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Healthy Lands & Healthy Economies: Nature's Value in Santa Cruz County

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Healthy Lands & Healthy Economies: Nature's Value in Santa Cruz County HEALTHY LANDS & HEALTHY ECONOMIES: NATURE’S VALUE IN SANTA CRUZ COUNTY HEALTHY LANDS & HEALTHY ECONOMIES: NATURE’S VALUE IN SANTA CRUZ COUNTY NATURE’S VALUE IN SANTA CRUZ COUNTY SUGGESTED CITATION Schmidt, R., Lozano, S., Robins, J., Schwartz, A., Batker, D., 2014. Nature’s Value in Santa Cruz County. Earth Economics, Tacoma, WA & the Resource Conservation District of Santa Cruz County, Capitola, CA. PARTICIPATING AGENCIES • Resource Conservation District of Santa Cruz County • Santa Clara Valley Open Space Authority • Sonoma County Agricultural Preservation and Open Space District Initiative team members include Sacha Lozano, Chris Coburn, and Karen Christensen (Resource Conservation District of Santa Cruz County); Andrea Mackenzie, Jake Smith, Matt Freeman, and Joelle Garretson (Santa Clara Valley Open Space Authority); Karen Gaffney, Tom Robinson, Alex Roa, and Bill Keene (Sonoma County Agricultural Preservation and Open Space District) and Jim Robins of Alnus Ecological (Regional Coordinator). ECONOMIC ANALYSIS TECHNICAL PARTNER • Earth Economics FUNDING PARTNERS • Gordon and Betty Moore Foundation • S.D. Bechtel, Jr. Foundation • State Coastal Conservancy ACKNOWLEDGMENTS The Initiative would like to thank Jim Robins of Alnus Ecological for providing excellent regional coordination and strategic input on the Healthy Lands & Healthy Economies Initiative, to Kate Goodnight of the State Coastal Conservancy for invaluable input and support, RCDSCC Board of Directors for their feedback and support, and the Earth Economics Board of Directors for their continued support and guidance: David Cosman, Josh Farley, and Ingrid Rasch. Thank you to all of our peer reviewers and to the organizations, agencies and individuals who contributed data, resources or other feedback, including Trish Chapman and Tom Gandesbery (California State Coastal Conservancy), Bryan Largay (Land Trust of Santa Cruz County), Gary Knoblock (The S.D. Bechtel Jr. Foundation), Jake Smith (Santa Clara County Open Space Authority), Andy Fisher (UCSC), Daniel Mountjoy (Sustainable Conservation), John Ricker (County of Santa Cruz Environmental Health Services), Chris Coburn and Karen Christensen (RCDSCC), Mike Hopper (Santa Cruz Port District), Kelley Bell (Driscoll’s Berries), Chris Spohrer (California Department of Parks and Recreation), and Matt Chadsey, Angela Fletcher, Tania Briceno, Scott Szeman, Brianna Trafton, Gwenael Podesta, TaNeashia Sudds, Tedi Dickinson, and Greg Schundler (Earth Economics). Land cover data was processed by Jake Smith (Santa Clara County Open Space Authority). Cover photo credit: image released under a creative commons share-alike license by Peter B. James. Some images used in this report are licensed under a creative commons license. To learn more about these licenses, visit https://creativecommons.org/licenses/. Report authors: Rowan Schmidt, Sacha Lozano, Jim Robins, Aaron Schwartz, and David Batker. The authors are responsible for the contents of this report. i NATURE’S VALUE IN SANTA CRUZ COUNTY CONTENTS Foreword � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � i Executive Summary � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � v CHAPTER 1: Healthy Lands & Healthy Economies � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 1 Economies Operate within Landscapes ������������������������������������������������������������������������������������������������������������������������������� 1 Santa Cruz County’s Rich Portfolio of Natural Capital Supports a Diverse Economy . 2 Natural Capital Conservation and Stewardship in Santa Cruz County ������������������������������������������������������������������������������� 4 The Healthy Lands & Healthy Economies Initiative ������������������������������������������������������������������������������������������������������������� 5 Nature’s Value in Santa Cruz County: How to Use This Study . 5 CHAPTER 2: A Primer on Natural Capital: Ecosystem Goods and Services � � � � � � � � � � � � � � � � � � � � � � � � � � � 7 What is Natural Capital? . 7 A Framework for Assessing Ecosystem Services . 7 Provisioning Services ������������������������������������������������������������������������������������������������������������������������������������������������������������� 9 Regulating Services . 9 Cultural Services. .10 The Importance of Valuing and Accounting for Ecosystem Services and Natural Capital ��������������������������������������������� 11 Policy Applications of Ecosystem Services �������������������������������������������������������������������������������������������������������������������������12 CHAPTER 3: A Countywide Appraisal of Natural Capital in Santa Cruz County � � � � � � � � � � � � � � � � � � � � � � � 15 Monetizing Ecosystem Goods and Services �����������������������������������������������������������������������������������������������������������������������15 Valuation Results at a Glance . .15 Benefit Transfer Methodology . .17 Revealed-preference approaches ���������������������������������������������������������������������������������������������������������������������������������������19 Cost-based approaches �������������������������������������������������������������������������������������������������������������������������������������������������������20 Stated-preference approaches �������������������������������������������������������������������������������������������������������������������������������������������20 Valuation Gaps and Study Limitations . .31 CHAPTER 4: Natural Capital Stewardship in Santa Cruz County � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 32 The Importance of Land Stewardship for Maintaining and Enhancing Santa Cruz County’s Natural Capital Value . 32 Stewardship of Natural Capital Supports Multiple Benefits ���������������������������������������������������������������������������������������������34 Stewardship of Natural Capital as a Cost Avoidance Strategy . .36 CHAPTER 5: Case Studies on the Economic Benefits of Conservation and Stewardship Investments in Santa Cruz County � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 38 Conservation and Stewardship as an Investment �������������������������������������������������������������������������������������������������������������38 Return on Investment Case Study: Bokariza Managed Aquifer Recharge Project . 38 Benefit-Cost Analysis Case Study: Santa Cruz County State Parks �����������������������������������������������������������������������������������41 Local economic impacts of the Integrated Watershed Restoration Program ����������������������������������������������������������������� 46 CHAPTER 6: Integrating Natural Capital into Economic Decisions and Investments � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 47 Natural Capital: A Smart Investment Opportunity . .47 A Framework for New Economic Measures and Incentives ���������������������������������������������������������������������������������������������48 Building on Innovative Partnerships �����������������������������������������������������������������������������������������������������������������������������������48 Supporting Stewardship through Policy and Planning . .49 Next Steps: Making Smart Conservation Investments . .50 Recommendations ���������������������������������������������������������������������������������������������������������������������������������������������������������������51 ii References � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 53 Appendix A: Study Limitations � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 61 Appendix B: Value Transfer Studies Used: List of References � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 65 Appendix C: Value Transfer Studies Used By Land Cover � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 70 Appendix D: Value Transfer Studies Used: Annotated Bibliography � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 70 Appendix E: The Bokariza Managed Aquifer Recharge Project Return-on-Investment Analysis � � � � � � � � � � � � � � � � � � � 71 Appendix F: Local Economic Impacts of Santa Cruz County’s Integrated Watershed Restoration Program (IWRP) � � � � 77 FIGURES Figure 1: Map of county in relation to California � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 1 Figure 2: Ecosystem Goods and Services Flow from Natural Capital Assets and Ecosystem Functions � � � � � � � � � � � � � � � 7 Figure 3: Annual Value of Ecosystem Services in Santa Cruz County Relative to other Revenue Streams � � � � � � � � � � � � 17 Figure 4: Natural Capital Asset Value Ranges relative to the Value of Assessed Property and Structures in Santa Cruz County � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �
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