| Environmental Economics - Introduction
|Fishermen leaving boat in New Jersey
Credit: Edward Pastula,
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 , 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
(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
|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.