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Proposal for Increasing Consistency When Incorporating Ecosystem Services into Decision Making

In October 2015, the U.S. Executive Offices of the President—the Office of Management and Budget, the Council on Environmental Quality, and the Office of Science and Technology Policy—released a memo, “Incorporating Ecosystem Services into Federal Decision Making,” that directed federal agencies to develop work plans and implementation guidance by the end of 2016. But many practical questions remain about how ecosystem services can most effectively be used in decision making. This policy brief explores how to achieve consistency in the use of ecosystem services, primarily in terms of which ecosystem services are selected for assessment and how they are quantified. An initial idea for promoting consistency might be to require all decision makers to consider a common set of ecosystem services, each with a pre-defined metric. Although this strategy might seem logical, it may not provide relevant or useful information for decision makers because even fairly constrained categories of these services—say those for maintaining air and water quality, managing water quantity, and reducing risks from fire, storms, and droughts—when further refined break up into many more services that are defined by who is affected and how they are affected. For example, a water quality management issue results in a change in water quality for downstream stakeholders—which can alter services such as municipal water supplies, irrigation, fishing, swimming, and so on. Each of these services involves different stakeholder populations or beneficiaries. Moreover, each of these services might be more or less relevant in different contexts or regions. The ecosystem services that should be considered in a particular decision depend on the ecosystem type, the attributes and qualities of that ecosystem, the ways in which surrounding human communities use or appreciate the ecosystem, vulnerabilities and characteristics of those communities, and the preferences and values of human beneficiaries in different areas and policy contexts. They also depend on the temporal and spatial scale of the project, plan, program, or policy under consideration. Consequently, achieving consistency in the selection of ecosystem services to be considered is a complex task, as is achieving consistency in quantification of those services across decision contexts.

Authors: Lydia Olander, Dean Urban, Robert J. Johnston, George Van Houtven, and James Kagan

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Ecosystem Services

National Ecosystem Services Partnership

Policy Briefs

Data and Modeling Infrastructure for National Integration of Ecosystem Services into Decision Making: Expert Summaries

Resource managers face increasingly complex decisions as they attempt to manage for the long-term sustainability and the health of natural resources. Incorporating ecosystem services into decision processes provides a means for increasing public engagement and generating more transparent consideration of tradeoffs that may help to garner participation and buy-in from communities and avoid unintended consequences. A 2015 White House memorandum from the Council on Environmental Quality, Office of Management and Budget, and Office of Science Technology and Policy acknowledged these benefits and asked all federal agencies to incorporate ecosystem services into their decision making. This working paper describes the ecological and social data and models available for quantifying the production and value of many ecosystem services across the United States. To achieve nationwide inclusion of ecosystem services, federal agencies will need to continue to build out and provide support for this essential informational infrastructure.

Authors: Lydia Olander, Gregory W. Characklis, Patrick Comer, Micah Effron, John Gunn, Tom Holmes, Robert Johnston, James Kagan, William Lehman, John Loomis, Timon McPhearson, Anne Neale, Lauren Patterson, Leslie Richardson, Martin Ross, David Saah, Samantha Sifleet, Keith Stockmann, Dean Urban, Lisa Wainger, Robert Winthrop, and David Yoskowitz

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Ecosystem Services

National Ecosystem Services Partnership

Working Papers

Conservation Finance and Impact Investing for U.S. Water

The 2016 Aspen-Nicholas Water Forum focused on the shifting role of public and private financing for water infrastructure and the new universe of innovative financing solutions to create impacts in the water sector, including how impact investing can hold the multiple roles of bridging the ever growing funding gap for infrastructure, improve water use efficiencies, and protect water resources while at the same time making a financial profit. Among the forum report's key findings: 1) Business as usual is not sustainable—we as a society are now paying for the “can-kicking” that has occurred while we debated responsibility for U.S. water resources; 2) The water issues we face as a nation continue to grow as the water community dithers and invests in one-off projects, rather than focusing on scaled solutions like regionalization and integration; 3) Money is not the issue; there is plenty of private capital available to meet the current water funding gap, but there are significant barriers to impactful and innovative financing; 4) Government regulation and public education can go hand in hand to gain public support for improved water management while supporting social equity; and 5) Leadership is one of the prime movers for innovative finance projects in the water space.

Authors: Lauren Patterson, Martin Doyle, and Nicole Buckley

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Aspen-Nicholas Institute Water Forum

Water Policy

Environmental Economics

Reports

Coral Reefs and People in a High CO2 World: Where Can Science Make a Difference to People?

Increasing levels of carbon dioxide in the atmosphere put shallow, warm-water coral reef ecosystems, and the people who depend upon them at risk from two key global environmental stresses: 1) elevated sea surface temperature that can cause coral bleaching and related mortality, and 2) ocean acidification. These rising CO2 levels may affect most of the world’s coral reefs and the populations which depend on them by 2050, according to a study the journal PLOS ONE. The study projects that countries in western Oceania would be amongst the first affected by CO2-driven coral reef stress, followed by Southeast Asian countries in the Coral Triangle such as Indonesia, which are highly dependent on coral reefs. Countries predicted to be most likely to experience severe ocean acidification are generally different from those predicted to experience the earliest onset of coral bleaching, with acidification projected to be worse for countries at the upper and lower latitudinal bounds of coral reef distribution such as Baja California (Mexico), Japan, China, and southern Australia. Unfortunately, many of the countries that are most dependent upon coral reefs are also the countries for which data are least robust, and the authors note that international and regional efforts will be needed to overcome obstacles to obtaining good data globally.

Authors: Linwood Pendleton, Adrien Comte, Chris Langdon, Julia A. Ekstrom, Sarah R. Cooley, Lisa Suatoni, Michael W. Beck, Luke M. Brander, Lauretta Burke, Josh E. Cinner, Carolyn Doherty, Peter E. T. Edwards, Dwight Gledhill, Li-Qing Jiang, Ruben J. van Hooidonk, Louise Teh, George G. Waldbusser, and Jessica Ritter

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Climate and Energy

Ocean and Coastal Policy

Ecosystem Services

Journal Articles

Ecosystem Service Concepts in Practice

Economists have long embraced the idea that services provided by nature have inherent economic value. Ecologists, other scientists, and many in the environmental advocacy community have more recently come to focus on the connection between natural systems and economic value. The broadening interest in the economic value of nature over the last two decades led to the emergence of the interrelated and now commonly used terms ecosystem services and natural capital. To inform Canadian policy, this article in a special issue of the journal Canadian Public Policy discusses some of the efforts that have been enacted elsewhere, with particular emphasis on those in the United States, and why some have been more successful than others.

Author: Brian C. Murray

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Climate and Energy

Ecosystem Services

Environmental Economics

Journal Articles

Toward a Strategic Action Roadmap on Oceans and Climate: 2016 to 2021

This comprehensive set of policy recommendations on oceans and climate for consideration at the United Nations Framework Convention on Climate Change 22nd Conference of the Parties and beyond is aimed at recognizing the central role of oceans in climate and the need to implement stringent reductions in greenhouse gas emissions to avoid disastrous consequences for coastal and island communities, marine ecosystems, and ocean chemistry. The recommendations from the International Expert Working Group on Oceans and Climate address mitigation, adaptation, displacement, financing, and capacity development.With respect to mitigation, the authors recommend implementing “blue carbon” policies, reducing carbon emissions from ships, developing ocean-based renewable energy, and considering (long-term/no-harm) ocean-based carbon capture and storage. They also encourage all nations to reduce carbon emissions so that the Paris Agreement to limit emissions to well below 2 degrees Celsius can be achieved. With respect to adaptation, the authors recommend implementing ecosystem-based adaptation strategies through integrated coastal and ocean management institutions at national, regional, and local levels to reduce the vulnerability of coastal/ocean ecosystems and human settlements and to build the management capacity, preparedness, resilience, and adaptive capacities of coastal and island communities. With respect to displacement of coastal and island populations as a result of climate change, they recommend international law changes to clarify definitions, rights, and procedures for climate-induced refugees and migrants, including development and implementation of appropriate financing measures. With respect to financing adaptation and mitigation efforts, they recommend directing a significant portion of the current climate funds to coastal and SIDS issues and developing supplementary financing to support adaptation and mitigation methods through innovative approaches and partnerships. Finally, with respect to capacity development, they recommend building up knowledge, tools, and scientific and political expertise to empower people to implement mitigation and adaptation measures, to increase adaptive management capacity, to create early warning systems, and to institute disaster risk reduction. They also recommend developing knowledge management mechanisms to share knowledge among all countries.

Authors: IBiliana Cicin-Sain, Julian Bariere, Hiroshi Terashima, Carol Turley, Rapahael Bille, Dorothee Herr, John Virdin, Meredith Kurz, Janot Mendler de Suarez, Miriam Balgos, Vinicius Lindoso, Kirsten Isensee, Tibor Vegh, Miko Maekawa, Edmund Hughes, Fredrik Haag, Edward Kleverlaan, Glen Wright, Kathy Baughman McLeod, Mike Donoghue, Warren Lee Long, Cassandra de Young, Lisa Levin, Natalya Gallo, Magdalena Muir, Tundi Agardy, Christophe Lefebvre, Doug Woodring, Philippe Vallette, Manuel Cira, Erica Wales, Ujwala Ramakrishna, Julie Steinberg, Meghan Rowe, Richard Bowers, Michael Burt, and Kateryna Wowk

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Blue Carbon

Ocean and Coastal Policy

Reports

The Paris Agreement and Beyond: International Climate Change Policy Post 2020

While the Paris Agreement sets forth an innovative and potentially effective policy architecture, a great deal remains to be done to elaborate the accord—to formulate the many rules and guidelines required and to specify more precise means of implementation. Governments, other stakeholders, and researchers also need to think about constraints on the effectiveness of the Paris Agreement—and identify organizations and processes that could complement the Paris Agreement and the United Nations Framework Convention on Climate Change process more broadly. In July 2016, the Harvard Project on Climate Agreements hosted a research workshop at the Harvard Kennedy School, the purpose of which was to identify options for elaborating and implementing the Paris Agreement—and to identify policies and institutions that might complement or supplement the Paris-Agreement regime. Participants, which included Nicholas Institute researchers Brian Murray and Billy Pizer, subsequently prepared the briefs that are included in this volume, based largely on their presentations at the workshop, addressing opportunities for—and challenges to—elaborating, implementing, and complementing the Paris Agreement. 

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Climate and Energy

Environmental Economics

Reports

North American Climate Policy Forum: Exploring Cooperation between Canada, the U.S., and Mexico, June 22–23, 2016—Post-Conference Discussion and Summary Report

Canada, the United States, and Mexico have begun to recognize opportunities for harmonization on climate change policy as a way to decrease costs and increase the efficiency of actions to address climate change and to help all three countries achieve their greenhouse gas (GHG) emissions reduction goals pledged under the 2015 Paris Agreement. Although significant progress has been made at the sub-national level on climate policy innovation in North America, more work is needed to understand how increased coordination on climate change policies in North America could address concerns such as competitiveness, emissions leakage, and policy consistency in the region. To begin the conversation on the potential for and impacts of climate policy harmonization in North America, The University of Ottawa’s Sustainable Prosperity (now Smart Prosperity Institute) and Duke University organized the first annual North American Climate Policy (NACP) Forum, June 23-24, 2016, in Ottawa, Canada. The forum brought together prominent climate policy makers, business leaders, and researchers to discuss policy options to mitigate climate change and stimulate innovation for low-carbon technology solutions, to initiate conversation about whether climate goals and policies could and should be harmonized across the region, and to highlight the potential challenges and advantages of such harmonization ahead of the 2016 North American Leader’s Summit, also in Ottawa, where joint energy and climate change policy goals were announced by Prime Minister of Canada Justin Trudeau, President of the United States Barack Obama, and President of Mexico Enrique Peña Nieto. This report presents an overview of how existing regulatory approaches to climate change as well as recently announced joint emissions reduction targets lay the groundwork for climate policy harmonization. It then describes four issue areas that present potential opportunities and challenges for climate policy harmonization: alignment with trade policy, carbon pricing, clean innovation policy, and climate change adaptation policies. For each area, it reviews relevant insights from discussion at the forum, occasionally expanding on them by drawing on relevant literature. The report concludes with opportunities for future research that can further illuminate the issues raised at the conference and in the literature.

Authors: Emily Pechar, Mercedes Marcano, Acacia Paton-Young, Brian Murray, and Geoff McCarney

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Climate and Energy

Environmental Economics

Reports

Benefits, Costs, and Distributional Impacts of a Groundwater Trading Program in the Diamond Valley, Nevada

In Nevada’s Diamond Valley, unsustainable groundwater pumping has decreased the aquifer’s water level, raising irrigators’ pumping costs and threatening the viability of existing wells and springs. Continued extraction in excess of natural recharge will trigger a legally required curtailment of water rights in the valley, which was recently declared a critical management area (CMA). The extent of rights curtailment is not mandated, but it could be as high as 64%, the amount required to reach the estimated natural recharge rate. The default policy for curtailment of water rights will occur according to the principle of prior appropriation, whereby rights are revoked in reverse order of their date of issuance. Rights granted most recently will be canceled first, and the revocation will proceed in order of increasing seniority until the government’s desired level of total water extraction is reached. Nevada law requires this intervention to occur within 10 years of the CMA declaration. By law, irrigators and other stakeholders can propose alternative policies for reducing groundwater over-extraction. Because sudden rights curtailment could have detrimental economic impacts, such policies are under discussion. This report analyzes the economic outcomes of sudden and alternative curtailment policies. Using a hydro-economic model tailored to conditions in the region to examine alternative extraction scenarios, the analysis finds that, with no action, the depth to the water table will exceed 200 feet by 2045; with policy action, aquifer levels can be stabilized at 170–180 feet and at higher depths with more gradual curtailment. Across all policy scenarios, net agricultural profit is lowest under the default curtailment policy, and it increases with more gradual curtailment. Under curtailment, allowing parties to trade rights to extract water modestly increases economic benefits relative to no-trade alternatives.

Authors: Harrison Zeff, Greg Characklis, Marc Jeuland, David Kaczan, Brian Murray, and Katie Locklier

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Western

Water Policy

Reports

Increasing Emissions Certainty under a Carbon Tax

To reduce greenhouse gas emissions, some groups have proposed that the United States consider use of a carbon tax. But whether the nation will achieve a specific emissions goal is uncertain because the economy’s response to such a tax is uncertain. Ultimately, there is an underlying tradeoff between certainty about emissions and certainty about prices and costs. To reduce uncertainty about whether a tax will achieve specific emissions goals, additional mitigation measures could be called on if emissions exceed those goals by a given amount. However, such additional measures introduce uncertainty about costs. At the extreme, a commitment to achieve emissions targets at all costs would imply that costs could be quite high. Discussions of policy mechanisms to increase price and cost certainty under several current cap-and-trade programs confronted this same dilemma: how much uncertainty about emissions outcomes is acceptable given reciprocal uncertainty about costs? Viewed through a slightly different lens, mechanisms that balance emissions and cost uncertainty can be viewed as a way to structure a more careful compromise between economic and environmental interests. This policy brief discusses mechanisms that could increase emissions certainty under a carbon tax. It draws from recent discussions between the authors and other policy experts, and its goal is to introduce ideas for further exploration. It begins with a discussion of how to measure emissions performance, or what it means to be achieving or not achieving an emissions goal. This performance would presumably provide the basis for pursuing remedial mechanisms. Next, the brief turns to a taxonomy of such mechanisms and the challenges and opportunities of each. It discusses ideas for initiating these mechanisms, either through some automated or discretionary procedure. The brief concludes with areas for additional research. The brief intentionally raises more questions than it answers—questions will be important to explore in ways that can provide guidance to policy decisions and design.

Authors: Brian Murray, William A. Pizer, and Christina Reichert

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Carbon Tax

Climate and Energy

Environmental Economics

Policy Briefs

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