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Natural capital: in a single tree resides the context for pondering the true wealth of nature.

During the late 1980s, when billionaire media mogul Ted Turner went hunting for a ranch, he found his Shangri-la near the outskirts of Bozeman: the Flying D Ranch, a historic cattle operation set against the foothills of the Spanish Peaks Mountains.

At more than 100,000 acres the Flying D stretches across a remarkable quilt of forest, meandering streams, and high plains grasslands, girded on the west by the famous Madison River and to the east by the Gallatin River.


On certain days of the year, it is not improbable to spot buffalo, mule deer, and wild elk grazing the uplands, bald eagles soaring overhead, dozens upon dozens of passerine birds singing from the tree branches, grizzly bears prowling the fir understory and perhaps, if you listen closely, a gray wolf howling or a band of coyotes yipping beneath a full moon.

Turner, who is one of the richest men in the world, at first merely wanted a retreat where he could relax by casting a line for trout. But his purchase of the Flying D and a subsequent venture into bison ranching, he says, opened his eyes to a broader view of wealth based upon the connection between ecology and economy.

"I had been a conservationist and a hunter my whole life, but I had never really seen the forest for its trees and vice versa," Turner said in an interview. "I now see nature as being far greater than the sum of its parts, but I've got to tell you that some of those parts are pretty impressive."

Around the globe, there are legions of anonymous Ted Turners embracing a similar call to stewardship, doing what they can on their own private tracts to voluntarily protect biological diversity, including endangered species, rather than having a mandate imposed upon them by government. And they--and the world--are reaping dividends.

Such ecological entrepreneurism, experts say, usually involves a blend of altruism: a love of God's creation, and, more recently, market-driven rewards for protecting or enhancing natural assets rather than depleting them.

Nowhere is the potential greater than in our nation's public and private forests, where a wealth of values have been largely ignored, despite trees' ability to clean up the environment and save money on services municipalities spend heavily to provide. Trees and forests, formerly seen chiefly for their aesthetic value or their value as timber, are now being recognized for the long-term benefits they provide. And this perception of a forest is expanding, on both public and private lands. In 1993, former Forest Service chiefs-turned-college professors Mike Dombeck and his predecessor Jack Ward Thomas wrote an unprecedented letter to newspapers across the country encouraging the agency to aggressively protect all remaining old-growth.


Dombeck and Thomas referred to old-growth as "reservoirs of biodiversity with associated 'banks' of genetic material."


How potent is nature as an economic engine? In the Yellowstone region alone, natural assets are the foundation of a sustainable $1 billion annual tourism industry. On U.S. private lands, the forest products industry has long been ahead of the curve in recognizing that trees have a profound intrinsic value that transcends their economic potential as 2X4s.

Trees serve as filters for clean water that is the source for municipal water supplies. They help reduce energy costs for homeowners by keeping homes cooler in summer and warmer in winter. They help protect investments by increasing property values. They are homes to wildlife. And, in an age of climate change, forests serve as sinks for carbon dioxide that might otherwise find its way into the atmosphere, exacerbating global warming.

Each of these "collateral values" of forests figures prominently into discussions of the value that ecosystems and their related services produce, but the question now before society and government policy makers is how to create incentives that reward stewardship.

"There is a profound evolution taking place in how society looks at nature, and the way that it has multiple implications for our quality of life," says Deborah Gangloff, executive director of AMERICAN FORESTS, which has reorganized its programs around the idea that we must protect, restore, and enhance forests and the ecosystem services they produce. Those services include cleaning air and water, preventing erosion, storing carbon, and slowing stormwater runoff.


With the first Earth Day in 1970, Americans took on the challenge of creating a cleaner environment and protecting species from extinction. A firmament of vanguard federal environmental codes were crafted bipartisanly in Congress and signed into law, among them: the National Environmental Policy Act, the Endangered Species Act, the Clean Water Act, the Clean Air Act, the National Forest Management Act, and the Federal Lands Policy Management Act. These laws serve as the foundation of the nation's environmental policy, but today, a full generation later, industry and conservationists generally agree that the laws have worked but need fixing.


Wildlife protection codes were enacted primarily to prevent species loss. The National Forest Management Act set minimum standards by which the national forests would be managed. For conservationists, though, those keystone federal laws are limited by a tendency to focus species by species and jurisdiction by jurisdiction rather than by what it takes to make ecosystems whole and healthy.

"What scientists are telling us is that some of the most important ecosystem components are found on private lands, particularly in the public-land rich West," says Dennis Glick, director of the Sonoran Institute's northern Rockies office. These predominately privately owned "lower elevation landscapes, and particularly riparian areas, harbor some of the most critical habitat in the entire region. In fact, the survival of many species that we typically associate with public lands, such as elk and mule deer and grizzly bears, depends on habitat found outside of national forests on adjoining private land."

Glick isn't advocating for more government regulation of private land, per se, but making the point that private property owners, whether they realize it or not, are defacto partners in species conservation. Unfortunately, many are leery of possible restrictions on land use that might accompany rare plants and animals protected by the Endangered Species Act.

"The fact is that regulations are a blunt instrument used to try and achieve a desired outcome," says Chris Wood, a vice president of the conservation group Trout Unlimited and formerly a senior advisor in the U.S. Forest Service.

Part of the conversation that needs to take place involves awakening citizens to the value of natural capital. Not long ago, a team of economists attempted to calculate the net worth of nature on Earth. Their estimates ranged from between $16 trillion to $54 trillion annually. But such valuation is a tricky business because much of what nature does for humans is free, and the very concept of value is a human construct. We are limited by our biases and personal attitudes about what matters and what does not.

Gloria Flora, a former national forest supervisor, has given the subject of "natural capital" a lot of thought. Flora is founder of Sustainable Obtainable Solutions (SOS), which promotes community-based conservation. As a former civil servant, she entertained such philosophical questions when she decided in the 1990s to temporarily shield from oil and gas drilling a portion of the Rocky Mountains encompassed by the Lewis and Clark National Forest in Montana.


But language is missing from the discussion of natural capital, Flora says. "We don't have the lexicon to think about the big picture. We try to put everything into dollar terms, but it does not move us closer to a concept that enables society to know what we are talking about. We have not even begun to grasp the fullness of what we are losing or what it means to our life support system on this planet."

While nature is estimated to yield as much as $54 trillion in goods and services annually, compared to an estimated $10 trillion realized in goods produced by humans, things society takes for granted are not factored into the equation. For example, a single tree, 18 inches in diameter, has been shown to produce enough oxygen for a family of four, be it human or a clan of grizzly bears. If Earth's complex system of producing oxygen is ever irreparably impaired, then what?

"I would like to see the topic of ecological community take us to a point where we can have meaningful discussions about abundance, but we need to do it differently," Flora says.

On public lands, "it is time to move beyond the 'board-feet of timber' debate," say Dombeck and Thomas, who have half a century of forestry experience between them.

In the spirit of multiple use, all applicable values should come into play, including cultural/archaeological, water, timber, biodiversity, recreation, fish and wildlife habitat, wilderness, nontimber forest products, and grazing. The work of improving forest health and restoring watersheds on national forests has great potential to provide jobs and economic opportunities to many of the same communities caught up in the 'cut vs. no-cut' battles of the past.

Already, markets are emerging for transferable credits that enable companies exceeding federal regulations in, say, protecting the air and offsetting carbon dioxide emissions to sell them to companies having difficulty meeting compliance. In the pine forests of the U.S. Southeast, larger forest products companies have worked with the U.S. Fish & Wildlife Service and ecological entrepreneurs to devise land-management strategies that benefit the red-cockaded woodpecker and even use wildlife watching as a source of added revenue.



Economist Holly Fretwell of the free-market think tank Political Economy Research Center says rewarding companies that strive for innovation creates an incentive for industry, and its shareholders, to champion technological efficiency that reduces ecological impairment, waste, and pollution. However, it's a far more complicated matter to place monetary value on a clean-running stream or the ancient trees shading it, or on microbial organisms in the soil or the rare butterfly that drinks nectar from a rare endemic wildflower found here and nowhere else.

"The limits to a market approach are found in how one defines 'biodiversity' and what portions of it can be represented in the marketplace," Fretwell says.

Across the country communities are beginning to see the value of natural capital and natural areas and are taking steps to protect it. Ordinances designed to protect and increase urban tree cover are becoming more common in the wake of an AMERICAN FORESTS study showing a national "urban tree deficit" of 634 million trees. The study pointed out that this ongoing loss of urban trees robs city dwellers of parks, cooling shade, and services that are costly to replicate artificially, services like slowed runoff and clean drinking water.

Trail systems are also attractive and help to enlarge the local tax base. Clean water, much of it produced by forests, supports recreational fisheries but also meets the needs of growing cities. Survey after survey shows that quality of life concerns figure prominently in business management decisions. Environment matters to companies, communities, and families.

Chris Wood was on the staff of former Forest Service chief Dombeck when the controversial "roadless rule" was crafted; it placed nearly 60 million acres of roadless lands in national forests off limits to development. Many of these lands were passed over by the Forest Service and timber industry in the decades following World War II because the trees growing in them were found in difficult to reach places and fragile ecological settings.

Besides the value of roadless lands as wildlife habitat and serving as places of solace away from the mechanized world, Wood says these areas possess a value that makes a pragmatic case for their protection: Many serve as the source of drinking water for tens of millions of Americans living downstream.

Given how forests function as filters and their role as factories for clean water, it's cheaper for humans over the long term to let nature do its job than to pay for costly filtration and water treatment systems that might result from watersheds impaired by industrial activity.

The argument isn't theoretical; it's based on an example from America's largest city. In the late 1990s, policy makers and their taxpaying constituents in New York City were presented with a choice: Either construct a new multi-billion-dollar water treatment plant as mandated by the Environmental Protection Agency or look to nature for a solution. New Yorkers chose the latter.

Drawing their tap water from reservoirs in forested areas of the Catskills and other environs, the 9 million inhabitants went with natural capital--in this case the scrubbing power of forest ecosystems to filter out impurities. Experts say it is cheaper to restore rivers and forests ringing the reservoirs than to levy taxes for a new treatment plant.


While Ted Turner's team agrees with economist Fretwell that government must be more efficient in how it spends tax dollars to protect public land and species, it believes that taking a free market approach focused only on those creatures that may deliver an economic payback is perilous.

"Economic efficiency is about doing things right by the bottom line," says Mike Phillips, a biologist hired to oversee the Turner Endangered Species Fund, which aims to recover native species on Turner's ranches. "But effectiveness is about doing the right thing. The markets are efficient, but it doesn't mean they always do what's right."

In the 21st century, Americans have grown increasingly concerned with the quality of their environment and the need to protect it. Ecological entrepreneurs, on the vanguard of change and deeply concerned with finding new and more effective strategies, have experimented with intriguing new approaches.

Ultimately, it comes down to the simple idea of managing an endowment: protect the principle and spend only the interest. Forests and natural areas are part of our natural endowment. We need to protect and increase that endowment--or we all become much poorer.


Canopy-cooled parks and homes. Trees that slow down stormwater runoff and meet clean air and water regulations. Trees as a best management practice. Trees to shade urban streams and cool fish habitat--and downtowns. All are examples from cities that turn to tree canopy as a first choice in solving urban environmental problems. Across the country success stories are emerging, stories that feature trees as the star of local land-use decisions.

Research and technical analysis show that trees improve air, water, and energy, but to make certain that happens local officials need to adopt public policies on tree canopy. Policies, laws, and best management practices that recognize the ecosystem services that tree canopy provides have been adopted at all levels of government. It's there within municipal tree ordinances, state implementation plans for air quality, and cities' stormwater management plans for compliance with the Clean Water Act.

How to see if your community's urban forest measures up to its full potential? Start by assessing your community's tree cover and calculating its economic value for ecosystem services (how much your community's trees save in stormwater control costs, air pollution filtration, water purification, etc.). Then, set canopy coverage goals. AMERICAN FORESTS' website lists recommended average citywide and per land-use goals ( example, 40 percent citywide east of the Mississippi and in the Pacific Northwest-depending on the geographical location, climate, and existing canopy. Lastly, implement steps to achieve your goals.

City leaders are writing trees into local codes, policies, and practices. By doing so, they are changing the fundamental way that communities are developed and managed.

What Is a Tree Really Worth?

Courts have assigned a nominal replacement value for urban trees destroyed by natural disaster or mistakenly cut down. Replacement values typically are calculated using an arboricultural industry formula based on a particular tree's intrinsic value for size, species, and health.

In 1993 a logging company claimed it was lost when it illegally logged nearly four acres of 60- to 70-year-old pine and hardwoods in Brock and Grand River parks in undeveloped parts of Houston. In seeking damages, the city recognized not only the trees' timber value but also the loss of ecosystem services for watershed protection.

In the city's first known case of illegal logging in a public park, a consultant assessed the damages and calculated timber and replacement values. Also included: the ecological value for stormwater reduction and for water and air quality using AMERICAN FORESTS' CITYgreen software and GIS-based data. The total value of the nearly 1,000 trees was calculated at almost $700,000.

Clean Water

As of March 2003, municipalities of fewer than 100,000 must obtain a permit for managing their stormwater discharges into water bodies, according to federal Clean Water Act regulations. Each city's stormwater management program must detail which Best Management Practices (BMPs) it will implement to reduce its discharge of pollutants. The city of Lodi, California, located in the San Joaquin Valley 35 miles south of Sacramento, submitted its urban forest as a BMP to help ensure the protection of the Mokelumne River, located north of the city.

Chinook salmon have returned to the Mokelumne, a positive indicator of ecological health in a river that had been polluted by the mining industry until the 1940s. Lodi's stormwater management program describes the urban forest as a natural stormwater management area that filters pollutants. The city of Lodi is considered a model for other communities that want to incorporate trees into their Stormwater Management Plans.

As the demand for water increases, the city of almost 60,000 people, with its broad agricultural base, plans to augment its current well water supply with Mokelumne water.

Starting Where the Rain Falls

Communities are looking for ways to institutionalize innovative means of managing stormwater on-site in new developments rather than channeling it to overburdened stormwater sewer systems. In Lacey, Washington, the city adopted a zero impact development ordinance to protect receiving waters and aquatic life after construction; it ensures that all stormwater remains on site and infiltrates into the soil.


This action not only relieves stormwater management systems and reduces flooding potential, it directs water to tree root zones and recharges, or refills, the groundwater reservoir, a valuable source of drinking water. Tree planting areas can serve double duty, not only providing beauty, but also acting as stormwater filters and detention areas.

Communities like Collier County, Florida, have taken stormwater management one step further by writing these design provisions into landscape and tree planting ordinances. In this tourist and retirement community, which boasts the top 10 beaches in the U.S. and the most golf courses per capita in the world, nature in the city is important to the county. Under the ordinance, "micro-detention" areas in each development, used to capture water onsite, become part of the open space system. The areas are planted with trees, shrubs, and groundcover, which provide irrigation and serve as buffers that allow developers to meet federal stormwater rules.

Protecting Wildlife Habitat

Salem, Oregon's new greenways ordinance recognizes the need to preserve valuable salmon habitat under federal wildlife protection laws. Protecting that habitat begins upstream where urban stormwater runoff, laden with pollutants picked up from roads, parking lots, and other impervious surfaces, eventually make their way to the Willamette River. Among the ordinance provisions, all off-street parking stormwater treatment facilities shall be designed to remove pollutants to the "maximum extent practicable."

Trees are listed as a mitigation measure to reduce impervious surface area, intercept rainfall, detain flows, and dissipate runoff velocity.

Salem's ordinance also recognizes the importance of shading impervious surfaces that would otherwise heat stormwater that enters the river, harming aquatic life. The ordinance requires that trees be planted in and around parking lots so their canopy will shade 50 percent of the pavement after 15 years of growth. And cooler parking lots and shaded cars provide direct human comfort as well.

Two salmon species that live in Salem's waters are listed as "threatened" on the federal Endangered Species List. The salmon's decline has had a huge impact on Salem's residents. As of 1996, the declining fisheries industry has meant the loss of 25,000 family-wage jobs. This translated to about $500 million in lost earning power for Columbia River Basin communities as businesses closed and people moved elsewhere for work. In addition to beefing up protection of the salmons' habitat, the city has adopted a strategic plan that evaluates the impact various city activities have on the fish, defines strategies to ensure departments comply with the Endangered Species Act, and recommends actions to assist salmon recovery.

As the above examples show, local leaders are beginning to tackle their environmental issues in a new way: by using the ecosystem services their urban forest provides. The "green infrastructure" dialogue is evolving. Instead of just discussing how trees benefit environments and economies, cities are acting--writing green infrastructure into their codes, policies, and practices and changing the fundamental way communities are developed and managed. In doing so, city leaders accomplish a more cost-effective and environmentally friendly way to meet federal clean air and water regulations and make better land-use decisions.

--Cheryl Kollin
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Author:Kollin, Cheryl
Publication:American Forests
Geographic Code:1USA
Date:Jan 1, 2005
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