BC Farm Project Attempts to Value Natural Capital

^ Ecological Services Initiative launches at Granville Island.

A significant flaw in our economic system is how natural capital is not assigned any direct monetary value. This means, for example, that while a wetland produces clean water and controls flooding, the only economic value is seen in converting it to agricultural or industrial use. However, the total value of benefits provided by ecosystems is actually considerable. In Natural Capital in BC’s Lower Mainland, a study produced by the David Suzuki Foundation for the Pacific Parklands Foundation, the total value of all benefits provided by the area’s natural capital was estimated at $5.4 billion annually or $2,462 per person.

When natural processes are taken into account in the formal economy, decisions and outcomes can be quite different. A landmark agreement in New York City in 1997 saw 165 stream miles in the Catskill/Delaware watershed protected to improve the quality of the city’s drinking water. The US Environmental Protection Agency (EPA) was about to mandate the City build a water treatment plant at a cost of up to $8 billion, with $250 million in annual operating expenses. However, by investing $1.5 billion in watershed protection, including paying farmers to remove sensitive lands from production, they were able to keep drinking water at a sufficient quality to avoid the need for a filtration facility.

In contrast, the smaller neighbouring Croton watershed was given up for development. Consequently, the EPA and the New York State Department of Health decreed that the City must filter this water by May 2012. Originally estimated at $800 million, the cost of the Croton Water Treatment Plant has ballooned to $3.4 billion since construction began in 2004.

Thanks to a new research consortium of farmers, ranchers, academics and conservationists, incorporating the value of natural capital in land use decisions is now being tested in BC. The Ecological Services Initiative will provide producers with financial incentives to adopt management practices that maintain or enhance the production of natural services, such as clean air and water, while growing our food. Participants will be compensated according to the land area they set aside and the loss of agricultural productivity. This will be to a maximum of $2,000 for measures such as erecting livestock fencing around sensitive areas, increasing the buffer zone between waterways and crops, planting trees to shade salmon spawning streams, or replanting native plant species to sustain indigenous wildlife.

ESI is endorsed by the BC Agriculture Council and the BC Cattlemen’s Association. It is funded by the Agriculture Environment and Wildlife Fund, BC Ministry of Agriculture, Columbia Basin Trust, Ducks Unlimited Canada, East Kootenay Conservation Fund, Sustainable Prosperity, and the University of Alberta’s Institute for Land Use Innovation. Thirteen demonstration farms and ranches, spanning a variety of different commodities and regions, are being monitored for biological and economic results. The viability of the concept will then be evaluated to see if a broader program with longer term application can be developed as a part of provincial agricultural policy.

~ RG

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