Natural Capital Team Introductory Meeting April 20 th, 2009 Partnership for the Delaware Estuary 1

Overarching Goal To make smarts investments in restoration, monitoring and management decisions, using limited resources, which best enhance the health and function of the DE Estuary and its resources Better Restoration Decisions Climate Adaptation Ranking and Prioritizing Projects Target Case Study Areas Natural Capital Team Goals: This Year 2

Climate Ready Estuaries Climate Predictions: 2050 & 2100 Vulnerability Assessments: Resource response to physical stressors of climate change Drinking Water Bivalve Shellfish Tidal Wetlands Natural Capital Quantified assessment of resource damage Quantified intervention by restoration actions Management Recommendations Damages expected Intervention and Adaptation activities 3

Regional Restoration Project Registry & Matrix – Comprehensive list of projects – To be sorted and ranked Case Study Areas – Tidal Wetlands – Benthic Species (Bivalve Shellfish) – Urban Waterfront Restoration – Headwater Streams Natural Capital – Assessment of restoration options – Tool to rank projects based on ecoservice benefits 4

Regional Restoration Workgroup (RRWG) Project Registry and Matrix Team: Natural Capital Valuation Team: Urban Waterfront Subgroup: Drinking Water Headwaters Subgroup : Tidal Wetlands Bottom Biota (Sturgeon and Shellfish): Climate Workgroup RRWG Only Shared Case Studies Climate Only Partnership Work Group Structure – Natural Capital Team Connection 5

Examples of Ecosystem Service/Natural Capital Valuations 6

New Jersey Natural Capital Study Goal: Impact of resources on human economy – Even if market doesn’t reflect directly, indirect methods are used to determine economy’s dependence Benefits – Big, shocking numbers! –Publicly accessible – Closer to true costs of resource to humans Drawbacks – Incomplete (i.e. wetlands) – Expensive studies – Static Numbers don’t account for: loss, climate impacts, recession, spatial differences – Missing ecological dimension: system health & function – Unclear how to translate to policy decisions 7

New Jersey’s Natural Capital The ecosystem services evaluated 1. Climate and atmospheric gas regulation 2. Disturbance prevention: 3. Freshwater regulation and supply 4. Waste assimilation: 5. Nutrient regulation 6. Habitat refugium 7. Soil retention and formation: 8. Recreation 9. Aesthetic and amenity: 10. Pollination Non-Market Economic Valuation Techniques Avoided Cost (AC): services allow society to avoid costs that would have been incurred in the absence of those services; flood control provided by barrier islands avoids property damages along the coast. Replacement Cost (RC): services could be replaced with man-made systems; nutrient cycling waste treatment can be replaced with costly treatment systems. Factor Income (FI): services provide for the enhancement of incomes; water quality improvements increase commercial fisheries catch and incomes of fishermen. Travel Cost (TC): service demand may require travel, whose costs can reflect the implied value of the service; recreation areas attract distant visitors whose value placed on that area must be at least what they were willing to pay to travel to it, including the imputed value of their time. Hedonic Pricing (HP): service demand may be reflected in the prices people will pay for associated goods: For example, housing prices along the coastline tend to exceed the prices of inland homes. Marginal Product Estimation (MP): Service demand is generated in a dynamic modeling environment using a production function (i.e., Cobb- Douglas) to estimate the change in the value of outputs in response to a change in material inputs. Contingent Valuation (CV): service demand may be elicited by posing hypothetical scenarios that involve some valuation of alternatives; e.g., people generally state that they would be willing to pay for increased preservation of beaches and shoreline. Group Valuation (GV): This approach is based on principles of deliberative democracy and the assumption that public decision making should result, not from the aggregation of separately measured individual preferences, but from open public debate. 8

University of Delaware – Valuation of the Christina River Basin Classic Benefit Transfer Analysis – Compilation of literature values applied to Christina Basin – Used studies like New Jersey’s Natural Capital report Benefits – Cheap, easy, and fast analysis – Attempts more accurate reflection of human economy’s indirect dependence on natural resources – Could be very useful in Drinking Water Case Study Drawbacks – Outputs only as good as quality of supporting literature values – Misses ecological health and function component – Danger in $ amounts 9

Valuation of the Christina Basin 10

Habitat Equivalency Analysis (HEA) Tool used to assess Damages & Restoration – Climate Impacts as Injury to resource Benefits – Hits ecosystem health & function – Nationally recognized tool – Can integrate with Cost/Benefit analysis – Easy model to use Drawbacks – Outputs only as good as the supporting science – Ample room for judgment calls – Isn’t appropriate for all services (i.e. cultural, 11

Industrial Economics - DE Study Example of HEA Application Supporting Science: SLAMM model & Primary Productivity Wetland response to climate for portions of New Jersey Potential for expansion to Estuary 12

GIS - Priority Areas Place-Based Restoration & Conservation Examples: InVEST, Smart Conservation Model, The Natural Conservancy – eco-region based portfolios Prioritize projects based on areas with highest overlap of eco-services Benefits Great visual product Spatial relationships very useful Drawbacks Outputs limited by state of science Overconfidence in maps & layers Overlap assumes maximization of ecosystem health 13

EPA - Ecosystem Services Research Program (ESRP) How do we…. 1.Engage with ESRP? 2.Integrate ORD research into ecosystem service valuation? 3.Adapt new information into our models/analysis? 14

Big Questions How much can we accomplish in a year? Appropriate Scales? Others? 15

Thinking in terms of Services 1 Service2 Service3 Service Provisioning FoodFisheries Support Algae and invertebrate production Fresh Water Genetic Materials Fiber and Fuel Biochemical products Regulating Nutrient Sequestration Sediment Stabilization Storm Protection/ Wave Attenuation Gas Regulation Carbon Sequestration Oxygen production Flood Protection Waste Water Treatment Water QualityWater clarity, N, P Water Supply Cultural/ Spiritual/ Human Well Being RecreationBird hunting Spiritual and Inspirational Educational Aesthetic Value Supporting Habitat Wildlife Habitat/Maintain Fauna Biodiversity Maintain Plant Communities ProductionPrimary Production Water Cycling/Hydrologic Regime Nutrient Cycling/Biogeochemical Processes 16

Wetlands Case Study HEA – Assess injury & damages from climate – Assess restoration & adaptation options Inputs from IEc Study Economic valuations of replacement costs of services??? GIS – modeling service layers??? 17

Wetlands Case Study 18

Shellfish Case Study HEA Economic analysis of harvest industry impacts? GIS – mapping of populations/services??? 19

Drinking Water Case Study Economic Models – Replacement Costs Analysis – Avoided Cost Analysis Potential Use of NRDA process??? 20

Next Steps 1.NC Team commitment to case studies 2.Refine service lists & vulnerabilities 3.Decisions: – Tools to use for case studies? – How to scale work for coming year? 4.Literature Search – NRDA Settlements – Resource response to stressors & restoration Biology, ecology, infrastructure – Restoration & adaptation options – Gaps & Best Professional Judgment 5.Develop plan for GIS components 6.Prep for June meeting of Climate Workgroup 21