Valuation of ecosystem services

available from farms and forestsDeveloping reliable approaches

for federal agencies

Lisa Wainger1 and David Ervin2

1 University of Maryland CES

2 Portland State University

Project Co-chairs

June 29, 2017

NESP webinar

Cooperative project between USDA

Office of Ecosystem Markets & CFARE

Background

Project initiated by USDA Office of Ecosystem Markets

(OEM) and Council on Food, Agriculture, and Resource

Economics (C-FARE)

Collaboration among many governmental and academic

researchers

Intended audiences - USDA analyst or manager and broad

federal community

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Question:

Can valuation be routinely used to

assess conservation program effects?

Addressed 3 primary questions:

1. What changes could be valued now

with available data, models and

understanding?

2. Are these methods sufficiently

reliable to support program decisions?

3. If not, what strategic investments are

needed? NRCS

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Process for valuing ecosystem service

benefits

Interdisciplinary teams of economists and ecologists from academia and government

Three natural resource areas chosen to reveal differences

Pollinator habitat

Water quality

Forest carbon sequestration

No new ecological assessments

All valuation used economic benefit transfer (no primary studies)

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Research TeamsPollinator Team Water Quality Forest Carbon

Lead: Rich Iovanna, USDA FSA

Amy Ando, U Illinois

Dan Hellerstein, USDA ERS

Jimmy Kagan, Portland State

Dave Mushet, USGS

Clint Otto, USGS

Charlie Rewa, USDA NRCS

Scott Swinton, Michigan State

Leads: Lisa Wainger, UMCES

Noel Gollehon, USDA NRCS

John Loomis, Colorado State

Robert Johnston, Clark U

LeRoy Hansen, USDA ERS

Darren Carlisle, USGS

Doug Lawrence, Blackwoods

Group

Lisa Duriancik, USDA NRCS

Greg Schwarz, USGS

Marc Ribaudo, USDA ERS

Caron Gala, CFARE

Lead: Kate Zook, USDA OEM

Randall Bluffstone, Portland

State

John Coulston, USFS

Robert Haight, USFS

Jeff Kline, USFS

Steven Polasky, U of MN

Dave Wear, USFS

+ Chris Hartley (USDA OEM) & numerous reviewers and steering committee members

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Pollinator habitat Benefit Relevant Indicator (BRI) example

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More forbs in seed mix

Greater forb diversity/abundance

on field

Greater pollinator diversity/abundance

Higher yield on adjacent cropland

Increase in welfare

Improved honeybee health

Lower cost for pollination services

HIgher honey output

Greater beneficial insect diversity/

abundance

Higher yield / lower input cost on adjacent

cropland

Enhanced aesthetics / existence values

Enhanced recreationGreater bird diversity/

abundance

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8

11

10

7

5

1

2 4

3

9

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Action Process Service ValuePollinator Habitat Conceptual Diagram

Iovanna et al. 20177

Arrows represent data or models

that form the relationship between elements

Data gaps were substantial for pollinator

benefits to crop production (examples)

Outcome Data & information gaps

Bee health / Colony

strength

• Commonly only modeled for native pollinators

• More work needed to understand whether CRP forb

plantings influence honeybee health

Economic returns No simple model that relates hive strength & colony

numbers to economic returns

• Reduced costs to beekeepers

• Increased supply of bees to farmers

• Value of increasing reliability of pollination

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Data gaps being addressed by new research-INVEST pollination model

Adapted to include managed bees and project honey

production as a function of landscape conditions

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Quality of landscape to honeybees

Amanda Preslicka, Eric Lonsdorf, et al. 2016

Managed bee model

ResultsBenefit Relevant Indicators useful for comparing

cost-effectiveness in this data landscape

Pollinator Habitat

Not relevant

Relevant if within range

BRI: Area of pollinator-

dependent crops within flying

distance of pollinator habitat

Food Provision

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Questions?

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Water QualityMultiple monetized benefits

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Water Quality Conceptual Diagram

Arrows represent data or models

that form the relationship between elements.

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Wainger et al. 2017

ActionBenefit

Relevant

Indicators

Final Ecosystem

Service BenefitsEcosystem Features &

Processes

What data & models are needed to value services?Sportfishing example

Adopt

conservation

practices

Valuation

Decreased

runoff

‐ Sediment

‐ Nitrogen

‐ Phosphorus

Decreased

nutrient &

sediment

delivery to

waters

Value of

improved

fishing

Increased

fish

(piscivore)

abundance

Change in

fish caught

per day

Match ecological

& economic

variables for

benefit transfer

function

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Illustrative

Valuation

ResultsWestern Lake

Erie Basin

Case Study

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Carbon sequestration by forestsValue of a bundle of services

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USDA Policy Private land

CRP

Afforestationon marginal agricultural

land

Increase in private

forestland

Increase in carbon stocks

USDA Policy Federal

land restoration

Restoration of federal forestland

Increase in trees on federal

forestland

Increase in carbon stocks

Increased Carbon Stocks

Social Cost of Carbon Avoided negative

impacts to agriculture,

human health, property

damages, energy systems, etc.

$ Benefits for Society

Connecting

USDA

actions and

ecological

outcomes

Connecting

ecological

outcomes

and dollar

values

Forest Carbon Conceptual Diagram

17Bluffstone et al. 2017

Projected changes in carbon stocks resulting

from alternative actions

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Values by discount rate ($ billion)

Policy scenario 5% 3% 2.5%

3% and 95th

Percentile

Reference$125 $517 $807 $1552

Reduced

development $134 $555 $867 $1668

Afforestation and

Reforestation $155 $649 $1014 $1951

High A&F

+ Reduced Fire $158 $660 $1031 $1985

Present value of projected CO2 sequestered

in US forests (2015 -2045) varies by scenario

Actions

added

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Case Study Results: What could be valued with available resources?

Resource area Ecosystem service benefits

Pollinator Habitat

Crop and honey yield changes

Reduced pest control costs

Water Quality

Property value support

Recreational fishing

Nonuse values for aquatic ecosystems

Water supply and recreational services from reservoirs

Commercial shipping benefits

Forest Carbon Damage costs avoided from climate change

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How to use the reports

Methods demonstrated in detail to enable replication

Problem framing

Applying a benefit transfer function (water quality)

Building on Johnston et al. 2006, recreational fishing

Applying discounting with the social cost of carbon (carbon)

Building on Wear and Coulston (2015)

Using biophysical model results in economic models (all)

Unpublished details documented (CEAP)

Data gaps (pollination)

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Questions?

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Synthesis of ecosystem service

modeling opportunities & challenges

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Project Synthesis – Lessons Learned and

Path Forward

Recall overarching purpose – Develop reliable

approaches that use best available science to

estimate ecosystem service values flowing

from USDA conservation programs in

monetary and non-monetary units.

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Lesson 1 -- Create interdisciplinary

analytic teams to enhance credibility

of all aspects of value assessment.

• Federal government and academic scientists bring complementary skills, perspectives and knowledge.

• Building conceptual value diagrams at the outset helps align the interdisciplinary research team.

• Recruit scientists who value contributions from outside their disciplines and who wish to document public benefits.

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Lesson 2 -- Monetize benefits as

appropriate but non-monetary benefit

indicators are valid as well.

Economic theory of valuation tends to promote the monetization of ES values.

However, monetization is not always feasible nor appropriate for some ES benefits of conservation programs.

Non-monetary indicators, such as measures of scarcity of resource provision, can complement monetary measures.

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Lesson 3 -- Demonstrate sensitivities to

assumptions and sources of error to develop

a shared understanding of how results can

best inform policy.

Uncertainty about biophysical and

socioeconomic linkages pervades ES

valuation; treat it transparently!

For sources with quantitative bounds,

analyze the effects on ES values to

ascertain salience, e.g., sensitivity

analyses of social discount rate.

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Lesson 4 – Strategic investments needed

Increased representation of the breadth of

effects, e.g., non-market cultural services

Empower interdisciplinary teams to use best

available science to identify model linkages

Create additional benefit transfer functions

for priority topics with meta analysis

Support new primary valuation studies –

particularly when it illuminates tradeoffs

Develop benefit relevant indicator methods

that are peer-reviewed and replicable

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Conclusions -- Valuing conservation practice

benefits

Best available science is improving but does not fully support a replicable valuation framework that captures all salient values

Not realistic to expect a consistent approach to fit all situations

Non-monetary benefit indicators complement monetary values; useful in cost-effectiveness analysis

Bottom Line – systematic valuation of ES is feasible for a host of conservation benefits

precision of estimates will vary

comparing site specific values is challenging 29

For additional information

All CFARE reportshttp://www.cfare.org/events/2017events/release---the-valuation-of-

ecosystem-services-available-from-farms-and-forests

Pollination model

Amanda Preslicka, Eric Lonsdorf, David Mushet, Emily Kirkpatrick, & AmélieY.

Davis. 2016. Spatially explicit modeling of landscape features for the health of

managed bees. IALE Poster Session. Asheville, NC.

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