Getting Demand Right for Valuing Urban Ecosystem Services in the Pacific Northwest

Transcription

1 Getting Demand Right for Valuing Urban Ecosystem Services in the Pacific Northwest Mark Buckley ECONorthwest 2010 ACES December 7, 2010

2 Ecosystem service definitions Millenium Ecosystem Assessment Ecosystem contributions to human well-being Direct and Indirect Provisioning, Cultural, Regulating, Supporting Refinements Focus on direct benefits, final goods and services to avoid double-counting

3 Ecosystem services economic framework Natural capital and associated processes only have value as services with human demand Society exercises demand in consumptive ways on all stages of ecosystem service production process

4 Uses for natural capital

5 Ecosystem service demand Demand drivers: the ecosystem processes present the quality and supply of ecosystem processes, including regularity and extent the community activities utilizing the ecosystem services the value of activities utilizing the ecosystem services the number of people using the ecosystem service communities of concern using the ecosystem service the cost and availability of substitutes and complements changes over time scarcity, resilience, preferences Changes in these factors change the values. Measuring, characterizing these factors is a step towards valuation.

6 Cost/benefit concentration Concentrated costs/benefits strong incentives exist to motivate action markets/individual self-interested behavior can lead to socially-optimal outcomes Diffuse costs/benefits weak incentives exist coordination/information/transaction costs can overwhelm cooperative efforts

7 Markets: function and failure Rival Excludable Non-Excludable Non-Rival

8 Markets: function and failure Rival Non-Rival Excludable Private Goods Land parcels Buildings Markets Work Toll Goods Bridges River Access Non-Excludable Common-Property Resources Water supply (aquifer, streamflow) Fisheries Oversight Required Public Goods Water quality, scenery Flood protection Government Provision Efficient outcomes typically arise without intervention for private goods only Non-rival goods can increase in total value with increasing population

9 Avoided costs Costs of services that would otherwise be required Depends on supply (marginal cost) AND demand (marginal benefit) Avoided cost requires demand drivers New information Change in tastes New regulatory requirements New regulatory framework Demographic/pop ulation shifts

10 Components of value Ecosystem service-based approaches to infrastructure typically provide multiple benefits, relative to traditional infrastructure

11 Quantification of economic benefits Known and Unknown Theorized Identified Characterized Quantified Monetized

12 Urban vs. rural tradeoffs Urban Rural Population High, Directly benefiting Low direct, High indirect Ecosystem quality Mixed-Low Mixed-High Ecosystem context Mixed-Poor Mixed-High Variety of demands High Low Direct benefits High Low Indirect benefits Medium Medium Potential avoided costs High Low Opportunity costs High Low Political challenge High Low-Medium Demographics Mixed (Recreation, Sustenance, Property value) Mixed (Livelihoods, Recreation)

13 Green River Watershed Ecosystem improvement demands from Puget Sound Partnership, Salmon Recovery Plan, King County Equity and Social Justice Initiative

14 Green River project area Lower Green Watershed designated land uses 50% residential 27% commercial and industrial 6% park/open space 100% within urban growth boundary

15 Salmon populations Salmon Populations in the Lower Green River by Species ( ) Salmon Populations in Puget Sound Rivers and Streams by Species ( )

16 Lower Green River ecological constraints Salmon habitat limiting factors Channelization of streams to facilitate land use practices Formation of barriers to fish passage Introduction of non-native plant and animal species Water temperature: fails to meet standards Salmon restoration goals increase natural origin spawners ( /yr initially, 27,000 long term)

17 Monthly willingness-to-pay for increases in Puget Sound salmon population 50% increase in Green River salmon equates to $270 million WTP over 20 years (3% r) ($350 million undiscounted)

18 Property boundaries and setback alignments

19 Property acquisition costs

20 Area of ecosystems under setback scenarios

21 Benefit ranges from Puget Sound Benefit Range Low High Aquatic and Riparian Habitat Non-market Benefits $103/acre/year $8,695/acre/year Low Impact Development Programs Avoided Costs $380/acre/year $30,000/acre/year Air Pollution Removal Avoided Costs $67/acre/year $276/acre/year Carbon Sequestration Avoided Costs $1.15/acre/year $1043/acre/year Wetland Functions Avoided Costs $2400/acre/year $4800/acre/year Up to $250 million over 20 years of value from setback Likely actual level of function still under review

22 Recreation values

23 Sample recreation, person/days per year

24 Portland Intertwine Demand for stormwater management, aesthetic and recreational amenities, greenways for non-motorized transportation, community focal points

25 Proximity to parks and value Over half of homes in Portland metro within 1300 ft. of developed park

26 Hedonic analysis results Other studies find urban parks can provide 0.5-3% of value, natural areas provide 15-17% value (Lutzenhiser and Netusil 2001)

27 Job creation via market-based restoration $8 million in salmon habitat restoration created 143 jobs (one year) = 17 jobs/million$ (higher than most options) Local input demand increases multiplier effects Local labor supply usage increases multiplier effects (particularly as unemployment ^) Creates highly-skilled jobs (science, green businesses) in emerging rather than declining industries

28 Green development Turning economic bads into economics goods Attract businesses, skilled labor force that appreciate amenities Second paycheck for areas with high amenity values Consider conditions, amenities in areas that have done well and not so well in the downturn Property scarcity and amenities are public goods

29 Planning implications Urban ecosystem service values can justify the high opportunity costs Understanding urban demand necessary for appropriate values Public and private efforts and activities reveal demand Urban ecosystem activities are incremental, but can have landscape-scale benefits Mark Buckley