Gretchen Daily, professor of biological sciences and senior fellow in the Woods Institute for the Environment

Stanford Challenge

What is a honeybee worth? Or the serenity of an unspoiled nature preserve, alive with native species? Both have value, but quantifying that value when making land-use and conservation decisions is a complicated and largely unknown process.

To address that problem, Stanford has joined with The Nature Conservancy and the World Wildlife Fund (WWF) to create the Natural Capital Project. This interdisciplinary research effort is designed to make conservation attractive and commonplace by developing a new process for incorporating the values of nature into decision making.

Gretchen Daily, a Stanford professor of biological sciences and senior fellow in the university's new Woods Institute for the Environment, leads Stanford's involvement in the project. Ecosystems can be seen as capital assets, Daily says. Depending upon how they are managed, they supply a stream of benefits, without which human life would cease to exist. These include goods (such as seafood and timber), processes (including water purification, flood control, and pollination), life-enhancing attributes (such as beauty and serenity), and the preservation of options (genetic diversity for biotechnology).

"Once people see ecosystems as capital assets, a light bulb goes on," Daily explains.

For example, a honeybee might seem inconsequential, unless you are one of the world's 25 million coffee farmers. In a recent study, Daily worked with Taylor Ricketts, director of conservation science at WWF, to examine the value of remnant rainforest amid coffee plantations in Costa Rica. They showed that small patches of rainforest, which serve as important habitat for the bees that pollinate coffee plants, increased crop yield by 20 percent and reduced bean deformities by 27 percent on one nearby coffee plantation. The higher yield alone added more than $60,000 to the farm's annual income.

Managing ecosystems like the precious assets they are will require new scientific approaches, new financial instruments, and new government policies. The Natural Capital Project is therefore pursuing three concurrent efforts: first, developing new tools to incorporate the values of natural capital into decision making, including market-based mechanisms; second, launching an international network of projects that bring to life the promise of this way of viewing nature; and, third, magnifying the impact of these on-the-ground projects by engaging decision makers, from local communities to the international finance arena.

The project involves sites around the world, primarily in three regions: the Eastern Arc Mountains of Tanzania, the upper Yangtze River Basin in China, and the Sierra Nevada Mountains in California. But the project grew out of Daily's ongoing work in Costa Rica and Hawaii. She and several Stanford colleagues received a grant from the Woods Institute's Environmental Venture Program, which funds research that brings together experts from different fields to study environmental issues.

The team includes Stanford Law School faculty Margaret "Meg" Caldwell and Barton "Buzz" Thompson, Jr., co-director of the Woods Institute and the Robert E. Paradise Professor of Natural Resources Law; Pamela Matson, the Chester Naramore Dean of the School of Earth Sciences, Richard and Rhoda Goldman Professor of Environmental Studies, and Burton J. and Dedee McMurtry University Fellow in Undergraduate Education; Bill Barnett, the Thomas M. Siebel Professor of Business Leadership, Strategy, and Organizations in the Graduate School of Business; Paul Ehrlich, the Bing Professor of Population Studies; Harold Mooney, the Paul S. and Billie Achilles Professor of Environmental Biology; Peter Vitousek, the Clifford G. Morrison Professor of Population and Resource Studies; and many others.

Their work in Hawaii has examined forests of koa, an endemic tree, which have been largely displaced by cattle ranches. In addition to having very high timber value and providing habitat for native species, the forests provide groundwater recharge, climate stabilization, and flood control benefits. Daily and her colleagues in economics, law, public policy, and ecology are exploring ways to reward local landowners for reforesting their properties and providing these benefits.

Daily's personal interest in valuing ecosystem services began when she was an undergraduate biology major at Stanford. Today she serves as the Stanford Parents University Fellow in Undergraduate Education and directs both Stanford's Center for Conservation Biology and the university's Interdisciplinary Graduate Program in Environment and Resources—two more programs that bring together scholars from throughout the university.

Stanford's support for interdisciplinary research is key, Daily says. "Providing a good environment in which to engage in these collaborations is crucial. There is so much to learn from one another across campus."