Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation

Transcription

1 Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation November 2017

2 About this Report This report was prepared by The Nature Conservancy in collaboration with TD Bank Group (TD). It builds on a previously released white paper, Putting a Value on the Ecosystem Services Provided by Forests in Canada: Case Studies on Natural Capital and Conservation: natureconservancy.ca/naturalcapitalreport2017 The case studies in this report include properties that were secured through a five-year collaboration between The Nature Conservancy and TD to conserve high-priority forests across the eastern seaboard of the United States, under the TD Forests program. This partnership has helped conserve over 19,000 acres in eight forest conservation projects. In addition to the important natural values protected at these sites, including habitat for rare species and corridors for wide-ranging mammals, these properties also provide ecological services to Americans and their communities. The purpose of this report is to explore these ecological services and their associated natural capital values. More information about the program can be found at: Acknowledgements This report was prepared by Dan Kraus (Nature Conservancy of Canada) and Brian DePratto (TD Economics) with review and input by Timm Kroeger (The Nature Conservancy). Mapping was done by Andrea Hebb (Nature Conservancy of Canada). Suggested citation: The Nature Conservancy Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation. 29 pp. Cover photo: Bradley-Sunkhaze Preserve in Maine. Protected through the forest conservation partnership of The Nature Conservancy and TD Bank Group. TNC. Disclaimer Information presented in this report is based on the most recent information and approaches to natural capital valuation. These values may change as new information and methods are developed. Natural capital values do not include all of the economic, social and ecological values associated with protected areas, and are solely intended to assess the values of ecological services and the projected costs to local communities and society if these services were to be lost or degraded. Questions about this report? The Nature Conservancy: natureny@tnc.org

3 TABLE OF CONTENTS Foreword page 4 Introduction page 5 An Introduction to Natural Capital page 7 Eastern Forests page 8 Natural Capital Values of Forests page 10 Other Economic and Social Values of Protected Forests page 11 Introduction to the Case Studies page 12 Northern Appalachian-Acadian Ecoregion page 13 North Atlantic Coast Ecoregion page 16 High Allegheny Plateau Ecoregion page 18 Mid-Atlantic Coastal Plain Ecoregion page 20 Florida Peninsula Ecoregion page 22 Tropical Florida Ecoregion page 24 Technical Notes page 26 References page 28

4 FOREWORD Since 2012, The Nature Conservancy and TD Bank Group (TD) have had the pleasure of collaborating through the TD Forests program to protect forests across the eastern seaboard of the United States. The conservation results have been impressive. TD s support has helped The Nature Conservancy protect over 19,000 acres of important forest habitat. Over the course of this collaboration, The Nature Conservancy and TD have further investigated how a charitable organization and financial institution can work together in innovative ways to contribute to the protection of our natural world. One of these ways is with this paper. Combining our respective expertise in ecology and economics, we were able to calculate the natural capital values of the ecosystem goods and services that forests provide. In this report we use the forest properties that have been protected through this initiative across the states in which TD operates, from Maine to Florida. These forests, and countless others across the country, provide essential services to Americans every day. They produce oxygen, filter the air we breathe, hold flood waters, clean our drinking water, regulate our climate and absorb atmospheric carbon dioxide. Until recently, the value of these services has seldom been calculated and communicated. As a result, the important ecological services that forests provide are often not included in decision-making. The environmental challenges facing our natural world are too big for one sector alone to overcome. The Nature Conservancy and TD s collaboration is an excellent model of how we can work together to protect America s most important natural spaces and create a sustainable future for our children. We hope that this analysis helps inspire both the private and public sectors to explore collaborative approaches to conservation, factor the natural capital values of America s forests into decision-making and continue to explore the myriad ways in which forests matter to all Americans. On behalf of The Nature Conservancy and TD, we are pleased to present the following case studies, which explore the natural capital benefits that forests provide to the United States. We are proud to contribute to the important conversation about the value of America's natural places and the essential ecosystem services they provide every day. Mark Burget Executive Vice President and Managing Director, North America The Nature Conservancy Joe Doolan Head of Environmental Affairs TD Bank, America s Most Convenient Bank

5 INTRODUCTION Effective conservation protects and restores nature for all species, including people. Conserving natural ecosystems, such as forests, wetlands and grasslands, helps to protect important species and habitats and maintain essential ecological processes. Protecting natural habitats also provides a benchmark to monitor future environmental change. There has been increasing recognition of the importance of protected areas to the quality of human life (Secretariat of the Convention on Biological Diversity, 2008). In addition to conserving important habitats and species, protected areas provide ecosystem services, sometimes referred to as natural capital services, such as: water filtration flood control pollination climate regulation In the past, the ecological benefits provided by nature have been largely taken for granted. Although externalities, or the unintended and often unpriced consequences as a result of human action, is a core concept in economics, only recently has the notion of pricing positive externalities (such as cleaner air) entered into the mainstream of the discipline. This is important because in a world where we are losing species and ecosystems, it is ever more critical to include nature in economic decision-making. The emerging field of natural capital valuation which places a financial value on ecosystem assets and services provides a framework for assigning economic values to these services. Natural capital is the stock of natural resources (finite or renewable) and ecosystems that provide direct or indirect benefits to the economy, our society and the world around us. TD Economics (2014) The valuation of nature provides an opportunity to link conservation and economics. By valuing the assets and services that nature provides, we can improve our understanding of the impacts of habitat loss and land conservation not only to nature, but to our economy and well-being. This provides decision-makers with valuable tools to support better conservation and more sustainable development. This report focuses on properties conserved by The Nature Conservancy through the TD Forests program to estimate the natural capital value of forests. The report includes two main parts: 1. General background on the eastern forests of the U.S., and approaches to natural capital valuation. 2. Case studies for eight properties protected by The Nature Conservancy with help from the TD Forests program. These properties occur in seven different ecoregions in the eastern U.S. Each case study provides an introduction to the ecoregion and explores the natural capital values associated with the conserved forest properties. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 5

6 Approach and key findings Analysis of the natural capital value of the protected forests was undertaken using a combination of a 'standard' assessment of the externality value of the property ecosystems, and, to a lesser extent, the defensive expenditures approach. The defensive expenditures approach values the damage caused by environmental degradation according to the costs that society is willing to pay to prevent the damage. Monetary valuation of the benefits used the U.S. Environmental Protection Agency (EPA) estimates of the Social Cost of Carbon (EPA 2016), as well as standard estimates from the literature for non-carbon pollutants. Further details are provided in the Technical Notes at the end of this report. A relatively broad range of natural capital values were calculated, reflecting the diversity of forest types, densities and geographic features. The case study properties provide services valued at between $1,500 and $5,500 per acre, per year, in natural capital benefits. The average benefit was estimated to be $4,028 per acre per year (all figures are in current U.S. dollars). Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 6

7 AN INTRODUCTION TO NATURAL CAPITAL Decision-makers, whether in politics, business or other realms, may not always incorporate environmental trade-offs into their thinking. When these trade-offs are ignored, unexpected costs and unanticipated consequences may occur. Consider the late 19 th century factories that released untreated effluent into rivers and streams, affecting the health and livelihoods of people downstream. The downstream effects are what economists refer to as negative externalities; when the actions of one party has consequences, and associated costs, that accrue to another without pricing and/or compensation. Natural capital is a way of bringing externalities into the decision-making process. As TD Economics has defined it, "natural capital is the stock of both finite and renewable natural resources and ecosystems that provide benefits to our economy, society and the world around us." With the concept of natural capital comes natural capital services, sometimes referred to as ecosystem services. The parallels with other forms of capital are clear: just as a piece of physical capital like a piece of machinery produces a product or service, or an investment provides income, natural capital also provides a yield in the form of natural capital services. For example, the ecological services provided by forests that benefit people include water purification, removing air pollution and regulating our climate by storing carbon dioxide. Once these ecological services are taken into account, decision-making improves and becomes smarter. It may be more beneficial to a local community to protect a forest once the value of the clean air, habitat, biodiversity and other benefits are taken into account. If there is a decision to convert a forest to other land uses, natural capital can provide a framework to better understand and articulate the services that are being lost, and explore options to restore those benefits. In this way, the conservation and restoration of forests help to ensure that these natural capital benefits remain available for generations to come. For example, New York City has a watershed protection program that conserves lands around the reservoirs and tributaries that provide its drinking water. As a result of this watershed protection, residents avoid the need for costly filtration, a cost estimated at between $8 billion to $10 billion to construct the facility, and approximately $1 million each day to operate and maintain the filtration plant. Protecting forests and other natural capital within these watersheds provide New York City s eight million residents with clean water, reduces their infrastructure costs and protects lands that provide wildlife habitat, recreational opportunities and other ecosystem services, such as air filtration and climate regulation (New York Department of Environmental Conservation, 2017). Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 7

8 EASTERN FORESTS Eastern forests in the U.S. stretch from the Canadian border south to Florida and west past the Mississippi River, where they meet the Great Plains. These forests cover 26 states and are one of the richest and most biologically diverse temperate forests on Earth. More than 110 tree species have been recorded in these forests, three-quarters of which are deciduous (Yahner 2000). The diversity of eastern forests is driven by a variety of factors, including latitude, elevation and geology. Northeastern forests in the U.S. are dominated by hardwoods, such as sugar maple, American beech and yellow birch, often in association with eastern white pine and eastern hemlock. Further south in this region, yellow birch declines in abundance and many forests are dominated by maple and beech. The central and southern regions of the eastern forests are dominated by a variety of oak and hickory communities, in association with pine in some regions. Eastern forests once occupied over 950,000 square miles of the U.S. (Delcourt & Delcourt 2000). Most of the forests in this region have been logged, and many of today s forests have regrown on marginal lands that were once cleared for farming and then abandoned. It is estimated that by the 1920s at least 50 per cent of the eastern forest had been cleared. Today, less than one-tenth of a per cent of these forests are undisturbed. There has been an increase in forest clearing over the last few decades not for farming, but for housing, coal mining and energy development associated with fracking, with approximately nine million acres cleared since the 1970s (Biello 2010). In addition to clearing, eastern forests have been impacted by other threats. Invasive species, such as chestnut blight, have decimated the once abundant American chestnut. Other forest insects and pathogens that have been introduced into these forests are now impacting eastern hemlock, American beech and ash. Natural periodic fires that once helped maintain oak-hickory forests and longleaf pine forests have been mostly supressed. In many regions, overabundant populations of white-tailed deer are also impacting these forests by over-browsing on saplings and other plants in the forest understory. Several regions within the eastern forests have been identified as global priorities for biodiversity conservation. In 2016, the North American Coastal Plain that stretches from the Gulf of Mexico and Florida along a narrowing band to Rhode Island was added as the world s 36 th biodiversity hotspot (Noss 2016). Much of this hotspot region, in addition to the Appalachian Mixed Forests, was also identified in the Global 200 list of key areas for global biodiversity conservation (Olsen & Dinerstein 2002). This region has many rare and endemic species, including the highest diversity of salamander species in the world, centred in the Appalachians. The Nature Conservancy has identified key sites for forest conservation across the eastern U.S. Eight properties were protected by The Nature Conservancy with help from the TD Forests program since 2012 (Figure 1). Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 8

9 Figure 1: Forest regions of the eastern U.S. and TD Forests conservation projects, Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 9

10 NATURAL CAPITAL VALUES OF FORESTS Forests provide a broad range of ecological services that support the infrastructure and well-being of communities (Box 1). The values of the ecological services calculated in this report s case studies range from $1,500 to $5,500 per acre, per year. The calculations rely largely on estimates of externality costs from the literature, which effectively calculate the cost to society were the services that are provided by forest regions not provided. We note that, as we are only able to focus on a narrow slice of benefits due to data and methodological limitations, the values presented in this report should be considered lowerend estimates of the benefits provided by these regions. Quantification of all benefits shown in Box 1 would undoubtedly increase the quantified value. The bulk of the natural capital values of the protected lands used as case studies are related to carbon sequestration and storage in both trees and soils. These natural capital services have a direct link to human health in local communities, and form part of the natural infrastructure that supports well-being and economic prosperity. Additional notes on the methods and limitations are provided at the end of the report in the Technical Notes (page 26). Box 1: Ecological services provided by forests carbon storage* carbon sequestration* disease regulation water filtration and purification flood control* pollinator habitat nutrient recycling pest control soil erosion prevention recreation and exercise air filtration* shade and cooling soil formation wildlife habitat * ecological services that are included in the case study valuations Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 10

11 OTHER ECONOMIC AND SOCIAL VALUES OF PROTECTED FORESTS The ecological services that forests provide are manifold and go beyond carbon storage. Many forests provide opportunities for recreation and are critical for the conservation of biodiversity. Forests may also be the location of culturally important places and practices. Although it can be difficult to assign specific dollar values for many of these on a property scale because of lack of data, and they are not included in the valuation presented in this paper, their importance should not be underestimated. Protected forests provide space for nature activities, such as hiking, picnicking and birdwatching. The opportunity to engage in these activities is clearly important, as two in five adult Americans reported participating in nature-based recreation in 2016 (U.S. Fish and Wildlife Service, 2017). Each year, Americans spend more than $150 billion (or roughly 1 per cent of GDP) on equipment, travel, lodging and other expenses to undertake wildlife-associated recreation activities that clearly would not take place if this wildlife and their habitat were no longer present. Moreover, these expenditures often take place in more remote parts of the country, helping distribute income geographically. All of these values contribute to the worth of protected lands, regardless of whether a dollar value can be explicitly assigned. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 11

12 INTRODUCTION TO THE CASE STUDIES The natural capital values of America s eastern forests vary, depending on location, habitat type and landscape context. The following case studies review the natural capital values of forests from seven ecoregions in the eastern U.S. that stretch from Maine to Florida. All of the case study properties were acquired as part of the TD Forests program in partnership with The Nature Conservancy (Table 1). Each case study consists of two parts. The first part provides an overview of the ecoregion. The second part provides a description of the case study property, including the types of forests and other habitats, wildlife species, and an explanation as to why it was conserved. The case study then outlines the natural capital values and explains the underlying ecological services that are driving these values. The case studies are presented from north to south, providing a cross-section of the eastern forests. Table 1: TD Forests conservation projects in the eastern U.S., TNC Project Lower Penobscot Shed Antler 1 and Shed Antler 2 Lenape Farms Hickory Ridge Black River Preserve Hollywood Pines Goulds Pineland Preserve Ecoregion Northern Appalachian-Acadian Northern Appalachian-Acadian North Atlantic Coast High Allegheny Plateau Mid-Atlantic Coastal Plain Florida Peninsula Tropical Florida Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 12

13 Northern Appalachian-Acadian Ecoregion New York, Vermont, New Hampshire, Maine The Northern Appalachian-Acadian Ecoregion extends from the Tug Hill Plateau and Adirondacks of New York, across the Green Mountains of Vermont and the White Mountains of New Hampshire into Maine. It also continues north into Quebec, New Brunswick, Nova Scotia and Prince Edward Island, and has a total area of almost 1.3 million square miles. The Northern Appalachian- Acadian ecoregion extends over large ecological gradients with more conifers in the north and greater dominance by deciduous forest to the south. Forests are characterized by a mix of spruce-fir and hardwood species, such as red spruce, balsam fir, yellow birch, sugar maple, red oak, red maple and American beech. There has been a historical shift away from the uneven-aged and multi-generational old growth forest towards even-aged and early successional forest types due to human activities. Although most of this region remains in natural cover, very few old growth forests remain. The ecoregion has many rivers and wetlands that support rare species. Characteristic mammals include species that require large blocks of forested habitats such as moose, black bear, fisher, beaver, bobcat, lynx, and marten. Shed Antler property, New York. TNC Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 13

14 Northern Appalachian-Acadian Ecoregion Natural Capital Case Study: Shed Antler, New York Valuation: $1,500 per acre per year In 2013 and 2014, TD Bank funds through the TD Forests program were used to protect 514 acres on New York s Tug Hill Plateau, an important forest region connecting the Adirondacks and Lake Ontario. The property builds on a large network of protected areas. The region harbours many rare species and natural communities. Wide-ranging mammals, like bobcat, black bear, fisher and pine marten, are common here, as well as birds, like the goshawk, olive-sided flycatcher, blackburnian warbler and northern three-toed woodpecker. The forests are characterized by a northern hardwood community and are dominated by red maple, yellow birch, American beech and sugar maple. Stands of spruce-fir and hemlock also occur on the property. The Shed Antler property is significant for its extensive healthy forest, numerous wetlands and undeveloped stream corridors Wetland areas are estimated to occupy approximately 15 to 20 per cent of the subject property s acreage. These ponds and wetland areas form the headwaters of Fish Creek, since they ultimately drain into Sixmile Creek, which joins with Sevenmile Creek to become the East Branch of Fish Creek. Natural capital valuation The Shed Antler property contains significant amounts of stored carbon, with more sequestered each year. At the same time, the property also provides an example of some of the limitations that come with the current approaches to natural capital valuation. The remote location of the property implies that a likely alternative use would be for light recreation, implying that there is only modest natural capital benefit to the protection of the property. As noted in the technical appendix, the limitations of this approach include the inability to easily account for impacts, such as species protection, wildlife corridors and other benefits, that are likely to be reduced or disrupted under alternate usage. Bearing these limitations in mind, an estimated annual natural capital service value of $1,500 per acre per year is found, the lowest estimate of the properties considered. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 14

15 Northern Appalachian-Acadian Ecoregion Natural Capital Case Study: Lower Penobscot, Maine Valuation: $4,200 per acre per year In 2015, the TD Forests program helped protect 12,741 acres at the Bradley-Sunkhaze Preserve in Maine, connecting 35,000 acres of Acadian forest. The property lies within the largest intact forest block in central Maine and links existing conservation lands. Over 93 per cent of the property is forested and is predominately softwood and mixed wood dominated by eastern white pine, balsam fir, eastern cedar and red spruce. Oak-ash forest is located in the southeast corner of the property, where richer soils support basswood and white ash on steep slopes. Streams on the property support spawning habitat for Atlantic salmon, blue-back herring and alewife, as well as habitat for American eel. The Bradley-Sunkhaze Preserve lies within the largest intact forest block in central Maine. Natural capital valuation Dense forest that provides significant carbon storage and sequestration, as well as the proximity to the community of Milford, Maine, result in relatively large estimated natural capital service values for the Lower Penobscot property. The result is an estimated $4,200 per acre per year in natural capital services. It is worth noting that the property also includes a section of snowmobile trails, suggesting that were recreation usage benefits to be included, the estimated value would rise. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 15

16 North Atlantic Coast Ecoregion Delaware, Pennsylvania, New Jersey, New York, Connecticut, Rhode Island, Maryland, New Hampshire, Maine The North Atlantic Coast Ecoregion encompasses just over 19,000 square miles in a narrow band from the southwestern shore of Delaware Bay north to Maine. This ecoregion includes a region known as the Atlantic Coastal Pine Barrens. The North Atlantic Coast Ecoregion is heavily influenced by coastal processes and the many rivers that flow into the ocean. The ecoregion is characterized by coastal plain ponds, fens, tidal marshes, beach and dune complexes and pine barrens. This ecoregion harbors over 100 imperiled species, 13 of which are endemic to the ecoregion. Most of these species occur in the ecoregion s unique habitats such as beaches and dunes, maritime grasslands and pine barrens. The unique pine barrens forests are dominated by pitch pine. The North Atlantic Coast Ecoregion has been heavily fragmented by development. Lenape Farms property, New Jersey. TNC Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 16

17 North Atlantic Coast Ecoregion Natural Capital Case Study: Lenape Farms, New Jersey Valuation: $3,600 per acre per year In 2014, 5,079 acres were protected at New Jersey s Lenape Farms with TD Bank s help. This is one of the largest privately owned natural tracts of land remaining in the Southern Pine Barrens. The property protects a diversity of habitats and builds on a network of protected areas. The Southern Pine Barrens supports numerous threatened and endangered species, including bald eagle, peregrine falcon and pine barrens tree frog. The property is dominated by oak-pine and pitch pine lowland forest, red maple forest, Atlantic white cedar swamp, lakes, ponds and salt marsh. Natural capital valuation The Lenape Farms property, with its mix of forests, salt marsh and scrubland, and its relative proximity to Corbin City and surrounding low-density residential and farm The Lenape property protects a mix of pine-oak forests and wetlands that characterize the Pine Barrens landscape. development, results in significant benefits across both atmospheric and water-related service categories. Consequently, a relatively high service value of $3,600 per acre per year is estimated. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 17

18 High Allegheny Plateau Ecoregion New York, Pennsylvania, New Jersey The High Allegheny Plateau ecoregion straddles New York and Pennsylvania, with a small section reaching into the northwest corner of New Jersey. The ecoregion is over 26,000 square miles and includes several high elevation areas, such as the Catskill and Pocono mountains. In addition to the high elevation, this ecoregion is characterized by major rivers. Hundreds of rivers and streams, including the Delaware, Allegheny and Susquehanna rivers, have eroded the plateau into a series of rounded, forested hills. The High Allegheny Plateau ecoregion has one of the highest amounts of natural cover of any ecoregion in the northeast United States. Deciduous and mixed forests cover over three-quarters of the ecoregion. Much of the remaining land cover is agricultural, used primarily for grazing. The dominant forests in this ecoregion are maple-beech, with oak-hickory forests occupying south-facing and drier slopes. In the eastern part of the ecoregion, pine barrens occur on rocky ridgetops and along the Pocono Plateau. The southwestern section of the ecoregion includes tulip poplar and cucumber tree, while spruce and balsam fir range into the northern parts, particularly at higher elevation sites. Hickory Ridge property, New York. TNC Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 18

19 High Allegheny Plateau Ecoregion Natural Capital Case Study: Hickory Ridge, New York Valuation: $3,800 per acre per year In 2012 under TD Bank s TD Forests program, The Nature Conservancy protected the 107-acre Hickory Ridge property in New York s Finger Lakes region. The Nature Conservancy has protected more than 11,000 acres of forests, lakeshores, wetlands and stream corridors in the Finger Lakes region over the past 15 years. The forest on the Hickory Ridge property is characterized by Appalachian oak-hickory and northern hemlock-hardwood forests, and includes a small intermittent stream. Dominant tree species are red maple with white pine, chestnut oak, hickory, eastern hemlock, sugar maple, red oak and white oak. The forest is an even-aged hardwood stand with an average age of approximately 90 years. The Hickory Ridge property is located in a region of New York that has a high diversity and abundance of woodland salamanders. The region harbors numerous bird species, including Cooper s hawk, pileated woodpecker, yellowbellied sapsucker and a variety of warblers, and is an important area for salamanders. The property also includes trails that are part of one of the longest trail networks in New York, and its conservation contributes to maintaining the health of the Finger Lakes watershed. Natural capital valuation The dense forest of the Hickory Ridge property provides significant benefits in terms of the reduction of greenhouse gases and ongoing sequestration of carbon. In the absence of protection, the property is deemed a likely candidate for farmland, which would greatly reduce the annual carbon sequestration. Perhaps demonstrating the limitations of the analysis, the loss of habitat is not considered, biasing the estimated service values downwards. Consequently, the High Allegheny Plateau ecoregion, as typified by the Hickory Ridge property, is found to provide approximately $3,800 in annual natural capital benefits per acre per year. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 19

20 Mid-Atlantic Coastal Plain Ecoregion Virginia, North Carolina, South Carolina The Mid-Atlantic Coastal Plain is a small ecoregion (just over 4,000 square miles) along the coasts of Virginia and the Carolinas. Forests are dominated by longleaf pine and bald cypress, with bottomland hardwood forests and swamps. The Outer Banks include some of the world s best and most active coastal dunes. Natural fires, floods and storms are so dominant in this region that the landscape changes very quickly. This coastal ecoregion has been heavily impacted by development for urban and recreational use, although there are a few large protected areas. Some of the large areas of public land, such as the Alligator River National Wildlife Refuge, harbors small populations of the endangered red wolf. In addition to development, the forests have been impacted by fire suppression, which has changed the composition and structure of the pine forests. This ecoregion is also vulnerable to rising sea levels and storm surges due to its low elevation. Black River Preserve, South Carolina. TNC Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 20

21 Mid-Atlantic Coastal Plain Ecoregion Natural Capital Case Study: Black River Preserve, South Carolina Valuation: $4,500 per acre per year In 2013, TD Bank funds were used to protect 80 acres on South Carolina s Black River, one of the Atlantic seaboard s largest and most diverse forested wetlands. The Black River Preserve remains saturated throughout most of the year, though water depth and area of flooding may vary depending on the river s flow. The forests include one of eastern North America s most threatened ecosystems: tidal freshwater forested wetlands. Common trees on the property include tupelo and bald cypress with red maple, red oak and sweet gum. This property includes old-growth stands of cypress and tupelo, and builds on several other conservation lands along the Black River. The Black River Preserve sits at the heart of a conservation corridor that has protected almost 20 miles along the river. Natural capital valuation The Black River Preserve provides an excellent example of the natural capital benefits of forested wetlands, which provide significant carbon sequestration and storage benefits, as well as providing some flood reduction benefits for the nearby community of Andrews. Given its proximity to suburban development, light residential usage is considered a likely alternative land use in the absence of protection. Significant carbon storage/sequestration and the noted flood benefits and reduction of other atmospheric pollutants result in an estimated annual service value of $4,500 per acre per year. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 21

22 Florida Peninsula Ecoregion Florida The Florida Peninsula Ecoregion includes most of central Florida. The ecoregion is characterized by a relatively flat landscape with swamps, open wetlands and upland hardwood forests. Large areas of longleaf pine also occur on dry sandy ridges. Because of the low elevation and relatively flat topography of this ecoregion, slight changes in elevation can dramatically influence the hydrology and vegetation. Many of the natural habitats in this ecoregion are now fragmented, although there are still some very large core protected areas, such as Ocala National Forest. The Florida Peninsula Ecoregion includes many rare and endemic species. This ecoregion has been significantly altered by human land uses, and includes major cities, such as Tampa Bay and Orlando. In addition to habitat loss, fragmentation is impacting many wide-ranging species, including the Florida black bear and Florida panther. Hollywood Pines property, Florida. TNC Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 22

23 Florida Peninsula Ecoregion Natural Capital Case Study: Hollywood Pines, Florida Valuation: $5,100 per acre per year The Nature Conservancy protected 631 acres of oakhickory-cabbage palm and upland mixed forests in central Florida with TD Bank s help. The acquisition of the Hollywood Pines property is helping ensure the protection of a critical corridor of conservation lands in central Florida, just north of Orlando. These rich and diverse lands protect a suite of natural communities, including forested pinelands and floodplain that are home to the largest black bear population in Florida, and many other unique species. The property includes two forest types. Hydric hammocks are wetlands and occur where the soils are almost continually wet. The forests are dense and dominated by hardwoods with loblolly pine, pines and cabbage palms. The other forest type is floodplain swamp. This forest is dominated by hardwoods, such as cypress, tupelo, red maple and sweet gum. The Hollywood Pines property is located just south of Ocala National Forest, and provides an important habitat linkage in this ecological corridor that is threatened by urban expansion. Natural capital valuation The Hollywood Pines property's close proximity to the light-to-medium density city of Orange helps increase the estimated value of the ecosystem services provided when compared against the plausible alternative usage scenario of light residential development. In addition, this proximity also means that the water-based benefits provided by the wetlands of the property are significant for the communities in the surrounding areas. Together with the carbon storage and sequestration benefits, the Hollywood Pines protected area is estimated to provide $5,100 per acre per year in natural capital benefits, among the highest value of the properties considered. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 23

24 Tropical Florida Ecoregion Florida The Tropical Florida ecoregion is characterized by flat sandy plains over shallow limestone bedrock, and the massive Florida Everglades. The forests were once dominated by pine rocklands, characterized by sand pine and various species of scrub oak. It is estimated that over 98 per cent of the pine rockland community has been lost. Today, the pine rocklands exist as small, often isolated fragments, but still support viable populations of rare plants and animals. Also occurring as small patches on the pine rocklands, and extending throughout the Everglades and into the Florida Keys, are a series of tropical hardwood-dominated forests referred to locally as hammocks. This tropical hardwood hammock system, supporting a mixed canopy of up to 65 Caribbean-derived hardwood tree species, once covered thousands of acres along the southeastern coast of the ecoregion (in what is now Miami and Fort Lauderdale). Goulds Pineland Preserve, Florida. TNC Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 24

25 Tropical Florida Ecoregion Natural Capital Case Study: Goulds Pineland Preserve, Florida Valuation: $5,500 per acre per year The 36-acre Goulds Pineland Preserve is dominated by globally imperiled pine rockland. These pinelands are dominated by Florida slash pine with an understory of saw palmetto, sabal palm, silver palm and locust berry, and are interspersed with hardwood hammocks. The property includes over 130 native plant species, several of which are rare, threatened and endangered, and includes species that are found nowhere else in the world. Being located in one of the fastest growing areas of Miami-Dade County, protection of all remaining examples of this rare forest type is a conservation priority. Goulds Pineland Preserve offers the opportunity to showcase how the protection and restoration of an endangered ecosystem can be achieved in an urban setting. The Goulds Pineland Preserve protects globally rare pine rockland forest. This property can now be managed and restored to protect this rare habitat and associated species. Natural capital valuation Even with the limitations of the methodology, and excluding conservation benefits of the rare and endangered plant species found on the property, the Goulds Pineland Preserve is estimated to provide the greatest annual natural capital service benefits: $5,500 per acre per year. This value results from significant atmospheric benefits, which are only modestly discounted given the property s location in the mixed-use suburbs of the Greater Miami area, which also underscores the value of protection given the likely alternative usage of light residential/commercial development. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 25

26 TECHNICAL NOTES Land sizes and ground coverage types are the outcome of independent assessment of the properties and are based on inventories, ecological land classification and timber cruises (timber cruises identify and measure trees to estimate standing timber). Non-carbon atmospheric pollutants and water pollutant removal coefficients are adapted from Schuyt and Brander (2004). Values for non-carbon atmospheric pollutants are from Murray, Marsh and Bradford (1994), as reported in Nowak et al. (2008). Abatement costs used as consensus social costs for these pollutants (such as SO 2) have not yet emerged in the literature. In calculating the value of abatement, coefficients are adjusted to account for site-specific contexts via geospatial analysis that takes proximity to developed areas, and the intensity of development into account. Properties in urban settings are likely to have full abatement impacts, while remote locations are, conversely, likely to have a smaller impact given atmospheric processes that dilute their pollutant removal effects before reaching population centers. Carbon storage and sequestration rates are taken from McKinley et al. (2011). The August 2016 estimate of the social cost of carbon from the Interagency Working Group on Social Cost of Greenhouse Gases is used (EPA 2016). The report uses a social cost of carbon of $112 per metric ton: the 95 th percentile value, at a three per cent discount rate, for The 95 th percentile is used to reflect a number of criticisms of models of the social cost of carbon, which suggest that the values arising from each model may be too low (see for instance Revesz et al. (2014)). In practical terms, the valuations were conducted by first determining carbon and carbon-equivalent sequestration and storage by applying the results reported in McKinley et al., yielding measures of both annual CO 2 sequestration, and a snapshot of stored carbon on a by-property, per-acre basis. The natural capital value is then calculated by applying the social cost of carbon to these values. Importantly, it should be noted that this 'snapshot' analysis captures the benefits of protection of the sequestration to date, and the pollutant removal estimated to take place in 2017, but does not quantify the future stream of benefits, avoiding challenges around discounting of future flows, although the social cost of carbon embedded in these estimates is a discounted flow concept. As noted above, for non-carbon pollutant abatement, externality costs, as reported in Nowak et al. are applied. The valuation reflects the cost to society if the protected area did not exist. These values have been adjusted, as noted above, to take site specific contexts (proximity to developed areas, and concentration of those developed areas) into account. For properties with water systems, values reported by Wilson (2012) and Schuyt and Brander (2004) are applied, again taking site-specific contexts into account. Filtering benefits are only likely to occur in areas that are proximate to commercial farming (and thus likely to receive above-normal nitrogen/phosphorus loadings), and that feed into aquifers used for human consumption. Geographic analysis of each property and the development of the surrounding non-protected areas was undertaken to assess appropriateness of inclusion of these benefits. Similarly, flood control benefits are highly proximate, and given limited data on recreational usage in the sample properties, recreational usage benefits are excluded from the calculation. As a result, the natural capital values associated with water systems form Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 26

27 only a small fraction of the values reported in this study, and are included for only two properties: Lenape Farms and Hollywood Pines. A note on methodological limitations The science and economics of natural capital valuation continues to make advances, allowing for the quantification of an expanding universe of benefits. Unfortunately, many of these methods have significant data requirements, or are not yet at the fully developed stage. For instance, methods of valuing the recreational benefits of protected lands are well established, but require detailed information on the number of visitors, distance travelled, activities completed and others, which are currently not available. On the other end of the spectrum, the importance of protected lands to biodiversity has been well established, but methods of quantifying this importance in natural capital terms are not fully established. Owing to these and other limitations, this report focuses only on the natural capital values that can be quantified by well-established methods given the data at hand. Other benefits, such as cultural value, recreation value, biodiversity, etc. are tremendously important and should not be ignored. The current difficulty in incorporating these values in the natural capital valuation thus means that the estimates provided should be considered lower end figures. Clearly, an accounting that includes the full sweep of natural capital benefits provided by protected lands would result in valuations much higher than those presented here. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 27

28 REFERENCES Biello, D Slash and sprawl: U.S. Eastern Forests resume decline. Scientific American. April 13, Delcourt H.R. and Delcourt P.A Eastern deciduous forests. Pages in Barbour MG, Billings WD, eds. North American Terrestrial Vegetation. 2nd ed. Cambridge (United Kingdom): Cambridge University Press. Environmental Protection Agency (EPA) The social costs of carbon. US EPA. Interagency Working Group on Social Cost of Greenhouse Gases, 2016 "Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866", Retrieved from McKinley, D. et al "A synthesis of current knowledge on forests and carbon storage in the United States." Ecological Applications 21(6): Murray, F.J., L. Marsh, and P.A. Bradford New York State Energy Plan, Vol. II: Issue Reports. New York State Energy Office, Albany, NY. (As cited in Nowak et al. (2008)) New York Department of Environmental Conservation New York City Water Supply. Retrieved from New York Department of Environmental Conservation website: Noss, R Announcing the world s 36th biodiversity hotspot: the North American coastal plain. Critical Ecosystems partnership Fund. February 18, Hotspot.aspx#.WeD1ZWhSz4Y Nowak, D., et al A Ground-Based Method of Assessing Urban Forest Structure and Ecosystem Services. Aboriculture & Urban Forestry 34(6). Olson, D.M. & E. Dinerstein The global 200: priority ecoregions for global conservation. Annals of the Missouri Botanical Garden 89 (2): Revesz, R., et al Global Warming: Improve Economic Models of Climate Change. Nature Comment, 4 April Schuyt, K. and L. Brander "The Economic Values of the World's Wetlands" retrieved from Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 28

29 Secretariat of the Convention on Biological Diversity (2008). Protected Areas in Today s World: Their Values and Benefits for the Welfare of the Planet. Montreal, Technical Series no. 36, i-vii + 96 pages. TD Economics & Nature Conservancy of Canada Putting a Value on the Ecosystem Services Provided by Forests in Canada: Case Studies on Natural Capital and Conservation. 37 pp. TD Economics Valuing the world around us: an introduction to natural capital. Special Report. November 20, Retrieved from U.S. Fish and Wildlife Service National Survey of Fishing, Hunting, and Wildlife-Associated Recreation. August Retrieved from Wilson, S Canada s Wealth of Natural Capital: Rouge National Park. Prepared for David Suzuki Foundation. Yahner, R.H Eastern Deciduous Forest: Ecology and Wildlife Conservation. University of Minnesota Press, Minneapolis, Minnesota. Putting a Value on the Ecosystem Services Provided by Forests in the Eastern United States: Case Studies on Natural Capital and Conservation 29