Content
Introduction to Ecosystem Services
Welcome and Course Overview
Welcome to the first day of discussion on ecosystem services, a topic that is very important and central to personal research and professional work. This entire dissertation was focused on ecosystem services, and most of professional life has been dedicated to this field. The plan for today is to start with an introduction and discussion of the premise and history of ecosystem services, followed by a discussion of the Natural Capital Alliance, a critical organization that has been worked with for 15 years. It should be noted that the Natural Capital Alliance was recently renamed from the Natural Capital Project because “project” sounds like a short-term endeavor, and the organization has been around for 20 years.
Software and Practical Components
The lecture will cover Invest, the key software provided by the Natural Capital Alliance that participants should have installed on their computers. The focus will be on the provisioning components of ecosystem services, particularly the specific ecosystem service of carbon storage, which will be run on participants’ computers during the lecture. Valuation will be discussed in later lectures, but today’s emphasis is on getting the software operational and demonstrating its practical application.
Technical Setup and Mac Installation Issues
A show of hands revealed that most participants were able to successfully install Invest, though some encountered verification issues on Mac systems. The solution for Mac users is straightforward: if the system only trusts applications from the Mac App Store by default, users simply need to go to Settings, Security, and manually enable the particular application. This is a one-time process that resolves the installation and opening issues.
Personal Computing Transition
A noteworthy personal update: the transition from PC to Mac is happening for the first time after a lifetime of PC use. This represents a monumental shift despite being very comfortable with computers on the PC platform. The uncertainty about Mac shortcuts and functionality is significant enough that an emotional support PC computer is being kept available during the lecture, though the intention is to work primarily with the Mac. This first day of really using the Mac is slightly terrifying, but the goal is to make the transition work.
Understanding Natural Capital and Ecosystem Services
The Concept of Natural Capital
To begin discussing ecosystem services and natural capital, it is important to start with the simpler concept: natural capital. The word capital has been discussed multiple times throughout this course as an input to production, and now a new type of capital is being introduced. In ecosystem services and natural capital discussions, language is used that is tightly linked to economics, which makes the concepts more persuasive while also tying them to important underlying economic concepts.
Natural capital is the stock of valuable natural resources. The key word here is “stock,” meaning a stock of valuable resources and ecosystems. Natural resources extend beyond just minerals or forestry to include the geology, soil, air, water, all living things, biodiversity and natural systems present on the landscape. This broader definition is critical because it drives much of the value that natural capital provides when thought of similarly to other kinds of capital.
Capital in Economic Theory
The history of economics has long discussed capital in the production function. As mentioned previously, production can be expressed as capital raised to some exponent and labor raised to some other exponent, making capital critical to understanding productivity. However, the history of economics has spent considerable time moving beyond the idea of capital as something produced or manufactured in a factory.
The first major extension of this concept was human capital, which refers to education and skills. Universities produce human capital, and this is crucial to overall productivity in the economy. Social capital, a newer concept, refers to the idea that if people trust each other, they can work together cooperatively. Natural capital continues this tradition and uses the language of economics to expand the definition of what is considered capital beyond just natural resources. It recognizes that almost every biophysical cycle that happens in nature is fundamental to making life even possible.
The Value of Natural Systems
Reading books like Andy Weir’s Project Hail Mary and The Martian highlights how valuable Earth truly is. Survival on a spaceship is incredibly difficult, with numerous things that can go wrong—oxygen recyclers that do not work perfectly, and countless other systems that must function properly. On Earth, we receive all these cycling services for free. The planet performs all this cycling automatically, something that would be impossible to replicate artificially.
There are numerous biophysical cycles operating continuously in nature that deserve recognition. The phosphorus cycle involves understanding how animals contribute phosphorus, how it comes out of soil, and how phosphate emerges from rock formations. The carbon cycle is particularly relevant, involving cycling between CO2 in the atmosphere—which connects to climate change discussions—and various other factors such as how vegetation takes it up and how deep-sea ocean interactions differ from surface ocean interactions. The problematic component at present is how fossil fuels and cement production contribute to atmospheric carbon.
Other critical biophysical cycles include the water cycle, which is obviously very important, and the nitrogen cycle. Perhaps most critical when thinking about closed systems like spaceships is the oxygen cycle. These biophysical systems have been running in the background for so long that they are often not considered unless one studies natural resource science. However, if any of these were to break down, the consequences would be catastrophic.
If the phosphorus or nitrogen cycle broke down, agriculture would face severe problems because soils would no longer be fertilized naturally, requiring vastly increased artificial fertilizer use. With the water cycle, experiencing mega-droughts as California and other regions have been doing threatens the ecological basis for production that depends on these cycles continuing to function as they have been taken for granted. These are natural capital, and understanding them is essential because they demonstrate that it is not just about extracting things from nature, but rather the way nature enables all sorts of other economic activity.
The Challenge of Valuing Total Natural Capital
When first entering this line of research, the task was to identify the total value of all this natural capital. It has been joked about previously because the total value of keeping oxygen in the atmosphere is probably infinite. Nobody would be here without oxygen in the atmosphere, or at minimum, this value would be equivalent to the value of keeping modern civilization intact.
All economic activity is made possible by biophysical systems. The Holocene era, which is the only era in history where farming has been possible, is quite valuable in this context. Therefore, asking what the total value of nature is proves to be an uninteresting question for several reasons. Partially, it is simply not super relevant to making specific decisions. If told that all of nature was worth a trillion dollars or a quadrillion dollars, this makes no difference in how nature would actually be managed. While it is an impressive number, it does not tell anyone what to do regarding environmental management.
Ecosystem Services: From Theory to Application
Defining Ecosystem Services
More targeted on the question of what to do is the concept of ecosystem services, which uses another economic-style word. While natural capital is described as capital in economic terms, services follows the traditional economic meaning where services represent the flow of value from capital. In this context, ecosystem services are the flow of benefits from natural capital to people.
The relationship works as follows: there is a stock of capital, and like any other stock discussed previously—such as a stock of fish—these stocks are valued because they provide a flow of value from them, which is the service value. All those things like geology, soil, air, and water will provide a flow of value that could be measured over time. These two concepts work together, such that if the stock of natural capital were to be depleted, there would be a lower level of flow of ecosystem services, which is what people feel when they no longer receive the benefits they are accustomed to having.
Historical Development of Ecosystem Services Concepts
These concepts have had a long series of reports building out the idea over time. Around 2005, ecosystem services really started to gain traction and visibility among international communities. The Millennium Ecosystem Assessment is the big report from this era, arguing that ecosystems and biodiversity are essential for human well-being. This was really the first time that ecosystem services was used as a central organizing principle to explain why they are essential.
Many people and environmentalists already knew this intuitively, but had not framed it in terms of monetary value. A huge number of other reports followed, including a book written by a large group of colleagues on how to do natural capital analysis of ecosystem services. Reports from national governments, the United Nations, and others have worked to fill out the definition of what it means to have ecosystem services and how to understand where they provide valuable service to people.
Valuing Ecosystem Services
The question then becomes: how can we think about the actual dollar value? The first thing that ecosystem services provided that was useful for policy-making was putting a dollar value on nature so it could fit into cost-benefit analysis. While cost-benefit analysis methodology will be covered in later lectures, the basic approach is to apply economic tools to the provision of ecosystem services so values can be expressed in dollar terms.
However, there is a caveat: sometimes it is not always possible to get everything into dollars because some things are simply especially hard to put a dollar value on. These cases will be discussed more thoroughly in later valuation lectures. Regardless, this demonstrates a fundamental reality: ecosystem services research is an interdisciplinary research trajectory. To understand ecosystem services requires thinking about it from the perspectives of biophysical sciences, economics, and the preferences of people. This requires a pretty broad set of skills, which makes research fun and engaging. Many colleagues in other disciplines like entomology get very focused on narrow questions and only know how to work with other specialists in their field. This interdisciplinary approach avoids that problem by constantly working across different disciplines, making it much more enjoyable.
The Cost-Benefit Analysis Framework
Why Ecosystem Service Valuations Matter
Ecosystem service valuations are important because they help address external costs in economic analyses. Consider a basic cost-benefit analysis using a seesaw metaphor: when considering some sort of industrial or commercial project like developing a new office high-rise, building a new factory, or establishing a data center on natural land, such a project will generate some sort of benefit. The data center can sell its services, representing the benefit side of the analysis.
An individual making investment decisions will do a cost-benefit analysis to determine if the project is worth pursuing. This analysis must consider not just the benefits of the plan but also the costs involved. Building the infrastructure requires upfront investments, and the net present value of such infrastructure must be calculated over time. However, the full opportunity cost must also be considered—this is basic Econ 101 in that something must be given up. Perhaps previously it was possible to graze cattle on that land, or timber and fuel wood that could be harvested would no longer be available. These are all things that individual producers would consider because they are things they would actually have to pay for.
Types of Ecosystem Services
The Diversity of Ecosystem Services
There are many different ecosystem services, and considerable work has gone into trying to capture, organize, and understand what ecosystem services exist. What is important to emphasize is that there are many different ways to organize these services. A particularly useful organization is thinking about ecosystem services in terms of type: provisioning services, regulating services, and cultural services.
Provisioning Services
Provisioning services are the physical things that nature provides to people: food, fiber, and many other things where it is simply a resource that is provided. There are many subcategories within provisioning services. Crops are provided by nature and agriculture, as are livestock, fisheries, wild foods, timber, cotton, and wood fuel. But there are also provisioning services that are harder to identify with a specific instantiation, such as genetic resources. It turns out there is tremendous value in using natural genetic resources for pharmaceutical development. Additionally, provisioning services include providing fresh water, which is really quite critical to human survival and economic activity.
So the first type of ecosystem service is: what does nature provide directly to us?
Regulating Services
The second type is regulating services. Regulating ecosystem services are ones that regulate the system overall to make everything else work. They are definitely valuable, but they are a little harder to value because, unlike provisioning services, it is not obvious how one person takes the thing and consumes it.
When thinking about something like air quality regulation or climate regulation, people do not benefit by extracting climate regulation from the ecosystem and consuming it. Instead, it is simply the fact that if we have a stable climate, all of these other things are also made possible, including economic production overall. Regulating services therefore include regulating air quality, climate, ensuring that water is provided in both a clean and predictable manner on an appropriate timely basis, controlling erosion, purifying water, controlling disease, managing pests, and enabling pollination. These are all things that ecosystems regulate to make the overall system work properly.
Cultural Services
And then finally, there are cultural services. These are perhaps the hardest to put a specific dollar value on, simply because even humans could not necessarily agree on what their values are. Consider that some people have very different views on how aesthetic values work. What does a good-looking landscape look like? Some might have the opinion that a perfectly natural landscape, like something in the Boundary Waters, is most beautiful, while someone else might say they prefer a manicured garden look, like the landscaping of a university campus. Those aesthetic values would be debatable between different people.
The same applies to spiritual and religious values, which are very important to people but would be very hard to get common agreement on when trying to put a dollar value on them. Recreation and tourism might be a little bit easier to value because we can actually observe how people spend money on tourism and recreation activities. While this might be an underestimate, at least it is definitely possible to see that there is an exchange of money going on, and that represents one way of putting a dollar value on it.
Controversies Surrounding Ecosystem Services
The Broader Context
As soon as one starts talking about ecosystem services, sometimes people in academia will immediately bring up the controversy. It is a powerful topic, but it is incredibly controversial, acting as a lightning rod from multiple different directions.
The Influential but Flawed Seminal Study
One particularly influential article on ecosystem services is probably one of, if not the most, influential articles ever written about ecosystem services, but it is kind of cringey. People hate talking about it because it did not do a very good job, and it sort of gave a bad reputation to ecosystem service sciences. However, it was also super widely cited because it came up with one really big number: it said that ecosystems and ecosystem services provide an average of $33 trillion per year, which is something a little less, but not far off from, the total GDP produced in the world. A lot of people really did not like these methods.
Moving Away from Total Valuations
This all basically comes back to the earlier discussion: when thinking about total value, it gets really tricky. This article pushed the discussion towards these big numbers. However, the research since then has moved away from big numbers like this and towards marginal values, which economists automatically love. Instead of thinking about the total value, the focus is on: what is the change in value when something about the environment, like the ecosystem structure itself, changes? This marginal approach is much more useful for decision-making.
The Natural Capital Project and Invest
Overview and Mission
The Natural Capital Project is an organization that is super cool, with a symposium that, if you happen to want to travel to California, provides a really awesome conference experience. The organization has been around for 20 years now and represents a collaboration from all sorts of different research institutions, including governmental research, nonprofit research, and more traditional academic research.
The Natural Capital Project is aiming to provide ecosystem service tools to mainstream the value of nature in decision making. The key way this has been done is with Invest, the tool that participants were asked to install. What Invest does is provide spatially explicit ecosystem service production function models.
What Invest Stands For and Does
Invest stands for Integrated Valuation of Ecosystem Services and Trade-offs, and the basic idea is that we use a delta, or change symbol, to represent change. The objective is to look at how change in ecosystems causes a change in ecosystem services and how that then causes a change in benefits to people.
The overall goal is ambitious, but what Invest actually is represents a series of different models. There is a big list of ecosystems previously mentioned, but now each one has its own software tool for estimating the value of specific services like nutrient retention and scenic quality. The list is quite broad so as to try to capture as much of that value as possible.
Global Implementation and Project Contexts
The organization has had a lot of fun work, which is why there is so much travel involved in the work. Basically, ecosystem service methodology is being implemented in all sorts of different geographic locations and many different types of project contexts. This could be spatial planning, thinking about where it is good to put a protected area, for instance. Payments for ecosystem services design, climate adaptation, development planning, and restoration work are all contexts where ecosystem services are being applied. There is a ton of demand now for restoring degraded environments to higher quality. Additionally, corporate risk management is an important application area with a lot of money involved. Many corporations have direct incentives, both in terms of publicity and in terms of their reliance on nature, to understand where they are at risk.
Integration into Decision-Making Processes
The organization has also built up a whole bunch of experience on how to fit within the decision-making process itself. When a decision needs to be made, you can think of this as the cost-benefit analysis seesaw: when trying to decide, do the benefits outweigh the costs?
This is the process the Natural Capital Project follows throughout: first, define what are the partnerships, objectives, and questions. This is essentially reaching out to the many different people who are stakeholders—people who care about the outcome of some decision. That leads to defining the scope: figuring out what are the beneficiaries, what is the scale, what are the services and things that people care about?
Then it gets technical, and this is the fun part. That is where Invest actually fits in: you compile data and generate baselines and scenarios. Invest is then useful for putting a dollar value on the different scenarios that are going to be generated. This is the computational step, and sometimes there is iteration to figure out how the data could be improved while still being able to express in quantitative, spatial, mapped terms how outcomes will differ under these different scenarios.
What is nice about this is it really provides rich results that can either go directly into informing the decision—ideally making those hidden values of nature have an explicit value so as to properly do a cost-benefit analysis—or maybe there will be further iteration based on these results to try to understand if new policies should be tried or if the original ones were not very good.
Specific Project Steps
Each project following the Natural Capital Project engagement path follows these key specific steps: first, figure out what the spatial maps are. These will be played with in a moment, but particularly land use and land cover maps as well as all sorts of biophysical layers relevant to the ecosystem service being examined, like soil attributes, topography, or precipitation. Socioeconomic variables are also included. These maps are essentially stacked up so as to have a broad understanding of what is happening in different locations. Then we think about the different scenarios: what if this land use map were different, representing one scenario, or what if precipitation changes dramatically under, for instance, climate change, representing some other scenario?
That leads to the second step: this stack of data defined for each of the different scenarios goes into whichever of the ecosystem service models you are going to care about. Here we might be talking about water, nutrients, sediment, and others. This is the Invest part that produces a bunch of outputs. These outputs really come in two different types: the biophysical reporting on what ecosystem services are produced in terms of biophysical indicators like water quality or the amount of water available, and also valuation where we can put a dollar value on that output.
The Carbon Storage and Sequestration Model
Introduction to Carbon as a Regulating Service
We are going to do this in a number of different services, but the focus now is on understanding the first specific ecosystem service: the Invest carbon model. This is going to be a regulating service related to climate regulation. The basic idea is that we can calculate pretty accurately what the carbon stock present is in a particular area based on its land use and land cover maps.
Storage versus Sequestration
The concept of storage indicates that we are calculating a biophysical number: the tonnage and mass of the carbon that is present in vegetation and other parts, including soil carbon, at a given point in time. This distinction between storage and sequestration is critical and is a word that people often trip up on. Storage is just how much carbon is present at a given point in time. However, what we actually care about is changes in that carbon.
Sequestration, if heard in the context of carbon’s relevance to climate change, means that as plants grow, the plant is sucking carbon from the atmosphere, and over time the trees get larger. So there would be two different storage estimates: storage at the beginning, then it grows a bit, and then storage at a later point, which will be a higher amount if it is a growing forest. This change represents sequestration. Sequestration is just the difference in storage over time.
However, sequestration can be negatively affected. Rather than just letting the trees grow and adding a little bit of biomass from carbon dioxide, another thing that might happen is that the trees could be cut down. That also causes a big change in sequestration because now we would go from a storage level of a dense forest down to whatever it transitioned into, like croplands, which store much less carbon. So when we talk about the value and how it contributes to climate regulation, it is the sequestration component that is really critical.
Carbon Pool Components
The carbon model itself is really quite basic. Essentially, it is combining the best data on different carbon pools: above-ground biomass, below-ground carbon in the roots, soil itself, dead wood, and optionally what happens to it when it is harvested.
If wood is cut down and put into a house, that will be sequestering carbon now in a house instead of in the tree. However, the difference is critical: unlike a tree, the house is not growing, and eventually, if that is not kept dry and clean, it will decay over time. If you just have a pile of wood, it will actually slowly break down and release all of that CO2. We cannot think of wood as some permanent storage. Left alone, it will decay over the course of 5 to 20 years and will emit that all back up into the atmosphere.
The total carbon is just the sum of all those pools.
Practical Hands-On Session with Invest
Launching the Software
There are some slides available, but the preference is to go hands-on with Invest right now. This will be a quick foray because it is a quick model. The goal is at least to get it up and running on everybody’s computer. Go ahead and launch Invest to see what appears on the screen.
When you launch Invest, you will get a list of the different ecosystem service models. This interface shows all the different ecosystem service options available in the software. From here, go ahead and click on the carbon storage and sequestration one, which is right here in the list.
Data Download and Workspace Setup
For now, the goal is just to get our hands dirty with the basic functionality. Hopefully, everybody has already downloaded the base data that was indicated in the announcement. If anyone forgot to download it, that is where it can be accessed again.
The idea is that we are going to point the carbon model to some of the key inputs, and the sample data that has been provided will give us everything we need to run it for this example.
The first thing to do is set a workspace. This is just going to be the place where it saves all of the outputs of your model. It is convenient to set the workspace to be the same as the sample data that you just downloaded, specifically the sample data for the model being used.
For the carbon model, you can select the carbon folder where the sample data has been downloaded, which is likely in a structure like: class folder, then a folder for Invest, and finally the downloaded sample data in a carbon folder. You can select that carbon folder, and you will get a little green check indicating that this is a valid input.
Selecting Land Use Data
The next thing to do is look at the baseline land use and land cover data. We have spent some time with these before when we loaded them in QGIS, but if you click here in the model, it is going to remember where you were. In the carbon folder, there are a bunch of different files. If the model has been run before, there might be more files than new users have. You are going to look for the one that is called LULC Current Willamette. There are multiple ones that have that starting name, but you want to look for the one that is the .tiff file extension, not the others.
Mac does not give a very good preview of this particular file, but we talked about how to look at that in QGIS before. Once selected, there will be a check mark indicating that the right file type has been found.
Common Technical Issues
One common gotcha is that some people do not have file extensions showing on their computer. If that is the case, the LULC current Willamette will have no file extension showing, and it hides the .tiff. There are a bunch of other files that have additional file extensions. Ignore those ones. The LULC current Willamette file is the one you want.
If you are just selecting the folder rather than looking inside it, then you should just hit Select and select the folder. If nothing is showing inside the folder, that is because it is looking for folders and there were no other folders within. However, once you move to the next input, you will probably see the extra files that are in the main folder.
Carbon Pools Data Input
We are really running out of time, so we are just going to run it, and then next class we are going to dive into what we did. Let’s just power ahead and fill out the last of the required inputs, which is the carbon pools data. Next class we will dive into these to understand what we did, but for this one, look for the carbon pools data called carbonpoolsWillamette.csv. This is essentially data on what is present there. Once these three inputs are filled in—the other ones can be dealt with in more detail next class—go ahead and click Run if you are able to do that.
If you have file extensions hidden, the .csv might be hidden as well. The system should still be able to find the right file. Once you have selected the correct file, the model can run.
Running the Model and Viewing Results
Excellent, now this has just run and computed a bunch of science, and we will talk about it more next class, but this is more just proof that we got it up and running on your machine. If you want to poke around in the Invest model after it runs, you can click on View Results for an auto-generated report. Sometimes it is easier to actually just look at the files directly. When you click Open Workspace, it opens the folder where it created all the results. These are the ones that we will look at next class in detail.
Carbon storage is a geospatial data layer indicating how much, in tons of carbon, was stored on the landscape. That is where we are going to have to leave it for today.
Closing and Troubleshooting
If you had any problems running the model, it is recommended that you stick around and we can troubleshoot them directly. Otherwise, have a really good day. Thanks, everyone.