Managing Natural Assets Alongside Engineered Ones

Managing Natural Assets Alongside Engineered Ones

Natural assets like wetlands can provide services like water storage and purification.

PHOTO COURTESY OF ROBERT JONES.

Asset management is a familiar concept for most local governments and water utility providers, but when they hear the term, almost everyone thinks about wastewater treatment plants, buried pipeline, and pump stations. The Municipal Natural Assets Initiative (MNAI), a Canadian nonprofit, is aiming to change that. MNAI’s core insight is that natural assets like wetlands, forests, and creeks provide tangible services for municipalities that are similar to those provided by engineered assets like retention ponds and culverts. By inventorying, analyzing, and maintaining their natural assets, local governments and utilities can make intelligent decisions about whether or not to build engineered assets and the wisdom of development that will interfere with these natural assets.

In this interview, MNAI Executive Director Roy Brooke speaks with Municipal Water Leader Managing Editor Joshua Dill about the concepts behind natural asset management and the results that communities have seen from putting it in practice.

Joshua Dill: Please tell us about your background and how you came to be in your current position.

Roy Brooke: I spent much of the 1990s working in Ottawa as a political advisor, including to Canada’s environment minister. Then, I worked for the United Nations for about 9 years, based primarily in Geneva, Switzerland, and later in Kigali, Rwanda, working at the confluence of humanitarian affairs and environmental and climate change issues. Around 2011, after our child was born, we moved back to Canada. I became director of sustainability for the City of Victoria, British Columbia. Later, as a consultant, I became aware of the pioneering work that the Town of Gibsons, British Columbia, was doing to recognize its natural assets as core infrastructure. The Town of Gibsons, the Smart Prosperity Institute, the David Suzuki Foundation, and my own firm, Brooke and Associates, also realized the national potential of Gibsons’s work. From this realization, MNAI was born in 2015, and I have been working there ever since.

Joshua Dill: Please tell us about MNAI.

Roy Brooke: The core idea of MNAI’s work is that a natural asset, such as a forest, green space, wetland, or riparian area, can provide many of the same services that local governments would otherwise need to provide via an engineered asset. For example, a wetland can store water, purify water, and reduce downstream flooding in much the same way that engineered culverts and retention ponds could. However, most local governments, to the extent that they are thinking about natural assets at all, are thinking about them from a fairly narrow perspective: as social, recreational, cultural, or green amenities. All those aspects are important, but in seeing natural assets in that narrow manner, governments are failing to consider other core services for which they could be understanding, measuring, and managing their natural assets. Stated differently, there’s a gap between the potential of local natural assets and the way that most local governments are contemplating or conceptualizing them.

So, there is a gap, and it matters for a number of reasons. In the United States and Canada, there are challenges related to aging and deteriorating infrastructure and delayed maintenance. Issues like climate change are making the situation considerably worse in many communities. What used to be a 100-year storm event may now happen several times in the same winter. Local governments need a different way to conceptualize and to deliver services.

We’re finding that standard modern structured asset management processes provide a platform for thinking about natural asset management. That is because asset management, in its modern incarnation, which is derived from International Organization for Standardization standards, does not ask whether an agency needs a green asset or a grey asset. Instead, it asks what service the agency is trying to deliver sustainably, cost effectively, and reliably. To the extent that it can be demonstrated that natural assets provide a service reliably and cost effectively, they have a place within that asset management system, just like any engineered asset.

The Town of Gibsons on the Sunshine Coast of British Columbia, north of Vancouver, is a small community of about 4,000 people. It was one of the first local governments to stitch together the idea of modern asset management and ecosystem services. The members of the local government kind of backed into it. They were looking at all the town’s engineered assets and doing inventories, condition assessments, and operations and maintenance plans. When they got to the end of the process, they realized they’d ignored the aquifer, the forest, and the forest shore, which provide the town with clean drinking water, stormwater management, and protection from winter storms and sea level rise, respectively. This was a moment of insight that led to the first asset management policy in North America to put engineered and natural assets on the same footing in a local government context. This led to a slew of other changes, including changes to subdivision bylaws and the charges that developers are charged for new developments and changes in how natural assets are managed and accounted for.

The Town of Gibsons, the Smart Prosperity Institute, the David Suzuki Foundation, and my own firm, Brooke and Associates got together in late 2015 with a range of stakeholders in Vancouver to discuss whether this work was replicable and could be scaled. Our answer was yes. That led to the birth of MNAI, which incorporated a year ago as a nonprofit.

MNAI does work at two levels. One is direct work with local governments to help them identify, measure, model, and manage their natural assets using MNAI’s methodology, which is based on standard asset management practice and uses a growing suite of tools. The other is enabling work—for example, identifying funding sources for local governments and working with individual professions such as planners to help them understand the opportunities for natural asset management in their work.

This stream in Oakville, Ontario, provides the town with water conveyance services, just like an engineered asset.

PHOTO COURTESY OF THE TOWN OF OAKVILLE.

Joshua Dill: How is MNAI funded?

Roy Brooke: Our funding comes from a wide range of sources. When we work with local governments, they pay part of the costs of the services they receive from us. The remainder is funded by a diverse set of donors, including provincial governments, the Federation of Canadian Municipalities, Natural Resources Canada, and the Real Estate Foundation of British Columbia.

Joshua Dill: How do you identify a discrete natural asset in a natural environment where everything is interconnected?

Roy Brooke: We can conceptualize of a natural asset in one of a couple of ways. We can start with a natural asset itself—for example, a green space, a wetland, or a riparian area—and identify its biophysical attributes—for example, how much water a wetland stores. Based on that, we can calculate the services that it could provide. For example, if we know the storage capacity of a wetland and the rate at which it lets water disperse, we can calculate its effects on downstream peak flows and flooding. We can also, using a replacement cost method, calculate what it would cost to provide those services by other means. We also model scenarios: What would happen if everyone near the asset built as of right and reduced its total area? What would happen in various climate change scenarios in which there are more frequent and intense rain storms in winter and potentially drought in summer? Based on the results, we can develop different implementation options required to maintain the desired level of service.

The results that we’re getting are really interesting. After we launched MNAI, our first national cohort was made up of five communities, three in British Columbia and two in the province of Ontario. One of the latter is the Town of Oakville, which is in a fully built-out, older urban area. Winter storms are becoming more frequent and intense, and at the same time, people are pulling out their smaller bungalows and putting in larger McMansions, reducing the amount of permeable surface. That’s putting pressure on the existing stormwater management system, which is not engineered and is largely made up of remnant streams and grassy ditches. There is also pressure from homeowners to culvert the streams and keep them out of sight. However, we calculated that to replace even a 240-meter (790-foot) stretch of this fairly unexciting-looking ditch via an engineered means would cost C$1.2 million (US$904,000). Once you have that information, it becomes hard to ignore. It doesn’t force you to any one particular conclusion, but it is information that the community can leverage in thinking about how it wants to manage stormwater in the future.

Joshua Dill: Are municipal natural assets generally things that are on public land, or are features on private land also considered?

Roy Brooke: It’s almost always both. Local governments sometimes own the land that provides the service, but in many cases, the natural assets are also found in areas owned by others or within the jurisdiction of others. Of course, the natural assets themselves don’t care about jurisdictional issues. In the case of Oakville, many of those grassy ditches are on private land. But the information provided about them creates at least the basis for a discussion related to stormwater utilities, covenants, easements, and other mechanisms to ensure that private actions don’t create an undue public cost. In Gibsons, part of the forest is owned not by the town but by the province of British Columbia. Nevertheless, the province gives the town permission to go in and undertake management work on land that they don’t own. On the face of it, it seems ridiculous to do work on land you don’t own, but the fact is that they are deriving services from that land. If they didn’t do it, they’d be racking up far larger expenses.

Joshua Dill: What does natural asset management look like in practice? Are the assets being inventoried and recorded in a computer system?

Roy Brooke: We follow a standard asset management methodology that has been adapted for use with natural assets. We have developed a suite of tools that can be configured for use in different local government settings. First, there’s typically a scoping discussion with the local government to understand what services it is concerned with, or conversely which natural assets are of interest. Then there is normally a process of inventory. We’re not necessarily inventorying all natural assets in an area right now, as this is all fairly new work. We typically start at subwatershed levels, though one of our projects in British Columbia has moved to an entire-watershed scale. We inventory the assets of concern; do condition assessments; and then, based on our understanding of the services they provide, work to model the scenarios that are of interest to the local government. What happens if we build on half the wetland or on none of the wetland? What happens if we restore it or acquire more wetland or forests? Then we work with them to create different management options to help them secure the desired service-level cost effectively and reliably.

Joshua Dill: What have the results of natural asset management been?

Roy Brooke: The Town of Gibsons knew that a lot of development was going to occur in the upper town, and it knew it had to manage storm water somehow. It did a side-by-side comparison of an engineered option and a natural option. The engineered option consisted of 4 kilometers (2½ miles) of front line and some engineered retention ponds. That clocked in at around C$4 million (US$3 million). If you’re New York City, that’s probably a rounding error, but in a small community, which the bulk of North American local governments are, it’s a ton of money. The natural option was to do some ongoing measurement, maintenance, and monitoring in the forested area, for example dredging out channels every few years. That was estimated at C$800,000 (US$603,000), and moreover, it was not a capital expenditure. It was something the town could pay out over time. It didn’t need to be borrowed all in one shot.

In the district of West Vancouver, we began fairly narrowly by looking at the economics of daylighting, or uncovering, streams that had been culverted. That work unleashed other considerations. Now, the district of West Vancouver has completed or is completing an inventory of all its natural assets and evaluating them. The median home price is something like C$2.8 million (US$2.1 million), and there’s an amazing amount of pressure and impetus to build. If you build without understanding the value of the natural assets, they have an implied value of $0. That means that the natural asset is going to lose every single time. An analysis of the value of the community’s natural assets doesn’t mean that it is going to cease to develop, but it does mean that it now has a basis for understanding the services it would lose in a variety of different development scenarios and the value of those services.

In all the cases that we have looked at, the natural assets have a substantial value. We looked at two subwatersheds in the Credit Valley watershed west of Toronto. In this 1,000-square-kilometer (386-square-mile) area, the wetlands we looked at have a service value of about C$700 million (US$527 million), rising to about C$765 million (US$576 million) in climate change scenarios. That brings us to our second finding, which is that natural assets typically increase in value over time. That is because they’re resilient and adaptable. Unlike an engineered asset, which doesn’t grow—if your pipe is 12 inches, that’s how big it is—natural assets are inherently adaptable. Our third finding was that in all cases, the natural asset met or exceeded the provincial standards that we were looking at, namely, surface water quality standards and the ability to manage a 100-year storm event.

Joshua Dill: Is MNAI active in the United States?

Roy Brooke: Only peripherally, but there is enormous opportunity. We have spoken to one major U.S. city that is doing a lot in the stormwater management area but has not really knitted it together with asset management. This is an area in which much more could be said and done. Both sides of the border benefit from many of the same assets. An obvious example of this is the Great Lakes and the surrounding area.

Joshua Dill: What is your vision for the future of municipal natural asset management?

Roy Brooke: Our mission is to make municipal natural asset management a mainstream practice across Canada and to inspire action beyond. Whatever your jurisdiction, natural assets are providing services from which local governments are benefiting. Understanding, measuring, and managing natural assets can benefit local governments with everything from risk liability to service delivery.

PHOTO COURTESY OF MNAI.

Roy Brooke is executive director of MNAI. He can be contacted at royb@mnai.ca.