The Environment and the Bottom Line

Photo: Patrick Tehan

When then-21-year-old Gretchen Daily walked into biology professor Paul Ehrlich’s office in 1985, Ehrlich figured she was another smart Stanford senior with ambitions of being a scientist, like all those he had been advising for the past 19 years. What he didn’t know back then is that Daily would teach him as much as he taught her. Or that her work would identify and protect some of the most precious natural resources on the planet.

Today, Ehrlich, the conservation biologist famous for his 1968 book The Population Bomb, calls Daily “the top environmental scientist under 60 in the world.”

Daily, ’86, MS ’87, PhD ’92, is a pioneer in the field of natural capital, demonstrating how the well-being of humans depends on the well-being of ecosystems, such as forests, wetlands or coral reefs. As a professor of biology and the co-founder and faculty director of the Natural Capital Project, she works to identify and quantify the sometimes invisible benefits nature provides to society.

The Natural Capital Project (NatCap) is a joint venture among Stanford’s Woods Institute for the Environment and department of biology, the University of Minnesota Institute on the Environment, the Nature Conservancy, the World Wildlife Fund and the Chinese Academy of Sciences. Launched in 2006 and headquartered at Stanford, NatCap is a set of global initiatives and partnerships dedicated to integrating nature’s value into community, business and government decisions. It is based on a simple yet transformative concept: taking stock of natural assets — soil, water, air and living things — to enable the valuation of the wide range of services humans derive from nature. Forests act as natural sponges and protect us from floods and erosion; bees pollinate plants; fish provide sustenance to residents and businesses; and coral reefs protect the shoreline, lessening the impact of sea level rise.

“The Natural Capital approach is not just ‘Development can’t happen because I love nature,’” says Nicola Virgill, director of economic development and planning in the Bahamas’ Office of the Prime Minister and a NatCap collaborator. “Their approach advocates for helping developers and practitioners know what you are giving up, and what can happen depending on what you do. Then you — the community and the government — make the decision,” Virgill says.

“Nature provides us with all these things we take for granted,” says Daily. “We have always acted as if we would have these resources in perpetuity. But everything is changing today.” The list of environmental issues we face in 2018 is daunting: Climate change, overpopulation, mass species extinction, extreme weather, and air and water pollution are only the proverbial tip of the icebergs, which are also melting at alarming rates.

In calling out the value of nature as crucial to the policy-making conversation, Daily has landed on what many believe is a key pathway to solving the world’s most pressing environmental problems.

“She has captured people’s imaginations and the way they think about nature,” says Mary Ruckelshaus, ’83, managing director of NatCap, who has known Daily for 15 years and worked with her for a decade. “She has made a fundamental shift in the way people think about nature and human well-being.”

More than a price tag

NatCap teams spend months to years, even decades, working closely with local communities that are struggling to solve environmental challenges. On each customized project, NatCap brings experts — university scholars, software engineers, field researchers and boots-on-the-ground workers from nongovernmental organizations — together with local partners to gather the most current data on regional environmental issues. Then they model a set of scenarios: “What if we do this? What if we do that?” NatCap makes the economic and business cases for conservation, providing options that are sometimes described as “better, greener, cheaper, smarter.”

“People either love me or hate me,” says Daily, the Bing Professor of Environmental Science, director of the Center for Conservation Biology and senior fellow at the Stanford Woods Institute for the Environment. “They think I slap a value on nature, but that isn’t it. It is changing the way we operate. It is more than just slapping a price tag on nature. That alone doesn’t accomplish anything.”

Take Andros Island in the Bahamas. When NatCap and the Bahamian government began collaborating in 2015, Andros’s 10,000 residents were feeling the impacts of sea level rise and more frequent, more intense hurricanes.

“We were seeing increasing depopulation; agriculture and our fisheries were declining; and our population was aging,” says Virgill. “At the same time, there is this amazing habitat, some of it untouched, where you can wander through and see flamingos nesting. Our crabs are seasonal, and they are a delicacy, but they were being sold for pennies. There is potential for so much more, but people were having trouble eking out a living.”

Pressure was increasing to bolster the economy by building a larger cruise ship port and developing beachfront high-rise hotels. But there was also growing awareness that such development would have far-reaching implications for the nature that makes Andros unique.

So NatCap and the prime minister’s office went to work. They held community meetings, conducted surveys and went into the field to meet with residents. They completed comprehensive maps showing each region and its associated activities: crucial fishing sites, housing most vulnerable to sea rise, an inefficient sprawl of city services and homes.

During the two-year project, NatCap modeled a series of scenarios — from full development of the coast to none — and their relative outcomes. “We would get valuations for a lobster catch in one area, for example,” says Virgill. “It would be millions of dollars for one season. The science shows that major development would pollute the water, and you would have a major loss in the catch and in the livelihood of the fishermen. People are also coming as tourists, and for fresh fish. If you kill [the lobsters] off, you could lose both.”

The team ended up choosing a “sustainable prosperity” scenario. “The solution was somewhere in the middle,” says Virgill. “The end result is a development agenda for Andros Island that was people- and community-based and environmentally friendly, while also planning for substantial development for this island.”

Software as a solution

Since its inception, NatCap has collaborated with more than 150 organizations, mostly NGOs carrying out conservation work, in more than 80 countries. Its reach is enabled by its unique eco-mapping software, which is free and open-source, and guides users in the identification and economic valuation of the local land and water resources that affect human life. Once field research identifying and quantifying natural capital is complete, the data is entered into the software, which models different scenarios.

Consider a forest that creates natural flood control, stabilizes the local climate and helps purify water. If the forest is clear-cut to allow development, there will be profit from lumber sales, but the software might reveal that the profit would be more than offset by the costs of building retaining walls and rerouting roads that would flood without the forest.

Gretchen Daily - Gulf of MexicoSHORING UP: NatCap’s work often demonstrates the value of coastal protection. These marshes along the Gulf of Mexico protect communities from hurricanes and provide habitat for wildlife such as shrimp, fish and migratory birds, which are important to people and economies. (Photo: Carlton Ward Jr./TNC 2015)

“Software happens to work very well for certain types of problems,” explains NatCap lead software developer Rich Sharp. “If you have an expert on staff, you can refer to her and she would know what to do, but if you are trying to reach everybody on the planet, software is the proxy for an expert.”

Typically, NatCap provides its collaborators with information on specific trade-offs, rather than a total valuation of their natural resources. “Other folks tend to focus more than we do on dollar values,” says economist Benjamin Bryant, a NatCap postdoctoral scholar. In that way, Bryant says, NatCap’s work is distinct from that of other experts, such as ecological economist Bob Constanza, who in 1997 estimated the value of global ecosystems at $16 trillion to $54 trillion. “We tend to focus more on specific decisions and providing the information that is relevant to those decisions,” Bryant says. “Sometimes we do put monetary values, when that is what stakeholders want to see.”

NatCap has used its eco-mapping software to facilitate its work with China, one of its longest-running and largest collaborations. Daily and NatCap co-founder Steve Polasky, a professor at the University of Minnesota, joined forces with Chinese scientists and government officials more than a decade ago to carry out a countrywide initiative to protect China’s natural capital. In the wake of devastating floods in the late 1990s, the government designated enormous areas of agricultural land to transform back into grasslands and forest.

Gretchen Daily - Yangtze‘BREATHTAKING‘: China, which experienced devastating floods in the 1990s, has committed to restoring enormous areas of agricultural land to grasslands and forest. In collaboration with NatCap, it has identified five crucial services provided by nature to consider in future decision-making — including flood control and soil stabilization. (Photo: Ami Vitale/TNC 2007)

The NatCap team and Chinese collaborators identified five crucial “services” provided by nature that should be considered in future decision-making: sandstorm control; water for drinking, irrigation and hydropower; flood control; soil stabilization; and biodiversity. NatCap did a cost-benefit analysis that could be used in development, planning and investment decisions.

Daily points out that China, long considered a major polluter, is today moving more rapidly than the United States to put in place government policies that will secure water and move people out of harm’s way from flooding, erosion, sea rise and other natural hazards.

“It is breathtaking,” she says. “The pace is amazing.”

‘An intellectual godparent’

For those who maintain an old-fashioned view of what it means to be an environmentalist (backpacking and saving the pandas, as Ruckelshaus puts it), NatCap has some educating to do before its approach makes sense. People often name top-of-mind issues such as jobs, health care and good schools as higher priorities than environmental protection, researchers and pollsters have found.

“People don’t tend to think conservation is their first concern,” says Ruckelshaus, who in addition to her role as managing director is a senior Stanford researcher focusing on marine systems. “If you can show that the health of their children and their livelihood rely on nature, then it is a different conversation.”

That’s where Daily comes in.

Humble, accessible and, by her own description, shy, Daily is prone to say yes to anyone who asks for her opinion or help. She is the kind of person who makes whomever she is speaking with feel important. She is also quick to act, grabbing her phone to text a colleague she thinks would be better at answering a particular question during a recent interview.

“She is basically a genius,” says longtime mentor Ehrlich, “and more than being a genius, she is too nice and gives time to anybody and everybody at her own cost.”

Daily laughs off the comment, then quickly reiterates the urgency of the work and her passion for getting it done.

“I feel we are in for some shocks in our lifetime,” Daily says, sitting in her fourth-floor office in the biology building, surrounded by photos of her family and nature.

“We are probably going to see things humanity has never seen, and there will likely be real suffering,” she says. “At the same time, we have a shot at turning things around.”

Daily is a much-lauded scholar. Last year, she won the Blue Planet Prize, sometimes called the “environmental Nobel.” She has also received the 21st Century Scientist Award, the Sophie Prize, the International Cosmos Prize, the Heinz Award, the Midori Prize and the Volvo Environment Prize, to name just a few. The Blue Planet trophy, which brings with it $450,000 in research money, arrived in such a big box that her students had to move it on a dolly. Daily’s comment: “I’m not really a trophy person.”

Clearly awards aren’t what drive her. Nor is knowledge for knowledge’s sake.

“I have never felt I could just do research and describe how the planet was coming apart and not do anything about it,” says Daily.

It is her ability to bring clear-eyed planning to what many scientists say is an environmental crisis beyond repair that makes Daily a magnet for both students and colleagues.

“What sets Gretchen apart among most ecologists is she also goes out and makes great things happen in the policy world,” says Jeffrey Smith, one of her PhD students. “Gretchen is a shining example of doing the real work in the real world.”

“Gretchen is a kind of intellectual godparent,” says Mark Tercek, president and CEO of the Nature Conservancy, one of NatCap’s partners. He and Daily became acquainted when Tercek, formerly a managing director and partner at Goldman Sachs, decided he wanted to leave the world of investment banking to apply his efforts to environmental work. With her trademark generosity, Daily met with him and then connected him with other leaders in the field. “Never in a million years would it have dawned on me that two and a half years later I’d be CEO of TNC,” says Tercek.

“In my book,” adds the former investment banker, “saving nature is the smartest investment society can make.”

Chickens, cats and dark chocolate

At her home on a tree-lined street on the Stanford campus, Daily has created a sanctuary. From the walkway to the front door, one can hear the Rhode Island Red chickens clucking contentedly. Joshie, one of the four, was named after a favorite former grad student, Josh Goldstein, PhD ’07, who now works at the Nature Conservancy. Naming the family chickens is such an important task that Daily has written up their individual stories, which her teenage son and daughter draw on to select just the right moniker for each. PhD student Smith admits one of his goals is to have a chicken named after him.

Mornings start at 6 a.m. with breakfast for the family’s two indoor cats, and hand-fed grapes for the chickens if there is time. (“They like to have grapes with their brekkie,” Daily says.) Then it’s off for some exercise as the sun comes up — a bike ride, swim or gym workout. Although she is highly disciplined and a healthy cook and eater, Daily readily admits she has a dark chocolate habit, bringing out some treats to munch with a sparkling water during an interview in her light-filled living room.

Most comfortable in sweatpants or jeans and a zip-up jacket, Daily says she was recently advised by a new mentor that her attire was “playful at best,” so sometimes work requires a navy suit. Most days on campus, though, she is riding her mountain bike in her Dansko clogs, a helmet and a fleece.

“My favorite image of Gretchen is when we are in Costa Rica,” says Smith, who is studying the human impact on key insects at the remote NatCap field site in Central America. “If you get her out in the field, there is conveniently no cell phone service. She is out running around with a butterfly net.”

When Daily sweeps her butterfly net across the surface of vegetation in Costa Rican forests and on coffee plantations, she traps insects. The insects are then counted and compared, leading to conclusions about the differences between the sites where they were captured and what factors affect insect numbers and behavior. NatCap’s research on forests that border coffee plantations has demonstrated the value of bugs, birds, plants and the presence of mixed landscapes. Researchers have determined that the forest system and the coffee agricultural system are symbiotic.

Costa Rica’s Las Cruces Biological Station, Daily says, is her most beloved spot in the world. For the past two decades, she and fellow ecologists and students have traveled there to examine the ecological baseline on which much of her other work relies. They study some 1,158 species of plants and animals, which provide a vibrant window into unique ecosystems. When possible, Daily’s husband, Silicon Valley engineer Gideon Yoffe, MS ’83, PhD ’88, and their children join her on her field work there and in China, Amazonia, Indonesia and Africa.

Gretchen Daily - desk‘A LIGHT, JOYOUS TOUCH’: Daily‘s colleagues say she brings a sense of optimism to her work. (Photo: Patrick Tehan)

Daily attributes her love for nature to her upbringing in Marin County, Calif., where she lived from ages 4 to 12. Her father, an ophthalmologist, would sometimes accept barter arrangements from his low-income clients. This often involved payments of ducks, geese, dogs and, in one case, a half-wolf named Mishka, to whom Daily grew so attached that it traveled with the family to Germany, where they settled until she left for college at Stanford.

Her entry into science was serendipitous, facilitated by a radio broadcast on the military station where her family lived. Daily, then 16, was used to tuning in to find out whether her school was closed due to a bomb threat (common at the American school in Germany she attended during the anti-American ’80s). One day, she heard an announcement about a science competition.

Daily approached her chemistry teacher to ask if he would help her research acid rain, which he deemed too complicated. Instead, they agreed, she would look at pollution in the local river.

Today the report from Daily’s experiment, “Dissolved oxygen content in water,” lives in her office junk drawer. Typed on onionskin paper, the document contains carefully hand-drawn maps of the river, as well as a family friend’s sketch of Daily in braids leaning over the side of a tattered raft, scooping water into a cup from the partially frozen river.

The final research excursion was cut short after an onlooker called the police because Daily and her friend were heading toward a dam. The police called the girls to safety, but luckily, Daily says, they had collected their last sample. The resulting research report won Daily her first science award and a chance to fly to the United States to present at West Point.

Those who know and work with Daily today see her bring the same spirit and enthusiasm to the serious problems she studies.

“Gretchen shines a light on why we should be hopeful,” says her thought partner, Ruckelshaus, “and why it is worth working toward these solutions.” Ruckelshaus calls the work “life support for the planet.”

“She doesn’t get all morally self-righteous,” says the Nature Conservancy’s Tercek. “She has a light, joyous touch. Even in the face of really tough challenges, she is able to do her work while being as steely-eyed and realistic as any smart environmental leader, [yet] always remembering how fortunate we are to do such important work and to do our work in a joyous way.”

Expanding our view of capitalism

Of course, there are critics of the NatCap approach. Those who question the very concept include British environmental writer and activist George Monbiot. “Put a price on nature?” grouses a 2014 headline in the Guardian.“We must stop this neoliberal road to ruin.”

The column highlights what Monbiot calls our spectacular failure to protect the environment, and faults those applying the concept of natural capital: “We are trying to make a case to people who just don’t care about the natural world,” he writes. “How do we convince them, when they don’t share those values, to change their minds? To me the answer is simple. We don’t.”

Such critics argue that “putting a price on nature” demeans nature itself. That argument doesn’t hold water, say Daily and her colleagues.

NatCap’s chief strategy officer and lead scientist, Anne Guerry, sums it up in a blog post: “The words ‘natural capital’ seem to suggest, to the skeptical, that we’re reducing nature to a puppet of capitalism. In reality, a natural capital approach is actually a way of correcting capitalism’s myopia, expanding its view. We use capitalism’s own terms to help people who may not value nature a priori to see how important it really is.”

While no one at NatCap thinks the concept of natural capital will solve all of our environmental challenges, they argue it is a crucial piece of the puzzle.

“I’m wary too,” Daily says. “But valuing nature is not the same as ‘putting a price’ on it.” Sometimes prices are useful, she acknowledges, but the true goal is to bring to the fore the many hidden ways people depend on and affect nature. By doing so, she says, “we can create the smarter practices, policies and institutions needed to live together on this planet harmoniously.” 

Melinda Sacks, ’74, is a senior writer at Stanford.