Puyallup River Watershed worth billions

"Nature doesn't respect our political boundaries…we have to come to terms with that," explained Rowan Schmidt of Earth Economics, a Tacoma based nonprofit devoted to researching the economic value of nature, and showing why it is a good investment. 

He was discussing the value of the Puyallup River Watershed, which has been estimated by Earth Economics to be worth billions of dollars in ecosystem services. A watershed is an area of land that drains all of its water into the same outlet. In the 1970s Washington defined roughly 62 watershed areas; Puyallup River's watershed contains about thirteen different land covers such as forests, wetlands, grasslands, rivers, and lakes. Each land cover offers a unique set of ecosystem services.

Ecosystem services are broken down into four categories: provisioning, regulating, supporting, and cultural; these categories encompass everything from food and climate stability to recreation and education.

In order to establish the value of these ecosystems Earth Economics combined previously conducted scholarly research with their own findings to give earth's resources a monetary value. For example, the forests of the Puyallup River basin alone provide on an annual basis, from $500 to $9000 per acre not only in timber, but in nonuse values such as habitat for salmon, flood protection, soil erosion control, and water filtration. Most businesses do not establish a value for nonuse ecosystems because they aren't tangible; you can't sell them and receive immediate profit, but research shows that a healthy ecosystem, such as a watershed can save companies hundreds of millions in water filtration structures, storm levees, and climate control.

One Seattle utility company has saved $200 million in filtration because of the watershed in that area, however the watershed is only valued as timber, so it counts for just $40 million on their books. With our current economic practices, these systems are so undervalued it is extremely difficult to invest in their upkeep and restoration, especially if there are loans involved.

If the Seattle utility company decided to restore more of the watershed by pulling out the logging roads that run through it, the cost would make it impossible, especially since the roads are seen as a bigger asset. Through cost benefit analysis Earth Economics is attempting to show businesses like these that the benefits of maintaining ecosystems outweigh the costs.

One recommendation Earth Economics has offered to remedy the problem of debilitating restoration costs is to change national accounting standards so that the value of natural capital will be able to compete with that of built capital.

In reality, natural capital is actually far more valuable than built capital because it appreciates where built capital depreciates; over hundreds of years, natural capital, which is for the most part self maintaining, will remain healthy and functioning, as built capital falls apart and deteriorates. The value of assets in our economy determines where investment money goes, and as society continues to value built resources over natural resources, nature, which provides the means for built resources, will become more and more scarce, devastating not only the economy, but the quality of human life as well.