Non-Commodity Assets

In addition to the more readily-quantifiable commodities produced on agricultural, ranching, and timber lands in the Sierra, there are traditional services, such as recreational opportunities, open space, wildlife habitat, and ecosystem goods and services that are also of direct value to humans. These assets of agricultural, ranching, and timberlands are referred to as non-commodity based values.

Today, investment in natural systems may be a better choice than investment in man-made hardware. This is because evidence is accumulating that reinvesting in natural capital can increase both natural and financial capital. Investment in natural capital does not necessarily deplete financial capital, as is often assumed. Rather than engineering every process in a complex system, we can rely on healthy natural systems to provide these services for us – sometimes at a fraction of the cost. Investing for Prosperity, Sierra Business Council (2003)

Traditional services like recreation and, to some extent, open space are valued based on money spent or money saved. Economic valuation of recreation is often based on how much money people spend or are willing to spend on such activities. According to the 2001 National Survey of Fishing, Hunting and Wildlife-Associated Recreation, more than 5.7 million U.S. residents spent more than more than $2.6 billion partaking in wildlife-watching activities in California. That same year roughly 2.5 million anglers spent $2 billion on fishing outings in California, and 274,000 hunters had total expenditures of $315 million. In Nevada, 172,000 anglers spent nearly $333 million, while 47,000 hunters totaled expenditures of $163 million. Enthusiasts of wildlife viewing also contributed significant amounts with 609,000 participants expending nearly $249 million.

Another method of calculating the value of open space can be determined by how much money local government can save by not having to provide municipal services, such as roads, sewers and schools. A study by Strong Associates calculated that in California’s Central Valley, local governments lose on average $354 for each developed parcel. In other words, while they may take in $275 in property tax, they spend a total of $629 on roads ($146), administration including police and water treatment ($337), and school busing ($146).

Open space has direct effects on nearby property values as well as natural and scenic resources. Several studies have shown that the value of property adjacent to open space contributes to higher property values. Homes in Portland, Oregon located within 1,500 feet of natural open space show an increase in value of several thousands dollars compared to home beyond that distance. A 1978 Boulder, Colorado study found that property value decreased $4.20 for every foot of distance, up to 3,200 feet, from public open space.

Ecosystem goods and services are generally harder to quantify in economic terms but are just as valuable as merchantable products because of the important role they play in the underlying natural processes, such as:

• Photosynthesis: This is the process by which forests, plants, and crops, which form the basis of the food chain, are able to grow. Photosynthesis also produces oxygen, a critical element in the air we need to breathe;

• Soil formation and nutrient cycling: These are the processes responsible for breaking down matter and making earth's limited nutrients available for new life and growth;

• Regulation of the hydrologic or water cycle: This ecosystem service provides the fresh water we need for residential, commercial, industrial, and environmental purposes. This is also important for flood control;

• Biological control: A process for natural regulation of herbivore, predator, and pest populations that impact human activities, e.g. bats that consume beetles, moths, and other insects that damage agricultural crops and timber stands;

• Genetic resources: Nature’s bank of genetic diversity provides important sources of medicines, horticultural species, and genes to build resistance to pests. Seventy-nine percent of the top 150 prescription drugs sold worldwide are based on compounds synthesized by wild species – plants, fungi, bacteria, vertebrates – and nine of the ten top prescription drugs in the United States are based on natural plant products; ? Pollination and seed dispersal: These services are critical stages in the life cycle of plants. For example, honeybees are necessary to pollinate alfalfa or fruit and nut trees, and birds help spread conifer seeds after fires or other disturbances;

• Climate regulation: The regulation of temperature and precipitation at the global and local scales is important for maintaining a stable and hospitable environment to live in;

• Disturbance regulation: Natural systems like wetlands and floodplains help moderate major disturbance events, such as floods or droughts;

• Erosion control and sediment retention: Vegetation prevents costly soil loss by wind or water runoff;

• Waste treatment: Natural systems like riparian areas and wetlands retain or break down toxins, retain nutrients, and otherwise provide natural purification and pollution control.

At the grand scale, biodiversity and the ecosystem goods and services it provides run the global life-support system humans and other species depend upon for survival. At the smaller scale, ecosystems and species other than our own provide direct benefits which, when combined with commodities produced, provide for the welfare of residents and visitors to the Sierra and beyond.

Unfortunately, ecosystem services are difficult to quantify in a comparative nature with economic services or manufactured goods. In effect, they are typically relegated to an economic category referred to as externalities. Externalities are factors not accounted for in the calculation of profit or loss.

However, resource economists have developed models to calculate the value of ecological and environmental services. Taking into account 17 ecosystem services, one study estimated the value of these services at $33 trillion per year on a global basis, almost twice the global gross national product of $18 trillion.

As Dr. Peter F. Brussard, a professor of population and conservation biology at the University of Nevada at Reno, points out, “[t]his system worked well enough until the human enterprise became so large that it began to overwhelm the capacity of natural ecosystems to deal with it.”

Unfortunately, human activities are impacting biodiversity and, by association, the non-commodity goods and services biodiversity provides. Population growth, management decisions, and just the way we humans live on the land may not be sustainable unless we start making more informed choices to lessen the impacts on the very processes we rely upon for our survival. “There are those who would like the public to believe that it is a choice between the needs of people and the needs of the environment; but human well-being depends on a fully functional environment,” Brussard explains.