Estimating the Impact of Climate Change on Landscape Value

Ecosystems (Socio-economics)Ecosystems (Socio-economics)

Estimating the Impact of Climate Change on Landscape Value

Aliza Fleischer1, Denise Fouks1 and

Marcelo Sterenberg2 1Hebrew University of Jerusalem

2Tel Aviv University

GLOWA – Jordan RiverGLOWA – Jordan River


Objective

Evaluating the impact of climate change on the economic value of different natural landscape with an emphasis on the Galilee


Economic Impact of Global Climate Change on Grazing Land

Economic Impact

Landscape value Grazing services Ecosystem services

Recreationalists’ welfare Farmer’s income Local population welfare


Topography South-facing slopes with stony and shallow soil (Terra rossa to desert lithosol on hard limestone and chalk) Temperature Mean annual temperature 140C-230C Rainfall Mainly winter - 5 summer months with no rainfall Range North-South: 780 to 90 mm

~ 48

0 km

Humid Mediterranean - 780 mm

Mediterranean - 540 mm

Semiarid – 300 mm

Arid – 90 mm

The Climatic Gradient

עין יעקב

מטע

להב

שדה בוקר


Ecosystem type Rainfall (mm)

Temperature (oC) Min. – Mean - Max.

Elevation (a.s.l)

Herbaceous biomass (ton Ha-1)

Mesic Mediterranean)N 33o0' E 35o14('

780 13.5 - 18.1 - 23.4 500 m 0.832

Mediterranean)N 31o42' E 35o3('

540 12.8 – 17.7 - 23.6 620 m 0.741

Semiarid)N 31o23' E 34o54('

300 13.2 – 18.4 – 24.8 590 m 0.576

Arid)N 30o52' E 34o46('

90 13.6 - 19.1 - 26.1 470 m 0.014


Methodology• A stated preference survey was designed to ask

respondents to choose their preferable program to reduce the ecological impacts from 5 sets of five programs.

• The alternative that has been chosen represent the maximum utility for the respondent.

• Let Uij be the utility for the ith individual from alternative j.

X= attribute [1,k] β= coefficient of the attribute = random error term i.i.d

= ji i ji jiU x

ji

Ecosystems (Socio-economics)Ecosystems (Socio-economics)a

Plan 1

No Action

Plan 2

Forestry and Plant life development.

Plan 3

Reduction of the use of damaging

materials and fuels

Plan 4

Increased forestry & less use of harmful

materials and fuels.

Plan 5

Drastic reduction of the use of damaging materials and fuels

The landscape in the Galilee will become

dry and arid, also lost of plants life will

occur.

The landscape in the Galilee will become semiarid and dry.

The landscape in the Galilee will become semiarid and dry.

The landscape in the Galilee will have less

plant life.

The landscape in the Galilee will not

change.

0 NIS per household monthly.






Multinomial Logit Model

The utility an individual gets from alternative j is:

This probability an individual will choose this alternative is:

In the Multi Logit Model (MNL) the probability is:

( choice j for individual i ) = = ji i ji jiU U x

Prob[ ] for all ji miU U m j

1

exp( )Prob[ ]

exp( )

i jii Ji

i mim

xy j

x


The IIA Assumption

• The MNL is subject to the independence of irrelevant alternatives (IIA) property.

• IIA= the odds ratios are independent of the other probabilities.

• IIA test = if an alternative is irrelevant omitting it from the model will not change parameter estimates systematically.

• We rejected the hypothesis and thus had to use a model not subjected to IIA.

j kp / p


Random Parameters Logit Model

The utility function associated with the model is from the general form:

is a random term with zero mean iid over alternatives and does not depend on parameters or data.

ji

ijijijijiijij XXXU ~_


Random Parameters Logit Model

In the RPL model the probability of choice can be simulated as:

This model is not subjected to the IIA.

Rr

rmk

k

X

X

ijirik

ijij

e

e

RP

1

1

)(

)(1


Alternatives Description

• Each alternative contains all four attributes.

• Alternatives differ in the levels of attributes.

Attributes Levels Used

Landscape Changes

(measured in landscape pictures)

4 levels; Ein ya’ako’v, Matta, Lahav, Sde

boqer

In biomass units

Forestry2 levels; Utilized or

Not Utilized

Abatement 3 levels; None,

Limited, Vigorous

Program Cost

(measured in NIS per month)

14 levels; 0, 10, 15, 20, 30, 40, 50, 60, 70, 80,

90, 100, 150, 200


Econometric Analysis - Specification

The indirect utility function V is specified as linear in parameters. “Price” enters linearly. One dummy variable for “forestry”, two for “abatement” (in this estimation we only used one due to singularity) and three dummy variable for “landscape changes”

The indirect utility function would look as follow:

ij p matta matta lahav lahav sdeboqer sdeboqer

forestry forestry abatement abatement

v price I I I

I I

Ecosystems (Socio-economics)Ecosystems (Socio-economics)Econometric Results Biomass

***significant at 1% ** significant at 5% * significant at 10%

Variable Parameter Value Std. Error

Cost Mean of coefficient -0.033* 0.008

Std. dev. of coefficient 0 0

Biomass loss Mean of coefficient -0.069* 0.018

Std. dev. of coefficient 0.260* 0.081

Forestation Mean of coefficient -0.221 0.194


Reduction Mean of coefficient 1.664* 0.794


R2 (a) 0.18

Number of obs. 1500=(500 x 3)


Econometric Results - WTP

The willingness to pay in order to prevent landscape changes was calculated as the coefficient of the “landscape change” divided by the coefficient of “price”.

is the utility differences between the state

and without the programs to prevent landscape change

v 1Q0Q

1 0( , , ) ( , , )v v p m A Q v p m Q

wtpPr(WTP> )=1-G ( )=F ( )b b v


Welfare from landscape loss ($/ha) as a function of biomass loss

real

predictedy = 1756.5Ln(x) - 6443.9

0

1000

2000

3000

4000

5000

6000

0 100 200 300 400 500 600 700 800 900

Loss of grassy biomass

$/h

a


Income Loss as a Result of Decreases in Grassy Biomass

Income Loss in Cattle Growing ($/ha)

0.00

20.00

40.00

60.00

80.00

100.00

0 91 256 818

Loss of grassy bio mass

/$ha


Income Loss as a Result of Decreases in Grassy Biomass

Loss of grass bio mass

/$ha Income Loss in Sheep Growing ($/ha)

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

0 91 256 818

Ecosystems (Socio-economics)Ecosystems (Socio-economics)YEARLY LOSS VALUE OF ECOSYSTEM SERVICES IN THE TRANSFORMATION FROM MESIC MEDITERRANEAN TO

MEDITERRANEAN, SEMIARID AND ARID CLIMATES Loss of total biomass(ton ha-1)

Total WTP to prevent loss of biomassb

($ 106 ha-1)

Loss of herbaceous biomass (ton ha-1)

Loss of grazing services for cattlec

($)

Loss of grazing services for sheepc

($)

Mesic Med. Med.

7.8 51.5 0.009 5,733 8,001

Mesic Med. Semiarid

13.0 85.8 0.256 16,128 22,554

Mesic Med. Arid

16.3 107.6 0.818 51,534 72,135


Conclusions

• Local community is eliciting utility from landscape and is willing to pay for government mitigation measures.

• Loss of welfare for recreation services is larger than grazing services

• The higher the conceived landscape loss the higher is the payment.

• Policy makers have the public consent for taxing this generation in order for future generations to enjoy the landscape.

Estimating the Impact of Climate Change on Landscape Value

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