Resetting Expectations: the Value of Natural Systems and Government’s Role in Protecting Water

Report author Skip Pruss

This is the second of four policy briefs by former FLOW board chair, and former director of the Michigan Department of Energy, Labor and Economic Growth, Skip Pruss that make the economic case for government’s role in protecting the environment. Click here to read the full report. FLOW will unveil the last two briefs in the coming months.

Read the first report here

Read the first report’s executive summary here

 

The health and well-being of our state, our country, and our planet are dependent on maintaining the productive capacity of nature and the services it provides. Though not widely recognized or acknowledged, “natural capital” and the services provided by healthy ecosystems have always been the foundation upon which societies thrive and prosper.

The relatively new science of ecological economics now provides the means of assessing and quantifying the value of natural capital and related ecological services. The science indicates that natural systems endow trillions of dollars of annual benefits that society overlooks and takes for granted, yet undergird all global economies. Determining the value of natural capital and the associated ecological services provides a means of measuring and understanding the economic value of the natural world. Accurate data and unbiased information about the value of nature and the services natural systems provide are essential to inform public policy and legislative action.

Although there are many human impacts that impair and diminish natural systems, reducing the value and economic efficiency of natural systems, no greater threat exists than the warming of the planet caused by the continued emission of anthropogenic greenhouse gases, primarily from the combustion of fossil fuels. Recent assessments indicate that greenhouse gas emissions will cause future damages of more than $50 trillion by 2050, and the economic burden will disproportionally fall on developing economies. Decarbonization of the global economy by transition to clean energy sources is imperative. The good news is that there is a clear consensus emerging that the energy transition is not only technically and economically feasible, but also that the global economic benefits from decarbonizing the global economy are substantial, including safeguarding the Great Lakes freshwater system from the worst effects of climate change. Government’s role in accelerating the energy transition is essential.

Michigan’s water resources are a rich source of natural capital and provide significant ecological services that will become more valuable over time. Our abundant water resources will increasingly weigh to Michigan’s competitive advantage, but more likely than not, Michigan will face future challenges from states that will be stressed by inadequate water supplies and from water-dependent agricultural, commercial, and industrial interests. Our legal and moral authority to resist appropriation of our water wealth will be a function of how adept and effective we are as Great Lakes stewards in the conservation and protection of our water.

In this, governance in Michigan is failing. The Flint water crisis is a stark lesson in the pitfalls of overriding and ignoring government standards intended to safeguard public health and safety. The PFAS crisis is attributable to the inadequacies of existing environmental laws, exacerbated by failed government leadership that ignored the findings and recommendations of the scientific professionals. Both the Flint crisis and PFAS concerns are incidents of a much larger systemic problem—groundwater contamination that is pervasive, yet is being ignored by policymakers and political leaders.

The water-related exigencies Michigan is experiencing call for broader application of the Public Trust Doctrine to reestablish and reaffirm government’s responsibility to protect and safeguard water resources for the benefit of the public. Recognizing the interdependence of natural systems and the importance and value of the ecological services that water resources provide, the Public Trust Doctrine must be applied aggressively and proactively to address conditions that have the potential to harm or impair commonly held water resources.

Report’s Key Facts

  • Science informs us that nature and natural systems endow trillions of dollars of annual benefits that society overlooks and takes for granted, yet undergird all global economies.
  • Though not widely recognized or acknowledged, “natural capital” and the services provided by healthy ecosystems have always been the foundation upon which societies thrive and prosper.
  • There is not only an absence of tension between environmental protection and economic performance, but in fact, the health of the environment and long-term economic growth and prosperity are mutually dependent and inextricably interconnected.
  • Although there are many human impacts that impair and diminish natural systems reducing the value and economic efficiency of natural systems, no greater threat exists than the warming of the planet caused by the continued emission of anthropogenic greenhouse gases, primarily from the combustion of fossil fuels.
  • Recent assessments indicate that greenhouse gas emissions will cause future damages of more than $50 trillion by 2050 and the economic burden will disproportionally fall on developing economies.
  • Climate changes predicted for the Great Lakes Region include increased precipitation with a larger percentage of annual rainfall occurring in heavy precipitation events causing flooding, increasing soil erosion and nutrient loadings to tributary streams and rivers. More precipitation will also increase the frequency and amount of sewage overflows and further the propagation of algae, including cyanobacteria resulting in declining water quality and beach health. 
  • Warmer lake water temperatures will affect the distribution of fish by advantaging warm-water species over cold-water species, change aquatic plants and benthic communities, and accelerate eutrophication.
  • Decarbonization of the global economy by transition to clean energy sources including safeguarding the Great Lakes freshwater system from the worst effects of climate change is imperative. The good news is that there is a clear consensus emerging that the energy transition is not only technically and economically feasible, the economic benefit of the global energy transition would range from $65-160 trillion by 2050.
  • Safeguarding water resources and the ecological services they provide will become more challenging in a world where rising demand encounters growing water scarcity.
  • Escalating future demand and competition for water resources, intensified by a warming climate, will enhance the value of Great Lakes water, potentially increasing the chasm between the water rich and water poor.
  • Policymakers must come to recognize the importance of applying the Public Trust Doctrine to modern societal needs, the imperatives of evolving science, and to ensure water equity.
  • FLOW advocates for an expanded application of the Public Trust Doctrine to act as a shield for protecting water resources against activities that would reduce the quantity or quality of water or threaten to diminish or reduce the value of the ecological services the waters provide to the public.

Government’s Role in Protecting Human Health and the Environment

Since the 1970s, history has shown that government interventions requiring protection for human health and the environment through more stringent environmental laws have not only improved baseline conditions of our environment like air and water quality, but have also improved overall economic conditions. These studies, some of which were described in the first policy brief in this series, demonstrate the economic value of government-mandated protective standards by quantifying the benefits of protections aimed at improving public health and safeguarding the environment, as well as the high cost to the economy and public health of failing to protect the environment through adequate regulation.

Our politics fail to take into account the overwhelming benefits accruing to the public by the protections and safeguards effectuated by environmental standards. Though the political narrative has recently evolved to the point where some political leaders publicly acknowledge that there is “no conflict between economic performance and environmental protection” recognizing that society can have both, the reality, clearly found in the relatively new field of environmental economics, is that economic prosperity, indeed the world’s economies, are ultimately dependent on protecting the planet and the valuable resources that well-balanced natural systems provide. In economic terms, there is not only an absence of tension between environmental protection and economic performance, but in fact, the health of the environment and long-term economic sustainability and prosperity are mutually dependent and inextricably interconnected.

It is imperative that political leaders, policymakers, and citizens come to understand this critical association.

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