The 21st Century Utility: Securing a Sustainable Water Supply

All water utilities and private wells rely on natural assets to provide water. These assets include watersheds, open space, rivers, lakes, groundwater, and aquifers. Natural and built (man-made) capital assets provide and filter clean water for every sector of the economy including agriculture, industry, businesses and households. Healthy watersheds reliably provision and filter water, saving ratepayers billions of dollars compared to filtration plants. These same watersheds provide a suite of other benefits including biodiversity, habitat, recreation, flood protection, aesthetic and cultural value.Many utilities want to invest more in their watersheds. Some own, manage or hold easements on parts or all of their watersheds. But there’s a problem: These watersheds are only valued (on the balance sheets) for the bare land and timber value. The most important element of these lands – water provisioning and filtration of water – count for zero value. In contrast, more expensive, less resilient, and relatively short-lived built capital options including filtration plants, pipes, or desalinization plants have clear asset value. This leaves the natural capital assets of watersheds underfunded for acquisition, restoration, easements, and maintenance. Today’s accounting rules for utilities, local and state government were created a century ago to accommodate the construction of built water utility infrastructure. The rules for state and local government are set by the Government Accounting Standards Board (GASB). With their focus on built capital, these rules present a major barrier to securing watershed health and water supply: only built capital counts on the balance sheets of utilities, biasing funding mechanisms towards built solutions that are often more costly and less efficient than natural systems.Earth Economics and several major water utilities in the United States are leading a national effort to explore the implications of a change in national accounting standards. Following a recent workshop, the working group was formed to propose and justify changes to GASB rules for natural capital, look at rate structures, review asset management plans, and to identify funding mechanisms for watershed management activities. A change in national accounting rules would apply to government assets at all levels and shift needed investment towards green infrastructure. The case of water utilities presents a clear and definitive case of the need for better natural capital accounting

From theoretical to actual ecosystem services: Mapping beneficiaries and spatial flows in ecosystem service assessments

Ecosystem services mapping and modeling has focused more on supply than demand, until recently. Whereas the potential provision of economic benefits from ecosystems to people is often quantified through ecological production functions, the use of and demand for ecosystem services has received less attention, as have the spatial flows of services from ecosystems to people. However, new modeling approaches that map and quantify service-specific sources (ecosystem capacity to provide a service), sinks (biophysical or anthropogenic features that deplete or alter service flows), users (user locations and level of demand), and spatial flows can provide a more complete understanding of ecosystem services. Through a case study in Puget Sound, Washington State, USA, we quantify and differentiate between the theoretical or in situ provision of services, i.e., ecosystems\u27 capacity to supply services, and their actual provision when accounting for the location of beneficiaries and the spatial connections that mediate service flows between people and ecosystems. Our analysis includes five ecosystem services: carbon sequestration and storage, riverine flood regulation, sediment regulation for reservoirs, open space proximity, and scenic viewsheds. Each ecosystem service is characterized by different beneficiary groups and means of service flow. Using the ARtificial Intelligence for Ecosystem Services (ARIES) methodology we map service supply, demand, and flow, extending on simpler approaches used by past studies to map service provision and use. With the exception of the carbon sequestration service, regions that actually provided services to people, i.e., connected to beneficiaries via flow paths, amounted to 16-66% of those theoretically capable of supplying services, i.e., all ecosystems across the landscape. These results offer a more complete understanding of the spatial dynamics of ecosystem services and their effects, and may provide a sounder basis for economic valuation and policy applications than studies that consider only theoretical service provision and/or use. © 2014 by the author(s)

The Perfect Spill: Solutions for Averting the Next Deepwater Horizon

In this article the authors comment on the oil spill incident from the Deepwater Horizon, particularly on its economic and ecological damages. The authors highlighted the disaster as an event wherein much is needed to be learned so that future oil spills can be avoided. One lesson refers to the valuability of natural capital assets and other public entities that are at risks due to private interests and that better regulations and incentives are needed to protect these assets against risks

A methodology for adaptable and robust ecosystem services assessment

Ecosystem Services (ES) are an established conceptual framework for attributing value to the benefits that nature provides to humans. As the promise of robust ES-driven management is put to the test, shortcomings in our ability to accurately measure, map, and value ES have surfaced. On the research side, mainstream methods for ES assessment still fall short of addressing the complex, multi-scale biophysical and socioeconomic dynamics inherent in ES provision, flow, and use. On the practitioner side, application of methods remains onerous due to data and model parameterization requirements. Further, it is increasingly clear that the dominant one model fits all paradigm is often ill-suited to address the diversity of real-world management situations that exist across the broad spectrum of coupled human-natural systems. This article introduces an integrated ES modeling methodology, named ARIES (ARtificial Intelligence for Ecosystem Services), which aims to introduce improvements on these fronts. To improve conceptual detail and representation of ES dynamics, it adopts a uniform conceptualization of ES that gives equal emphasis to their production, flow and use by society, while keeping model complexity low enough to enable rapid and inexpensive assessment in many contexts and for multiple services. To improve fit to diverse application contexts, the methodology is assisted by model integration technologies that allow assembly of customized models from a growing model base. By using computer learning and reasoning, model structure may be specialized for each application context without requiring costly expertise. In this article we discuss the founding principles of ARIES - both its innovative aspects for ES science and as an example of a new strategy to support more accurate decision making in diverse application contexts

Reenvisioning Water Jurisdictions and Value in Our Puget Sound Watersheds

Batker will discuss the social benefits of water in the Puget Sound. He will set the stage by reviewing economic background conditions, and then move on to propose a new way of considering ecological economics in this region: 1. Ecological sustainability as a foundation for economic sustainability. 2. The need to make decisions about fairness and property rights, equity, etc. 3. The need to create economic progress and efficiency. 4. Getting good governance -- how do we create institutions that govern well and do good, for resources management?Earth Economics

The Perfect Spill: Solutions for Averting the Next Deepwater Horizon

In this article the authors comment on the oil spill incident from the Deepwater Horizon, particularly on its economic and ecological damages. The authors highlighted the disaster as an event wherein much is needed to be learned so that future oil spills can be avoided. One lesson refers to the valuability of natural capital assets and other public entities that are at risks due to private interests and that better regulations and incentives are needed to protect these assets against risks

Gaining Ground Wetlands, Hurricanes and the Economy: The Value of Restoring the Mississippi River Delta

This report is a project of Earth Economics. The authors are responsible for the content of this report. Fundin

Funded by: WRIA 9 Watershed Forum of Local Governments through the King Conservation District Prepared by: Asia Pacific Environmental Exchange

©2005 by Earth Economics. Reproduction of this publication for educational or other non

Water supply sustainability (m³/year) for rice agriculture in the two areas considered.

<p>Water supply sustainability (m³/year) for rice agriculture in the two areas considered.</p