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11-2010 NEWS & ANALYSIS 40 ELR 11129
Can the Deepwater Horizon Trust
Take Account of Ecosystem Services
and Fund Restoration of the Gulf?
by Carrie Presnall, Laura López-Homan, and Marc L. Miller
Carrie Presnall is a Master’s student and Peace Corps Fellow at the University of Arizona School of Natural Resources
and the Environment and the Udall Center for Studies in Public Policy in Tucson, Arizona. Laura López-Homan is an
Assistant Professor in the University of Arizona School of Natural Resources and Environment and an Assistant Research
Professor at the Udall Center for Studies in Public Policy. She is the lead editor of Conservation of Shared Environments:
Learning From the United States and Mexico, the rst volume in the new series e Edge: Environmental Science, Law,
and Policy (Univ. of Arizona Press). Marc L. Miller is the Ralph W. Bilby Professor at the University of Arizona James E.
Rogers College of Law. He currently serves as the lead series editor for e Edge. See http://www.edge-books.com.
November 1, 2010
Dear Mr. Feinberg,
We write today to emphasize the importance of restora-
tion as an appropriate and necessary goal of the Deepwater
Horizon compensation fund, and to note the centrality of
the concept of ecosystem services to the proper assessment of
compensation for environmental harms and strategies for
achieving ecosystem restoration. To the extent that the exist-
ing Trust authority is not sucient to take account of these
concepts, we encourage you to seek broader authority.
Restoration as Part of Compensation
President Barack Obama has repeatedly emphasized the
importance of looking not just to the past with respect to the
Gulf, but to the future as well. In his June 12 Oval Oce
address, President Obama said: “Beyond compensating the
people of the Gulf in the short term, it’s also clear we need
a long-term plan to restore the unique beauty and bounty of
this region.” In late August, BP CEO Bob Dudley, speak-
ing to the Southern Governors’ Association, said that BP will
“make this right” and restore the region. e BP website reaf-
rms this commitment, stating that “[a]t BP, we have taken
responsibility for the cleanup in the Gulf,” and “[w]e have
committed to do everything we can to make things right in
the Gulf region, working as long as it takes, on the ocean, on
the shore and in the community.”1
However, there appears to be some tension between this
broad and commonly asserted commitment to restore the
Gulf and the scope of the Deepwater Horizon Oil Spill Trust
and the Gulf Coast Claims Facility (GCCF), which you now
1. BP, Making It Right—Highlights, http://www.bp.com/extendedsectiongeneri-
carticle.do?categoryId=9034427&contentId=7063885.
administer. e GCCF was established “for the purpose of
administering, mediating and settling ... Damage Claims.”
e Trust document denes damage claims as follows:
3. “Damage Claims” shall be limited to amounts owed by the
Grantor pursuant to: (i)claims resolved and settled by the
GCCF (“GCCF Claims”); (ii)amounts owed by the Grantor
pursuant to nal judgments or settlement agreements that
are resolved outside of the GCCF process and relate to the
Oil Spill (“Other Resolved Claims”); (iii) natural resource
damage costs (including assessment costs) pertaining to the
Oil Spill (“NRD Claims”); and (iv)state and local govern-
ment response costs pertaining to the Oil Spill (“Govern-
ment Response Costs”)....2
Do you believe that you have the authority under the
GCCF claim funds to pay for restoration projects, or do you
believe your responsibility is limited to a narrower remedy
of xed payments for environmental harms suered to date
from the oil spill? If you cannot fund restoration projects,
how will you compensate for ongoing and future harms? If
the Gulf’s ecosystems are not restored, people will continue
to suer well into the future from an ecosystem that no lon-
ger provides the economic and cultural services it once did.
If, at the end of the day, all current harms from the Deep-
water Horizon spill have been compensated, but the ecologi-
cal systems upon which much of the region’s economy rests
are not restored, the president and BP will have made empty
promises to restore the beauty and bounty of the region.
2. Deepwater Horizon Oil Trust Agreement, Aug. 6, 2010, available at http://
media.nola.com/2010_gulf_oil_spill/other/Trust%20Agreement.pdf.
Copyright © 2010 Environmental Law Institute®, Washington, DC. reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
40 ELR 11130 ENVIRONMENTAL LAW REPORTER 11-2010
Ecosystem Services to Measure Both Harm
and Hope
e restoration of the Gulf’s ecology and economy will
require concepts and strategies that do not uniformly t into
a xed payment to discrete claimants for past harm. e
concept of ecosystem services provides a critical and well-
established scientic measure for some of the harms from the
spill. Attention to ecosystem services can help provide solu-
tions that aim not solely for past compensation but also for
restoration and protection of Gulf residents’ future economic
and cultural well-being.
Ecosystem services are the benets humans receive from
functioning ecosystems and the species that comprise
them. e Gulf of Mexico and Gulf Coast ecosystems
provide a wealth of services, including seafood, ood con-
trol, carbon sequestration, habitat for resident and migrat-
ing wildlife, hunting, sport shing, wildlife watching and
other outdoor recreation, a rich local culture, and more. It
has been well-documented how these services benet Gulf
residents and visitors.
Attention to the importance of ecosystem services had
been identied as relevant to Gulf Coast restoration even
before the Deepwater Horizon spill. In 2009, President
Obama convened the Louisiana-Mississippi Gulf Coast
Ecosystem Restoration Working Group, comprised of high-
level agency ocials, to create a new plan for restoration. On
March 4 of this year, the Working Group released a “Road-
map for Restoring Ecosystem Resiliency and Sustainability.”
e Roadmap recommended more attention to ecosys-
tem services, and said that, “[t]he exploration of alternative
nancing mechanisms could foster progress on projects.”
e total damage to Gulf ecosystems is extensive but yet
unknown. Many sensitive ecosystems and animals remain
threatened by oil, dispersants, and tar balls. Numerous
sheries were closed, leading to economic losses today and
perhaps well into the future. Marine turtles are successfully
laying eggs on nesting beaches, but the hatchlings needed to
be transported to safer waters.
e oil spill also occurred in areas where primary produc-
tion is usually very high in June and July.3 Primary producers
(phytoplankton) are a food source for many marine organ-
isms, including commercially harvested sh and marine
mammals. Lost income from reduced primary production
has been estimated at $350-$875 million.4 Gulf Coast man-
groves provide billions of dollars worth of ecosystem services
in the form of wood, erosion and ood control, shelter for
young sh, and breeding grounds for shrimp.5 Oil spill dam-
age to the mangroves is yet unknown, but costs could climb
rapidly, as the value of coastal protection oered by man-
3. John Talberth & Stephen Posner, Ecosystem Services and the Gulf Disaster,
World Resources Institute, July 7, 2010, available at http://www.wri.org/
stories/2010/07/ecosystem-services-and-gulf-disaster.
4. Id.
5. Alice Kenny, BP Disaster Highlights Need to Value Ecosystem Services, E-
M, June 17, 2010, http://www.ecosystemmarketplace.com/
pages/dynamic/article.page.php?page_id=7590§ion=home (last visited
Sept. 22, 2010).
groves has been estimated as high as $300,000 per kilometer
of coastline.6
Ecosystem services from the Gulf region benet people
in distant communities as well, such as the diners around
the world who enjoy seafood imported from the Gulf. e
August 23, 2010, GCCF policy statement on eligibility crite-
ria for claims includes a proximity factor.
Economic losses which are more remote, or occurred at a
location more distant from the Spill, are less likely to be fully
compensated. In determining eligibility, and how much
compensation is appropriate for such eligible claims, the
GCCF will take into account geographic proximity to the
Spill, the nature of the claimant’s job or business, and the
extent to which the claimant’s job or business is dependent
upon injured property or natural resources. Each of these
factors will be weighed in the initial assessment of a claim.
Geographic proximity will primarily be based on whether
the claimant’s loss occurred in a community or municipality
adjacent to a beach, shoreline, marsh, bay, or tributary of
the Gulf where oil or oil residues came ashore or appeared
in the waters. Determinations regarding proximity focus on
where the claimant’s work or business activity takes place
(or normally takes place)—not an individual’s or business’s
mailing address.7
e GCCF’s use of proximity as a criterion for compensa-
tion may undervalue important interests. e Millennium
Ecosystem Assessment explained that ecosystems provide
benets that are enjoyed locally, as well as regionally and glob-
ally.8 For example, the only spawning ground in the Western
Hemisphere of the bluen tuna, a migratory species com-
mercially harvested around the world, is in the Gulf of Mexi-
co.9 e Deepwater Horizon spill occurred in the spawning
ground during the height of the species’ breeding season.
Because the bluen tuna population was already threatened
before the spill, the potential decline in the remaining blue-
n due to the oil spill could present a major loss of income for
local and global shing industries.
Ecosystem processes occur on diuse geographic scales.
Because of the spatial mismatch between where ecosystem
services are generated and where humans receive those ben-
ets, proximity will distort proper compensation for some
harms and claimants. In appropriate circumstances, the fund
should compensate for wide-reaching harms.
Structures for Restoration
We encourage you to clarify your ability to pay for restora-
tion in response to harms caused by the Deepwater Horizon
spill, and to account for ecosystem services when assessing
6. Id.
7. Gulf Coast Claims Facility, Understanding the GCCF’s Eligibility Criteria for
Emergency Advance Payments, Aug. 23, 2010, http://www.gulfcoastclaimsfa-
cility.com/proto_2.
8. M E A, E, H W-B-
(2005).
9. Paul Greenberg, Tuna’s End, NYT., June 22, 2010, available at http://
www.nytimes.com/2010/06/27/magazine/27Tuna-t.html?_r=1.
Copyright © 2010 Environmental Law Institute®, Washington, DC. reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
11-2010 NEWS & ANALYSIS 40 ELR 11131
those harms. If you do so, you will be well-served to con-
sider a variety of strategies that, when combined with direct
payments for past harm, may increase the chance of achiev-
ing the goal to return the Gulf to ecological and economic
health.
Commentators have widely noted the lack of detailed
data over time and space to fully account for harms from the
spill, and to distinguish ecological harms from other sources.
Perhaps one of the most helpful steps the GCCF compensa-
tion fund could make would be to fund scientically sound,
wide-scale, and long-term monitoring of the Gulf. Data col-
lection might include carefully structured citizen science,
since so many people live and work in the Gulf, and their
observations and interactions with the environment may pro-
vide unique insights into eects and trends.
Another strategy is to utilize tools from ecosystem mar-
kets. Ecosystem markets are an emerging mechanism for
achieving restoration and conservation of ecosystems and for
putting in place a structure to ensure continued benets to
human well-being.10 Ecosystem markets have been develop-
ing over the last decade and have provided payments for a
variety of services, including water quality improvements,
wildlife habitat, and carbon sequestration. Market incentives
can be especially benecial to property owners or restoration
professionals in need of funding to improve resource stew-
ardship or implement new conservation projects.
Several U.S. companies provide good examples of how
ecosystem markets currently work. Chesapeake EcoFinance
Company (CEFC) buys farms, restores habitat, reduces
nutrient runo, sells credits for wildlife habitat and nutrient
reductions, and then sells the restored properties with con-
servation easements for a small prot. Willamette Partner-
ship is developing mechanisms, such as a credit calculator for
dierent ecosystem services, which have been used by their
partner, the Freshwater Trust, in an online tool, StreamBank.
StreamBank allows local restoration professionals to initiate
restoration projects by entering project details on interac-
tive maps and online forms, thereby reducing planning and
implementation time from years to months.11 Another site,
LandServer, allows individual landowners in the Chesapeake
Bay area to map their property and use integrated data layers
from various agencies to determine if they can receive pay-
ments for implementing conservation actions.
10. Ecosystem Marketplace, Payments for Ecosystem Services, http://www.
ecosystemmarketplace.com/pages/dynamic/web.page.php?page_id=7183&
section=about_us&eod=1#pes_5 (last visited Sept. 22, 2010).
11. See http://www.thefreshwatertrust.org.
An Illustration of a Potential Ecosystem
Market for Restoration in the Gulf
One way of compensating for lost income due to decreased
phytoplankton production, or lost income due to spill-related
shing closures, could be to directly pay shers. Following
an adaptation of the CEFC model, impacts from the oil spill
could be oset in other ways in addition to direct compensa-
tion or oil cleanup. e Trust could remediate harm done
and improve Gulf ecosystem functioning by reducing the
“dead zone,” a hypoxic area caused by nutrient-rich runo
from the Mississippi River. e Trust could purchase nutri-
ent-reduction credits from a centralized broker, like Markit
or Mission Markets, to pay for upstream nutrient-reduction
projects, thereby improving water quality and increasing the
Gulf’s marine biodiversity and sheries’ productivity. e
number of credits required—the size of the market—could
be determined based on a variety of functions including, but
not limited to, estimated primary production loss, number of
acres aected by the spill, or income lost from shing.
In this way, the Trust would not only compensate sh-
ers for their direct nancial losses in the past, but also take
steps to ensure that the ecosystem on which shers rely will
be able to support the sh they need in the future. Incor-
porating ecosystem services into measures of harm and
strategic responses to the spill will increase the likelihood
of achieving sustainable and revived ecosystems. It is these
ecosystems that support the economies and communities in
the Gulf region.
We urge you to fulll the promises of President Obama
and BP and use the extent of your authority to consider new
mechanisms to restore the Gulf ’s ecosystem functions, now
and into the future.
Sincerely,
Carrie Presnall
Laura López-Homan
Marc L. Miller
Copyright © 2010 Environmental Law Institute®, Washington, DC. reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
