no common language with project financing, denominated in dollars. Ecosystem service identification and valuation often strengthen what is the weakest area of environmental planning and analysis - the economic implications and value provided by restoration projects. In 2010, Earth Economics provided the first economic section in an environmental impact analysis for Snohomish County’s Smith Island restoration project.