May 24, 2006
Contact:
Howard Silverman, Director of Public Information
Ecotrust
503.467.0769

Valuing Ecosystem Services: A Backgrounder

• The burden we place on ecosystem services is taxing their ability to support life. “Approximately 60% (15 out of 24) of the ecosystem services examined during the Millennium Ecosystem Assessment are being degraded or used unsustainably.” (Millennium Ecosystem Assessment: Ecosystems and Human Well Being, 2005)
  
• With the 1995 Acid Rain Program, the United States pioneered the use of markets to regulate pollutants, meeting targets for sulfur dioxide (SO2) reductions and avoiding an estimated $27 billion in health care costs. The U.S. Acid Rain Program later served as the model for the design of the international Kyoto Protocol. (Nature, 2004)
  
• In 1993, Portland became the first U.S. city to adopt a greenhouse gas reduction program, and in 2005 the city announced that it had cut emissions to nearly 1990 levels. (The Oregonian, 2005) In 2005, Seattle City Light became the nation's first major utility to cut its net greenhouse-gas emissions to zero. (Seattle Times, 2005)
  
• With a 1997 law requiring new power plants to offset part of their CO2 emissions, Oregon created the first regulated carbon market in the nation. An Oregon nonprofit, The Climate Trust, has built a portfolio of $4 million in offset project contracts, a figure that could double this year. In May 2006, The Climate Trust announced first U.S. sale of Voluntary Emission Reductions to Europe. (The Climate Trust press release, 2006)
  
• Healthy ecosystems help to mitigate natural disasters. After the 1993 floods on the Mississippi and Missouri Rivers, researchers concluded that the restoration of wetlands in the upper Mississippi could have alleviated much of the $16 to $19 billion in flood damage – at a fraction of the cost. (Ecosystem Marketplace, 2006)
  
• Investments in protecting nature’s services can prove more efficient and effective than those for industrial infrastructure. The city of New York avoided the construction of a $6-8 billion water filtration plant by spending a third that amount to protect its municipal watershed. (The New Economy of Nature, 2002) Here in the Portland metro area, Clean Water Services preserved water quality by investing in riparian protections – rather than construct a $150 million water cooling plant. (Ecosystem Marketplace, 2006) Building on these successes, the newly formed Willamette Partnership has secured $779,000 in EPA funding to create a water quality trading and banking initiative for the Willamette watershed. (EPA news release, 2005)
  
• With the Kyoto Protocol in effect, the European Union’s Emissions Trading System launched in January 2005 with carbon trading at €8.40 ($10.79) per tonne. As of May 23, 2006, it was trading at €19.55 ($25.12) per tonne. (PointCarbon, 2006) Eight Northeastern and Mid-Atlantic states have joined the Regional Greenhouse Gas Initiative, a collaborative effort to alleviate global warming through caps in emissions and trading of carbon offsets. (Regional Greenhouse Gas Initiative website, 2006)
  
• Important innovations in the design of California’s voluntary Climate Action Registry account for the carbon storage capacities of the state’s forests. (Ecosystem Marketplace, 2004) Conservative forest management practices that include longer rotations can nearly double the carbon storage capacity of West Coast forests. (Pacific Forest Trust, 2000)
  
• Institutional investments in the forestry industry have grown by roughly 20 percent a year since the late 1980s and now total over $20 billion. (Ecosystem Marketplace, 2005)
  
• In 2005, Goldman Sachs became the first global investment bank to adopt a comprehensive environmental policy that acknowledges the value of ecosystem services. (Christian Science Monitor, 2006)