Local aquatic ecosystem assets worth billions to taxpayers annually: Suzuki Foundation reportStudy estimates massive replacement costs for benefits lost from degraded environment
Annual taxpayer costs to replace climate regulation, animal habitats, tourism attraction and other benefits from Lower Mainland aquatic ecosystems could be up to $60 billion.
That’s the estimate from a new David Suzuki Foundation (DSF) report.
Michelle Molnar, report co- author and DSF ecological economist, said the report estimates costs for various environmental benefits, including:
•providing drinking water, food and raw materials;
•gas and climate regulation, soil erosion control and storm and flooding protection;
•providing habitat for plants and animals; and
•providing esthetic and recreational benefits that draw people to live and work in an area.
The report puts dollar values to the theoretical cost of replacing degraded ecosystems with man-made alternatives that offer comparable benefits, such as the cost of replacing a watershed forest with a water filtration plant.
Where man-made options aren’t viable, the report assesses the cost of restoring a degraded ecosystem’s functions.
The report is aimed at helping government and policy makers weigh the hard costs of environmental degradation.
“Unfortunately,” Molnar said, “[currently] we don’t recognize these [ecosystems] as assets, but they provide a flow of goods and services, just like any other capital asset.”
She said Hurricane Sandy’s devastation of the U.S. East Coast highlights the consequence of not protecting natural assets that provide storm and flood protection.
Molnar said the report adds to a 2010 DSF report that calculated the economic value of Lower Mainland terrestrial assets at approximately $5 billion annually.
She said aquatic assets carry a higher pricetag in part because the report assessed ecological rather than political boundaries, which for aquatic ecosystems covered a wider area.
The new report says the value of Lower Mainland aquatic ecosystem services range from approximately $31 billion up to $61 billion.
Referring to the 2011 revenue for Teck Resources Ltd.(TSX:TCK.A, TCK.B), Telus Corp. (TSX:T) and the Jim Pattison Group, Molnarpointed out that even the low estimate “is greater than the combined annual revenue of B.C.’s three biggest companies.”
She added that the report was able to crunch figures for only 30% of known aquatic ecosystem services due to lack of primary data available on the balance of services.
James Tansey, an associate professor at Sauder School of Businessand co-founder and CEO of carbon offset company Offsetters, said the report is in line with a larger international effort to crunch dollar values for ecosystem services.
He said failing to assess those values can result in significant costs for jurisdictions.
“If you degrade the water cleaning capabilities of an ecosystem and you have to build a water purification plant, that’s a real expense.”
Tansey added that DSF’s methodology in crunching ecosystem service costs is sound, but he cautioned that there are many unknowns in the area of study.
“There’s a bunch of assumptions built into the way that you do these valuations,” he said.
He noted that the lion’s share of the costs fall into an “esthetic and recreational” category, which he said is common for such assessments.
The category indicates an ecosystem’s ability to attract people to live, work and play in an area.
But Tansey said that pinning down that value is tricky.
“There’s a very wide uncertainty band around that because it really depends on what value judgments you make.”
Tansey said he hopes the report will help inform decision-making around Lower Mainland natural assets.
“I hope that the provincial government and BC Hydro and other regional districts are able to recognize that if they don’t manage for those costs and for that damage, then they’re going to have to find money to pay for it themselves on a fairly high level.” •