An Indigo Industrial Ecology Paper
Creating systems solutions for sustainable development through industrial ecology

The Restoration Economy

Restoration: a Basic Sustainable Economy Strategy

by Ernest Lowe

The restoration and renewal of natural systems, rural areas, and our cities and towns is the most fundamental economic solution. The devastation of natural systems has seriously depleted the natural capital upon which all life depends. All life includes every type of ecosystem and its organisms, human economies, industries, and households. Inappropriately designed urban and suburban systems have mis-used massive volumes of materials, embody huge investments of energy and water, and generally operate with very low resource efficiency.

So investment in restoration of natural systems and the constructed environment is as necessary as the optimization of resources the Circular, Recycling, and Service Economies seek. It actually improves the production of renewable resources, thus adding major economic value. Restoration will play a critical adaptive role as climate change unfolds in the next decades due to greenhouse gas emissions. Every type of ecosystem and all human systems will be impacted by this transition to a warmer, less predictable climate.

Restoration of natural and human systems is already a well-established field of investment, with a value estimated as at least one trillion dollars annually. As environmental crises become more acute, it will evolve from scattered projects to regional initiatives integrating renewal of watersheds, forests, grasslands, coastal areas, farm lands, and urban areas. (Society for Ecological Restoration International 2003) Policy and investment to support restoration will create new opportunities for entrepreneurs, many new jobs (that can’t be outsourced), and a strong return in both profits and tax revenues.

A riparian restoration project in Illinois illustrates the holistic value of ecological restoration.

Flood-plain land along rivers is quite fertile and through the centuries has attracted farmers, who in turn receive support from public agencies to minimize flooding and limit or eliminate marshes. Often dikes and pumping keep the land fully available for farming except in extreme flood situations. While contributing to crop production, this widespread practice severely limits the natural services and biodiversity that undeveloped riparian systems provide.
  • Flooding is more likely as the absorption of high waters by wetlands is eliminated.
  • Habitat for migratory waterfowl and breeding grounds for fish are both reduced.
  • Habitat for wildlife including migratory waterfowl, game birds, and land and water species is reduced.
  • Farmers who follow the currently conventional approach of applying expensive chemical fertilizer, pesticides, and herbicides, cause severe pollution to rivers.
  • Ultimately the soil is degraded by the dependence on chemical inputs and the infrequency of flooding.
  • Large animal feedlots and pens add to river pollution through excessive runoff of nutrients.
Reversing these damages through riparian and wetlands restoration brings natural systems back into balance and has both public and private sector economic benefits. For instance, in 1999 the Nature Conservancy, a large non-governmental organization, bought a 1,700-acre farm in Illinois, at Spunky Bottom, along the Illinois River. TNC managers discontinued drainage of the site and allowed it to regenerate as wetlands and shallow lakes. Within a few years otters, muskrats, turtles, frogs, and fish populated the former farm. Waterfowl such as osprey and herons search for their meals among the grasses, reeds, and floating plants. It is now a recreational site for humans, a buffer for absorbing floodwater, and a purifying system for the river.

Spunky Bottom was a test site for a new project on 7,000 acres, Emiquon Farm 165 miles southwest of Chicago. Nature Conservancy ecologists will stop draining the land over three years, allowing a riparian wetlands ecosystem to spontaneously regenerate, as happened in the earlier project. They expect this to also renew the population of fish in the Illinois River, which once was one of the most abundant fishing rivers in the US. Migratory birds will find such restored wetlands a welcome stop over on their journeys north and south each year. Ducks Unlimited is an interest group whose members understand the value of ecological restoration as a means of maintaining viable populations of game fowl.  

Economic Values Created by This Riparian Restoration

An economist could calculate the economic impact of taking these farms out of agricultural production and allowing them to return to flood plain riparian systems. Some of the values generated include:
  • Reduced risk of flooding downstream through the ability of the marshes to absorb high water.
  • Bio-processing of pollutants from upstream by the marshes and wetlands.
  • Avoidance of pollution from chemical agriculture.
  • Sequestration of carbon dioxide to reduce input to climate change.
  • Productivity of the riparian fishery and increased gamebird population, yielding food and recreational opportunities.
  • Development of eco-tourism businesses to serve visitors, such as accommodations, restaurants, campgrounds, canoe rentals, tours, and local crafts.
A rich variety of enterprises and jobs will be created compared with the relatively few permanent jobs in a modern large-scale farm. The economic investment produces financial profits and rebuilds valuable natural capital, including high biodiversity, sinks for human pollution, and ecological resilience (the ability to adapt to change). “Natural capital” is, of course, a concept centered in the welfare of humans. It is worthwhile to back off from our own self-interest and simply perceive the intrinsic value of viable ecosystems functioning in an evolving balance.

The Dimensions of Restoration

This specific ecosystem restoration project creates a context for exploring the full range of economic opportunities, that are at the same time imperatives for maintaining the vulnerable ecological niche that enables survival of human life. Its special fields of innovation and effort are divided into natural systems and the built environment or constructed systems, however there are many areas of overlap.

Restoration of natural systems:
  • Watersheds, including wetlands, streams, rivers, lakes, aquifers, glaciers, (and manmade reservoirs and canals);
  • Coastal ecosystems, estuaries, dunes, beaches, reefs;
  • Forests, grasslands, deserts, and avoidance of desertification;
  • Airsheds and regional atmosphere.
  • Regaining balance in the global “grand cycles” that flow between the atmosphere and other living systems (oxygen, carbon, nitrogen, and sulfur) is a primary objective which requires both forms of restoration.
Restoration of constructed systems:
  • Sites of extraction, generation, or collection of natural resources to supply infrastructure and industry;
  • Urban and rural infrastructure for transportation, energy, water, sewage, waste, telecommunications; 
  • Residential, commercial, and industrial buildings and facilities and their interrelationship in resident usage and resource utilization;
  • Cities, towns, and suburbs as integrated land use systems in the context of their surrounding ecosystems (including historical restoration, neighborhood renewal, and rehabilitation of infrastructure);
  • Natural systems within the built environment, including parks, urban rivers and streams, and wildlife habitat and corridors,
We see farms and farming regions as constructed systems that are also natural systems, bridging the two categories. Renewal of farms is intimately related with the restoration of farming towns and villages, and neighboring urban centers. See a following section outlining the ways in which sustainable farming is interdependent with regional restoration initiatives.
Watershed restoration includes reforestation to better hold rain water and prevent landslides, renewal of disrupted hydrogeology of streambeds, renewal of streamside habitats, cessation of grazing near streams, adoption of 'best management practices' (BMPs) for animal waste management and manure-to-crops applications, and training of farmers in practices to reduce impacts on waterways and their demand on water.

In urban areas, watershed restoration requires strict measures for pollution prevention and treatment to eliminate flows of chemical and biological pollution into waterways from factories and municipal infrastructure. Naturalizing the channels of urban rivers and streams is often possible when the rest of a regional watershed management is effective in minimizing flood risks. This creates attractive recreational space. 

Another vital type of ecosystem restoration, closed linked to watershed management, is reforestation of mountain ecosystems denuded by clear-cutting of timber. Clear cut land usually results in runoff of soil and landslides in hilly and mountainous areas. The goal is to create diverse ecosystems of indigenous plants and animals, not the monocultures of introduced species that often characterize such efforts. Such restoration can have a significant long-term economic impact through sustainable selective harvesting of trees and other forest products. The life of downstream dams is extended by reducing the flow of silt from landslides. The forest contributes to atmospheric purity and, for a significant period, absorbs carbon dioxide.

Restoration of the built environment will become increasingly significant as developed and developing economies deplete supplies of non-renewable resources. Infrastructure, residential, commercial, and government buildings, and industrial facilities are banks of natural capital in the form of embedded energy and materials. As the price of oil escalates, the economic value of rehabilitating versus new construction will become quite apparent. A relatively basic version of this is conducting resource audits and designing retrofits to improve the efficiency of energy and water use and cut the utility bills.

In a documentary titled The End of Suburbia: Oil Depletion and The Collapse of The American Dream, James Howard Kunstler, a critic of urban planning called suburban development “the most wasteful use of natural resources in history.” (Greene 2004) Nearly all suburban planning assumed the individual automobile would be fueled by cheap oil far into the future. Kunstler and a number of authorities on the petroleum industry lay out a scenario in which continued increases in oil prices will make suburbia’s spatial sprawl too costly to maintain present lifestyle. The long commutes of workers and the long “local” trips across a complex road infrastructure to satisfy the basic needs of family life will have to change. The only real uncertainty, they say, is whether oil production has already peaked or will do so in the next five to fifteen years. Oil prices are likely to clima to new record highs when the world economy recovers from the current recession. .
(See and the sites of organizations such as the Association for the Study of Peak Oil,; the Oil Depletion Analysis Centre; and Peak Oil Action )

Once that peak is reached, it will present a major challenge and economic opportunity for urban planners, citizen groups, and engineering and construction firms to retrofit suburbs to adapt to the new economic realities. Infill development, more distributed commerce and services, telecommuting, and lightrail transportation systems are a few of the restoration options already emerging. Co-housing is also an option attracting much support. This is where groups of families and extended families set up common services for a cluster of homes. A project in Davis, California has opened their backyards into a shared space for gardens and sports and built a commons building. 

Remediation of polluted sites is another area of restoration with the dual value, in best cases, of eliminating a source of continuing pollution and making cleaned up land available for appropriate new uses. Factory sites, exhausted mines and oil fields, and toxic waste dumps are at one increasing scale of difficulty. Much more challenging are the massive military industrial dumps of radioactive and biological weapons waste. Russia and China have similar sites at even greater risk.
Restoration of Farms and Rural Towns

A good example of integration across several fields of restoration is linking the transition to organic farming in a region with watershed, riparian, and soil restoration, as well as village and urban renewal. This page is generalized from a concept for a project on the Yellow River in China’s Shandong Province (Lowe, Murray and Weber 2004). Chinese Agro-EIP

This would be an ambitious initiative, integrating regional rural and urban economic development with restoration of major natural systems. Fortunately development of the agro eco-industrial park offers a business-based center for generating the public sector elements outlined above. It creates value through the real estate development process, which becomes a basis for attracting both private capital and public investment.


Cunningham, Storm. 2002. The Restoration Economy, Berrett Koehler, San Francisco. www.restorationeconomy.com .

Kinzer, Stephen. 2004. “Future of Illinois Farm May Lie in Swampy Past,” New York Times, September 27, 2004

Society for Ecological Restoration International Science & Policy Working Group. 2002. The SER Primer on Ecological Restoration.

Society for Ecological Restoration International and World Conservation Union (IUCN). 2003. SERI and IUCN's Draft Global Rationale for Ecological Restoration.

Society for Ecological Restoration. 2004. Natural Capital and Ecological Restoration, An Occasional Paper of the SER Science and Policy Working Group (1), April 2004

Society of Ecological Restoration, Restoration Ecology Journal

Ecological Restoration is a forum for people interested in all areas of ecological restoration:

(The author’s colleagues, Ivan Weber and Scott Murray, have made major contributions to this page.)

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