Monday, January 9, 2012

The Great Blue Heron Paradox

Great question on the Ecosystem Commons Soapbox today.  Nicole Maness asks the big assessment metric question:

"How do we balance the need for both precision and practicality when it comes to metrics?  Can we argue that while current measurement systems are imperfect, they are better than nothing? Is commitment to long-term monitoring and adaptive management a sufficient strategy to mitigate against the risks of incomplete or imprecise measurement systems? What’s “good enough” when it comes to metrics?"

I've been thinking about this for a long time -- in fact it seems like everything I've ever written boils down to "defining environmental commodities is HARD because ecology is complex and commodities need to be abstract".

Some of the responses delved into the ecological difficulties of creating accurate metrics, which I think is exactly the wrong problem (not that there's not a lot of work to do on that front).  Ecological criteria are already too complex for economies to handle.  Since we're talking in the language of "services", we're talking about things that are primarily economic in their identity whether or not there's actually a market for them (they might be used for indexical purposes -- green GDP etc -- rather than sold in markets).  So we're already in a fully economic world here, and the question is how to render ecological complexity in a form that is as abstract and transportable as a commodity.

Or, as the NRC put it in their 2005 book on the topic, studies must be "designed so that the output from the ecological models can be used as an input to the economic models".  This hierarchy will rankle some ecologists.

The market consequences of getting too complex, ecologically, with your metrics was put to me once by an EPA regulator in the following way:
"You can define a unit so that you’re going to have flourishing mitigation banking.  You can also define a unit so that, should there ever be one exchanged, it would be environmentally precise.  And those are at potentially different extremes… [You might end up with credits in] 'habitat for middle-aged great blue herons who don’t like shrimp', or something.  Obviously, I can’t imagine even trying to do that."
I consider this to be one of the real unresolvable paradoxes of environmental markets.  If a metric is ecologically precise enough to fully reflect the complexity of ecological systems, it will be so hard-to-measure and so specific to a site that it will tend to describe a commodity that cannot trade successfully in a market of sufficient thickness and volume to sustain trade.  If a metric is abstract enough to describe a commodity which can trade at volume, it will tend to fail to describe ecological complexity.

In short, as the ecological sensitivity of a metric increases, the fungibility of the commodity it describes decreases.  Empirically, I saw this as wetland credit markets began to evolve -- the metrics actualy got simpler as pressures for increased volume come to bear.  The Minnesota wetland banking metrics from the 1980s, for example, back before there was a private market, required you to navigate a blizzard of lookup tables to figure out what your mitigation ratio would be.  The metrics for the first mitigation bank in the country (Tenneco LaTerre) depreciated credits over time based on the dynamism of the coastal ecological/geomorphic environment!  As private markets became common, the acre became the unit of assessment, and assessment criteria were dumbed down.  But with the trend toward functional assessment we're seeing a push to complicate the assessment -- so the paradox above creates a stiff headwind, but not an absolute bar.  Will be interesting to see how far it can go.

ps: I originally titled this post "The Ecology Paradox in Ecosystem Services", which was boo-ring.  Then I named it after the EPA regulator who provided the quotation -- but aside from being a violation of our confidentiality agreement, who wants a paradox named after them??  It seems like something that might have driven the eponymous person mad.  So I rather grandiosely named it after myself, since I've published about it since 2004 and I don't know if anyone else has formulated it, and am assuring you that it's not driving me mad or even keeping me up at night.  If anyone can find something similar published elsewhere, please post up or send me a note and I'll give credit where it is due.
edit: after almost a year of blogging I've had to concede that someone besides me actually reads it -- those thousand hits couldn't all have come from spambots.  I'm far too Midwestern to engage in that kind of egomania in public, so I came up with a far better name for the concept!

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