The abundant natural capital of the watershed of San Juan Bay Estuary is a critical part of the regional ecosystem and economy. The wetlands and mangroves of the coastline around the city of San Juan support rich biodiversity, erosion control, and moderate flood events. These benefits – and others produced by functional natural systems – are known as ecosystem services, and they represent significant, long-term contributions to San Juan’s local economy. This is the first study to estimate the dollar value associated with these critical ecosystem services within the city and surrounding watershed.
Around the world, planners and policy makers are starting to include the value of natural capital assets (e.g., watersheds, forests, shorelines) and ecosystem services to better understand and value relationships between healthy environments, resilient economies, and thriving communities. Including these assets yields a more complete understanding of the contribution of restoration and stewardship projects and ultimately fosters more practical, cost-effective policy outcomes.
This analysis finds that the watershed’s natural capital contributes $14 million to $61 million in ecosystem service benefits each year, around 33 percent of which are provided within San Juan’s municipal jurisdiction. These can be viewed as assets providing a flow of benefits over time, similar to a building or a bridge. Over a 100 year period at a three percent discount rate, this amounts to an annual asset value of between $447 million and $1.9 billion. With stewardship to maintain the health and function of that natural capital, this annual economic contribution can continue in perpetuity. Given the limited economic studies currently available for San Juan’s nearby ecosystems, these estimates are rather conservative, addressing only those factors for which supporting research is available. As more detailed ecological and economic research on the region’s ecosystems emerges, these estimates are quite likely to grow.