Step 2. Inventory your environmental assets. Most public- and private-sector organizations already have on hand much of the needed information for an environmental asset inventory. The sources include planning documents, baseline surveys, environmental impact statements, biological assessments, and geospatial data holdings. It’s also worth talking to resource managers at other local facilities of interest, along with experts in local government agencies and nongovernmental organizations who can help decision makers understand the way a local facility, like a plant, fits into the ecosystem around it. Make a thorough list of the land and water that your organization owns or influences, and the effluent releases and other environmentally relevant processes for which it is responsible.
Step 3. Determine the goods and services potentially available with these assets. What types of goods and services could (or do) your assets provide? Timber, water supply (from reservoirs or streams), minerals, crops, fish, and game are obvious examples. The inventory of assets would also include permits, water rights, and pollutant and restoration credits. These often have market value as well as trading value in market-based regulatory regimes.
Finally, identify less obvious environmental assets. Many commercial and government organizations own wetlands that provide such services as water filtration and flood control. Other potential values are climate regulation, waste assimilation, disturbance prevention, nutrient regulation, biodiversity, soil formation, pollination, recreation, aesthetics, and habitat provision for endangered species. For example, the Marine Corps Base Camp Pendleton, near San Diego, is home to several endangered species, including fairy shrimp, gnatcatcher, and snowy plover. By setting aside a large portion of its land as natural habitat, the base supports its continuing claim to 125,000 acres and 17 miles of beachfront coastline in one of the fastest-growing regions in the United States.
Step 4. Specify the potential value of your environmental assets. Monetary valuation is relatively straightforward for assets and services that are sold in markets. Conducting a monetary valuation is more difficult — often impossible — for nonmarket assets and services. For any given asset, there are three possible ways to spell out the value so that the organization’s leaders can make investment and portfolio decisions:
• Monetize it: The most common approach to financial valuation is market appraisal. This approach derives an estimate of an asset’s worth on the basis of market data (by tracking sales of comparable assets), income streams, and the cost to replace the asset. Markets for timber and oil leasing rights make it easy to calculate their monetary value. Comparable studies enabled military officials at Eglin and other military bases to assign a monetary value to the recreational services they provide. Credits in pollution or emissions markets can also figure into a monetary value.
• Quantify it: Even when natural resources can’t be monetized, it is often possible to quantify their ecological value or their value to the enterprise. Several indicators have been developed for use by environmental agencies and others to compare practices and resources. For instance, the habitat equivalency analysis estimates the ability of a land parcel to provide habitat for wildlife. Environmental benefit indicators estimate the economic value of potential services from a watershed or ecosystem. One source on these valuation approaches is the writing of James Boyd, a fellow at the Resources for the Future institute in Washington, D.C.; these materials are available at www.rff.org.
• Describe it: Most natural resources can be qualitatively described in terms of their value to the mission and ecosystem. For instance, the leaders of Eglin Air Force Base might not have been able to put a dollar figure on the value of 400,000 acres of longleaf pine forest, but by cataloging and describing the forest, they made its value clear to themselves, to the Air Force, and to the surrounding community. A descriptive analysis might also evaluate the quality and relative importance of the asset’s ecological services. For instance, wetland assets could be designated as high, medium, or low quality, which would lead to different assessments of value for habitat provision, aquifer recharge, or other services.