August 15, 2013 | Water in the West | Insights
A stream flowing through high-altitude grasslands in Ecuador. TNC is working through water funds to finance watershed protection in this area.
Photo: Bridget Besaw
Mark Tercek, president and CEO of The Nature Conservancy (TNC), spoke at the Commonwealth Club of Silicon Valley last Tuesday on how business and society can thrive by investing in nature. A tall and wiry former Goldman Sachs investment banker, Tercek acknowledged to a mostly white-haired crowd that writing about natural capital is very different than doing something about it.
What is natural capital? It’s the Earth’s lands, waters and their biodiversity. The stream of benefits flowing from natural capital to people is what we call “ecosystem services.”
TNC has been at the forefront among conservation organizations in “doing something” about natural capital and ecosystem services. In partnership with Stanford University, the World Wildlife Fund and the University of Minnesota, TNC created the Natural Capital Project (NatCap) to integrate ecosystem services into major decision-making using scientific tools that quantify, map and value services provided by nature.
One timely example: NatCap’s tools could help federal agencies consider ecosystem services when making decisions about water resources to meet the new Standards and Requirements discussed in an earlier post.
Source water protection is one area of ecosystem services that has garnered increasing interest. A healthy watershed minimizes water treatment costs. In 2000 TNC started working with the water utility in Quito, Ecuador, to help protect the watershed providing the city’s drinking water supply. Working with farmers and ranchers to change practices in the upper watershed – a “green” alternative, the water utility saved money it might have spent on water treatment equipment, or “gray” infrastructure.
The project worked so well that the Quito water utility started charging customers a fee to continue to fund watershed protection. Tercek says this partnership has served as a model for more than 25 Latin American water funds.
These water funds are now using NatCap’s tools to value ecosystem services when making watershed investment decisions.
In an example closer to home, the San Francisco Public Utility Commission’s Hetch Hetchy Reservoir, located within Yosemite National Park, provides naturally filtered water to Bay Area residents with such high purity that no filtration system is required (the water still goes through UV treatment and disinfection). By not having to filter Hetch Hetchy water, the commission is saving millions of dollars a year, as well as construction costs for such a system. To give you an idea of how much it would cost to construct a water filtration plant, New York City recently built one with a treatment capacity that is less than half of what Hetch Hetchy provides daily, at a cost of $2 billion.
In exchange for keeping the Hetch Hetchy watershed healthy, the commission currently provides a modest $5 million a year to Yosemite National Park for trail projects and public outreach and education.
Now that is a deal.
By Janny Choy