Setting the Context: Ecosystem Service Analysis

Transcription

1 Setting the Context: Ecosystem Service Analysis Lisa A. Wainger University of Maryland Center for Environmental Science STAC workshop on Ecosystem Goods and Services 3/28/17

2 Economic Value = Anything that contributes to human well-being Use Value Total Economic Value Non Use Value Direct Use - I m enjoying nature Indirect Use - Nature does that for me?! Option - I might need it later Existence - I just like it Bequest - I want my grandkids to enjoy it Increasing difficulty of valuation ($) Altruistic - I want to help others who might need it

3 Non-use values can be substantial (from Wainger, Secor et al., in press) Ecosystem service Property value enhancements due to enhanced water clarity Property value enhancements due to expanded SAV extent Spatial extent of beneficiaries Waterfront & nearwaterfront homes Waterfront & nearwaterfront homes Monetary values for TMDL $400-$700 million (present value) Authors Klemick et al. (2016) $300-$400 million Guignet et al. (2016) Multiple use and non-use benefits [changes in abundance of striped bass, crab and oysters, water clarity in the bay, and algae in lakes] About 80% of the total benefits accrued to nonusers of the Bay $1.20 to $6.49 billion / year Moore et al. (2015) Climate change damage costs avoided (carbon sequestration)* Health and aesthetic benefits due to air quality improvements* Watershed $12.6 million/year US EPA (2011, Scenario 8a) Watershed $2.5 million/year US EPA (2011, Scenario 8a) Hunting* Watershed $0.2 million/year US EPA (2011, *Optimized scenarios - not WIPs Scenario 8a)

4 Valuation does not measure overall importance Builds social preferences from individual preferences People get to choose what they like What people will pay is determined by supply and demand conditions Benefits to society are measured as the aggregate of what everyone prefers Does not address Fairness Distribution of benefits and losses among stakeholders Biases or information gaps that may prevent people from making optimal choices

5 Values Are Not Market Prices Price of Carbon Credit Based on supply & demand conditions Based on benefits to society (avoided damage to property, crops, health, etc.)

6 Values Are Rarely Potential Income Because values are not market prices - Benefits do not represent money you could receive in transactions What can be valued might not be what motivates someone to act Same management practice might improve soil health & sequester carbon Relatively easy to value carbon sequestration But farmer may be more motivated to adopt by changes in soil health

7 Values Are for Small Changes, Not the Whole Enchilada Economists can only value small-moderate size changes in services People adapt and substitute when there are large changes Costanza approach of valuing the worlds ecosystems has been called a serious underestimate of infinity, Why? A: Value changes as services become scarcer Values based on a per-acre value are better thought of as promotional values

8 Ecosystem service values tailored to location promote cost-effective planning Benefit index includes 1) Opportunity to reduce nutrient runoff from manure 2) Likelihood of nutrients reaching a stream 3) Potential to improve impaired local water quality or protect areas with high habitat quality or high demand for fishing Cost-effectiveness of manure transportation subsidies Red areas: Combined benefits for subsidizing manure transport are projected to be the highest per dollar spent (white areas = missing data) Magen and Wainger, 2016

9 Economic Impacts are a Local Benefit Spend money Model of economic structure Direct effects Indirect effects Induced effects Jobs Economic Activity Any money spent generates jobs and economic activity Jobs created depends on structure of local economy, not the social importance of the investment

10 How do we value ecosystem services to promote sound decisions?

11 Conceptual Value Diagram Action Ecological outcome Benefit- Relevant Indicators Who cares? Social Benefits How much do they care?

12 Action Alternative Benefit Measures with Increasing Economic Content Ecological Outcome Metrics Benefit Relevant Indicators Social Benefits % change game fish Likely # anglers Willingness to pay Figures from Mazzotta, Wainger, et al. 2015

13 Practical & feasible methods for measuring values One example

14 Gray vs. Green Options and the Provision of Ecosystem Service Co-Benefits Gray options Wastewater treatment plants Stormwater detention ponds Ecosystem Service Indicators Reductions in nutrient and sediment inputs Benefits to Stakeholders Improved recreational opportunities and aesthetics Septic upgrades Green options Wetland restoration Reforestation Riparian buffers Bioretention Water storage* Freshwater fish habitat* Animal habitat* Waterfowl habitat* GHG mitigation* * Bonus Ecosystem Services Flood and drought mitigation Hunting, fishing and birding Reduced risk of climate change

15 Weighting ecological changes by potential for benefits Flood protection value highest when BMP is upstream of urban area + downstream of flood control dams US EPA 2011

16 Using economic benefit transfer Table Annual Values* of Pollutant Removal by Urban Stormwater BMPs ($/acre of BMP/year) * Health + other benefits accrue in urban areas with air quality problems US EPA 2011

17 $Million Using Ecosystem Services Values to Compare Implementation Choices $60 $50 Least Cost Max Benefits Air Quality $40 Duck Hunting $30 $20 Non-Waterfowl Hunting $10 $0 Base Case LC Restricted NPS LC Base Case LNC Restricted NPS LNC Carbon Sequestration & Reduced GHG Emissions US EPA 2011

18 Economic Benefit Index Using both monetized and non-monetized benefits provides a balanced picture of benefits Non-Monetized Benefits Monetized Benefits rural - Existence - Bequest urban - Property protection - Recreation 18

19 Values that support good decisions Reflect ecological effectiveness of management practices Include location characteristics that determine if service is possible & needed Reflect peoples degree of concern for the change Include use and non-use values to represent a broad portfolio of ecosystem service benefits

20 References Klemick, H., C. Griffiths, D. Guignet, and P. Walsh Improving Water Quality in an Iconic Estuary: An Internal Metaanalysis of Property Value Impacts Around the Chesapeake Bay. Environmental and Resource Economics:1 28. Guignet, D., C. Griffiths, H. Klemick, and P. J. Walsh The Implicit Price of Aquatic Grasses. Marine Resource Economics 32: Mazzotta, M., L. Wainger, S. Sifleet, J. T. Petty, and B. Rashleigh Benefit transfer with limited data: An application to recreational fishing losses from surface mining. Ecological Economics 119: Moore, C., D. Guignet, K. B. Maguire, C. Dockins, and N. B. Simon A Stated Preference Study of the Chesapeake Bay and Watershed Lakes. National Center for Environmental Economics, US Environmental Protection Agency. US EPA An Optimization Approach to Evaluate the Role of Ecosystem Services in Chesapeake Bay Restoration Strategies. Office of Research and Development. US EPA/600/R-11/001 Wainger LA, Secor D, Gurbisz C, Kemp M, Glibert PM, Richkus J, Barber M. (in press). Resilience indicators support valuation of estuarine ecosystem restoration under climate change. Ecosystem Health and Sustainability. Wainger, L. A., G. Van Houtven, R. Loomis, J. Messer, R. Beach, and M. Deerhake Tradeoffs among Ecosystem Services, Performance Certainty, and Cost-efficiency in Implementation of the Chesapeake Bay Total Maximum Daily Load. Agricultural and Resource Economics Review 42: Wainger, L. A., R. J. Johnston, K. J. Bagstad, C. F. Casey, and T. Vegh Social Impact Analysis: Monetary Valuation. In: The Federal Resource Management and Ecosystem Services Guidebook (Olander, L. et al. eds.). National Ecosystem Services Partnership, Nicholas School of the Environment, Duke University.