Valuing the Puget Sound Basin: Revealing our Best Investments

Abstract

Nature provides goods and services offering magnificent value and extraordinary investment opportunity. 14 goods and services provided by nature within the Puget Sound Basin provide benefits worth between $9.7 billion and $83 billion every year. This "natural capital" includes drinking water, food, wildlife, climate regulaKon, flood protecKon, recreaKon, aestheKc value and more. Valuing the asset that provides this annual flow of goods and services-that is, the natural capital of the Puget Sound Basin, as if it were a capital asset shows it would be valued between $305 billion and $2.6 trillion (at a 3% discount rate). This wide range in value should not be surprising. Every house or business appraisal has a range in potenKal values. Appraisers arbitrarily pick a number between these figures to provide to clients. By providing a range this report avoids that arbitrary single number selecKon. In addiKon, volaKlity in asset value is normal. Consider the value of Washington Mutual Bank, $306 billion in January 2008 yet it was sold for $1.3 billion in October 2008. The lower values provided in this study are really base values. Natural assets examined in this report, such as water, flood protecKon and recreaKon, are far more stable in value than many other economic assets. This study idenKfies 23 natural goods and services that provide value to people, businesses and government agencies. Of these, 14 were valued. These ecosystem services can also be mapped, showing the provisioning areas, beneficiaries and impairments to ecosystem services; values will be further refined when we are able to take full advantage of modeling systems currently under development (See page 76). Understanding the value ecosystem services provide, where these benefits are provided on the landscape, who benefits from them and where they are impaired sets up a sound scienKfic and economic basis for developing funding mechanisms to secure this vast value. Even at the low end of this esKmate the value of natural systems in the Puget Sound Basin is enormous. Yet this wealth is being lost. As the ecological health of the region deteriorates, benefits once provided for free and potenKally in perpetuity are deterioraKng or disappearing. As each ecosystem service is lost, residents, businesses and agencies suffer damage. To reduce damage, new expensive engineered infrastructure is developed to replace nature's lost and previously free services. Levees, stormwater systems, water filtraKon plants and other built capital all require maintenance, depreciate in value and require replacement every 40-60 years. The most efficient, least costly, sustainable and robust systems ofen require a combinaKon of 1 Natural systems in the Puget Sound basin, if valued as economic assets, would be worth between $305 billion and $2.6 trillion. natural and built capital. For example, the Cedar River watershed provides water (natural capital), while pipes (built capital) deliver the water to people's homes. This is not an either/or discussion, it is about how built and nat...