Assistant Professor, Natural Resources Management Program, Department of Environmental Science and Technology, University of Maryland
“With the combination of my nature experiences as a child and my more recent training as an industrial systems engineer I immediately appreciated the concept that nature had real values that ultimately form the basis for our economic wealth and prosperity.”
David Tilley is an Assistant Professor of Ecological Engineering in the newly formed Environmental Science & Technology Department at the University of Maryland (Go Terps!). David double majored in Industrial Engineering and Furniture Manufacturing and Management at North Carolina State University (Go Wolfpack!), but switched to Ecological Engineering after completing his Masters and Doctorate in the Environmental Engineering Sciences Department at the University of Florida (Go Gators!). After UF, David tested the academic profession as an assistant professor in the environmental engineering department at Texas A&M University—Kingsville (Go Javelinas!, not Aggies) for two years. While in Texas, David worked on several ecological engineering projects, including a constructed salt marsh for sustainable shrimp farming, ‘soft’ engineering of coastal shorelines, and biofiltration for air quality treatment. At Maryland David conducts ecological research in wetlands and pursues ecological modeling approaches to understand the value to ecosystem services.
You have B.S. degrees in furniture manufacturing and industrial engineering. How did you get into environmental engineering?
I am more comfortable calling myself an ecological engineer. I design, build, analyze and learn from ecosystems. I grew up in a rural part of North Carolina that still had large tracts of undeveloped land with healthy forests and streams. As a child and teenager, I spent a lot of time outdoors enjoying the environment. After I was about ¾ of the way through my engineering B.S. degrees at N.C. State University, I had a personal epiphany that I should pursue a career that would put me closer to my childhood pleasures of working in nature. So I discovered ecological engineering while surfing the library shelves in Raleigh (this was 1991 before the Internet). Bill Mitsch at Ohio State U. and Sven Jorgensen in Denmark had put together a book on the subject (Ecological Engineering : An Introduction to Ecotechnology, edited by William J. Mitsch and Sven Erik Jørgensen). My first thought was, the title of this book is exactly what I’ve been searching for. Inside was a chapter about using wetlands to treat municipal wastewater. How novel, I thought. Treating the waste generated by humans to benefit nature. Up to that point I naively thought that our wastes were only toxic and destructive of the environment. I applied to the graduate program in Environmental Engineering Sciences at the University of Florida and moved to Gainesville in the winter of 1994 to work with Professor Howard T. Odum, the man who introduced the term “ecological engineering” in the 1960s, and Dr. Mark Brown, who was heavily involved in building wetlands and assessing ecosystem services.
How and when were you introduced to the concept of natural capital? Did you immediately accept the idea?
For my first semester as a grad student at UF, I was privileged to take a course on Ecological Economics taught by Professor Odum. It was in that course that he enlightened me to the concept of Natural Capital. With the combination of my nature experiences as a child and my more recent training as an industrial systems engineer I immediately appreciated the concept that nature had real values that ultimately form the basis for our economic wealth and prosperity.
While most of our readers buy into the concept of natural capital, 16% do not. Reasons why generally fell into three categories. 1) Many question its practicality. As one reader puts it, “…we have yet to find a way to translate this value into the economic system under which almost all business decisions are made. I believe that our current economic model does not and will not accept values that cannot be traded.” 2) Some philosophically reject the assignment of economic value to organisms and natural systems. 3) Some reject the concept because they fear that once natural goods and services are assigned values, governments and corporations will attempt to “buy, trade, seize and sell” them, without any moral or ethical implications, and possibly to the detriment of poor people.
1) Will there ever be a practical implementation of valuing natural capital? Slowly, corporations and the public are learning that nature indirectly supports much of our economic well being. Pollination of crops comes to mind immediately. If bees were not able to pollinate our food crops, I think we would quickly realize their economic importance. Eventually, politicians will listen to society when they force them to do a better job of reinforcing the concept that we are a partner with nature and not its master. At the research level, there has been and continues to be many efforts on the part of ecological economists such as David Pearce, Herman Daly, Nicolas Georgescu-Roegen, Bob Costanza, Juan Martinez-Alier, and many others to develop tools that would show how much nature contributes to human well-being and economic vitality. It’s called valuation. My personal thinking on the implementation of valuation schemes is that we can not obviously compensate ecosystems for the work (i.e. transforming materials and energy to useful products and services) they do for us, we can compensate good stewards who conserve ecosystem services. On the other hand those of us who enjoy the labors of ecosystems, but are not stewards should be forced to compensate the stewards. Therefore, there needs to be an exchange system setup that forces consumers of ecosystem services to pay into a fund in proportion to how much ecosystem service they use and its value. Money from this fund would in turn be used to compensate ecosystem stewards for their management and willingness to forego land development. Politically, I think it could be a win-win, because if you consider that many of the ecosystem stewards are in conservative rural areas and many of the ecosystem service consumers are in liberal urban areas, the benefit and burden could be acceptable to folks on each side of the political divide. In addition, it would give the public the dual incentive to consume less ecosystem services, but preserve more of it.
2) This was Aldo Leopold’s contention in his masterful A Sand County Almanac , when he proposed a Land Ethic. I agree that there are many facets of nature, especially preservation of rare and endangered species, which likely can not be monetized. But I would argue that we have laws that are over 30 years old that protect the most valuable parts of nature. We also have the national park and forest systems that harbor a great deal of important biodiversity. However, there are countless ecosystem services that are common and not rare. Take for example the Urban Heat Island Effect, whereby temperatures in cities are often several degrees higher than the surrounding environment due to the greater absorption and retention of solar heat by asphalt, concrete and roof tops than by trees and waterways. There is a direct relationship between how much additional money city folks spend on summer cooling and how little green space there is in the city. If there were more vegetation and open water, the Heat Island Effect would be less and people would spend less. Of course, some people will never be convinced that valuing nature is a good idea.
3) As I said before, I don’t think monetization of all ecosystem services is possible or prudent. Certainly there will always be corporations or individuals who counter the public’s interest and abuse privileges. So in addition to valuing natural capital we need to continue our regulatory commitment to protect highly valuable pieces of natural capital. Once we lose a rare species for good, no expenditure of money is going to bring it back.
Within certain ecological systems, what have you found to be the indicators which can most easily and accurately be correlated to dollar amounts?
Using our new ecologically-based technique of “emergy” accounting to place value upon ecosystem services, we take a holistic systems view to quantify how much total work an ecosystem is doing. This first leads to an estimated value of the whole ecosystem. When we have done this we’ve often found that wetlands, and especially forested wetlands, have the greatest value because they require the greatest total amount of work of nature to make, which we measure using emergy. Emergy is the total amount of work required to make something, which includes the work of nature and people. After evaluating a whole ecosystem with emergy accounting, the next step can be to distribute value to particular ecosystem services generated and provided by the ecosystem. For example, my colleague Mark Brown estimated that the work nature did to make a wetland able to process surface water that recharged groundwater supplies was equivalent to $0.50 per 1000 gallons. In traditional economy thinking, this water would not have any value until we diverted it for human use such as agriculture or industrial production.
Let’s talk briefly about “emergy.” Who came up with the term, and how long has it been around?
The word itself can be thought of as a conjugation of “embodied energy.” The idea of embodied energy got going in the 1970s when the world suffered its first oil crisis. Energy analysis of public expenditures was put forth by Professor Odum. Several other scientists and engineers also started doing their own energy analyses. Dr. Odum was one of the leaders in the effort back then. With each group doing their analyses a little differently, Dr. Odum and his associates thought it necessary to come up with a term that represented this newly discovered attribute of systems that they thought embodied energy represented. David Scienceman, a physicist from Australia who liked to look into the roots of words, went to great lengths to come up with the term in close collaboration with Dr. Odum.
This is all relatively new, then. “The work of people” is easy to understand, but how do you quantify “the work of nature?”
Another way to think about work is as the transformation of energy from one form to another. For example, photosynthesis is work converting solar energy to chemical energy. Any work that is conducted uses some energy. You can measure how much energy is used, and that’s the measure of how much “work” an ecosystem is doing. But in an ecosystem, it’s not only the amount of sunlight that’s being used; there are all other forms of environmental energies like water, wind, chemical potentials, minerals derived from the bedrock geology, etc. that ecosystems are using. With emergy, we try to quantify all of those inputs, estimate the total ultimate amount of solar energy that went into making each and then use that as our measure of work.
How do you then convert that measure of work into a currency value?
We take an average value of the ratio of the total emergy being used in an economy – say, for example, the state of Maryland—relative to a measure of its total economic activity…in the case of Maryland it would be the Gross State Product and use this ratio to convert emergy values to what could be called “ecological-dollar” values…eco$’s if you will. If we were interested in using emergy to come up with this equivalent dollar value of an ecosystem in Maryland, we would calculate the total amount of emergy that is being used by the ecosystem and divide it by the average emergy-to-dollar ratio to come up with what emergy analysts have historically called “emergy–dollars,” but I like to call eco$. It’s an estimate of the equivalent amount of work that nature did in dollar terms.
How is the concept of emergy being accepted in academia and elsewhere?
Unfortunately, there has been a lot of resistance from a lot of people over the history of its development – from economists and ecologists. There have also been many proponents. The science of emergy accounting has been evolving since the late 1970’s. There is a treasure trove of dissertations, theses and project reports dating back to then. (See emergysystems.org for more information.) In recent years, however, there has been a concerted effort by emergy analysts to publish more in the peer-reviewed literature about emergy and more demonstrations of its utility. There is progress being made in getting environmental groups and government agencies like U.S. EPA to consider it. At the research level, U.S. EPA is now investigating the utility of emergy for evaluating ecosystems. Dan Campbell at the U.S. EPA Atlantic Ecology Division and John Richardson at the U.S. EPA in Atlanta have been spearheading that. We’ve been working with both of them and The Conservation Fund. We are trying to [secure funding for a project that will] look at the Chesapeake Bay watershed and come up with values for whole ecosystems – terrestrial forests, wetland, marshes, etc. – as well as the specific ecosystem services that may be provided, such as nutrient cycling, and generating soil. One of the newer approaches in emergy is to do it on a landscape scale using GIS. That is what John Richardson and some other folks in Gainesville are doing. They are taking land use/land cover and coming up with an emergy value – how much energy is being used on average by a commercial, residential or industrial tract of land.
You mentioned the initial resistance to emergy from economists and ecologists. You must still encounter a bit of that today. What are some of the main objections?
From an economists’ standpoint, it’s very counter to the way they think value is generated and measured in society. Typically, an economist says that the purchasing decisions a person makes tells you the value of something –value is given by the human. Many ecological economists extend this philosophy to generate estimates of the dollar values for ecosystems and their service by interviewing groups to basically ask them how much they would be willing to pay. Our approach assumes that the economy is an extension of ecosystems. The two have very similar workings in terms of energy flow, material cycles and creating information. They both use their information to operate, progress and evolve. Emergy accounting estimates the ecosystem value based on how much work nature did to make and use it. Things of value to an ecosystem are kept, thus how much work it took to make them is an estimate of how much nature is willing to devote to them. If they weren’t valuable, they’d probably be selected against and disappear. Some people have characterized emergy as a “donor” value approach, looking at how much is being contributed by nature to make something. The economists’ approach is a “receiver” value approach, because the person receiving the benefit determines the value.
One of your questions [about Leaf Litter readers’ skepticism of natural capital] really hit it on the head. Some people say you can’t value nature; that it has infinite value. By putting a value on it, you run the risk of diminishing its importance. It gives the economic system and corporations the right to control it and forsake environment ethics. I’ve heard that argument about restoration ecology as well. If we say we can restore ecosystems, then this can be seen as giving a developer the right to destroy an existing one, since it can be replaced.
Emergy also involves such a different approach from the way economists are trained and the way they think. Many see it as too foreign, too complex. My early training as an industrial engineer makes me see the world from a systems perspective. Maybe more economists need to come back to their roots in the natural sciences and not presume that they are only social scientists.
Across all systems, are certain benefits “rising to the top” in terms of what people perceive to be of greatest value? (e.g., water quality, air quality, presence of species used for industry, natural beauty, human health, etc.)
My approach to valuing natural capital does not include “willingness-to-pay” types. Therefore, I can’t answer your question directly. As I mentioned above, our emergy accounting technique is ecologically based (some would say biophysically or energetically) and does not rely on asking people to guess what they might pay for an ecosystem service. Rather, emergy approaches it from the point of view of: how much work did nature do to provide an ecosystem service? Philosophically, these are polar opposite approaches. Willingness to pay says only people can place value on goods and services, whereas emergy accounting assumes there are many direct and even more indirect ways that ecosystems support economies and peoples’ well-being and they are all quantifiable due to the fact that energy must be used to make all the connections. However, if I must answer the question, I would guess that people place the most value on services that appear to be least replaceable and most rare, namely biodiversity. On the other hand, the quality of water and air has a direct bearing on people’s health, so I would venture that these are also high on people’s lists.
Where, in this country or in others, do you see natural capital being used successfully to facilitate ecological restoration, conservation planning and/or regenerative design?
I think that natural capital as a metaphor has advanced the concept that ecosystem services are valuable and should be protected and restored. Having lived in Florida for a number of years as a graduate student, I think of the large-scale, multi-decade, multibillion dollar restoration of the Everglades as a premier case where citizens are struggling to balance the allocation of a limited resource, fresh water, to nature and people in order to optimize the whole system that is the ecological-economic system of South Florida. Has valuation of ecosystem services played a significant role in the Everglades restoration? I don’t believe so. At that scale it took a tremendous number of years and the life’s work of many heroes to foster the political support to make the restoration happen. I would tend to agree that Americans are less willing to spend money on restoration than in other parts of the world. I’m not sure why that’s so. I prefer not to speculate, but I would add that it begins with how we educate our children. They need to be taught from an early age that they are agents of the earth and not masters of it.
One of our readers said, “Sophisticated studies using different methods for coming up with eco-services values are difficult to understand and outside most people’s frame of reference.” I recently read about Robert Costanza’s $813,000 grant from the Moore Foundation to create a set of computer models and tools to help people estimate the dollar values of ecosystem services in their areas. What do you think about this effort? To what other studies or resources would you refer people who want to begin applying natural capital to their work?
Dr. Costanza has been a leader in the ecological economics movement since he was a graduate student at UF working with Professor Odum. I’m not familiar with this specific project, but I think it’s wonderful that the Moore Foundation is willing to donate that amount of money to a worthy undertaking. There needs to be more funds made available to other universities to undertake similar efforts. At this stage of the science of valuation, I feel strongly that there needs to be a diversity of efforts and philosophical approaches. There are deficiencies in all of the approaches I know of, including emergy. To date, there is no silver bullet…no one tool that gives us the ultimate value. That tells me we need to keep working on it.
As I mentioned above, our emergy accounting approach comes at valuation science from a different point of view than the willingness-to-pay types of approaches. In addition to my own burgeoning efforts to work with land trusts like The Conservation Fund, and state and federal agencies to demonstrate the machinations and utility of emergy accounting to ecosystem valuation, my colleagues at UF continue to promote emergy accounting as well. Certainly, there are many other groups around the world promoting valuation tools. My University of Maryland colleague Dennis King at the Chesapeake Bay Lab is an example.
Some of our readers have incorporated natural capital into their work. But when we asked them what ecological health indicators they used, we received a variety of answers ranging from very general, such as “biodiversity” to specific, such as “the energy consumption of surface water runoff.” Similarly, when we asked how they assigned value to Nature’s “goods and services,” the responses varied tremendously – including one that read, “just went with my gut and trusted my higher self.”
Do you believe there will ever be a universally accepted method to assign the value of natural capital?
Highly improbable. And unnecessary. If the self-organizing capabilities of freedom and democracy are fostered, different groups of citizens around the world will discover unique ways to realize the value of their ecosystems.
We also asked those who have incorporated natural capital in their work if they attempted to assign value to intangible “quality of life” factors. More than half said they did not – mostly because they did not know how to do so. What do you recommend to folks like this?
I think my training as an engineer lends me to think that almost anything can be quantified. If an intangible can be quantified from the perspective of knowing where and how it fits into the overall ecological-economic system, then we could derive its value using emergy accounting. However, how practical would a valuation be if it found something to be four times as valuable as Gross World Economic Product?