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The feds must start to value natural capital — what's next?

This article was first published in Ecosystem Marketplace.

In early October, the administration of President Barack Obama issued a memorandum instructing all federal agencies to incorporate ecosystem services and natural infrastructure into its development processes.

The memorandum recognizes that (PDF) nature provides vital contributions to economic and social well-being that are often not traded in markets or fully considered in decisions, and it builds on efforts to internalize externalities, as economists put it, by making those value explicit.

What values?

Ecosystem services can be as simple as trees providing clean air and water or as complex as climate regulation and soil stabilization. Integrating these services into planning and decision-making can lead to better outcomes, fewer unintended consequences and more efficient use of taxpayer dollars and other resources, the administration said in a statement.

Long time coming

The connection between ecosystem services and human well-being isn’t a particularly new idea. Many credit the Millennium Ecosystem Assessment, from the early 2000s, as the point where awareness-raising on the linkages began.

Much more recently, Duke University’s National Ecosystem Services Partnership released its Federal Resource Management Guidebook. Three years in the making and published in coordination with the White House’s announcement, the guidebook offers a framework on how to incorporate ecosystem services into federal resource management decisions. It also highlights federal efforts already underway.

The memorandum recognizes the fact that nature provides vital contributions to economic and social well-being that are often not traded in markets or fully considered in decisions.

Incorporating natural capital and ecosystem services into decision-making will help leaders from the public and private sector see the connection between their decisions and the implications they have for people and the planet, according to Anne Guerry, chief strategy officer and lead scientist at the Natural Capital Project, a collaborative initiative focused on integrating nature’s values into decision-making.

"It represents a fundamental shift in federal decision-making," she said, adding that much remains to be seen in implementation.

Walk the talk?

Others in the space are focused on this implementation point saying the actual significance of this announcement is contingent on how it plays out.

"I think a lot of folks will be waiting in the wings to see how this actually translates into new agency actions and regulatory changes/investment changes," said Todd BenDor, an associate professor of city and regional planning with an environmental specialty at the University of North Carolina at Chapel Hill.

"How big a deal this memo is, is going to depend a lot on how the agencies and the administration take it and run with it," said Bobby Cochran, executive director of the Willamette Partnership, a Northwest nonprofit focused on environmental restoration. "If FEMA is able to significantly incorporate green infrastructure into its National Flood Insurance Program and increase its pre-disaster funding, if the Army Corps is able to prioritize its water infrastructure investments and dam operations to prioritize ecosystem services and if the Centers for Medicare and Medicaid Services are able to finance green spaces and trails as a core part of their healthcare strategy, then this memo will have profound impact."

So pay attention to the implementation guidance, he said.

Now comes the nitty-gritty

That guidance is forthcoming, according to the memorandum. The initial process will take place over a 14-month period where federal agencies first submit plans, within six months, on how they will integrate ecosystem services assessments into decision frameworks. After the Council on Environmental Quality releases the implementation guidance, which will be issued as an appendix to the document, agencies then revise their plans accordingly.

The implementation guidance is meant to be a living document, the memorandum stated, and will be updated as needed to incorporate emerging science and new methodological advances.

How big a deal this memo is, is going to depend a lot on how the agencies and the administration take it and run with it.

At the very least, Guerry said this announcement signals progress. "After significant advances in the science and tools, some evidence that these approaches can make a difference, and some great leadership, we’re seeing a real change in thinking,” she said. "And hopefully soon, we’ll see a fundamental change in the way the government makes decisions."

"I think it’s a fantastic announcement," BenDor said. "And I think it means a shift in focus for agencies towards metrics that will speak more towards the public and towards ecosystem science."

A flurry of presidential programs

In early August, the Environmental Protection Agency released a final version of its Clean Power Plan, with overwhelming support from the president. Federal agencies also released a new Clean Water Rule last spring.

This recent announcement coincides with these rules as well as with a Forest Service planning rule the agency issued in 2012. It sought to better protect ecosystem services on Forest Service land.

The upturn in violent weather in the past decades also increased policy-makers’ awareness of nature’s values, paying more attention to coastal ecosystems that can act as natural storm buffers. In August, the government released a report (PDF) outlining ecosystem services assessments and integrating coastal green infrastructure into planning decisions. And just last month, the Department of Agriculture together with the Environment Protection Agency hosted a workshop on water-quality markets that showcased the importance of quantifying ecosystem services.

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