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Assessing the Attributes of an Ecosystem Economically (or: “How Much Are Our Natural Resources Worth?”)

North Bay Water Association Presentation Roberto Piccioni July 10, 2009. Assessing the Attributes of an Ecosystem Economically (or: “How Much Are Our Natural Resources Worth?”). Dominican University, San Rafael, California Master of Business Administration in Sustainable Enterprise.

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Assessing the Attributes of an Ecosystem Economically (or: “How Much Are Our Natural Resources Worth?”)

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  1. North Bay Water Association Presentation Roberto Piccioni July 10, 2009 Assessing the Attributes of an Ecosystem Economically(or:“How Much Are Our Natural Resources Worth?”)

  2. Dominican University, San Rafael, California Master of Business Administration in Sustainable Enterprise

  3. Green MBA Mission: Dominican University of California’s MBA in Sustainable Enterprise is an engaging learning community where people with strong environmental and social values develop effective leadership capacities to advance economically successful, ecologically restorative, and socially just initiatives in any type of environment.

  4. The Green MBA Curriculum3 Major Components: Business Fundamentals, Sustainability, & Leadership • Critical Thinking for Leadership in Business Redesign • Eco-Commerce Models • Managerial and Environmental Accounting • Marketing and Communication Skills • Human Relations & Organizational Behavior • Entrepreneurial Finance • Marketing Research • Operations Management • Social Impacts of Enterprises • Managerial Finance and Economics • Green and Social Marketing • Strategic Enterprise Planning • Thriving Regenerative Enterprise • Ecological Economics

  5. Roberto Piccioni, BS, MS, CSP, CHMM, RAB-EMS, OE-G • 24 years of experience, EHS, Operations, Corporate, Consulting, Academia • BS Industrial Technology & Manufacturing Engineering, • MS in Environmental Management • Beckman Instruments, Weyerhaeuser, RPC, Baxter, Genentech • 2001 Distinguished Service award at Baxter for Sustainability pioneering • Have coached ~25 factories to ISO 14001 & OHSAS 18001 certification in the US, central & South America, Asia, & Europe • “An Operations Management Sustainability Professional”

  6. Tradeoffs Enhancement of some services often leads to degradation of others creating new winners and losers Ecosystem Services: A Guide for Decision Makers

  7. 3 categories of ecosystem services Provisioning Goods produced or provided by ecosystems Cultural Non-material benefits obtained from ecosystems Regulating Benefits obtained from control of natural processes by ecosystems Ecosystem Services: A Guide for Decision Makers

  8. “The conservation of our natural resources and their proper use constitute the fundamental problem which underlies almost every other problem of our national life.” THEODORE ROOSEVELT

  9. Global usage exceeds available resources by 30%. • By 2030, we will need “2 Planets” at current predictions

  10. Since the mid 1980s, humanity has been in ecological overshoot with annual demand on resources exceeding what Earth can regenerate each year. • It now takes the Earth one year and four months to regenerate what we use in a year. • Overshoot results in collapsing fisheries, diminishing forest cover, depletion of fresh water systems, and the build up of pollution and waste, which creates problems like global climate change. Source: Global Footprint Network

  11. Economics • Neoclassical Economics • Traditional view that the market and laws of supply and demand can determine effective allocation of resources. • Ecological Economics • Recognizes that certain resources are not adequately addressed by current market forces

  12.  Economic Impacts of a Water Shortage  Source: Dr. Robert Eyler, Chair, Department of Economics and Director, Center for Regional Economic Analysis at Sonoma State University , May 2007

  13. “Look deep into nature, and then you will understand everything better.” Albert Einstein

  14. Objectives of Ecological Economics… • Sustainable Scale • living within the limits of our systems… • Just Distribution • ensuring that all have access to basic needs… • Efficient Allocation • exchanging goods & services effectively… Source: Herman Daly, Ecological Economics, 2004

  15. Understand the link between ecosystems and development People impact nature Nature provides people benefits Ecosystem Services: A Guide for Decision Makers

  16. “Seek policies that set the marginal benefits of production equal to the marginal environmental costs…”How can we figure this $ out?Taxes? Subsidies? Tradable Permits?

  17. What is the Ecosystem Services Approach? • A framework for integrating ecosystem services into decision making • Incorporates a variety of methods, including • ecosystem service dependency and • impactassessment, • valuations, • scenarios, and • policies • Often applied at a watershed or landscapelevel

  18. Ecosystem Services: A Guide for Decision Makers

  19. Assess risks and opportunities Ecosystem Services: A Guide for Decision Makers

  20. 3 Generally Accepted Approaches To Estimating Monetary Values Of Ecosystem Services • Market Prices – • “Revealed Willingness to Pay” • Circumstantial Evidence • “Imputed Willingness to Pay” • Surveys – • “Expressed Willingness to Pay” • Market Price Method • Productivity Method • Hedonic Pricing Method • Travel Cost Method • Damage Cost Avoided, Replacement Cost, Substitute Cost Methods f. Benefit Transfer Method • Contingent Valuation Method • Contingent Choice Method http://www.ecosystemvaluation.org/1-02.htm

  21. General Policy Design Principles • …policy always has more than one goal, and each goal requires it’s own instrument. • …attain the necessary degree of macro-control with the minimum sacrifice of micro-level freedom and variability • …leave a margin of error when dealing with the biophysical environment. • …we always start from historically given initial conditions • …adapt to changed conditions • …policy making unit must be congruent with the domain of the causes and effects of the problem with which the policy deals.

  22. Countries starting to utilize the Ecosystem Services Approach Proposing national ecosystem assessments and exploring how to incorporate into policy China Costa Rica, South Africa, & others Have established or are exploring markets for ecosystem services European Union European Environment Agency is developing an ecosystem service assessment process Tanzania Government paper identifying concrete ways in which sound ecosystem management can contribute to poverty reduction goals U.K. DFID/NERC have established an Ecosystem Services for Poverty Alleviation Programme United States E.P.A. Office of Research and development has an ecosystem service research program Water quality trading programs emerging in a few states Ecosystem Services: A Guide for Decision Makers

  23. Thank you for your attention….. Roberto Piccioni July 10, 2009 North Bay Water Association Presentation Roberto_Piccioni@yahoo.com 925.330.2246 http://www.greenmba.com/

  24. “Below the Line” slides…..

  25. Tradable Permits • Set and allow a maximum “use” right, • A market instrument • Clean Air Act, SO2 • CA – RECLAIM program, etc • CA AB32 • Fisheries • advantages • obstacles

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