In this week’s episode, host Daniel Raimi talks with Bernie Bastien-Olvera, a postdoctoral scholar at the University of California, San Diego, about the benefits of ecosystems for humans and the global economy. Bastien-Olvera discusses the types of benefits that ecosystems provide, methods that economists use to estimate these benefits, how climate change is shifting ecosystems and biomes geographically, and why these shifts may have a relatively larger impact on nations in the Global South.
Listen to the Podcast
- Ecosystems provide benefits directly and indirectly: “One of the most common frameworks to understand [the benefits of ecosystems] is the use and nonuse values of nature. We can think about ‘use values’ as those benefits that we get from ecosystems anytime we interact with them, either directly (for example, going to the forest to cut some wood to fuel a stove) or indirectly (all the materials that were used to form many of our household items, for example). The ‘nonuse values’ are all of those benefits that we get from nature, even without interacting with them.” (5:14)
- Impact of shifting ecosystems may be relatively larger for lower-income nations in the Global South: “They really depend a lot on what they can get from their local forests and ecosystems to fuel their market economy—which is not the case for richer economies, which mostly rely on other nontangible aspects of the economy or on importing goods and services coming from other ecosystems in the world.” (14:40)
- Global economic effects of shifting biomes and ecosystems: “Our estimate is that biome shifts would cause, on average, a 1 percent reduction of GDP … This is pretty large, considering that we are not taking into account, for example, other larger phenomena in the ecosystems; for example, wildfires or biodiversity loss and how that could affect the market economy.” (18:33)
Top of the Stack
- “Unequal Climate Impacts on Global Values of Natural Capital” by B. A. Bastien-Olvera, M. N. Conte, X. Dong, T. Briceno, D. Batker, J. Emmerling, M. Tavoni, F. Granella, and F. C. Moore
- The Biggest Little Farm movie
- Planeteando de Pelicula podcast
The Full Transcript
Daniel Raimi: Hello, and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Daniel Raimi. Today, we talk with Bernie Bastien-Olvera, a postdoctoral scholar at the Scripps Institution of Oceanography at the University of California, San Diego.
Bernie and his coauthors have recently released a new paper in the journal Nature that explores how ecosystems benefit human society and how those benefits might change with our changing climate. It's a rich and fascinating piece of work, and, in today's episode, I'll ask Bernie to help us understand it. We'll talk about the ways that using and not using ecosystems provide benefits to humans, how those benefits can be valued using economic tools, and how climate change is likely to affect those benefits in ways that disproportionately harm low-income parts of the world. We'll also talk about the many unanswered questions that remain on this crucial topic. Stay with us.
All right, Bernie Bastien-Olvera from University of California, San Diego, welcome to Resources Radio from sunny San Diego. I hear it's a nice day where you are today.
Bernie Bastien-Olvera: Yeah, a very nice day. Thank you so much for having me. So happy to be here.
Daniel Raimi: It's our pleasure, Bernie. Let's start the show with the same question that we ask all of our guests, which is asking you to give us a sense of how you ended up working on environmental issues. And if you had an interest in this topic as a kid, or you developed it later in life, what drew you into this field?
Bernie Bastien-Olvera: Yeah, I think I started to get more involved in this topic when I was a kid. I really liked to go camping near the mountains in Mexico City, where I am from, and there's something very special about camping in the mountains of Mexico City in summertime, which is that there are a lot of thunderstorms that sometimes can be really, really intense. So, as a kid, I always went camping there as a teenager. I think that really connects me with the nature of my city.
But there was this particular day that I remember—this particular camping trip when I was in high school. There was this big, super-intense thunderstorm—like big winds, a lot of rain, a lot of thunder, and many of our tents in this camping trip just blew out. They were in the sky. It was crazy, because they were these tents that were not the new, light tents. They were the vintage style: very thick materials, large metallic poles—the ones that you need three or four people to carry, and it just seemed like kites in the sky. For me, it was really surprising, and, by that time, I was between studying drama theater or Earth sciences. That settled up my internal debate, and I was like, “No, I really need to understand our atmosphere, our ecosystems, the forest, the mountains—how these energies work right here above our heads.”
Daniel Raimi: Wow, that's such a cool story. The tents flying in the air; I can totally picture it. I grew up in North Carolina, and we always had big thunderstorms in the summertime, but I was not a big camper, so I never had a tent flying away from me. That sounds like quite an experience.
Bernie, we're going to talk today about ecosystems and, particularly, the potential impact of climate change on ecosystems. This is all stemming from a paper that you and several colleagues have recently published in the journal Nature called “Unequal Climate Impacts on Global Values of Natural Capital.”
We'll have a link to the paper in the show notes, of course, but let's start by just simply defining a couple of terms. The focus of our conversation is really about ecosystems, today. Can you give us an introduction to this term “ecosystem”? We've all heard it a million times, but what does it actually mean, and how do ecosystems provide benefits to society?
Bernie Bastien-Olvera: Sure. In general terms, an ecosystem is an aggregate collection of animals, plants, bacteria, soils, and the physical environment surrounding them; like the weather patterns, for example, that all share a similar geography, or all of them are in the same landscape. This is what an ecosystem is, and they are really behind everything that we value as humans. They sustain our lives, giving us food, materials, and the proper conditions to do our daily lives.
They also are behind a lot of our economies. They are behind the conditions that make our economies work properly, and they are behind the raw materials that are used in many industries. They give a lot of benefits to people, and there are so many benefits that we wouldn't be able to understand this universe of nature's contributions to people if we didn't have a framework.
One of the most common frameworks to understand these benefits is the use and nonuse values of nature. We can think about “use values” as those benefits that we get from ecosystems anytime we interact with them, either directly (for example, going to the forest to cut some wood to fuel a stove) or indirectly (like, all the materials that were used to form many of our household items, for example). The “nonuse values” are all of those benefits that we get from nature, even without interacting with them.
As a personal example, I really value, for example, the Oyamel Forest in Michoacán, because it's shelter for the monarch butterfly. I like to live in a world where butterflies have a home. For me, it's important that this forest is there, even if I don't get to visit it, or I don't have plans to visit it in the future. These are sort of the main two branches of nature benefits in this framework. Of course, there are many others.
Daniel Raimi: That's a great description and great examples. For listeners, it's intuitive that ecosystems provide enormous benefits. They sustain us in all sorts of important ways. But one of the things that's complex when we're doing research on these topics is that, to really inform policymaking, we often have to quantify the benefits that ecosystems provide. That can be really, really hard, especially for the benefits that aren't traded on an open market. Monarch butterflies aren't traded on an open market. Complex methods are required to try to value the benefits that they provide either in a use or a nonuse case.
Can you talk a little bit through the data that you and your colleagues use to estimate benefits—especially those nonmarket benefits of ecosystems in your paper?
Bernie Bastien-Olvera: Yeah. You're completely right. Now, when we don't have a price or a clear market signal to estimate these benefits, it becomes really difficult to estimate them. But of course the economic valuation literature has come up with many methodologies to estimate these sorts of benefits to people.
These two can be categorized in two main areas. One is revealed-preference methods. We can find the footprint of how humans or societies are behaving regarding certain trade-offs that they can make directly or indirectly in the market that we can measure. For example, these are travel cost methods. How much does it cost to go to a national park, for example, in terms of entrance fees, but also in terms of the time that we are spending there? This can give us an idea of how much we value these sorts of benefits.
Then, there's also another category of economic valuation, which are the stated-preference methods. These are mostly used to estimate the nonuse-value benefits, which is asking people what their willingness would be to pay to protect an additional amount of, for example, marine area, or an additional hectare of a mangrove.
All of these are methodologies that are employed in primary studies, where researchers actually go to places or design a study that can elicit those values for people. But I didn't do a primary study; rather, I used a global data set, which is the Changing Wealth of Nations data set from the World Bank, which already has global values at the country level. The key thing in this data set is that these values of different ecosystem benefits are already standardized across the globe with different metrics that are useful for us in economics, such as GDP. The benefits that are in this database are what we get from forests in terms of recreational services, for example, or water resources, or other forest products—and also the value of protected areas.
To answer your question and give an idea to the listeners, for example, how this data set values the benefits that we get from protected areas—because it's really challenging to get these estimates, what they do is use a valuation method called “opportunity cost,” which is imagining that, because we are protecting a natural area, we are letting go of other profits that we are not realizing, because we're not converting that protected area to, for example, an agricultural field.
This is a way in which the World Bank, in this case, measures the value of protected areas. Of course, they are leaving out a lot of other values that protected areas give to people, but they are saying that at least the data set values the foregone profits that we are not realizing by converting this area to an agricultural field. That's a data set that I used.
The main innovation that we did here in this study was to combine this data set of global values of natural capital with other output from the ecology literature, which is output from dynamic global vegetation models. These are computational models across the world that tell us how vegetation will move. What we did is that we were able to map the values that we get from nature to the different plant groups that we can model from the present through the end of the century.
Daniel Raimi: That's great. And, of course, you're using climate models to estimate the changes in the climate, which translates into changes in land cover and then changes in the value in terms of market benefits and nonmarket benefits of those ecosystems. Does that sound about right?
Bernie Bastien-Olvera: Yeah, that's exactly what we did.
Daniel Raimi: Great. We're going to dig into detail in just a minute, but first let's start with the headline. Can you give us some of the top headlines that you and your colleagues pull out from this paper on how you estimate climate change potentially affecting natural capital over the course of the century?
Bernie Bastien-Olvera: What we were able to do is to pin down a number—an estimate of this mechanism in terms of market and nonmarket values. In terms of the nonmarket values, for a moderate emissions scenario—like, just above 2°C by the end of the century—we estimated an average global loss of 10 percent of nonmarket ecosystem services. This is quite a lot, but also for the market values—all the ways in which we use ecosystems to fuel our economy—those are not as large as 10 percent. They have one characteristic, which is that they will unequally affect lower-income countries.
Daniel Raimi: That's one of the main points that's emphasized throughout the paper: that some of the largest impacts occur in some of the poorest parts of the world. Can you tell us a little bit more about why it is that these particular parts of the world are particularly vulnerable in the analysis that you carry out?
Bernie Bastien-Olvera: There are mainly two mechanisms here or two factors that drive this inequality-intensifying mechanism; that is, the biome shifting throughout the world. First, overall, ecosystems are moving toward the poles—from the equator toward the poles, on average, by the end of the century. This is a slow movement, but it is happening.
So, in a way, this matches the places where most of these lower-income countries from the Global South are located. Most of them are within the tropical regions. They are located in places where the ecosystems will migrate out of their country boundaries, or they will just also become lower in terms of area cover in their countries. So, one thing is that the movement is towards the polls, and that, mainly, lower-income countries are in the tropics.
The other one is, How much do these economies rely on ecosystems themselves? We have varying degrees in which country-level economies rely on their local ecosystems, and varying degrees in which they use their ecosystems as raw materials to fuel their economy, so to speak. What we see is that this factor of ecosystems is very important for lower-income countries. They really depend a lot on what they can get from their local forests and ecosystems to fuel their market economy, which is not the case for richer economies, which mostly rely on other nontangible aspects of the economy, or by importing goods and services coming from other ecosystems in the world.
Daniel Raimi: That's so interesting. Can you maybe give us an example or two of a country or a hypothetical country that's somewhere near the equator that relies on ecosystems for a substantial share of its economy? Maybe just give us a feel or an example for how climate change affects that particular economy and its ability to grow economically.
Bernie Bastien-Olvera: We can think about a hypothetical country that is near the Global South. Think about a country in Latin America, for example; its economy is not as well-developed as other richer countries, and it relies a lot on, for example, wood materials to both fuel their industries, but also as a primary product for persons and for local societies to flourish.
That's another good thing about using this global database of the World Bank, because they have estimated these shares of the economy for each particular country that depends directly on these ecosystems. Basically, we can imagine that the raw materials enter the industry and enter households to allow the market economic activity. But also, there's another factor that we put into play here, which is kind of the innovation in what is called the “production function” now, which maps economic activity to the different factors of production, which is sort of like the conditions in which we are sheltered as the different country-level economies allow our economies to flourish.
These conditions are, for example, having a variable climate in which workers can go to factories, to the agricultural fields, and to do their job in the most efficient way. We are using as input these two types of natural capital. One is in the form of raw materials, and the other one is as an enabler of market production.
Daniel Raimi: That's really interesting. To get a flavor for some of these land cover changes and how they vary across space, there are some really amazing figures in the paper. I'm thinking about Figure 2 in particular; people can check it out. I feel like I could look at that figure for several hours and still not have captured all the riches in it.
Another question that came to my mind reading through this analysis is how big some of these impacts were compared to other ways that we measure climate damages that researchers have come up with. We've done shows in the past about the social cost of carbon, and we've talked about the potential impacts of climate change on human health, agricultural production, and other parts of our society. These damages that you estimate in this paper—how do they stack up relative to some of the other climate damages that are assessed in the research?
Bernie Bastien-Olvera: That's also a great question, because, for example, some recent studies have assessed or estimated the effect of climate change in the market economy or as a percent of GDP. They have estimated that future climate change can reduce up to 10 percent of GDP by the end of the century. Our estimate is that biome shifts would cause, on average, a 1 percent reduction of GDP. So, we can see that, only by accounting for this mechanism, basically one-tenth of the estimated impacts on GDP are due to biome shifts. This is pretty large, considering that we are not taking into account, for example, other larger phenomena in the ecosystems; for example, wildfires or biodiversity loss and how that could affect the market economy.
But, on the other hand, for the nonmarket benefits—those are higher. Those are expected to be reduced by 10 percent by the end of the century, which is quite a lot. Just to give you an example—compared to mortality effects of climate change under the same warming scenario as the one that we're using, the average mortality rate increase is expected to be 2 percent. So, for example, what I want to say is 2 percent for mortality and 10 percent for nonmarket benefits. That's quite a lot. It’s in the same order of magnitude, and still we're expected to lose a lot because of biome range shifts in terms of the nonmarket benefits they give to society.
Now, there's another aspect in which you mentioned how this could, for example, translate to the social cost of carbon, this metric of measuring climate impacts in the society. When we translate this 10 percent reduction of nonmarket benefits in terms of their monetary values, it is really, really small, especially compared with other metrics like mortality, which is quite a lot.
This is due to, first, the evaluation methods that are used for the different benefits or the different welfare components of society, which, for mortality, use the value of a statistical life, which is quite high. And for these nonmarket benefits, as in the example that I told you, some of them are quite low. For example, for protected areas, we are just estimating or using the value that we would have gotten if we had converted that protected area to an agricultural field.
So, this 10 percent reduction translates into small damages—first, because of the methods that we're using, and second, because of the benefits that we are measuring. We are only measuring four benefits, the ones that I mentioned: water resources, forest resources, natural protective areas, and recreational services. That’s four out of the many, many diverse benefits that we get from nature. I would say, in terms of percentage, it's a lot and comparable to other components of climate impacts in society. But, in terms of monetary values, it's quite small.
Daniel Raimi: Right. That's so interesting. That distinction of how much does the service itself change versus how much does the valuation of that service change is such an interesting economic question. I love that you pointed out that we are certainly not capturing all of the values here, and that's really important to keep in mind.
Another question that I was wondering about and hoping you could speak to is in the simulations that you and your colleagues run. I was wondering if there are any patterns regarding whether market or nonmarket benefits were affected more heavily, or if they were affected roughly the same. Could you help us understand why that might be? Is there something about the market benefits of ecosystems that might be more or less heavily affected under climate change scenarios than the nonmarket benefits that we as society enjoy?
Bernie Bastien-Olvera: That's an excellent question, because, certainly, we can see in the output that market benefits are affected less than the nonmarket benefits. I would say that it all comes down to, not the vegetation patterns, but rather how this vegetation is used as an input in the welfare components of society, either as an input as a factor of production in the market economy, or just as an asset that gives us a flow of benefits.
There's something really interesting regarding the vegetation patterns and how they change. For the lower-income economies, or mostly for countries that are in tropical regions, something interesting happens: grasslands are mainly substituted by forests. In general, we see forests in our imagination as more diverse or more productive. We share an imaginary around forests; they are better in some ways than just having a grassland. This also is something translated into the ways that we categorize plant functional types, which is this categorization that is used in these models that project future pathways of vegetation throughout the world.
Something interesting is that, even though tropical forests are replacing (up to a certain point) grasslands in the tropics, we still don't see an increase in people valuing more forests than grasslands. That has to do with our historical view of what is valuable; for example, mostly people from the Global North are the ones that have categorized this type of forest or this type of grasslands.
There's been some studies, for example, in human geography, in which they go back to some communities that are surrounded by what is categorized as grassland, and they ask them, What is this category for you? How would you categorize this? And they come up with a very skewed vision of what the values are for the people. Most of the time, the value that these local ecosystems give to people are way more than what is usually thought of with grasslands. I would say that's something that we need to work on a little bit more—to represent the diverse and rich types of ecosystems that we have throughout the world now throughout different regions.
Daniel Raimi: That's so interesting. So, these studies that you're talking about in human geography—these essentially are stated-preference surveys where researchers are going to communities and asking people about how they value their ecosystems? Or is it some other approach?
Bernie Bastien-Olvera: This is one step before doing that. This is just simply going to these places and asking, What is this ecosystem? We have that this ecosystem in our global data set is categorized as grassland with such and such characteristics—does that sound right to you? It's been shown that, most of the time, it is miscategorized, or there are many categories that are not taken into account. Then, if we put a value of, for example, net primary productivity, or even the ecological values, like the physical characteristics and biophysical characteristics of those ecosystems—these are misrepresented.
What you point out is what we would have to do next. How can we represent in these global models, and in these global valuation methods of natural capital throughout the world, different frameworks of both ecological characteristics and the values that those ecosystems give to people?
Daniel Raimi: That is so interesting, and it actually feeds in really nicely to the last question I wanted to ask you before our Top of the Stack segment, which is about limitations.
With any study, there are limitations, and you already mentioned a couple with the analysis that you've done here. But I'm wondering if you can just expand more on any other really central limitations that you see in your analysis and also in the literature more broadly, and then maybe whether you're actually working on some of those topics now. I'm not sure what you're working on these days, but I assume it has some connection with the work that you've already done, and maybe with trying to overcome some of those limitations.
Bernie Bastien-Olvera: There are many, many limitations in this study, because it touches so many different angles from many different disciplines. I would say that this is the part of the paper that is the richest part—the discussion and the discussion of the limitations, because it really paints some directions where we need to do more research. Some of them are the ones that I mentioned, regarding, for example, not taking into account large ecosystem changes or phenomena like wildfires. There are some ecosystem models that also project ecosystem changes by the end of the century and turn on the wildfires model in the model. That would be a really interesting follow-up study to do. What is the marginal impact on these market and nonmarket benefits if we turn on the wildfires model in these computational models?
Another thing is the diverse frameworks to understand nature benefits. That's also something that there has been a lot of research on, in which there's new research that comes up with frameworks that are created by decisionmakers, by Indigenous communities, by economists, and by ecologists, in which we're trying to come up with a framework with which we can expand diverse visions of nature.
Lastly, while we’re not taking this into account, another set of ecosystems that are quite important for us as humans are all the marine ecosystems. We are working with dynamic global vegetation models, like terrestrial models, but we are just missing all the things that are happening in the ocean, and how all those things enable both our market economies and also our welfare as a society. That really connects with what I'm currently doing as a postdoctoral fellow in the Scripps Institution of Oceanography, which is basically to come up with a social cost of carbon, or come up with the climate impacts in society through the oceans. I'm really excited to at some point say something about that that would be similar to this study.
Daniel Raimi: That sounds absolutely fascinating. Of course, with oceans, we've got not just temperature change, but acidification and species loss and so many other dynamics. That sounds really complex and fascinating. I'll look forward to inviting you back on the show when you've got some interesting results from that analysis.
Well, Bernie Bastien-Olvera, this has been a really great conversation. I've learned a ton, and there's so much more to unpack from this analysis. I hope listeners will check it out. But let's ask you the last question we ask all of our guests before we wrap up today, which is to recommend something that you've read or watched or heard that you think is really great and that you think our listeners would enjoy. What's at the top of your literal or your metaphorical reading stack?
Bernie Bastien-Olvera: That's a great question. Well, this is a movie recommendation. I just saw it recently, although it's not very recent. It's from 2018. It's called The Biggest Little Farm. Because we have been talking about ecosystems, this is about a couple that just dropped their jobs at age 40. They were working in Los Angeles, and they just dropped their jobs to buy a piece of land near Los Angeles, and they started a farm, but they wanted to create a working ecosystem within that little farm. They avoid pesticides or any sort of plant control or technological resources, but they solve every problem throughout seven years, which is the span of this documentary, only using the connections of an ecosystem to make a farm productive and to make a farm work.
This is a really great movie to understand ecosystems, our connection with them in market terms and also in nonmarket terms, and yeah, all the values that a small ecosystem can give to a family and to the people. I recommend it. This is directed by John Chester in 2018.
Daniel Raimi: Great, The Biggest Little Farm. That sounds really fantastic and dovetails perfectly of course with our conversation today.
So, Bernie Bastien-Olvera, one more time from University of California, San Diego, thank you so much for coming on to Resources Radio and sharing this fascinating work with us. We really appreciate it.
Bernie Bastien-Olvera: Yeah, thank you so much for having me. My pleasure.
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