Q&A: Launch of New NatCap Center at the University of Minnesota

The University of Minnesota (UMN) has been a crucial partner of the Natural Capital Project since NatCap began nearly 20 years ago. For many years, UMN’s NatCap team was supported by the UMN Institute on the Environment. As of September 2024, the formal home of NatCap at UMN has now shifted to the UMN Department of Applied Economics, with the formation of a new group based there: NatCap TEEMs (“The Earth Economy Modelers”). 

On September 23, NatCap TEEMs held a hybrid event at UMN to bring together distinguished guests, research partners, and department leadership to share their goals and aspirations for the new group. Watch the recordings here. 

In this Q&A we hear from Stephen Polasky and Justin Johnson – two leaders of NatCap TEEMS along with Nfamara Dampha, who is moving over from the Institute on the Environment to serve as research director and lead scientist (read more about Dampha in this recent Q&A). Polasky is the Regents Professor and Fesler-Lampert Professor of Ecological/Environmental Economics at the University of Minnesota, and Johnson is Assistant Professor of Applied Economics at the University of Minnesota.

This Q&A has been edited for clarity and brevity. 

Tell me about NatCap TEEMs – what is its focus, and how it has evolved?

Polasky: I’ve been involved with NatCap since the beginning, and I’ve been based in the UMN Department of Applied Economics that whole time. Throughout NatCap’s history, our team has brought a lot of the tools and perspectives on the importance of linking economics with ecology and natural sciences into the development of the InVEST models. Now with the formalization of our new group, NatCap TEEMs, we are solidifying our role as leaders within the broader NatCap partnership in that integration of economic and ecological modeling.  

Johnson: Our work looks at how the whole economic system connects to ecosystem services. How do ecosystem services perform better or worse under different scenarios? So as Steve said, we have now directly connected our economic models with high-resolution ecosystem service models. 

Why is the linkage of economic and ecological models so important?

Johnson: Linking this information opens up a whole new domain of questions you can answer. For example, any conservation policy will very likely have impacts on the economy. Meeting the 30x30 goals to conserve 30% of our lands and waters by 2030 will likely impact people who get their livelihoods from the land, or who want to expand their farm, but can’t if there is a protected area there. It’s helpful to know what those impacts might be in advance, economy-wide and in specific locations, to know where the most optimal places might be to implement policies. 

Polasky: For example, back when there was huge interest in ethanol – what happens when there is an increase in demand for corn in the United States? People begin planting more corn and less soybeans. People in Brazil clear forests to plant soybeans there, because the prices have gone up. This is exactly the kind of linkage you can get with this integrated model. People have run trade models before - but what impact does that have ecologically? If we just know what happens at the country level, in Brazil for example, that doesn’t tell me what watershed now has water quality that has been degraded. Ecology works at a very spatially fine scale. Economic models typically have been at very coarse scales. So the real key here is linking the scales, and thereby bringing the power of the economic models but at a scale that actually respects the ecological processes. That’s pretty unique to us.

How is it that your group is able to bring together economics and ecology in such an integrated way?

Polasky: Our team here has historically been very interdisciplinary. Compared to the rest of NatCap, we tend to skew more toward economics, but we have always had people with a natural science background as well – people getting PhDs in ecology who come take our economics classes, and likewise people getting PhDs in economics who take ecology courses too. We strive to have people who are fluent across this boundary. My goal is really not to have those boundaries between disciplines at all. You should figure out what tools you need in order to address the problems you are interested in.

We had a visitor come to our lab group once, and he said afterward, “I go to lots of universities and they tout how they are interdisciplinary and solutions-oriented, but you guys really are!” 

What are you most excited about with having this new group officially established?

Johnson: I am very focused on things like software, new tools, new algorithms, and I had gotten myself into a pretty thorny situation where I had written some code that was useful, but I was the only person who knew how to use it. So I'm excited about our training: we are getting a bunch more people trained up on what I do, and on InVEST in general, and how to do research that really requires thinking about the actual implementation.

Polasky: Over the last decade or so, the economic, finance, and policy worlds of course have discovered climate change as an important issue. Governments and the private sector have been working on what we need to do. Just within the last 2-3 years, that same kind of awakening has been about nature. NatCap gets some of the credit for bringing this awareness of the biodiversity crisis and the fact that we depend on nature in many ways. So one of the things I’m excited about is this allows us to scale up to meet the moment. 

There is so much need for bringing good science to these questions… how do we run a civilization, provide food and all the material goods we need, and do this in a way that is sustainable and does not undercut our own goals? These are huge questions that motivate us. In order to do that, you need the kind of team that can do the nuts and bolts of the pure science, the software, as well as the communication with other groups. I am really glad now to have a team around me that can help organize us to get this mission accomplished.  

Below are some of the key projects NatCap TEEMs is working on, along with others in the NatCap partnership:

• Frontiers for Sustainable Development Through Landscape Efficiency: Follow-on work, including a forthcoming peer-reviewed publication, related to a collaboration with the World Bank, “Nature’s Frontiers.” Combining cutting-edge, integrated natural science and economic models with an extensive new global dataset, this work provides, for the first time, a way for countries to identify optimal uses of their land, water, and natural resources, with a focus on win-win strategies that meet both economic and environmental goals. Countries can use this information to evaluate trade-offs in benefits across alternative land uses (such as grazing vs. crops) to guide their policies. More information here: https://naturalcapitalproject.stanford.edu/research/projects/natural-capital-index-global 
• Gross ecosystem product: A country-by-country assessment of GEP, the value nature contributes to the economy (a complement to GDP). GEP has been officially accepted by the UN Statistical Commission as part of its system of environmental-economic accounting). More information on GEP in China here: https://naturalcapitalproject.stanford.edu/research/projects/gross-ecosystem-product 
• Global General Equilibrium Economic Model (GTAP): Continuing to build on the work reported in this recent study that combines GTAP and InVEST: this work helps show how investing in nature could result in annual gains of $100–350 billion (2014 USD), with the largest percentage increases in GDP occurring in low-income countries. The policy options examined in this study included removing agricultural subsidies, financing research into improving crop yields and international payments from wealthy countries to poorer countries to support conservation. Continued trends in environmental degradation, on the other hand, would result in $75 billion losses annually, with the low-income countries suffering from 0.2% losses in GDP year on year. https://naturalcapitalproject.stanford.edu/news/investing-nature-improves-equity-boosts-economy-0 

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