A Handbook for Understanding Natural Capital - Earth Economics

Creative Funding
Concepts Engage the
Public in Supporting
Ecosystem Services
When we factor nature into economic decisions, we can
develop funding mechanisms to pay for the protection of
valuable ecosystem services. Small water surcharges, for
example, have been successfully implemented in cities to
raise money for their watersheds. In 2005, prompted by
local land trusts and the declining quality of their water, the
City of Raleigh, North Carolina began charging an impact
fee for new utility connections. The funds generated were
used to acquire property located around their drinking
water intake. As the program grew, it evolved into a line
item on ratepayer’s bills called a “Watershed Protection
Fee” of about 40 cents extra on a monthly bill. Since it was
implemented in November 2012, the fee has fulfilled the
city’s revenue goals and has generated over $1.8 million
for watershed protection. Thanks to community outreach
efforts on the part of Raleigh and the Conservation Trust
for North Carolina to educate and inform people about the
value of protecting watersheds, the fee has been met with
little opposition, especially among residential ratepayers.
Watersheds are not the only ecosystem to have benefitted
from creative funding mechanisms. Contrast what
happened in California (the closing of 70 parks) with
events that took place in Washington State that same year.
During the 2011 legislative session, Senators cited the
economic importance of natural resources jobs provided
by parks to gain support for the “Discover Pass.” The pass
would cost $30 annually and would be required on all
vehicles parked in public recreation areas like trailheads
and parks. The Discover Pass was approved, and produced
$22.2 million in revenue over the first 18 months ,
making up for some of the State Parks Department’s
budget shortfall with a robust funding mechanism. While
other states were closing parks in 2011, every one of
Washington State’s parks remained open!
Whether it is an individual homeowner paying 40 cents
a month for clean drinking water, an outdoor recreation
enthusiast paying for the upkeep of public land, or a multimillion
dollar investment on the part of a private or public
sector entity, when the value of ecosystem services and
the cost of losing them is made clear, investment is more
easily justified.
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