Trees on the balance sheet: Worried about your portfolio? Here's a hot investment tip to keep you cool and increase your earnings. (Editorial).

It doesn't take a financial wizard to recognize that the stock market has not been a good bet lately. While we are not traditional investment managers, AMERICAN FORESTS has a hot tip for increasing your earnings. It isn't a blue chip stock or dot com start-up. It's an asset allocation that pays off in multiple dividends: cleaner air and water, lower energy costs, and improved human health and quality of life. I'll give you a hint: it has to do with trees.

Natural capital-the intangible value of healthy ecosystems-is an investment guaranteed to perform high above standard indices and appreciate in value for generations. The concept of natural capital was developed as a way to compare the costs and benefits of natural resource management strategies. In other words, to put the value of natural resources into dollars and cents. But how to show debt and equity ratio on the budget sheet when the benefits don't have dollar values? What is a pound of oxygen worth to an animal?

About five years ago, after a decade and a half of leadership in the urban forest movement, AMERICAN FORESTS developed a way to measure the value of natural resources-especially that of trees- in urban ecosystems. Finally the planting and care of trees, as ecosystem-restoring actions, could be weighed against the value of the benefits those trees provide.

AMERICAN FORESTS has looked at urban ecosystems in several metropolitan areas across the US, and the findings are striking. All areas that were naturally treed have lost about 30 percent of their canopy cover in the last 25 years. We can place dollar values on these missing trees because we can measure the effect of their loss. In a cross-section of 100 of the country's urban and suburban forests (where more than 156 million of us live), trees reduce the need for 264 billion cubic feet of stormwater retention infrastructure (sewers, channels, catchment basins, etc.). The one-time cost to build these systems would be about $528 billion, or $38.3 billion annually to pay the principal and interest on these construction projects. The costs of preserving or replanting the trees that could do this job, pales in comparison. It's a profit margin any investor would understand.

Healthy urban forest ecosystems are a profit center for air quality, too. By sequestering carbon dioxide, cleaning particulate pollution from the air, and returning oxygen, the value of trees in these same American cities exceeds $10 billion. The return is both municipal and private. Studies show as few as three of the right trees planted in the right spots around your home can cut air-conditioning bills in half. Now think of the energy savings community-wide.

These values can be leveraged by public policy decisions and management actions. In Washington, DC, for example, Mayor Anthony Williams made a commitment to improve the urban forest, and the Eugene B. Casey Foundation stepped up with a $50 million endowment for the District's trees. But while we know how to value the ecological benefits of trees in urban ecosystems, there is still work to do on their social and economic values. Working with hospitals, medical organizations, and insurance companies will help us get a handle on the values of human health.

For more than 125 years, AMERICAN FORESTS members have sought to interest people in sound conservation. This concern is moving ever closer to home; as urban America expands, trees decline. Like the cliche says, natural capital is an investment that doesn't cost, it pays. Preserving and restoring healthy ecosystems is a financial no-brainer. So here's the real hot tip: Plant your trees early.