John Reid: Teaching Ecologists the Economics of Nature

4 September 2009 | In 1997, John Reid already knew that conservation and economics were inseparable.

“All you need to do is spend a day in the field in any developing country in any region where there are conservation efforts going on,” he says, “and you see that the economic development issues are an integral part of solving the conservation challenges.”

At the time, however, few conservationists had looked at environmental problems through an economic lens.

Then, while pedaling home from his job in Conservation International‘s Washington, DC resource economics program, Reid started mulling over the dynamics of the community he’d become a part of: a conservation community whose primary culture was biology and ecology, and whose quest to protect species and land was driven by science and love of nature – rather than by an appreciation of nature’s utilitarian value to society and industry.

But what if conservationists could take a crash-course in economics?

Reid’s wheels spun across the bridge over the Potomac River, and “a number of different ideas and pieces fell into place,” he says. “By the time I was home, I had the idea pretty well-formed, the way it is today.”

This idea became the Conservation Strategy Fund, which runs economic boot camps of sorts for conservationists and conducts its own analyses of infrastructure projects. With training courses several times each year in the US and in South America, the fund helps people working in many of the world’s threatened areas acquire the tools they need to understand the role of economics in environmental decisions and to communicate the economic value of ecosystem services to policymakers confronting decisions about development.

Randy Curtis says it’s impossible to over-estimate the importance of distilling that value and then conveying it to the right people. A senior policy advisor for international government relations with the Nature Conservancy, he says a typical response to traditional conservation pitches is: “Don’t talk to me about the birds and the bees, or biodiversity, or endemic this and endangered that.”

Policymakers want numbers, he says – and usually with dollar signs in front of them – to convince their constituents, colleagues, and the media.

Wheels Start Turning

Reid and his colleagues now teach conservationists how to use economics to show the true costs and benefits of proposed projects. Yet when Reid first launched CSF, his own grasp of another economic reality – fundraising – was “pretty naí¯ve,” he says. Once he tracked down foundations with similar interests, he thought he’d just send out a letter, and the foundation would send back cash. His first flock of letters returned with nothing.

But his persistence paid off: a few small donations, then a series of grants from the W. Alton Jones Foundation, the Charles Stewart Mott Foundation, and the Moriah Fund, and CSF was on its way. The first course ran in September, 1999, in a partnership with Smithsonian; the students mostly came from Latin America, many from conservation NGOs and a few from government agencies – the profile that most CSF courses now serve.

At first, CSF had to market courses through conservation networks. Now, people seek the course out. CSF offers tuition-free courses in Brazil and other parts of Latin America; for these courses, more than 300 extremely qualified applicants typically apply for 25 spots.

CSF also runs a tuition-based course with Stanford’s Center for Conservation Biology. Reid expected enrollment to drop during the economic downturn, but this summer’s course was as popular as ever.

“We have to take some credit for selling the idea that economics is important to conservation work, and that shift in attitudes has generated some of the demand,” he says. “In the last five years, there’s been increased interest in the idea of environmental markets, and that’s brought more people who want to figure out the economics of environmental services, and of course the most recent manifestation of that is the forest carbon issue.”

Beginning in Brazil

Reid’s own interest in conservation work came almost accidentally. As a teenager, he felt a strong connection to the public lands around his home in Marin County, but he never thought that he’d have a career involving nature.

In 1991, when Reid was in his mid-20s, he went to Brazil to learn Portuguese; while there, he became an intern on an environmental project.

At the time, environmentalism in the tropics was still a modest – but growing – movement, he says. “I discovered that there were people out there who were making a career out of trying to protect the environment.”

Reid returned to the United States for a graduate degree in public policy at Harvard University, focusing on environmental policy and economics. He’s been immersed in the field ever since.

With Conservation International, he was studying an area surrounding a public reserve in Brazil, where CI and other conservation groups wanted to encourage private landowners to preserve forest, extending habitat for species in the reserve. Reid and his colleague looked at the incentives landowners had to make choices from cutting forest for cattle to ecotourism.

The project helped spark CSF.

“It was a really sensible way to go about things, to understand the economics before trying to figure out what the appropriate conservation strategy was,” Reid says of the project. “But it was also an incredibly rare approach within the conservation community.”

Conservationists in the Classroom

With the help of CSF’s courses, conservationists – particularly those who work in developing countries and don’t have the time or money to get a PhD in environmental economics – are starting to make economics an integral part of their work.

Starting with the Basics

The core course starts with a few days of basic microeconomics – how markets work and how individuals, families, and companies behave as participants in markets. While there have been other courses in valuing environmental services, Reid says those have skipped over basic market theory – things like supply and demand, what makes a competitive market, and how to privatize a public good.

“These are all key issues, and you need to know the basics to understand them.”

Then, students look at the methods for assigning value to ecosystem services.

“The goal is to give people real fluency and familiarity with what all of these methods are, what their potential is, what their limitations are, where they’re most appropriately applied,” Reid says.

The next part of the course varies depending on students’ interest. A group interested in forests might focus on forest economics, exploring concepts including the basic economics of timber, how harvests are timed, and what decisions forest owners might make.

The course wraps up with a cost-benefit analysis, using spreadsheets to calculate rate of return and net present value of an investment, taking examples from everything from a small-scale sustainable animal husbandry project to a $6 billion hydropower project that threatens indigenous groups.

Students then present their results, tailoring their talk to a particular audience: politician, NGO board of directors, media. Those slated to speak to local community members have to slash terms like “internal rate of return” from their explanations; if they’re talking to a politician, Reid says, they only have five minutes to make their case – “and the guy takes a phone call in the middle of the meeting.”

Communicating the Calculations

The point, Reid says, is to reinforce that numbers are useless unless they can be communicated.

The courses don’t offer environmental economics as a cure-all approach for environmental issues – or turn participants overnight into economists – but Reid says students come away with practical knowledge to start chipping away at conservation challenges.

“They can find conservation approaches that are more cost-effective, and they can influence development policy in a way that is economically more efficient, more equitable and more environmentally sustainable.”

Participants also come away happy.

“They say it’s the best thing that ever happened to them,” says Curtis, who’s helped send as many as 50 TNC employees to the CSF-Stanford program.

Getting Results

One of Reid’s original goals, along with giving conservationists a solid background in environmental economics, was to find people with an analytical bent who could actively pursue this work alongside more seasoned environmental economists.

Once the courses are over, CSF has often joined with students to create research teams.

One example: After the first course in Brazil in 2000, three students wanted to do a cost-benefit analysis of a water diversion project. The group was a true mix: an analytical government researcher, a long-haired activist from the affected countryside, and a member of the national environmental agency. Together, they determined that the water diversion project would waste millions of dollars and wreak environmental havoc.

With the convincing data delivered by course participants, the national and state governments “saw that the public works project was a white elephant,” Reid says. Instead, they created a 1.7-million acre protected area, one of the earliest validations of CSF’s work.

Since then, former students have done influential work in Tanzania, Panama, and Brazil, among other places – and a few have even become a part of CSF’s staff. Reid estimates that the core staff of 15, based in Brazil, Bolivia and the United States, has contributed to the conservation of around four million acres of habitat.

The Consultancy Game

More and more, CSF was asked to perform analyses independent of teaching courses, and today the group provides cost-benefit analyses for major infrastructure projects around the world.

“They are now recognized not only as a great training organization, but also as an honest, objective and very competent analytical team for assessing major infrastructure development projects,” says Jason Cole, a senior program officer at the Gordon and Betty Moore Foundation, one of CSF’s funding sources. “Their findings and conclusions bear more weight now and we are seeing their work as directly influencing key decision-makers.”

In Brazil, CSF has studied an area of the Amazon where major road rebuilding is proposed – and found that there’s no economic benefit to the project, Reid says. Two Brazilian students-turned-staff members have done cost-benefit analyses and looked at the costs of protecting the land along the road in the case the road is built.

An Evolving Course Catalogue

When Reid began CSF in 1998, valuing ecosystem services was just beginning to take root.

“Since we started doing this work, the world has changed,” Reid says. CSF’s courses need to be ever-evolving, so Reid and his colleagues are tapped in to the latest research and policies on economics and the environment in order to infuse their courses with current information.

“Since the beginning, we’ve taught people about instruments for market-based environmental protection, so we’ve been talking about environmental taxes, and we’ve been talking about cap-and-trade, and the concept of how markets can accomplish environmental goals cost-effectively if they’re set up right,” Reid says. “So it’s a short leap to talking about REDD now and the kinds of things the international community is trying to hammer out.”

Reid already sees a need for more economics-based training on the issue – they’ve already been starting to incorporate some REDD-based information in current courses.

“Depending on the outcome of Copenhagen, we’ll be launching a series of REDD-specific economics trainings next year,” he says.

Marine conservation is another area that CSF plans to increasingly spotlight for its students. Coastal marine environments are incredibly economically valuable, Reid says, and policy tools for conservation are often already in place that can turn this economic value into conservation.

“Even more than the tropical forest, there’s a real opportunity to marry the economic interests and the conservation interests,” he says.

Hitting the Trail

In Panama, there’s an area of cloud forest where CSF analysis helped locals defeat a proposed road that would have gone through a national park and destroyed a popular hiking trail. Reid returned last fall and walked the trail in Volcan Baru National Park; the all-day rain that filtered through the trees reminded him of winter hiking in northern California.

“I felt completely at home and just grateful that it was there, and that we’d played a role in protecting it,” Reid says.

He’s known for bringing others out on the trail, too. Reid typically requests meetings that include a hike or bike ride, Cole says – a chance for discussion not only of the project at hand, but to experience the natural world they’re working to protect.

When he’s on his own, Reid uses his mountain bike to get into the same mental zone that first fueled Conservation Strategy Fund.

“I find that my brain goes into some different kind of a pattern when I bike, and new ideas do come up and solutions to problems emerge,” he says. “Riding is also a great way to have the discipline to get out in nature regularly and remember why I’m doing this work.”

Cameron Walker is a regular contributor to the Ecosystem Marketplace. She may be reached at [email protected].

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