April 15, 2005

Millennium Ecosystem Assessment Report—
A Breakthrough Study
Focus is on the Economic Value of Ecosystems
By Paul Rosenberg, Senior Editor

     For decades pollsters, pundits and politicians have pitted environmental protection against economic growth, but a path-breaking new report, sponsored by the United Nations, challenges this view by focusing on the economic value of services ecosystems provide, and stressing the economic costs of environmental degradation.
     Ecosystem services are broken down into four categories: provisioning services, like supplying food, water and fiber; regulatory services, that control climate, water flow and quality, air quality, pests and disease; cultural services, that supply recreational, aesthetic and spiritual/religious benefits; and supporting services, such as photosynthesis, soil formation and nutrient cycling.
     Things could get much worse in the next 50 years, but a projection of four different scenarios—two of them reactive and two pro-active—also showed that “significant changes in policies, institutions, and practices can mitigate some but not all of the negative consequences of growing,” according to the report, known as the Millennium Ecosystem Assessment (MA). Contributors included 1,300 experts from 95 countries.
     While the UN-sponsored MA is global in scope, its insights have direct relevance to local concerns, such as the “No Net Increase” (NNI) program to cap environmental impacts of the Port at 2001 levels. The unpaid health costs from port pollution—conservatively estimated at over $1.2 billion per year—are typical of economic costs incurred by the destruction of ecosystem services (in this case, the provision of healthy air to breath.) The NNI task force has a financial working group (FWG) that is preparing a rough estimate of health (and other) benefits along with the costs of implementing the measures needed to achieve NNI.
     The MA found that 15 of 24 ecosystem services studied “are being degraded or used unsustainably, including fresh water, capture fisheries, air and water purification, and the regulation of regional and local climate, natural hazards, and pests.” These changes are “increasing the likelihood of nonlinear changes in ecosystems (including accelerating, abrupt, and potentially irreversible changes)” such as “disease emergence, abrupt alterations in water quality, the creation of ‘dead zones’ in coastal waters, the collapse of fisheries, and shifts in regional climate.”
     The MA also found that harmful effects “are being borne disproportionately by the poor... contributing to growing inequities and disparities across groups of people,” which “are sometimes the principal factor causing poverty and social conflict.”
     “There’s no marketplace on some of those services. We regard them as free, simply because there’s no market,” said Stanford biologist Harold A. Mooney, one of the MA’s lead authors. As a result, Mooney told Random Lengths, “You could cut down the whole forest,” without paying for the regulatory services lost.
     “About 4.6 billion people depend for all or some of their water on supplies from forest systems,” the MA notes, but 25 countries have effectively lost all their forests, while another 29 have lost 90 percent of them.
     The MA also cited examples of “promising and effective responses,” which can avoid the problem of enhancing one service while damaging others. These ranged from removal of agricultural subsidies with “adverse economic, social, and environmental effects,” to “payments for ecosystem services provided by watersheds.”
     “One of our solutions is to value systems appropriately,” Mooney explained.
     What makes the MA unique, Mooney said was “the structure of the inquiry, how we looked for the information, what concepts we put it into.” An ordinary environmental assessment might examine forest cover or water pollution as isolated concerns, but with the MA, Mooney explained, “We tried to look at all of those resources simultaneously: water, forest, bio-diversity, etc. so we could examine the tradeoffs.” In short, “Ecosystems were the unit of study. What we looked at specifically was what the ecosystem services were.”
     A second major difference Mooney cited was the focus at three distinct levels—global, sub-global and local—all “looked at with the same lens,” which included “what the present status is, how it’s changed, how it looks to the future, and what to do about it.” The reason for the multi-level approach was simple: “We have to have the right answers at all levels.”
     Too often, attempts at global modeling in any field ignore the specific. But “A lot of decisions are made at the local level,” Mooney pointed out. So the MA included studies of villages in the alto plano in Peru, as well as India.
     One of the MA’s most important findings is the importance of tradeoffs—the way some services are gained at the expense of others.
     “Society is not structured in such a way to deal with such issues [as tradeoffs]. We have a Department of Agriculture, a Department of Interior, a Department of Commerce, a Department of the Treasury. You can’t do the tradeoffs. The institutions we evolved, evolved in a different era. We need a new way of doing business.”
     With the expanded awareness of how many different environmental services are out there, the standard environmental impact report process seems antiquated at best. Does it need to be revamped? “Absolutely,” Mooney said.
     Three issues confronting San Pedro illustrate different implications of the MA. The NNI effort represents just the beginning of trying to value harbor area ecosystem services. In addition to health costs from the loss of clean air, aesthetic losses and congestion losses also loom large. The 2003 Socioeconomic Report for the Air South Coast Air Quality Management District (AQMD)’s showed total benefits of $6.64 billion for its AQM plan, of which just under 40 percent are health benefits. If the same ratio holds for all Port of LA pollution—a reasonable assumption according to AQMD staff—its total cost is $3 billion per year. An ecosystem services approach makes it obvious the port is inflicting enormous costs on the surrounding environment—and the people who depend on it for their livelihoods and their lives.
     The Bridge-to-Breakwater development also involves ecosystem services, with tradeoffs between cultural services—recreation and aesthetics—and costs, such as traffic congestion. The question of open space vs. commercial development involves tradeoffs we can’t yet quantify, according to EPA economist David Simpson and Ohio State economist Elena Irwin, who researches the environmental economics of Lake Erie and its shore.
     “People fall into the error that if it’s too complicated to figure out we shouldn’t care about it,” said Simpson, “I think its the opposite: If we don’t know, we should be cautious.” Irwin agreed. Both argued for slowing development, because it can produce irreversible losses, which we are just beginning to be able to assess.
     Finally, the worldwide collapse of fisheries has multiple causes and effects. The MA recognizes cultural value in distinctive cultures shaped by ecosystems, such as the various fishing cultures that converged in San Pedro. It could be possible to rebuild local fisheries. But that will take a lot of doing, says Sierra Club activist Tom Politeo.
     “The next hundred years has to focus on reversing the damage of the last 100 years…and that involves restoring at least half of the wetlands that were there. How do we do that? It’s very possible, but it requires very significant changes in how industry is organized, and labor alignment.”
     Politeo envisions a port without storage space, prisons or offices, devoted solely to moving goods as soon as they arrive, exponentially more efficient than it is today—and, he insists, with all the port-related jobs remaining under ILWU jurisdiction.
     “The port produces very few jobs per acre, so it’s important that those be very well-paying, because that’s about the only benefit the community gets.”
     As for the cost... it’s $3 billion and rising... and that’s just for the Port of Los Angeles.

TechnoGarden: A globally connected world relying strongly on environmentally sound technology, using highly managed, often engineered, ecosystems to deliver ecosystem services, and taking a proactive approach to the management of ecosystems in an effort to avoid problems. Outcome: Economic growth is relatively high and accelerates, 2050 population is mid-range. Provisioning services will improve about 70 percent in both industrial and developing countries. Regulating services will improve about 30 percent in industrial countries and 50-60 percent in developing countries, cultural services will degrade about 20 percent in both industrial and developing countries.