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Teaming with Life: Introduction Page

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Cover  Introduction   Section I   Section II   Section III   Section IV   Section V


Biodiversity and Ecosystems are Natural Capital Assets

The tremendous natural wealth with which the United States has been endowed contributes greatly to its strength and prosperity and remains the foundation for the well-being of current and future citizens. This wealth exists in the form of fertile land, abundant fresh water, a diversity of biological species adapted to many different ecological habitats, productive forests, fisheries and grasslands, and favorable climatic conditions. From these, society derives an array of important life support goods and services, including medicine, clothing, shelter, agricultural products, seafood, timber, clean air and water, and flood control. The natural wealth from which these goods and services arise is a capital asset of enormous magnitude. The value of this natural capital has yet to be established in formal economic terms, but the goods and services that flow from it are worth hundreds of billions of dollars per year to the United States' economy. As with any such asset, if our natural capital is properly managed, it can yield a sustained flow of benefits for future generations.

With industrialization and the development of modern technologies, the human species has emerged as the dominant force on the planet. We have wrought massive changes that rival or exceed those caused by natural biological and geological processes. While human impacts were once local and reversible, they are increasingly becoming global and much less reversible. The collective activities of American society are changing the chemistry of land, water, and atmosphere far more dramatically than are natural processes. It is already apparent that some of these changes are adversely affecting our natural capital and its ability to support us sustainably.

Collectively, all human beings, including Americans, are playing a crucial role in the sixth major extinction event to occur in the course of more than three billion years of life on Earth, and the first in the past 65 million years. Species are being driven to extinction thousands of times faster than new ones can evolve. During the history of the United States, more than 500 of its known species have been eliminated (half of these since 1980) by various causes, including destruction of habitat by human activities or invasive species. Each of these species was associated with dozens of additional, mostly unnamed and unstudied, species that were wholly or partially dependent on it, so that the actual number of life forms lost is much greater.

Past and current usage practices have disturbed ecosystems and threatened ecosystem services. For example, urban and suburban development of watersheds has been detrimental to natural water purification by ecosystems at a time when human populations are growing and needing more water. Overuse of and excess application of chemicals to soils have disrupted natural processes. Habitat loss, air pollution and chemical pesticides have reduced populations of natural pollinators and natural control agents for agricultural pests. Overfishing and agricultural runoff have diminished marine biodiversity and increased the frequency of toxic algal blooms that cause poisoning of economically valuable fish and shellfish. And, chemical byproducts from human activities are damaging the stratospheric ozone layer that shields Earth's surface from ultraviolet radiation. Fortunately, these trends can still be reversed. However, we need to know more than we do, and properly apply what we do know, in order to make that reversal possible.

The dramatic deterioration of the natural capital of the United States already has had major economic and social consequences (see Box 1). These consequences are only just now being recognized. For example, land-use changes have seriously compromised the effectiveness of natural water purification processes, which in turn has imposed massive capital costs on many communities. More than one-third of our agricultural soils have been lost to erosion and unsustainable agricultural practices. Decimation of pollinating insects has imposed large costs on agriculture. Deterioration of wetlands and other natural aspects of drainages has left communities vulnerable to flooding and mud slides that destroy homes and disrupt utility, communication, transport and other services and infrastructure. Population explosions of harmful algae have destroyed or seriously impaired fisheries and recreational opportunities and created human health hazards. Invasive species such as killer bees, zebra mussels, fire ants, and the Mediterranean fruit fly annually cause billions of dollars of damage to agricultural and natural systems, pose threats to the health of our human population, and seriously affect populations of native species.

Without far-reaching changes in the quality of our stewardship of our natural assets, problems of this sort will escalate in both number and intensity as human populations and consumption of goods and services increase. Worse, solutions to and mitigation of these problems will become more difficult and costly to implement. The tradeoffs that individuals and society face in the course of pursuing the basic material ingredients of well-being will become more vexing, in both ethical and practical dimensions, as resource scarcity and growing waste increasingly constrain our options. The wise resolution of these tradeoffs requires explicit recognition of the costs as well as the benefits of the use of natural capital assets, so that an economically and socially optimal strategy can be devised.

We envision a new framework for managing the biodiversity and ecosystem assets of the United States. Under this framework, economic development efforts would be refocused in explicit recognition that a very large percentage of our economy is completely dependent on natural capital. This recognition would require new means of determining the economic value of biodiversity and ecosystems, and using these values to develop economic incentives for good ecosystem management and responsible stewardship of the Nation's natural capital. We believe this framework would be economically profitable, socially acceptable, scientifically sound, politically feasible, and environmentally sustainable.

Putting this framework in place requires taxonomic, ecological, economic and sociological understanding that we do not now possess. In this report, we recommend investments in biological, economic, and information science research to gain that understanding so that future generations of Americans can enjoy lives as bountiful as those we enjoy today. The Recommendations are presented in the main body of the report, and concern:

• integrating up-to-date knowledge into management, use, and conservation of biodiversity and ecosystems;

• searching out America's biological species, their genetic properties, and their interrelationships;

• exploring fundamental ecological principles, which, when understood, can help us to improve monitoring of ecosystem status, better predict and mitigate change, and optimize sustainable productivity;

• designing new mechanisms for economic assessment of natural capital and creating incentives to conserve it in order to encourage a realistic relationship between economy and environment;

• applying leading-edge information science and technologies to electronically organize, interlink, and deliver biological information for use by all sectors of society, and

• educating Americans about the economic importance of biodiversity and ecosystems and the need to protect our natural capital.

The remainder of this Introduction provides the philosophical background for our recommendations for developing a more realistic and sustainable relationship among society, the economy, and the biosphere—in short, teaming with life to keep Earth teeming with life.

Box 1: The New York City Watershed

Problem: The Cost of Replacing a Watershed - $8 billion!

New York City has traditionally been famed for its clean water, which Consumer Reports once ranked among the best in the Nation. New York's water, which originates in the Catskills Mountains, was once bottled and sold throughout the Northeast. In recent years, the Catskill's natural ecological purification system has been overwhelmed by sewage and agricultural runoff, and water quality has dropped below EPA standards. This prompted the New York City administration to investigate the cost of replacing the natural system with an artificial filtration plant. The estimated pricetag for this installation was $6 to 8 billion in capital costs, plus annual operating costs of $300 million—a high price to pay for what once could be obtained for free.

Solution: Harnessing Market Forces for Environmental Preservation This high cost prompted further investigation, which showed that the costs of restoring the integrity of the watershed's natural purification services— about $1 billion—would be a small fraction of the cost of the filtration plant.

Thus, New York City faced a choice: invest $6-8 billion in physical capital, or $1 billion in natural capital. The latter is the course that the city adopted. In 1997 it raised an Environmental Bond Issue, and is currently using the funds to purchase and halt development on land in the watershed, to compensate land owners for restrictions on private development, and to subsidize the improvement of septic systems.

In this case, a financial mechanism has been implemented to capture some of the economic and public health values of a natural capital asset (the Catskills watershed) and distribute these values to those with stewardship responsibilities for the natural asset and its services. Note that these calculations consider only a lower-bound estimate of the value of water purification services. However, the decision to conserve the Catskills ecosystem for water purification will also confer protection on other valuable services, such as flood control and carbon sequestration. This sort of financial mechanism could be extended to other geographic locations and other ecosystem services that would benefit municipalities and habitats throughout the Nation.

The Economic Value of Biodiversity and Ecosystems

The harvest and trade of products from biodiversity represent important and familiar parts of both the United States' and the global economy. The importance of the preservation of biodiversity to human economies has been explicitly recognized by more than 170 nations that had ratified the Convention on Biodiversity as of June, 1997. These nations recognize that biodiversity on one side of the globe can affect someone on the other side of the world, that the natural heritage of any nation is held in trust for all peoples, and that the management of that biodiversity is a matter for global discussion. The public and private sectors of these nations are full participants in the management of benefits derived from biodiversity and in the conservation of biodiversity for the future. At present, the United States is not a full participant in the discussions, nor in the management and conservation of global biodiversity, because it has not ratified the Convention. Neither the best interests of present and future Americans nor those of America's private sector industries that depend on biodiversity products are being served by our delay in ratification. This situation should be rectified immediately.

The Convention explicitly recognizes that economic goods are derived from the diversity of species that exist on Earth.

Examples of these economic goods include:  

Agriculture. Extractions from wild species in biodiversity's "genetic library" account for approximately 50% of annual increases in crop productivity accomplished by biotechnological and agricultural research and development. At present, just over 100 plant species directly or indirectly contribute 90% of the global human food supply, with only three — rice, corn, and wheat — supplying 60%, but thousands of plant species are cultivated or consumed from the wild somewhere on Earth. Some of these may be more nutritious or better suited to certain wide-spread growing conditions than are species currently widely cultivated.

Fisheries. The annual ocean fish catch is worth $2.5 billion to the US economy, and $82 billion worldwide, yet fisheries are being depleted everywhere because of poor management of the stocks.

Forest goods. Products from natural and managed forests include timber, fuel wood, game, fruits, nuts, mushrooms, honey, other foods and spices, and diverse natural products (e.g., gums and exudates, resins, dyes, waxes, insecticides) that serve as inputs to a wide array of chemical and biochemical industries. These wild products contribute between $3 and $8 billion per year to the US (between $84 and $90 billion globally).

Pharmaceuticals. Nine of the top ten prescription drugs used in the US are based on natural compounds from plants, fungi, animals, and microorganisms. Thus, nine of the top ten drugs in this list are based on the products of biodiversity. In the US, the commercial value of pharmaceuticals exceeds $36 billion annually. Globally, about 80% of the human population relies on traditional medical systems, and about 85% of traditional medicine involves the use of plant extracts. Over-the-counter plant-based drugs have an estimated market value of $20 billion per year in the US and $84 billion worldwide.

Medical research tools. Research on natural products also leads to basic scientific breakthroughs that may not lead directly to a pharmaceutical product, but may nonetheless have profound importance in biomedicine (e.g., the basis for protease inhibitors that are now used to treat HIV). Biodiversity also provides useful tools and models for research (e.g., neurotoxins from the skin of tropical frogs, bioassays for toxins or antibiotic properties that utilize small mammals or microorganisms, mechanisms for tumor suppression possessed by sharks), and indicators of environmental quality (e.g., egg shell thinning in raptors resulting from excessive use of DDT, fish die-offs from population explosions of marine algae).

Nature travel, horticulture and pets. The beauty of nature and the enjoyment that humans obtain from interactions with other species are intangible but very real components of the fulfilled human experience. A breath of clear Rocky Mountain air scented by conifers on a glistening day in December, the joys of beachcombing for shells, the thrill of a chance encounter with an octopus while snorkeling are all of enormous value. In fact, "ecotourism" is worth approximately $100 billion per year within the United States alone (estimate by the World Wildlife Fund, 1997). The horticultural trade in orchids, bromeliads, cacti, and all those plants used in landscaping and gardening is worth hundreds of millions per year because of the enjoyment humans derive from being surrounded by the beauty of biodiversity. Interactions with dogs, cats, parrots and other animals has been shown to be beneficial for the elderly, children with debilitating diseases, and persons with depression. Indeed, many Americans enjoy the companionship of pets throughout their lives.

Biodiversity exists within ecosystems. An ecosystem is a fundamental unit of nature that includes living organisms and their non-living environment. One of the important factors in the maintenance of healthy ecosystem functioning is the maintenance of the diversity of species that participate in the system; the most effective way to maintain a single species or all of biodiversity is to guard the integrity of the interactions that form the ecosystem as a whole. The organisms obtain life-support benefits from their ecosystem interactions. This is no less true of human society.

We take "ecosystem services" for granted, but we should be paying close attention to the maintenance of the ecosystems from which those services come (see Box 1).

Examples of ecosystem services include:

Pollination: The agricultural value of pollinator service by insects is estimated to be $40 billion per year in the US alone. One-third of all human food is produced by the 70% of crop plant species that require animal pollinators to produce seed. Despite their enormous value, thousands of pollinating insect species are threatened on a wide scale by pollution and the use of chemical pesticides.

Seed dispersal: Attempts to restore vegetation on degraded lands are often hampered by the absence of natural seed dispersers. Human-facilitated dispersal is expensive, time consuming, cost-inefficient, and may not even succeed. Without thousands of animal species (primarily birds, rodents and insects) providing seed dispersal services, many plant species would fail to reproduce successfully because their seeds will not germinate or grow to maturity if they fall only in the shadow of the parent plant. For instance, the whitebark pine, a tree found in the Rockies and the Sierra Nevada - Cascade Mountains, cannot reproduce without the services of a bird called Clark's nutcracker, which chisels pine seeds out of tightly closed cones and disperses and buries them.

Grazing: Grasslands support animals used for labor (e.g., horses, mules, asses, camels, and bullocks) and those (domesticated or wild) whose parts or products are consumed (such as meat, milk, wool, and leather). Grasslands are also the original source of most domesticated animals and crops.

Fisheries protection: Coastal wetlands and mangrove swamps protect inland areas from storm surges and saltwater intrusion, provide habitat for many species including the eggs and larvae of commercially important ocean fish, and buffer open waters from many land-derived pollutants.

Removal and storage of atmospheric carbon dioxide: More than half of the carbon dioxide produced by the combustion of fossil fuel does not accumulate in the atmosphere, but is removed and returned to nature. Proper management of forests, including reforestation, and new agricultural practices can significantly increase this carbon dioxide removal and storage service. Research suggests that this service is provided best by ecosystems with high biodiversity.

Flood control: Every year, about 6 x 1025 cubic feet of water fall as rain onto the Earth's land surfaces. Soils soak up much of this water and gradually meter it out to plant roots or into aquifers and surface streams. Living vegetation—with its deep roots and above-ground evaporating surface—serves as a giant pump, returning water from the ground to the atmosphere. If this pump is missing or lowered in volume, stream flow increases, sometimes to disastrous levels. Experimental clearing of a New Hampshire forest led to 40% higher average stream flow; during one 4-month period of the experiment, runoff was more than five times greater than before. A study conducted by the non-governmental organization American Forests, using engineering formulas developed by the Natural Resource Conservation Service, found that a 20% loss of trees and other vegetation in the Atlanta metropolitan region produced an increase in stormwater runoff of 4.4 billion cubic feet. At $0.50 per square foot, it would cost at least $2 billion to build containment facilities capable of controlling this water.


Values of Species Diversity
The species that comprise the crops and livestock of US agriculture contribute an estimated $57 billion annually to our economy ($325 billion worldwide), species that are hunted $12 billion ($25 billion worldwide), and species that provide wood products yet another $8 billion ($84 billion worldwide). Protecting these large segments of our economy means protecting the non-cultivated species to which crop and livestock species are related because with genetic engineering, helpful traits in these wild relatives may be transferred to the crop species. Successful protection of these relatives requires the maintenance of well-functioning ecosystems. The following examples illustrate how non-cultivated relatives of crop species can be of significant importance.

Rice growing in the US is worth $1 billion annually. One-fifth of the yield of this crop is attributable to relatively recent genetic infusions from wild sources. And, yield increase is not the only advantage to be gained from wild diversity: In the early 1970s, a virus called "grassy stunt" posed a major threat to Asia's rice production: it was expected to destroy 30% to 40% of the crop, which would have brought great hardship and economic loss, and placed huge demands on the food supply of the rest of the world, including the US. The threat was avoided by introducing an immunity-conveying gene from a wild strain of rice into commercial varieties. It is important to note that the beneficial wild strain of rice was originally found in a valley that was soon thereafter submerged by a hydroelectric dam.

Corn (Zea mays) crop value worldwide is about $60 billion per year. Most of the commercial varieties in use are susceptible to seven main types of viral diseases. In fact, in the 1970s, a viral outbreak caused $2 billion in damage to US agriculture. However, a very local wild Mexican species closely related to cultivated corn, Zea diploperennis, possesses genes for resistance to several of these viral diseases. Commercial strains of virus-resistant cultivated corn, with resistance from Zea diploperennis, can be developed by transferring its resistance genes into Zea mays.

Wheat also benefits from germplasm introductions from wild relatives, although the existence of wild strains is threatened by human activities in wheat's native range in the Middle East. Current collections of wheat germplasm are probably inadequate to meet coming environmental challenges.

Because wheat, corn, rice, and other staple crops (e.g., soybeans) are immensely more abundant now than at any time in their evolutionary history, and because they are grown in monocultures, they are highly susceptible to the evolution or invasion of new crop diseases. The loss of one of the major grains to such a disease would destabilize the economy; the loss of two or more would be catastrophic. A principal defense against such loss is the preservation of maximal genetic and species diversity among these crops and their wild relatives.

Values of Genetic Diversity

The biotechnology industry and much of biomedical and biological research and development depends directly on products derived from studies of biodiversity. In particular, the ability to manipulate genes emerged from surveys of the properties of enzymes found in different species of bacteria. The commercial production of these enzymes and related products obtained from hundreds of bacterial species has been one of the factors contributing to the tremendous growth of knowledge in molecular biology during the past two decades. Studies of certain of these enzymes have already led to the development of new methods for medical and forensic diagnosis. It is anticipated that the future will bring the development of "gene chips" that will profoundly enhance our ability to diagnose human and animal diseases. It seems likely that as we progress toward the use of more environmentally benign technologies for chemical production and biomass utilization, many additional uses will be found for the enzymatic diversity represented in the natural world.

Agricultural biotechnology is in its infancy. However, based on thousands of field trials of genetically modified plants during the past five years, it seems apparent that many improvements in crop and forest species can be expected. It is anticipated that the US market for seeds of genetically modified crops will grow to $6.5 billion during the next ten years and the annual production value of the plants derived from those seeds will be many times that amount. Most conceivable applications of biotechnology in this sector depend upon manipulation of genes that exhibit significant intraspecies variation. For example, it will become possible to enhance tolerance of crop species to many abiotic stresses by transferring genes for traits such as cold tolerance or salt tolerance from non-crop species. There is also a possibility of accelerating the domestication of potential crop plant species by using directed genetic methods to alter traits that are currently impediments to widespread utilization, such as the presence of toxic constituents or architectural features such as pod shattering. Interestingly, many of the wild species with desirable characteristics are native to countries other than the United States. Access to these resources for US agricultural biotechnology companies would be enhanced if the US ratifies the Convention on Biological Diversity.

With the ability to transfer genes from one unrelated kind of organism to another, first achieved successfully in 1973, the genetic dimension of biodiversity assumed greatly increased commercial value. Transgenic plants, animals, fungi, and microorganisms may gain key importance in carrying out sustainable development. However, beneficial genes will continue to exist only as long as the species that carry them continue to thrive on Earth. For all practical purposes, genetically modified organisms can be produced only by combining thorough knowledge of the genetic composition of species at the level that is now being attained through genome sequencing projects with detailed knowledge of the relationship between these sequences and specific desirable characteristics of the organisms. Many useful genes have been identified in recent years from plants or other organisms that have never previously been useful to humans. It is essential that we preserve all species without regard to their immediately known utility, because it is now, and increasingly will be in the future, possible to discover as yet unknown beneficial genes in previously unsuspected sources. To allow species to disappear now may be to deprive ourselves and future generations of unique biological and genetic resources of great value.

Values of Ecosystems

The ecosystem as a synergistic entity provides services, such as water purification, flood control, waste disposal through decomposition, detoxification, soil production, and so on. Though at present it is extremely difficult to pinpoint the value of such ecosystem services accurately, various reasonable total annual global estimates are in trillions of dollars; those for the US alone are in the hundreds of billions. One set of very conservative estimates of economic benefits of particular services includes the formation of arable soil ($62 billion per year in the US and $760 billion worldwide), biocontrol of crop and forest pests ($17 billion annually in the US and $160 billion worldwide), and bioremediation ($22.5 billion in the US and $121 billion worldwide). Microorganisms in natural ecosystems also fix nitrogen in forms usable by plants ($8 billion US, $90 billion worldwide), and forest and ocean ecosystems assist in mitigating the greenhouse effect by sequestering carbon dioxide ($6 billion US and $135 billion worldwide). Waste disposal, the breakdown of organic matter by those species within ecosystems known as decomposers, has been estimated to be worth $62 billion per year in the US ($760 billion worldwide). These estimates must be confirmed or corrected by the sort of research described later in this report, but they certainly indicate that such research is warranted, because the replacement of these services by artificial means is either impossible or prohibitively expensive.

Just as we improve and maintain transportation systems to avoid slowing the delivery of goods, we should restore and maintain ecosystems to ensure that the services we derive from them continue to flow. Just as the underlying capital value of human-constructed infrastructures is built into cost-benefit analyses for their maintenance, so the value of natural capital should be incorporated into calculations of the costs and benefits of uses that society proposes for its natural assets.  

Aesthetic Values of Biodiversity within Natural Ecosystems

The search for solitude or comfort as well as sustenance from natural surroundings is deeply imbedded in the human spirit. The ethical and religious beliefs of many cultures encompass a stewardship role that encourages protection of and reverence for natural surroundings. Religious texts from many traditions assume that all life on earth is interconnected, and assert that humans have the task of sustaining those connections. For example, Ezekiel 34 entreats: "Is it not enough for you to feed on good pasture? Must you also trample the rest of your pasture with your feet? Is it not enough for you to drink clear water? Must you also muddy the rest with your feet?"

Christians, in Jesus' parables, find rich and plentiful metaphors of the natural world as examples of right behavior. Catholic social teaching holds that "there is an order in the universe that must be respected, and... the human person, endowed with the capability of choosing freely, has a grave responsibility to preserve this order for the well-being of future generations." The Orthodox Church considers humankind to be stewards and not owners of material creation; it is imperative that humans display love and respect towards nature. Judaism affirms life, and with it creation as a whole. Humans are responsible for the active maintenance of all life, being commanded to respect nature and having a special position of responsibility towards it; the rich variety of nature (biodiversity), is to be cherished. The Koran emphasizes that, at the Last Judgment, the ways that people have cared for the Earth will be among the deeds that will determine their fate. Even in the most secular segments of our culture, it is widely recognized that we have an ethical responsibility to prevent extinctions of species.

Throughout history, humans have shown a strong curiosity about, and aesthetic attachment to, other species. That this connection to nature is important to people is revealed by numerous activities involving other species, notably gardening (even on highrise rooftops), petkeeping, wildlife and bird watching, the simple pleasure of walking in a woods, or watching the sun set over native prairie. It is impossible to place an objective economic value on this desire. At the same time, the aesthetic and emotional bond to other species has enormous economic consequences for many people. Worldwide, ecotourism and recreational enjoyment of the natural landscape and the species that inhabit it generates between $0.5 and $ 1 trillion a year. As noted above, within the US alone, these activities generate at least $100 billion per year.

Society and the Biosphere

Biodiversity, and ecosystem services, are worth trillions of dollars annually, but because they are usually not traded in markets, they typically carry no pricetags that could alert society to changes in their supply or to deterioration of the underlying ecological systems that generate them. These circumstances make it easy to take ecosystem services for granted and difficult to imagine that they could be disrupted beyond repair. Yet, escalating human impacts on natural ecosystems, now manifest in even the most remote parts of the planet, imperil the delivery of these services. Unchecked and unmitigated, these impacts will thereby impoverish and endanger our children and grandchildren.

There is a crucial need for policies, generated by government, business, and society at large, that can help prevent biodiversity loss and ecosystem deterioration, and preserve the natural capital that provides our economic prosperity. Such policies must resolve a daunting array of tradeoffs: Where should natural ecosystems be developed for farmland, housing, industry, or other human activities, and where should they be safeguarded for the valuable services that they deliver? What balance will best serve human needs, for present and future generations? Current understanding of ecosystem services is not complete, yet it is substantial, wide-reaching, and policy-relevant. As such, it can inform the resolution of these tradeoffs. The safeguarding of biodiversity and of ecosystem services will require that their economic and ecological value be explicitly incorporated into decision-making frameworks.

Over the long term, we cannot rely on directives and regulations to ensure conservation of America's living capital. Rather, it must be demonstrated to communities living within ecosystems, and to industries that generate their income from the benefits of ecosystem services, that conservation is in their own economic interests. This requires that ecologists, economists, planners and policy-makers devise ways of managing important ecosystems that can yield benefits to the local community while at the same time conserving integrity of the systems. It requires, in short, that economic development and environmental conservation be brought into a sustainable relationship. Investment in the design of new, efficient economic incentives and structures for determining how to safeguard ecosystem services will have tremendous payoffs.

The Challenges Ahead

There are economic, national security, and human physical and mental health consequences that follow from the manner in which our natural capital has been, is, and will be managed from this time forward. We are struggling today with the unfortunate consequences of the management practices of the past and present, which have not been adequate to the task. If we are to continue to benefit from America's abundant natural capital, we need to develop a new framework that integrates greater ecological understanding with a more realistic economic appreciation and societal perception of biodiversity and ecosystem services. Such a framework for sustainable management of natural capital is proposed below.  

These challenges include:

• Maintaining sufficient growth in agricultural productivity to meet the projected two to three-fold increase in global demand for food over coming decades;

• Finding means to mitigate the pressures on the waste absorption and detoxification services of natural ecosystems that are generated by use of fossil fuels, chemical fertilizers and pesticides, and other human activities;

• Restoring natural water purification services of ecosystems that are currently degraded by deforestation, draining of wetlands, and other activities that allow pollutants from agricultural, industrial and residential sources to move directly into water supplies;

• Discovering new species and their genetic capabilities to solve environmental problems and improve crops, health, and bioremediation;

• Mitigating the disruption of ecosystems caused by local or global climate change so that disease vectors living in those ecosystems do not threaten human health;

• Discerning the most efficient ways to preserve the Nation's biodiversity and the functioning of its ecosystems;

• Preserving recreational opportunities, including the simple enjoyment of natural areas and relatively undisturbed ecosystems rich in biodiversity that are at present threatened by pollution, urban sprawl, or intensive agriculture;

• Protecting national security from a number of threats that stem directly from effects of environmental degradation in various parts of the world (effects such as deterioration of human nutritional status, lack of safe drinking water, and energy scarcity):

• Well-being within US boundaries can be threatened by increased exposure to infectious diseases, which can rapidly spread from areas outside our borders.

• Resource scarcity and environmental deterioration abroad exacerbate tensions, which may lead to increased (and multiple) pressures for US intervention in violent conflicts.

Mass migration of peoples away from degraded areas can lead to significant social disruption.

• Achieving necessary cooperation from other nations to deal with Earth's environmental problems will require concerted efforts to reduce the global impacts of US consumption of products of biodiversity and of ecosystem services. With our prosperity comes an obligation to act responsibly, especially if we expect other nations to do the same.


Sustainable Management of Natural Capital

We offer a vision of a promising new framework for realigning the relationship between the environment and market economics. This framework would devise incentives to encourage the redirection of market forces so that they act to conserve rather than destroy ecosystem services. It would seek to illuminate profitable, efficient strategies for bringing the impacts of myriad human activities into balance with what Earth's life support systems can sustain. This framework calls for the establishment of new economic instruments and methods, and it will require assigning appropriate economic value to natural capital and the channeling of market forces based on that value.

To achieve this vision and implement the framework, it will be necessary for biologists to gain an appreciation of economics and interact with economists. And, economists will need to work with ecologists and other biologists to develop a new way of thinking about biodiversity and ecosystems. This will involve a concerted policy and funding effort to generate the new and deeply cooperative research effort that is needed. Together, biologists and economists must conduct research of several types:

• identification and characterization of natural capital assets and the processes that generate goods and services from those assets,

• improvement of on-the-ground management of natural capital that balances the ecological needs of the capital assets with the economic needs of society,

• economic assessment and accounting mechanisms for tracking the status of the assets and the supply of goods and services, and

• means for generating market incentives for conservation of capital to promote the flow of goods and services over the long term.


Identification and Characterization of Natural Capital

The safeguarding of vital biodiversity and ecosystem services based on their economic value requires that they first be identified. In comparison to record-keeping involving physical and financial capital, little formal accounting has been taken of the stocks of natural capital. At a variety of scales, from local communities to nations and the entire globe, an explicit cataloging of biodiversity and important ecosystem services is needed. For any given geographic location, it is also important to know which of these services are supplied locally, which are imported from elsewhere, and which are supplied globally.

In addition to knowing what services are delivered, how they are delivered, and how important they are (in economic or other terms), it is critical that society be able to track trends in the quality and rate of supply of goods and services from biodiversity and ecosystems, just as it tracks similar trends in its financial goods and services. Sustainable management of Earth's life support systems requires widespread, systematic monitoring of ecosystem services all over the world, with measurements taken at appropriate scales. Because not everything can be monitored, indicators of various sorts need to be developed, tested, and refined.

We need to develop a sound understanding of the ecosystem processes that yield natural goods and services, such as water-purification or generation of soil fertility, if society is to make a rational evaluation of the tradeoffs it faces as it pursues material prosperity. This includes an understanding of how ecosystem services are generated by biodiversity, how susceptible they are to human disruption, and how amenable they are to repair. A brief outline of some of the important questions that require further research before they can be answered effectively can be found in Box 2.

Box 2:
Some of the important questions about ecosystems and the services they provide:

  • What ecosystems provide which life support services?

• What are the relative impacts of alternative human activities upon the supply of services?

• What are the relationships between the quantity or quality of services and the condition (e.g., pristine vs. heavily modified) and spatial extent of the ecosystem supplying them? Where do critical thresholds lie?

• To what degree do ecosystem services depend upon the ecosystem being biodiverse (from the genetic to the landscape level)?

• How interdependent are the services? How does exploiting or damaging one influence the functioning of others?

• To what extent have various services already been impaired? How are impairment and risk of future impairment distributed geographically?

• To what extent, and over what time scale, are ecosystem services amenable to repair?

• How effectively, at how large a scale, and at what cost can existing or foreseeable human technology substitute for ecosystem services?

• Given the current state of technology and scale of the human enterprise, how much natural habitat and biodiversity are required to sustain the delivery of ecosystem services locally, regionally, and globally?

• Can we anticipate all the effects of perturbing a complex system and be alerted while there is still time to prevent serious consequences?

• How can ecosystems best be managed to preserve biodiversity and ecosystem resiliency?


Valuing and Accounting for Natural Capital as an Economic Asset

How can we measure the vital but largely unquantified values of natural capital and the goods and services that flow from it? No general, well-established methodology exists, and this is an area in which cross-disciplinary research is urgently needed. Possible methods of assessing economic value include calculations from:

  • Direct Market Value: Sometimes ecosystem services contribute directly to the production of something that does have an established market value, such as timber. Assigning the value of an output to the resources used in producing it requires understanding on two fronts, scientific and economic, and at present this understanding is likely to be missing.
  • Indirect Inference: Sometimes it is possible to infer from people's choices in other areas what value they place on an environmental attribute or service, even if there is no market for it or its products. A few approaches have been developed, but more and better ones are needed.
  • Contingent Value: Another means of estimating worth of services is to ask people directly what value they place on them (that is, to ask people what they are willing to pay to preserve certain types of environmental assets). There have been many such studies, but their utility is a matter of considerable argument, because of the value-laden nature of the questions.
  • Replacement Value: In the New York watershed example (Box 1), there was a well-defined cost to replacing the services of the Catskill ecosystems, namely the cost of engineering an artificial filtration plant, so that cost could be equated with the value of the ecosystem service. However, it is not always possible to apply this method.
We need new accounting systems that track both the biological status of ecosystem services and the measurement of their economic value. In particular, the national accounting system should incorporate both the usual measures of wealth (e.g., Gross National Product or Gross Domestic Product) and the long term environmental costs of unsustainable use of natural capital. Although research has begun to develop the mechanisms by which such a system of accounting could be implemented, we are far from having a satisfactory framework, and much additional research is needed. We also need national (or regional) ecological accounting systems in many respects parallel to our traditional national and regional economic accounting systems. The task of developing ecological accounting systems would be distinct from the task of modifying traditional economic accounting to include long term environmental costs.


Developing and Implementing a New Economic – Ecological Framework


The intelligent management of biological resources, both in the United States and throughout the world, requires a level of coordination that has been difficult to attain. Part of this report is devoted to an examination of some of the mechanisms that should be brought into play to achieve such coordination. Responsibility for the sustainable management of biodiversity in the US is distributed among a number of Federal agencies, and is also an important activity of state and local governments and of the private sector. Management for the overall good depends on continuing to improve coordination among the activities of these entities. We urge that such coordination be approached as a matter of high national priority.

Mechanisms that will promote rapid information flow from science into sound management decisions are an absolutely essential part of this coordination and the implementation of the recommendations of this Report. Information flow facilitates coordination among different entities. Also, data that are held by government agencies, museums, libraries and other institutions are needed for the various types of research that are recommended. In addition, educational institutions, industries, and the public must have access to available information on biodiversity and ecosystems. Mechanisms to promote this vital information flow include networks, computers, computer programs, data standards, and so on—the components of an information infrastructure. Thus, major portions of this report are concerned with strengthening the current National Biological Information Infrastructure (NBII), which is part of the National Information Infrastructure, and supporting the computing, networking and information science and computer science research that will result in the "next generation" of the NBII. Very modest investments will go far to increase the information content of the NBII as it is currently configured. Larger investments are needed to achieve a significant step forward in information management and manipulation. The "next generation" NBII would be possible very rapidly for an investment of $90 million per year, but can be achieved with $40 million per year for five years, followed by reasonable yearly expenditures for maintenance.

New results from scientific research in several biological fields (taxonomy and systematics, genetics, population biology, ecology and ecosystems), and in the social sciences and especially economics, are needed to provide a sound basis for conservation and sustainable use of the Nation's natural capital. Much of this research should be interdisciplinary, combining biological and socioeconomic efforts to develop economic incentives for all sectors of society to participate in conserving biodiversity and ecosystems. This report provides guidance as to the sorts of research that are needed and the means by which that research should be supported. Overall, support for research in the several areas discussed in this report (biodiversity cataloging, ecological pattern and process, economics, and the intersection among all of these) should be increased by 36% (a total of $138 million across a number of agencies). This investment will greatly increase knowledge of the biodiversity resources of the US, increase our grasp of ecosystem functioning and the means to restore it, and generate an understanding of the interaction of economics and ecology.

The results of the various research programs we recommend here, and information about environmental issues, should be shared with the American public. This information will be much more valuable if the populace understands the scientific approach to environmental issues. We recommend increasing support for agencies and institutions that provide scientifically centered informal environmental education and professional development for teachers, as well as the exploration (by another PCAST Panel, or a Presidential Commission) of mechanisms for improving the scientific basis for environmental education in the schools.

The approach we recommend weaves together insights from, and builds upon, the strengths of both the natural and the social sciences so that scientific knowledge, economic reality, and policy-making may be better integrated. Implementation of this approach will enable the United States to preserve and enhance its natural wealth, and to make the best use of that wealth in the long-term interests of its citizens. The measures we set out in this report are important for ensuring sustainable prosperity in the United States.

Cover  Introduction   Section I   Section II   Section III   Section IV   Section V

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