1. J.B. RUHL DAVID DANIELS ALLEN CHAIR IN LAW VANDERBILT UNIVERSITY LAW SCHOOL NASHVILLE, TENNESSEE, USA N ATURAL C APITAL AND THE R ULE OF L AW Second Asian Judges Symposium on Environment Dec. 3-5, 2013

2. Introduction

3. How to Protect Natural Capital How to Protect Natural Capital In Order to Protect Ecosystem Services In Order to Protect Ecosystem Services Groundwater recharge Water supply Sediment capture Flood control Biodiversity Wildlife Habitat Recreation The Legal Challenge

4. Building the Law and Policy of Ecosystem Services Context: The knowledge base (ecology, geography, economics) from which law must work Current Status: The baseline of existing property rights, regulations, and social norms Designing New Legal Principles: The choice of institutions and instruments to advance the new policies

5. Complex Ecology: Natural capital and its ecosystem services system are spatially and temporally complex Unclear Property Rights: Lack of clarity about land and resource owners’ rights and obligations Unclear Legal Authority: Uncertainty about agency and judicial authority to incorporate natural capital and ecosystem service values into decision making THREE KEY CHALLENGES

6. COMPLEX ECOLOGY The Entire Ecosystem Service Delivery System Must Be Protected 1. Natural capital source 2. Service provision (time A) 3. Service delivery channel (time B) 6. Many end user contexts 4. Beneficiary sites at different distances 5. Service delivery (time C) Wetlands River Clean water for farms and cities Streams Time and Distance

7. PROPERTY RIGHTS Establishing Rights and Duties Who owns ecosystem services?  Pollination? Groundwater recharge? Flood control? What services must landowners provide to the public?  Duty to public? What services must landowners provide to surrounding landowners?  Minimum standards of care?

8. PROPERTY RIGHTS Remedies What are the remedies for destroying natural capital or interfering with ecosystem services?  Private nuisance?  Public nuisance? What of misuse of public property?  Public trust duties?

9. LEGAL AUTHORITY Potential Sources Constitutions Treaties Legislative Statutes Administrative Regulations and Policies Law of Property, Torts, Contracts

10. LEGAL AUTHORITY Interpretation Questions Constitutional terms are broad Statutes pre-date awareness of natural capital Undefined statutory terms Unclear boundaries of agency discretion Balancing property rights with new policies

11. LEGAL AUTHORITY Challenges for Courts Establishing principles of Standing Pleading Evidence Burden of proof Remedy

12. BEGINNING AN EVOLUTION IN PROPERTY LAW? Examples of Judicial Innovation in the U.S.

13. The Situation In the U.S. Not much progress in public law forums: U.S. Constitution protects property rights but not the environment Some recent statutes enable natural capital markets  2008 Farm Bill and USDA Office of Environmental Markets Some federal agencies have begun to use ecosystem services as part of mitigation decisions  2008 US EPA and wetlands mitigation rule  2012 US Forest Service planning rule But US state courts have begun to adjust common law property rights

14. Palazzolo v. State, 2005 WL 1645974 (Super. Ct. R.I., July 5, 2005): Land developer sought to fill coastal pond to build homes State of Rhode Island allowed only one home to be built Developer sued for taking of property without just compensation Court denied taking claim, finding destruction of the pond would constitute a public nuisance because the pond “actually filters and cleans runoff” “This Court finds that the effects of increased nitrogen levels constitute a predictable (anticipatory) nuisance which would almost certainly result in an ecological disaster to the pond.” U. S. Common Law: Nuisance Doctrine

15. Avenal v. State, 886 So.2d 1085 (La. 2004) State of Louisiana sought to alter public water diversion channel Oyster farm leasing the area claimed taking of property Court denied taking claim because state must manage the area for the public trust “The public resource at issue is our very coastline, the loss of which is occurring at an alarming rate. The risks involved are not just environmental, but involve the health, safety, and welfare of our people, as coastal erosion removes an important barrier between large populations and ever-threatening hurricanes and storms.” U.S. Common Law: Public Trust Doctrine

16. Conclusions Courts will play a significant role in the development of natural capital and ecosystem services in environmental law: Defining property rights, duties, and remedies Interpreting constitutional, statutory, and regulatory provisions Establishing access to and standards of judicial relief Helping to shape social and cultural norms

17. QUESTIONS?