The economic value of nature?

Pricing habitats and species - Possibilities and constraints

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Ivan Olsson and Stefan Jendteg

Outline

- An introduction to ecosystem services and cost-benefit analyses (CBA) - The Fyledalen case study - Methods used - Cost estimates - Benefit estimates - Preliminary results

- Problems encountered: Biodiversity Species without commercial values Habitats without recreational values (mires, he he …?) Robustness of variables used by CBA´s

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Cost-Benefit Workshop

- Workshop exercise

Introduction

1) Providing/producing (eg goods; food, timber) 2) Regulating (eg pollination, predators regulating herbivores) 3) Supporting (eg hydrological cycle, transport of nutrients…) 4) Cultural (eg recreational, hunting, angling)

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Ecosystem services = goods and service provided by the ecosystem (beneficial for us).

Unio crassus filtering water, reducing nutrients

Threats …

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Sources responsible for loss of ecosystem services:

Habitat destruction (eg pollution, the impact of invasive species) Fragmentation (eg alteration of habitats resulting in loss of connectivity) - Loss of mechanisms driving ecosystems (eg pacific salmon as a “nutrient carrier”) - Loss of biodiversity and genetic diversity

Are traditional “ecological variables” (eg extinction rates, levels of pollutions, diversity index) - powerful enough for changing the negative trends (human behavior)?

In cases they are not…

The impact of canalizing; increase in extreme flooding events, nutrient transport, loss of diversity etc

The CBA as an additional (stronger?) tool describing, in monetary terms:

- the negative effects of having non-functional ecosystems - the positive effects of having functional ecosystems …Pricing and valuing ecosystem services by CBA´s may create an economic motivation for its protection… and for restoring habitats and re-introduction of species…

How about Cost-Benefit Analyses, CBA´s ?

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The Case study in Fyledalen

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Improved water quality

Increased biodiversity

Objectives

To learn a lot…

Recreation, post-hoc To disseminate a lot The Baltic perspective

Post-LIFE-conditions - Poor water quality, habitats - Poor aquatic biodiversity

The value of a mussel?

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As a pedagogue, indicator and symbol

- but also as a threatened “species”

and filter feeder…

Methods

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Transforming responding variables (objectives) into monetary values (SEK) before and after implementation of actions:

Biodiversity ???

Knowledge gained ???

Dissemination, catalyst effect ???

P-reduction, per kg = 1 023 SEK N-reduction, per kg = 31 SEK

Willingness to pay amongst visitors, but no fee (350 SEK per visit)

Salmonids, 108 SEK per kg Other species, 9 SEK per individual

Water quality

Recreation

Fish production

Filtering/storage capacity 0.1 – 1.2 g P per mussel (?) Mussel filtering

CBA Results - Recreation

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2012 2014 2016 2018 2020 2022 2024

Accu

mu

late

d c

osts

vs b

en

efits

(S

EK

) Costs 10% of RV

50% of RV Recreation Value (RV)

Action costs c. 6 MSEK Benefits: Willingness to pay 350 SEK per visit, annually 20 000 visits in Fyledalen Willingness to pay for action costs (50% of RV), 175 SEK ? – Balance 2015 Willingness to pay for action costs (10% of RV), 35 SEK ? – Balance 2023

The study (questionnaire) will be repeated the following years for “new” RV and accurate “willingness to pay” numbers for actions…

CBA Predicted Results - Water quality

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2012 2014 2016 2018 2020 2022 2024

Accu

mu

late

d c

osts

vs b

en

efits

(S

EK

)

Costs P-reduction

N-reduction

P-Mussels

Tot reduction

Action costs c. 6MSEK Benefits: P-reduction (range: -20 to 80 kg per month [1023 SEK per kg]) by floodplain actions N-reduction (range: 100 to 300 kg per month [31 SEK per kg]) by floodplain actions P-reduction by mussels (range 0.1 to 1.2 g per individual and year). Population density will level out 2030 (Carrying capacity 3 M)

Benefits will balance costs 2021 ?

CBA Predicted Results - Fish

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2012 2014 2016 2018 2020 2022 2024

Time (YEARS)

Accu

mu

late

d c

osts

vs b

en

efits

(S

EK

) Costs

Salmonids

other fish sp

Action costs c. 6MSEK Benefits: Fish, annual production (range: 200 – 10000, 9 SEK/fish): Benefits: Salmonids, annual production (range: 100 – 250 kg, 108 SEK/kg)

Benefits will balance costs 2070

CBA Costs vs benefits, predicted (total)

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2012 2014 2016 2018 2020

Accu

mu

late

d c

osts

vs b

en

efits

(S

EK

)

Costs

Benefits, total

Benefits = (recreation + water quality improvements + increased fish production)

balance project costs by 2018…

Conclusions

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Possible to value:

Costs

Improvements of recreation value +++

Improvements in water quality ++

Increased fish production +

Not possible to value(?):

Biodiversity

Dissemination

Gained knowledge

We were able to predict the time for when benefits balanced costs

We were able to estimate the benefits of having Unio crassus re-introduced

Robustness of variables/predictions(?), validation through monitoring

(before-after-impact-control-design)

Future LIFE-projects?

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Each proposal containing concrete conservation actions must also include an action aimed to assess the socio-economic impact of the project actions on the local economy and population, as well as on the ecosystem functions"

THANKS

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Workshop exercise

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Thematic (rivers and lakes, wetlands/bogs, grasslands, forest) groups?:

The tasks:

1) Define potential ecosystem services that are influenced by your project actions

2) Quantify, in monetary terms, ecosystem services (benefits) affected by your

project actions (optimal €/unit).

3) Define positive impacts on ecosystem services, not possible to quantify in

monetary terms. Why isn't it possible?

4) When should we use the concept of ecosystem services and

cost- benefit analyses? Why?