A National Ecosystem Services Classification System (NESCS) – NESCS as a Nexus for Ecosystem Services Research, Policy,

Effects, and Valuation

Charles RhodesORISE Post-Doctoral FellowU.S. Environmental Protection AgencyOffice of Water – Water Policy Staff, Office of Research and Development – Western Ecology Division rhodes.charlesr@epa.gov

NESCS Workshop II: Progress and Prospects U.S. EPA

17 September 2013

What is the relation between the industrial society upon which we depend and the ecosystems which we depend on for resources?

• Can human activity upset or harm ecosystem dynamics from which we draw?

• Is there waste, pollution, or environmental destruction?

• What is the scale of these relative to natural cycles of generation and regeneration?

• Is the scale changing over time, and if so, in what manner?

pre-industrial, industrial, post-industrial

http://upload.wikimedia.org/wikipedia/commons/a/a7/Cuyahogarivermap.png

November 2, 1952

June 23, 1969: same river in Northeast Ohio, new fire. “…the last of a dozen fires over 100 years of industrial development.” Michael Scott, The Cleveland Plain Dealer, January 4, 2009

“Many people see this fire as being a catalyst for the federal Clean Water Act and other environmental laws.”

Jane Goodman, South Euclid, OH councilwoman, 2009

http://blog.cleveland.com/metro/2009/01/after_the_flames_the_story_beh.htmlPicture is of some of damage from 1969 fire, and a fire crew.

1) Identify man’s impact (the problem)2) Make economic and institutional changes to

stop causing the problem3) let nature recover, and ecosystem services start flowing again

In 2009, 40 years after the last Cuyahoga River fire:

But point-source is easy. Small-scale relative to non-point source.

Ohio EPA biologist(s) fish count, mid-1980s: 10

40 species of fish

Ecosystem services are harder to account for:harder to define, harder to measure, harder to abate.

Efficient rational decision making values, in order: facts known probabilities lesser-known possibilities unknowns and conjecture

So while appealing in theory, it is harder to get traction for ecosystem services in concrete policy debates.

People who want to use natural resources as if they were endless may exploit the difference between what nature does, and how well we model and measure what nature does.

NESCS seeks to correct this bias – to expand the accepted base for arguments that employ deeper awareness of how human action impacts environmental resources and processes.

The intensityThe scale

of human activities that affect the environment

matters

Measuring the scale and intensity

What is the relation between the industrial society upon which we depend and the ecosystems which we depend on for resources?

Biased estimator – without the full range of ecosystem services: fewer assigned benefits (or costs associated with loss of ES) lower mean (average) leptokurtic distribution (has narrower range of even biased estimates)

How well-developed and standardized the definitions and measures of ecosystem services (ES) are, has a strong effect on what we bring to policy debates – as scientists, polluters, or regulators. If true population of ES is close to θ, and we are working with biased estimator θ - ε, the results are predictable: underestimation of ES value.

θ - ε

natural sciences Measure from physics up

through physical and biological systems

What to measure?How cross the “divide” between natural and social science approaches?

Ecologists Economists

social sciences Measure things that follow from the human mind and

human activities

Human measurement

Where do we define a measure to begin or end? How do we sort them?

Need: Classification System

What is the relation between the industrial society upon which we depend and the ecosystems which we depend on for resources?

A Total Economic Value Framework

Total Economic Value (TEV)

Use Value Nonuse Value

Consumptive Use Value

Non-Consumptive

Use ValueOption Value Existence Value Bequest Value

Needs:• a way to isolate non-marketed (un-priced) elements that humans

“value”• a way to measure human “value” on these elements• best if also know the processes that generate or affect non-market

elements and how humans place value on them

Economists build a theory that would bridge to values for Ecology

Ecology

Economists

EcologistsEcology and related fields• Study systems and processes whose time and scope can dwarf

human direct experience• Naturally difficult to model; difficult to see what to measure, where

to focus, where “value” might be (unlike basic economic theory)

As with economics beyond the price system, ecologists who care about what humans value are faced with difficulty of what to measure.

Another blind spot?

Ecologists build a theory that would bridge to values for Economists

Economy

Ecologists

Ecologists develop ecosystem services (ES) concept:humans rely upon and derive value from processes, products, and services for which there are very rarely prices or even direct measures.

Ehrlich, Ehrlich, Holden (1977); Daily (ed.)1997

What are ecosystem services, andhow do we measure them in a “meaningful” way?

ES need to be classified, but by whom and to what purpose? Can the classification be standardized so that the needs of different academic fields may be accommodated?

Growing ES literature since Daily (1997), as ecologists, researchers, and policy makers try to apply ES concept:

De Groot et al (2002); MEA (2005); Boyd and Banzhaf (2007);Wallace (2007); Fisher and Turner (2009); Staub et al (2011);Haines-Young and Potschin (2012); Others

Millennium Ecosystem Assessment (MEA) 2005:Supporting Services: soil formation, nutrient cycling, primary production

Provisioning Services: fresh water, food, fiber, genetic resourcesRegulating Services: water purification, climate and disease regulation

Cultural Services: spiritual, recreation & tourism, educational, heritage

Double Counting: • freshwater as provisioning and as water regulation and as purification?• most “regulating” services may prove intermediate, but counted again

when “provisioning”

Ecologists

Impasse: much of field not moving toward measuring ES in a way policy makers can use

Problems when attempting to quantify from MEA classification: 1) benefits ≠ services

2) not a set of clear, unique, unduplicated, measuresMEA classification mixes “processes (means) for achieving services and the services themselves (ends) within the same classification strategy”

Boyd and Banzhaf (2007)

Boyd and Banzhaf (2007) indicate a potential way forward: count only those ES that directly enter the human economy, at the point they do:

Final Ecosystem Goods and Services (FEGS)

• Classify Types of FEGS, to map a pathway by which any ES can pass in any way from the ecosystem into the human value chain

• Draw on methods used (by the Bureau of Economic Analysis (BEA), U.S. Census Bureau and other federal agencies) to classify goods and services exchanged in the market economy

– NAICS: How are ECONOMIC goods and services produced/ Who produces (SUPPLY SIDE)

– NAPCS: How are ECONOMIC goods and services used/ Who consumes (DEMAND SIDE)

NESCS- General Approach

NESCS – Objectives

• Aid in analyzing impacts of policy-induced marginal changes in ecosystems on human welfare:

- support cost-benefit, cost-effectiveness, and distributional analyses

- establish the logical structure for mapping how ecosystem changes affect human welfare, and develop a policy application

- further research (ORD) will make this structure more useful to policy makers (OW & OAR) using the application

• Align EPA Office objectives and resources to build a common framework to bring relevant non-marketed ecosystem services (ES) more directly to bear in policy decision making

• Measure welfare changes due to a policy change. This entails: identifying, quantifying, and valuing changes in the contributions of ecosystems to human welfare

Identify/Classify/Discretely Sort

Quantify

Monetize

111001011000010110111110101000101110110111111000101011000010110100111101

Three distinct steps needed to assign benefits from “ecosystem services” to discrete welfare changes:

Let’s mock through this, starting with a “nebulous” example:

RainbowFireCloud – better known as a circumhorizon arc

Identify/Classify/Discretely Sort?

Quantify? Value and/or Monetize?

Identify/Classify/Discretely Sort:Dark sky … Sky <50% color … Sky 50% < x <100% color … Spectral-color sky (<10% cloud) … Cloud-rainbow mix, w/silver lining …Cloud-rainbow mix, w/out silver lining …Dark cloud (<10% light)

Monetize:x $0.01x $0.10x $0.25x $1.00x $1.51x $0.20x $0.00

$21.96

Quantify the Classified and Sorted:Dark sky = 17

Sky <50% color = 5Sky 50% <x<100% color = 2

Full-color sky (<10% cloud) = 7Cloud-rainbow mix, w/silver lining = 9

Cloud-rainbow mix, w/out silver lining = 1Dark cloud (<10% light) = 19

Total = 60

Beauty, rich tide pool life, sea lion and bird breeding and sanctuary, heritage…

Set a New Standard for ES Classification Map all relations between FEGS and human economy /

human values• Unique pathways• No double counting

Bridge to existing classification systems: FEGS, NAICS/NAPCS

Build an App – Framework for a user-friendly policy tool• Scalable• Capable of marginal policy analysis• Capable of direct application to green accounting

Establish an Institutional Forum A processing structure that iteratively identifies match-

points between research and policy needs, and provides a vocabulary and a clearinghouse for communicating needs between EPA offices

NESCS and Next Steps:

Illustrative Policy ApplicationsPurpose: Illustrate key unique features of NESCS design, which sets the

frame for marginal policy analysis Demonstrate steps for applying the NESCS framework and

categories to identify pathways that potentially may be impacted by policy changes

Cross-Media, Different ScalesSpecific Policy Applications: Air Quality Standards for nitrogen and sulfur oxides (NOx & SOx):

Quality change in end-product (air) National Policy

Wetlands Restoration: Quantity Change in stock of natural capital in an environmental

class (wetland) Regional policy

Our Classification Scheme

18

NESCS-S to NESCS-D categorize FEGS “end products”, and decompose “beneficiaries” into “uses” and “users”

Economic Supply-side Economic Demand-side

Flows of FEGS

NESCS-S

NESCS-D

Intermediate Economic Goods &

ServicesFresh fish sales to canneries

NAICS NAPCS

IntermediateEconomic

Production Commercial

fishing

FinalEconomic

ProductionCommercial fishing;

Processing of fish

HouseholdUtility

FunctionFinal Economic

Goods & ServicesFresh fish sales to

households;Canned fish sales to

households

Human Well-being

EcologicalProduction

NaturalCapital

Streams & Lakes

Flows o

f FEG

S

capital and labor

services

Flows of FEG

S

FEGS StocksFish

Fish Health & Reproduction

Fish stocks contributing to commercial fishing

Fish stocks contributing to comm

ercial fishing Fish

stock

s con

tribu

ting t

o re

crea

tiona

l fish

ing

Hum

an S

yste

ms

Nat

ural

Sys

tem

s

PhysicalCapital and

LaborFishing & processing

equipment, Hours spent fishing

& processing

NESCS Conceptual Frameworkwith Fishing Example

End-Products

Policy Change

Environmental Class

(Intermediate) Ecological Processes

Changes in Direct Uses

Direct Users

Changes in Human Welfare

Pathway Linking Policy Changes to Human Well-Being

Changes in Final

ES Flows

ΔN

ΔE1

ΔE2

ΔE3

ΔEn

•••

ΔY1

ΔY2

ΔY3

ΔYm

•••

ΔW1

ΔW2

ΔW3

ΔWj

•••

ΔE4 ΔWj+3

ΔWj+p

•••

••Policy Action

ΔN = Change in Natural CapitalΔE = Change in Ecological end products (types of FEGS)ΔY = Change in Final Economic Goods and ServicesΔW = Change in human well-being (welfare)

Representation of Multiple Mutually Exclusive Pathways Between Policy-Related Ecosystem Impacts (ΔN)

and Changes in Human Well-Being (ΔW)

Proposed 4-Group NESCS Structure

Levels 1, 1a Levels 2, 2a Levels 3, 3a, 3b Levels 4, 4a

Applying NESCS for Policy Analysis: A Wetlands Restoration Program Example (Tracing Pathways for Different Wetland Functions)

Level 1 Level 1a Level 2 Level 2a Level 3a

Environmental Class Environmental Sub-Class

End-Product Class End-Product Sub-class

Use/Non-use Sub-Category Use/Non-use Detail Examples of Uses

Raw material for transformation Beverage production Beverage Manufacturing 3121

Support cultivation of plants and animals Irrigation for crop production Crop Production 111

Electric Power Generation 2211

Distribution to other users Distribution to commercial and household users Water Supply and Irrigation Systems 22131

Support of human health, life, or subsistence Tap water from private wells Households

Nonuse Nonuse Bequest value for future generations Households

Protection of human health/life Avoided drownings Households

Avoided crop damage Crop Production 111

Avoided damage to water intake structures Beverage Manufacturing 3121

Truck Transportation 484

Households

Avoided damage to residential structures Households

Raw material for transformation Beverage production Beverage Manufacturiing 3121

Distribution to other users Distribution to commercial and household users Water Supply and Irrigation Systems 22131

Non-consumptive use Aesthetic appreciation Scenic amenity for waterside homes Households

Nonuse Nonuse Bequest value for future generations Households

Distribution to other users Harvesting for sale by commercial fishers Commercial Fishing 1141

Support of human health, life, or subsistence Subsistence fishing Households

Chartered recreational fishing Charter Fishing Boat Services 487210

Private recreational fishing Households

Non-consumptive use Recreation/tourism Catch-and release private fishing Households

Nonuse Nonuse Existence value Households

Support of human health, life, or subsistence Subsistence hunting Households

Waterfowl hunting preserves Hunting and Trapping 1142

Private recreational hunting Households

Non-consumptive use Recreation/tourism Bird watching Households

Nonuse Nonuse Existence value Households

Non-consumptive use Recreation/tourism Birdwatching Households

Nonuse Nonuse Existence value Households

Cultural/spiritual activities Subsistence hunting Households

Canoeing/kayaking Households 1142

Hiking Households

Aesthetic appreciation Scenic amenity for waterside homes Households

Aesthetic appreciation Scenic amenity for waterside businesses Hotels 72111

Nonuse Nonuse Bequest value for future generations Households

Level 4a

User Sub-Categories

Waterfowl

Protection of human propertyAvoided damage to vehicles

Consumptive use

Open space provision

Aquatic Wetland LandscapeWetland landscape

Non-consumptive use

Aquatic

Aquatic

Wildlife habitat provision

Aquatic

Groundwater recharge

Aquatic

Recreation/tourism

Wetland Fauna Wading birds

Level 3b

Cooling water

Rivers and streams Water

Rivers and streams Fauna

Wetland

Groundwater Water Liquid water

Recreation/tourism

Fauna

Wetland Function

Consumptive useRecreation/tourism

Liquid water

Consumptive use

Fish

Industrial processing

Water storage Aquatic WetlandRegulation of extreme Events

Flood surge reduction

Non-consumptive use

Consumptive use

Water purification

Aquatic

Which ecosystems/end-products support which uses? “X” indicates potential ES

“Make Table” Links Direct Uses to End Products

http://aflalbio.webs.com/apps/photos/photo?photoid=84962703

research and programs do not approach ES issues in an institutionally efficient way

each group faces limited money and time, so have a natural incentive to narrow their own effort

inadequate signaling of needs and coordination efforts between offices

old constraints remain new constraints methods and databases are more likely to be built without

coordination to make them useable for other objectives, other offices, or other agencies

With NESCS: we will eventually want rules/dynamics for production of FEGS,

will want models for how and why systems will be stressed to threshold levels

EPA Offices become more discretely aware of other Offices’ needs

What is Missing without NESCS collaboration?

NESCS Classification

ES Quantification

ES Valuation

Institutional Communication and Evolution

Development and Deepening:

IterativeDevelopment of Methods and Metrics; Database Mergers

IterativeDevelopment of Policy Application Tool

Application and Evolution:

NESCS

ES Quantification

ES Valuation

Institutional Communication and Evolution

IterativeDevelopment of Methods and Metrics; Database Mergers

IterativeDevelopment of Policy Application Tool

Looking today for potential stakeholders, academics, and ecosystem service specialists to review, inquire, critique, and suggest

NESCS will work

Real-world examples: built Logical barriers to full build out: none

- large, but tractable

Or contact me later:Charles R. RhodesORISE post-doctoral fellow rhodes.charlesr@epa.gov202 564 9642

Thank you!!I will be available for questions throughout the day!

http://aflalbio.webs.com/apps/photos/photo?photoid=84962703

http://blog.cleveland.com/metro/2009/01/after_the_flames_the_story_beh.html

http://www.flickr.com/photos/paul-w-locke/300048279/sizes/l/in/photostream/

http://theecoadmirer.com/wp-content/uploads/2013/07/Pollution.jpg

http://www.weibull.com/DOEWeb/unbiased_and_biased_estimators.htm

http://cdn.breitbart.com/mediaserver/Breitbart/Big-Journalism/2013/06/11/global_warming.jpg

http://earthjustice.org/slideshows/campaigns/images-of-mountaintop-removal-mining#/sites/default/files/04-mtr-aerial-700.jpg

http://i2.cdn.turner.com/cnn/dam/assets/120803054404-us-drought-tractor-story-top.jpg

http://en.wikipedia.org/wiki/Biological_classification

http://www.recognitionsource.com/images/thumbs/0000318.jpeg