Economists assign monetary values to Puget Sound's 'natural' gifts

Study considers how to make cents of the Sound
Robert McClure seattlepi.com 24 Jul 08;

Lower doctor bills. Drinking water. Protection from floods. Food.

Those are just a few items on a newly compiled list of goods and services provided to people living around Puget Sound by the "natural capital" of the region's forests, mountains and waterways, says a report being released Friday by a team of economists.

After examining how wetlands, the Sound and other natural features benefit people living here, the economists behind the report pegged the value of those goods and services at between $7.4 billion and $61.7 billion a year. And they admit upfront that's a big underestimate -- it's just the best they could do for now.

If the ecosystems that surround the region's cities had a price tag, what would it be? At least $243 billion -- and perhaps as much as $2.1 trillion, the economic team says. Again, that's a "rough cut, first step" at putting a value on the nature that surrounds us.

Why do this?

"It gets us beyond the confrontational debate. It's not the environment versus the economy," said co-author Robert Costanza, director of the Gund Institute of Environmental Economics at the University of Vermont. "We live in a complex, interconnected system, and the environment is one of our huge assets."

Costanza, who helped pioneer the field of attaching economic values to natural areas in the 1990s, said the Puget Sound study is only the second time this kind of analysis has been performed for a regional ecosystem. The first was completed last year in New Jersey -- the state's Pine Barrens were given an environmental value of $1,476 an acre.

The concept has faced criticism from environmentalists who resent anyone attaching a dollar value to rivers and mountains and salt marshes and eelgrass beds, said the study's lead author, economist David Batker, director of Earth Economics, a Tacoma-based think tank.

But by putting price tags on natural assets, Costanza and other researchers say polluters can be fined more accurately for the damage they cause and governments can get a firmer grip on the importance of preserving forests and limiting sprawl.

The study, "A New View of the Puget Sound Economy," notes that the plusses that nature provides around here include clean drinking water, recreation, fish, flood protection, buffering from storms and erosion control.

"If lost, these valuable economic goods and services have a price tag," the report argues. "While ecosystems like the Puget Sound Basin are priceless, Puget Sound also does work. Just as a person's life is priceless, and that person gets paid for work performed, Puget Sound ecosystems provide valuable economic goods and services."

The report examines the value of ecosystems from the mountains to the Sound. First it details nature's local contributions, including:

# Lower doctor bills. It cites a 1998 study by the pro-tree American Forests that found urban forests surrounding Puget Sound remove 78 million pounds of pollutants annually, letting residents avoid health care and other costs of $166 million a year.

# Drinking water. It's stored underground, in wetlands and even in the snows that coat the Cascades and Olympics in the winter and the melt in the summer.

# Reducing property damage. Floodwaters are soaked up by wetlands; coastal wetlands and shores buffer the land from storm-whipped waves.

# Food. Besides the obvious ones -- crops, fish and shellfish -- there are wild berries, mushrooms, seaweed and wild game.

The study also catalogues some of the known contributions to the local economy: Nearly 80 percent of Washington tourism revenues come from the Puget Sound region; statewide, wildlife-watching brought in $980 million in 2001 (more than double expenditures for hunting and fishing), with a half-million visitors annually coming to see orcas, for example.

The second part of the report attempts to put dollar values on these -- but doesn't succeed in many cases. In fact, some of the more obvious benefits -- including food from local farms and the Sound, as well as drinking water from snowpack in the mountains -- just haven't been translated into dollar values that mesh with the methods used in the report, said Batker, the lead author.

"Even though this is a gross underestimate of the true value of ecosystem services, it's far better than counting them as zero, which is what we've done in many policies," he said.

The authors said they are working on better methods that would more fully capture nature's economic benefits and also allow them to measure values as they change over time.

Paid for by the Russell Family and Harder foundations, environmentally oriented philanthropies in the Tacoma area, the study took about 1 1/2 years. Its release comes as a unique state agency called the Puget Sound Partnership is trying to put together a multiyear Sound restoration "action agenda."

The person spearheading that effort, Bill Ruckelshaus, chairman of the partnership's leadership council, said he welcomed this kind of analysis, calling it "a major contribution to our understanding."

"We're diminishing the value of our natural capital," said Ruckelshaus, the former head of the Environmental Protection Agency. "We need to figure out how to put it back."

Puget Sound is plagued by pollution dumped into it, overfishing, destruction of shorelines and more. But the new state agency is focused on the idea that fixing the Sound's problems means adjusting how residents treat the land all the way to the mountaintops.

That's because way up there and everywhere in between, water falls as rain or snow. Then, because of the way cities and suburbs traditionally have been built and forests have been cut, that water is polluted and funneled downstream in fast-moving surges.

Those bursts of water scour out stream bottoms and dump into the Sound its biggest slugs of arsenic, cadmium, copper, lead, zinc, mercury, the banned pesticide DDT and phthalates.

On the eve of the report's release, Gov. Chris Gregoire, who convinced the Legislature to launch the Puget Sound Partnership, was on a boat tour of the estuary.

She emphasized the ecological and economic value of the Sound at a stop at Seattle's Golden Gardens.

"Think about the recreational fisheries, the tourism, the commercial fisheries, the clams and the oysters we send around the globe," Gregoire said. And when it comes to recruiting companies to the state, "they talk about the quality of life. ... Puget Sound is one of the biggest selling points to get businesses here."

Her opponent in the governor's race, Republican Dino Rossi, said through a spokeswoman that he has fought for funding for state parks and "supports a cleaner Puget Sound."

"However, state efforts need to do more than just provide rhetoric and set unattainable goals," Rossi's spokeswoman said in an e-mail. "The incumbent has made big promises, but has provided less than 2 percent of the funding that experts say is needed clean up Puget Sound."