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Environmental Economics - Introduction
Fishermen leaving boat in New Jersey
Fishermen leaving boat in New Jersey
Credit: Edward Pastula, NOAA

The Damage Assessment, Remediation, and Restoration Program (DARRP) restores natural resources injured during an oil spill, release of hazardous materials, or vessel grounding to fully compensate the public for losses. DARRP uses a variety of economic and non-economic science-based methodologies to assess these natural resource injuries. This injury assessment process is based on the understanding that functioning ecosystems provide multiple ecosystem services that are critical to day-to-day activities on this planet. Impairing the ecosystem functions through contamination negatively impacts the provision of these ecosystem services.

What are Ecosystem Services?

Nature freely provides a range of services to humans. The Millennium Ecosystem Assessment Linking to a non-federal government web site.This link does not imply endorsement., a multi-stakeholder effort, explicitly focuses on benefits to humans (either direct or indirect) and has separated these services into four categories:

(1) supporting - supporting services provide the foundation for all ecosystem services and include processes such as nutrient cycling and primary production

(2) provisioning - provisioning services include those benefits humans receive from the products of ecosystems such as food, fresh water, and genetic resources

(3) regulating - waste treatment, mitigation of natural hazard impacts, and control of erosion are some examples of regulating services

(4) cultural - cultural services include those benefits received from nature through recreational activities like fishing and swimming, the value humans have for nature even in the absence of any actual use of the resource (passive or non-use values), aesthetic values of nature, and community and spiritual connections to natural resources

DARRP's assessment work quantifies the injuries across these categories of ecosystem services and determines the type and amount of compensatory restoration projects that will make the public whole for their losses. Although the Millennium Ecosystem Assessment focuses on the benefits people derive from ecosystems in their definition of ecosystem services, DARRP's definition instead focuses on services natural resources perform for people or for another resource. Both definitions aim to encompass those benefits people directly enjoy as a result of natural resources (e.g., food, fuel, timber, recreation) and those services that have more indirect linkages to people, but are nonetheless critical (e.g., nutrient cycling, soil formation).

Fishing at Cabrillo Pier, California
Fishing at Cabrillo Pier, California
Credit: John Cubit, NOAA

Ecosystem Service Flows

The public's loss of ecosystem services is demonstrated by Figure 1 below. The graph of the public's gains from restoration of ecosystem services is shown in Figure 2 below. A few definitions are important to understand these diagrams.

Figure 1. Ecosystem Service Flows at the Injured Site

Baseline ecosystem services (the dashed horizontal line in the both diagrams) represent the level of benefits provided to the public prior to the injury (in Figure 1) or the restoration (in Figure 2).  The distance between the two dashed vertical lines in Figure 1 is the time between the incident and natural recovery to baseline ecosystem services (the period of loss of services to the public). 

In Figure 1, the area noted as "A" represents the public's loss that occurs over time as services drop below baseline because of the injury from the incident until the natural resource returns to its baseline level of ecosystem services. This is generally referred to as the "interim loss" from the injury.

Figure 2. Ecosystem Service Flows at the Compensatory Restoration Site

In Figure 2, the area noted as "B" demonstrates the public's potential gains in ecosystem services from a compensatory restoration project (above the baseline level of services already existing at the selected restoration site). The vertical dashed lines indicate when compensatory restoration begins and the time of full natural recovery for reference.

The goal of DARRP's economic analyses is to determine the amount of restoration required so that the restoration gain (area B in Figure 2) equals the loss from the injury (area A in Figure 1). The compensation owed to the public can be defined either in dollars or the amount of species or habitat restoration required, depending on the restoration scaling tool used.

Click here for further information on the restoration scaling tools DARRP uses to move from natural resource injury to restoration.

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Revised: Wednesday, 13-Feb-2013
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