Understanding variations in ecosystem service provision

The Millennium Ecosystem Assessment defines ecosystem services as the benefits that people derive from ecosystems (MA 2005). It is the natural capital that we rely on for food production, climate stabilization, pollination and drinking water. In the last decade, research on ecosystem services has exploded as academics and practitioners alike are searching for more explicit connections between ecosystems and human well being. New York City’s water supply is the successful adoption of the ecosystem services framework in practice. When water managers were evaluating alternatives for improving drinking water quality, it was found that investing in their natural capital, through watershed management and forest conservation, provided equivalent water quality at only a fraction of the cost of a new filtration plant. The financial savings have been estimated at $6 to $8 billion, plus $300 million per year in maintenance (Chichilnisky & Heal 1998, NRC 2000).

However our dependence on ecosystems has not prevented us from stressing them to the point where we have reduced their capacity to meet our needs (MA 2003). To maintain our ecosystem services intact we must incorporate their value into decision making (Daily et al. 2009). Initially ecosystem valuations measured total economic value (Costanza et al. 1997, Loomis et al. 2000). In a widely cited piece from Nature, Costanza et al. (1997) calculated the total economic value of 17 global ecosystem services to be in the range of USD$16-54 trillion/yr. Yet these estimates of total economic value were of little use to decision makers since most management choices operate at smaller scales and on the margins. That is, decision makers need to understand how the additional protection of an ecosystem will provide additional economic benefits to human populations. Marginal values are essential for evaluating tradeoffs. This recognition inspired research that integrated economic and ecological systems with the purpose of estimating the marginal values of ecosystem services (NRC 2005).

The problem with marginal valuations is that they generally assume a linear relationship between the ecosystem’s condition and the value of the service provided. This linearity does not hold for either ecosystem conditions or for the services provided. Ecologists have documented that ecosystems can fluctuate between alternative states where marginal changes have no impact if thresholds have been passed (Holling 1978). Economic systems also have thresholds whereby costs kick in after a certain point. Thus assuming linearity in our study of ecosystem services is likely to provide misleading information (Barbier et al. 2008). A new consensus is emerging that research on ecosystem services must consider the inherent variability and thresholds that are characteristic of both ecological and economic systems.

Researchers have only recently attempted to understand the stochastic qualities of ecosystem services. Aburto-Oropeza et al. (2008) studied the spatial and temporal fluctuations of fish catch as they related to mangrove conditions, while Koch et al. (2009) studied the irregular protection of coastal property provided by marine vegetation. The scant review of non-linear ecosystem service provision has generated urgent calls for improving our understanding of how ecosystem services fluctuate across space and time (Koch et al. 2009, Kremen et al. 2009).

Aburto-Oropeza, Octavio, Exequiel Ezcurra, Gustavo Danemann, Víctor Valdez, Jason Murray, and Enric Sala. 2008. Mangroves in the Gulf of California increase fishery yields. Proceedings of the National Academy of Sciences (30): 10456-9.

Barbier, Edward B., Evamaria W. Koch, Brian R. Silliman, Sally D. Hacker, Eric Wolanski, Jurgenne Primavera, Elise F. Granek, et al. 2008. Coastal ecosystem-based management with nonlinear ecological functions and values. Science 319: 321-3.

Berrens, R., Ganderton, P. Silva, C. 1996. Valuing the protection of minimum instream flow in New Mexico. Journal of Agricultural Resource Economics. 21:90-104.

Chichilnisky, G. and G. Heal. 1998. Economic returns from the biosphere. Nature 391: 629-630.

Costanza, Robert, Ralph D'Arge, Rudolf de Groot, Stephen Farber, Monica Grasso, Bruce Hannon, Karin Limburg, et al. 1997. The value of the world's ecosystem services and natural capital. Nature (387): 253-260.

Daily, Gretchen C., Stephen Polasky, Joshua Goldstein, Peter M. Kareiva, Harold A. Mooney, Liba Pejchar, Taylor H. Ricketts, James Salzman, and Robert Shallenberger. 2009. Ecosystem services in decision making: Time to deliver. Frontiers in Ecology and the Environment (1): 21-8.

Daily, Gretchen C. 1997. Introduction: What are ecosystem services? In Nature's services: Societal dependence on natural ecosystems., ed. Gretchen C. Daily, 1-19. Washington, D.C.: Island Press.

Holling, C. S. 1978. Adaptive environmental assessment and management. Wiley IIASA international series on applied systems analysis Chichester ; New York: Wiley.

Kremen, Claire, and Richard S. Ostfeld. 2005. A call to ecologists: Measuring, analyzing, and managing Ecosystem services. Frontiers in Ecology and the Environment (3): 540-8.

Koch, Evamaria W., Edward B. Barbier, Brian R. Silliman, Denise J. Reed, Gerardo M. E. Perillo, Sally D. Hacker, Elise F. Granek, et al. 2009. Non-linearity in ecosystem services: Temporal and spatial variability in coastal protection. Frontiers in Ecology and the Environment (1): 29-37.

Loomis, J.B., P. Kent, L. Strange, K. Faush, A. Covich. 2000. Measuring the total economic value of restoring ecosystem services in an impaired river basin: results from a contingent valuation study. Ecological Economics. (33):103-117.

Millennium Ecosystem Assessment. 2005. Ecosystems and human well-being: Current states and trends. Washington DC: Island Press.

National Research Council. 2000. Watershed management for potable water supply: Assessing the New York City strategy. Washington, D.C.: National Academy Press.

National Research Council. 2005. Valuing Ecosystem Services: Toward Better Environmental Decision Making. Washington, D.C.: National Academy Press.

(Koch et al. 2009) Non-linearity in ecosystem services: temporal and spatial variability in coastal protection

Since natural systems fluctuate over time and space, so do their associated ecosystem services. Koch et al (2009) propose that ecosystem managers take a closer look at these seasonal and spatial variations in order to assess the value of the ecosystem services more accurately. To date, few studies have looked at ecosystem thresholds or dynamic responses in the context of ecosystem services. They suggest that future research seek to incorporate the non-linear properties of the services for more accurate assessments. The authors show that assuming spatial and temporal linearity can lead to significant errors when trying to estimate the protection value of coastal ecosystems from storm damage.

This is a timely article for my research. In discussion with my advisors last week, we agreed that the water treatment managers in the Llobregat watershed were confronting environmental costs with significant seasonal and spatial variation. It became clear that understanding the dynamic nature of the ecosystem service provision in the watershed would be critical to help improve water treatment decisions. If we pursue this approach in the dissertation, Koch et al (2009) will an example from which to build upon.

Koch, EW., E.B. Barbier, B.R. Silliman, D.J. Reed, G.M.E. Perillo, S.D. Hacker, E.F. Granek, J.H. Primavera, N. Muthiga, S.Polansky, B.S Halpern, C.J. Kennedy, C.V. Kappel, E. Wolanski. 2009. Non-linearity in ecosystem services: temporal and spatial variability in coastal protection. Frontiers in Ecology and the Environment 7(1): 29-37.

Special Issue on Ecosystem Services

This month, February 2009, the journal Frontiers in Ecology and the Environment has published a special issue dedicated to ecosystem services, and it includes the most current ideas from the fields’ most well reputed scholars. Gretchen Daily and her team publish a piece entitled Ecosystem services in decision making: time to deliver, where they point out that the value of natural capital has not been incorporated into resource and land-use decisions on a large scale. To reach this goal, they present a conceptual framework that outlines the steps needed for ecosystem services to deliver on its promise.

The authors also briefly mention a software tool being developed, called Integrated Valuation of Ecosystem Services and Tradeoffs – InVEST, which is being designed to help decision makers quantify the benefits and tradeoffs associated with ecosystem services and relevant land-use decisions. However details regarding the software remains sparse, and it is unclear what distinguishes InVEST from other modeling tools used by environmental economists. That being said, it appears that the Natural Capital Project has recently released its first beta version of the InVEST software (1.001 beta) and its respective user guide. It looks like the software is being distributed as an ArcGIS toolbox. This looks like a smart move that should facilitate easy user adoption.

Daily, Gretchen C., Stephen Polasky, Joshua Goldstein, Peter M. Kareiva, Harold A. Mooney, Liba Pejchar, Taylor H. Ricketts, James Salzman, and Robert Shallenberger. 2009. Ecosystem services in decision making: Time to deliver. Frontiers in Ecology and the Environment 7(1): 21-28.

Research on Ecosystems Services searches for Integration

An underlying theme in the ecosystem services literature is integration. Scholars are searching for ways to overlap ecology with economics in order to generate new insight (Powers et al. 2005, Fisher et al. 2008, Ward and Pulido-Velázquez 2008, Daily et al. 2009). The ultimate goal is to improve decision making with respect to both ecosystems and human welfare. In their quest for integration, specialists in both fields are exploring unfamiliar topics. This has led to creative thinking, but also generated a degree of confusion, especially for students still learning both fields. Within the community of scholars specialized in Ecosystem Services, there is a consensus that integration is fundamentally a good thing; that future breakthroughs will be generated by this integration; and that we are still only in its incipient stages.

References
Daily, Gretchen C., Stephen Polasky, Joshua Goldstein, Peter M. Kareiva, Harold A. Mooney, Liba Pejchar, Taylor H. Ricketts, James Salzman, and Robert Shallenberger. 2009. Ecosystem services in decision making: Time to deliver. Frontiers in Ecology and the Environment 7(1): 21-28.

Fisher, B. Kerry Turner, Matthew Zylstra, Roy Brouwer, Rudolf de Groot, Stephen Farber, Paul Ferraro, et al. et al. 2008. Ecosystem Services and Economic Theory: Integration for Policy-Relevant Research. Ecological Applications. 18(8): 2050-2067.

Powers, M.E. N. Brozović, C. Bode, D. Zilberman 2005. Spatially explicit tools for understanding and sustaining inland water ecosystems. Frontiers in Ecology and the Environment. 3(1):47-55.

Ward, F.A. Pulido-Velázquez, M. 2008. Efficiency, equity and sustainability in a water quantity-quality optimization model in the Rio Grande basin. Ecological Economics. 66:23-37.

(Power et al. 2005) Spatially explicit tools for understanding and sustaining inland water ecosystems.

Mary Power, Nicholas Brozovic, Collin Bode and David Zilberman make a compelling case that new technologies will provide researchers with an unprecedented capacity to model "socioecological systems". While ecosystem response to human change remains uncertain, dynamic and nonlinear, the new mapping, monitoring and tracing techniques will allow researchers to make better sense of the changes underway. It follows that better ecological models will improve the input data for economists who design institutional arrangements and policies for better ecosystem management.

The article transmits huge excitement. No doubt, new data sets acquired through remote sensing technologies, and new analytical tools such as ArcGIS are opening new frontiers in data analysis. I share the authors´ interest in learning how to capitalize on the spatially explicit tools available. I find that there is a large gap between what the technology will allow us to do, and what users are capable of doing. The technology seems to progress five times faster the rate of user adoption. And as a PhD student, with time to invest in learning these tools, it is nearly incumbent upon me to become an earlier adapter and use the new tools or data sets. While I yet to find the way to integrate these new tools in my research, I look forward to discussing this with my advisers.

A key contribution came at the end of the article, where the authors suggested that researchers should focus on assessing cost-effective policies based on specific goals instead of generating elaborate optimization models that need monetary values on ecosystems or species. This alternative strategy sidesteps the valuation controversy, and avoids the costly, technically difficult and politically sensitive studies such as contingent valuation surveys.

It should be noted that the some leading scholars in the field of ecosystem services are still focused on valuation methods, and the integration of ecosystem values into decision making processes (Daily et al. 2009).

Power, M.E., N. Brozovic, C. Bode, Z. Zilberman. 2005. Spatially explicit tools for understanding and sustaining inland water ecosystems. Frontiers in Ecology and the Environment. 1(3):47-55.

Watershed Management and Optimization for Membrane Treatment Facilities

My research seeks to learn how water treatment managers can optimize treatment processes through improved watershed management. I hypothesize that watershed management will gain renewed relevance as newer membrane technologies increase treatment costs downstream. In recent years, we have observed how water managers increasingly select membrane treatment in order to meet new water demand and to improve water quality. These new technologies imply significant changes to various aspects of the treatment process. The high energy use and costs associated with membrane treatment create new optimization equations. Pollutants such as dissolved salts -- previously untreatable using standard treatment methods -- now will directly increase treatment costs. Thus the technological innovation should change how water treatment managers engage with upstream polluters who degrade water supplies. More precisely, the high operating costs associated with membrane treatment may uncover new economic arguments that favor of watershed management.

To understand how membrane treatment plants should respond to upstream polluters I will draw from the fields of urban planning, environmental economics, and environmental engineering. In particular, I am interested in learning if the adoption of membrane treatment will create new opportunities to align economic incentives with environmental goals. Do the increased treatment costs generate new incentives to address point source pollution at their source? If so, what are the quantifiable economic benefits associated with specific surface water quality improvements? These questions are of interest to a broad community of environmental engineers, urban planners, and environmentalists. They also are questions that move us forward in our quest for sustainability because they simultaneously address
economic and environmental goals.

This research is inspired by the experience in New York City where water managers saved millions of dollars by investing in strategic land use management in the Catskill watershed. The investment in land conservation helped them protect drinking water supplies and avoid installing an expensive filtration system (Chichilnisky & Heal 1998). New York is one of the most well studied examples of integrated land and water management (National Research Council 2000). While my research follows the spirit of the New York case, it adds two important twists. First, the treatment technology is vastly different. Instead of seeking to avoid new technologies, my research embraces the most advanced membrane treatment and yet searches for efficient and environmentally sound practices within this new technological context. Second, I will study the benefits of restoration, not conservation. I will quantify the real savings derived from improving surface water quality instead of speculating on the avoided costs that resulted from land conservation. Furthermore, the technological and environmental conditions at my research site are more representative of urban water challenges globally. Most treatment facilities have already installed the filtration systems that New York avoided. My research site reflects conditions that water managers are likely to face in the future, whereby poor water sources will be treated with newer technologies.

Research Site
The Llobregat River near Barcelona, Spain offers a special opportunity to study the new relationship between membrane treatment and watershed management. Over 4 million residents in the Barcelona metropolitan region depend on the Llobregat River for their drinking water (Saurí 2003).Two major treatment plants draw water from the Llobregat: the public water agency Aigües Ter-Llobregat (ATLL) and the private water company Aigües de Barcelona (AGBAR). Motivated by upstream pollution and new drinking water standards, both facilities will begin to operate new desalination systems starting in 2009. The publicly managed ATLL plant has purchased a reversible electrodialysis system from General Electric. The private water company AGBAR has chosen to install a reverse osmosis system.

For decades, both facilities have had difficulties managing trihalomethanes (THM) produced during disinfection (Esteban & Prat 2006). THM formation is especially high in water from the Llobregat River because mine tailings upstream release salts and bromides. These contaminants have also contributed to poor odor and taste. While several measures have mitigated the mines’ impact, public officials have always claimed that effective management of river pollution in the Llobregat implied unbearable financial costs. This scenario may change under the new technological and economic conditions. Clearly, the new treatment systems will generate additional operation costs per cubic meter. Therefore the transition to membrane treatment and the high operating costs that come with it may change the economic calculus to make investments in upstream pollution financially viable. And while no one disputes that cleaner surface water would reduce treatment costs, it is unclear how much the savings really are, if they would materialize under actual operating conditions, and if watershed investments truly make economic sense in a restoration context.

Method
I will collect and analyze one year’s worth of data from the treatment plants in order to define the relationship between surface water quality and treatment cost under actual operating conditions. In particular, I would like to learn how marginal improvements in water quality can reduce treatment costs. Regression analysis of a time series data set will help isolate the relationship between pollutant concentrations and treatment costs. Water treatment managers are already collecting water quality data at different points in their treatment process. In collaboration with them, I will compile a database of water qualities at three critical stages: (1) raw surface water quality, (2) water quality following the standard treatment process, and prior to desalination and (3) final water quality following desalination. At each stage, I will track parameters such as temperature, pH, dissolved oxygen, total organic matter, conductivity, and total THMs. When I have established how a marginal improvement in water quality reduces treatment costs, I will be able to conduct a Cost/Benefit Analysis of restoration options available to watershed managers.

Completed Research
I have conducted preliminary order of magnitude calculations to test if my research is viable. Thus far, these calculations have yielded encouraging results. The literature asserts that the operating costs for both desalination plants will be approximately €0.36 / m3 (Avlontis 2002, Karagiannis and Soldatos 2008). Nearly 75 percent of these operation costs are from energy expenditures (Valderi-Perez et al. 2001). To estimate the potential savings derived from improvements in surface water quality, I have calculated the savings associated with a 3 percent (€0.01/m3) reduction in water treatment cost. This hypothetical reduction would result in savings of over € 2 million per year. This represents a Net Present Value of €36 million over 20 years and using a discount rate of 5 percent. These are significant savings for a reasonably small reduction (3%) in water treatment cost, and suggest that there are real opportunities to align the economic and environmental goals. It means that watershed management proposals under €36 million will make financial sense if they can reduce treatment costs by only €0.01 / m3. With such a large amount of money in play, there may be several measures that can simultaneously help restore the Llobregat River and reduce treatment costs.