The ensurance protocol builds on established ecological economics frameworks for valuing natural capital. This page summarizes the methodology and provides links to detailed documentation.
why
Natural capital valuation requires:
- Consistent ecosystem classification
- Standardized service definitions
- Transparent valuation methods
- Linkage to ecological indicators
Without a framework, valuations are arbitrary. With one, they're comparable, defensible, and actionable.
what
stocks & flows model
The foundation is the stocks & flows model from ecological economics:
| Component | Definition | Expression |
|---|---|---|
| Stocks | Ecosystem assets (what accumulates) | Dollars ($) at a point in time |
| Flows | Ecosystem services (what circulates) | Dollars per year ($/yr) |
| Natural Cap Rate | Relationship between flows and stocks | Percentage (%) |
Formula:
Natural Cap Rate = (Annual Flows Value / Stocks Value) × 100
This creates a shared accounting language between ecology and finance.
the 15 stocks (ecosystem types)
Ensurance recognizes 15 ecosystem types, consistent with major classification systems:
| Category | Ecosystems |
|---|---|
| Terrestrial | Cultivated & Developed, Urban Open Space, Rural Open Space, Tropical Forests, Temperate Forests, Boreal Forests, Grasslands, Shrublands |
| Aquatic | Rivers & Lakes, Inland Wetlands, Coastal Systems, Marine Systems |
| Other | Polar & Alpine, Desert, Subterranean |
These map to IUCN habitat classification, SEEA ecosystem accounting, and NLCD land cover.
the 19 flows (ecosystem services)
Ensurance tracks 19 core benefits that nature provides:
Provisioning (6)
- Raw Materials, Food, Energy, Water Abundance, Healthy Soils, Medicinal & Genetic
Regulating (7)
- Climate Stability, Clean Air, Clean Water, Risk Resilience, Pollination, Erosion Control, Pest & Disease Control
Cultural (6)
- Habitat, Recreation & Experiences, Research & Learning, Aesthetic & Sensory, Art & Inspiration, Existence & Legacy
Plus two foundational benefits: Land Utilization and Resource Utilization.
This framework consolidates MEA, TEEB, CICES, and IPBES classifications.
RealValue methodology
RealValue expresses natural capital value through:
- Ecological Polygon — Defined extent, characteristics, and condition
- RealValues — Individual ecosystem service values converted to dollars
- Natural Cap Rate — Ratio expressing investment efficiency
Data sources:
- ESVD (Ecosystem Services Valuation Database) — ~9,000 value records
- FEMA Ecosystem Service Values — US per-acre values by land cover
- SEEA-EA framework — UN statistical standards
- TNFD — Nature-related financial disclosure guidance
ecological indicators
Natural cap rate metrics link to ecological indicators:
| Indicator Type | Examples |
|---|---|
| Biodiversity | SEED Biocomplexity index, species abundance |
| Carbon | Sequestration rates, storage capacity |
| Water | Quality metrics, flow rates |
| Condition | Ecosystem integrity scores |
This enables tracking how interventions affect both ecological health and economic value.
how
using the framework
For valuation:
- Define the ecological polygon (location, extent)
- Classify ecosystem type (which of 15 stocks)
- Identify applicable services (which of 19 flows)
- Apply value transfer from reference data
- Calculate natural cap rate
For comparison:
- Higher natural cap rates indicate more cost-effective conservation
- Cross-asset comparison enables portfolio optimization
- Temporal tracking shows intervention effects
classification crosswalks
The framework provides crosswalks between systems:
| Our Classification | Mapped To |
|---|---|
| 15 Ecosystem Types | NLCD, IUCN Habitats, SEEA-EA |
| 19 Ecosystem Services | MEA, TEEB, CICES, IPBES NCP |
| Value Methods | ESVD categories, benefit transfer protocols |
detailed documentation
Full methodology documentation is maintained in the Basin Field Manual appendix:
- Land Cover Classification & Ecosystem Typologies
- Ecosystem Services Classification
- Value Types & Valuation Methods
- Ecological Indicators & Metrics
- Glossary
key references
The framework draws from:
| Source | Contribution |
|---|---|
| Costanza et al. | Global ecosystem service valuation |
| de Groot et al. | TEEB foundations, service classification |
| SEEA-EA | UN ecosystem accounting framework |
| Dasgupta Review | Economics of biodiversity |
| TNFD | Nature-related financial disclosures |
| ESVD | Value transfer database |
related
- natural-capital — Stocks, flows, and valuation in practice
- natural-assets — How natural capital becomes investable
- ensurance — How framework informs policy pricing
- certificates — How par values are determined