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Business and Sustainability


Looking to Nature for Answers

The New Economy of Nature The Quest to Make Conservation Profitable by Gretchen C. Daily and Katherine Ellison

A Book Review by Joe Kresse
(Originally appeared in Timeline #66 November/December 2002)

Rather than always going for the technological fix, which often brings with it unintended consequences, why not find solutions in the way Nature does, and pay for those solutions, which really means paying for "Nature's services."

New York City has long been reputed to have some of the best drinking water in the U.S. How has New York achieved this goal? With a modern, high-tech water filtration plant? No. The answer, as wonderfully explained by authors Gretchen C. Daily and Katherine Ellison is that New York relies on Mother Nature for its great water!

In 1989, however, this was at risk as the City was faced with an order from the Environmental Protection Agency to build a filtration plant that could cost a budget-busting $6 to $8 billion. This order was to be issued because increased population and tourism in the Catskill Mountains watershed was causing a "creeping cumulative impact" on the water supply.

As engineers began to think about building the filtration system, Robert F. Kennedy, Jr., an attorney for Riverkeeper, a group formed to protect the Hudson River, started looking at alternatives. A real estate agent volunteered that the City could buy all the land in the watershed for about $1 billion, much less than the cost of the plant. This point was very persuasive in convincing government officials also to look at alternatives. In addition, while the City didn't own much acreage in the watershed, it did have the power to condemn land within it and to regulate development as well.

So officials got to work to keep the water supply pure enough to avoid having to build a filtration plant. So far, the EPA has given the City an extension on determining whether a filtration plant is needed. To get this far the City has bought land (especially to create buffers around its reservoirs), constructed new storm sewers and septic systems, and updated existing sewage plants in the watershed area. Further, it has worked with upstate farmers to limit pollution, and paid $140 million to local governments and businesses in the watershed to keep their land supplying natural water filtration. How much longer New York can continue without building the plants depends on its continued success in keeping the watershed functioning as a natural filter, free of contaminants.

Kennedy said he hoped the lesson would last. "Good economic policy is always good environmental policy," he maintained. "Whenever you see people trying to pit the economy against the environment, it's always in terms of short-term benefits. If you want to treat the planet as if it's a business in liquidation, you can generate cash flow and the illusion of prosperity, but our children are going to pay for our joy ride. It's just deficit spending, a way of making a few people rich by making everyone else poor." In New York, it was the city government, responding to federal and local activist concerns, that led the effort to recognize the value of Nature's assets and slow down the "deficit spending."

This story, one of ten in the subject book, is a good example of what the authors are getting at. Rather than always going for the technological fix, which often brings with it unintended consequences, why not find solutions in the way Nature does, and pay for those solutions, which really means paying for "Nature's services." Here, New York officials saw that there was a greater value to having the land filter the water than in spending money on a giant filtration plant. And additional benefits, such as less sprawl in the watershed, more ecological farming techniques, increased desirability of the area to tourists because of its excellent condition-all have come about.

Engineers' solution was to straighten and channel the river in concrete. Instead, Napa residents came up with their own plan, which they called a "living river" approach. "The waterway and its adjoining land would be coaxed back into ancient patterns. Planners would relocate homes, businesses, and even railroad tracks built on the floodplain and would bar future development there. The Corps, in a stunning reversal of approach, would raze levees and either remove bridges or rebuild them at higher levels. More than 650 acres of wetlands would be created or restored-even right in the middle of downtown, where an oil-storage facility once stood-and the land would periodically sop up floodwaters as it had done in centuries past."

While this plan cost more than the Corps' original scheme, it has brought about a hugely successful revival of downtown Napa, which has brought in increased revenue to offset the increased costs, reduced flood insurance rates, and provided cleaner water.

Why aren't there more projects like these? Because Nature's services haven't been valued in the economic equation. And paying a landowner for services such as providing habitat for biodiversity, water filtration, carbon sequestration, and other services upon which our very survival depends, is a really new concept. The authors (Daily is an interdisciplinary scientist at Stanford and Ellison is an investigative journalist) say there are three basic steps to creating projects like these that use and value Nature. The first step is to identify that there are alternatives. This requires great creativity and the willingness to break with conventional wisdom. The second step is to identify the implications of each alternative being considered. "This can be an enormous task because the implications can be so sweeping and varied." But it's looking at the implications that leads to taking more of a systems view. And finally, the third step is to compare the alternatives. "This is the truly sticky part because it invariably means comparing apples and oranges and even passion fruit." Some things can be expressed in dollars but others not. Some effects will be short-term, others long-term. Some issues are economic, others moral.

"In the end-and fortunately-these kinds of comparisons needn't require pinpoint precision. It didn't really matter, for instance, that the costs of protecting New York City's watershed weren't dead certain. Planners knew that the watershed option would cost much less, and confer many more benefits, than the next cheapest alternative, that of building a water filtration plant. At the same time, the very process of considering a natural-asset approach in these early efforts has been worthwhile because it has drawn in a much greater variety of people, information, ideas, and values than is normally the case in planning development. Consider the cases of New York and Napa. Once a commitment was made to give attention to environmental services, it became necessary to involve people who would normally be left out, such as upstate farmers in New York and steelhead trout experts in Napa. This point of departure meant that the final shape of the projects much more genuinely reflected the values-often hard to quantify in dollars-of people whose lives would be most directly affected."

While many in the environmental community blanch at the idea of putting a price tag on Nature, which many of us feel is sacred, it is nonetheless a way of getting the attention of those whose lives are lived wholly in an economic world. This book gives some good examples of how this idea can work.

The New Economy of Nature The Quest to Make Conservation Profitable by Gretchen C. Daily and Katherine Ellison Island Press/Shearwater Books, Washington, D.C. 2002. 25.00.

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