Valuation of Ecosystem Services

Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen

Valuation of Ecosystem Services Valuation of Ecosystem Services

An Integrated Hydrological and Economic An Integrated Hydrological and Economic Model to Value the Enhanced Nitrogen Model to Value the Enhanced Nitrogen

Retention in Renaturated StreamsRetention in Renaturated Streams

Ingo Bräuer & Rainer MarggrafInstitute of Agricultural Economics

University of Göttingen


ContentsContents

Introduction

The Replacement Cost Method (RCM) General Idea and Problems at Application

Chemical Processes in the River Modelling Changes in the Nitrogen Retention

Valuation of the Nitrogen-Retention Practical Problems using the RCM


AimsAims

1. Development of a user-friendly procedure to evaluate the ecosystem function N-retention to promote the use of RCM

2. Discussion of the choice of technical substitutes


Case study: the enhanced N-retention in renaturated streams to evaluate a

conservation program

Case study: the enhanced N-retention in renaturated streams to evaluate a

conservation program

The Replacement Cost MethodThe Replacement Cost Method

Valuation by comparison of an ecological function and a corresponding technical

substitute


Replacement Cost MethodReplacement Cost Method Valuation Procedure Valuation Procedure

1. Quantification of the ecosystem function QuantityQuantity

PricePrice

ValueValue

X

=

2. Determination of the technical substitute and its marginal costs

3. Economic benefits of the ecosystem service


Replacement Cost MethodReplacement Cost Method Valuation Procedure Valuation Procedure

1. Quantification of the ecosystem function


PricePrice

ValueValue

X

=


3. Economic benefits of the ecosystem service


Study AreaStudy Area


Investigated RiverInvestigated River

Jossa-Insel

Distelbach

Sahlensee

Pfaffenhausen

Oberndorf

Pegel „Kreuzgrund"


River System

11

Pro

ble

mM

od

els

De

nit

rifi

ca

tio

n-

Pro

ces

ses

Non-point N-Imission

point N-Imission

Rates of Denitrification (Literature)

Rates of Denitrification (Literature)

Model: Behrendt & Opitz (2000)

Model: Behrendt & Opitz (2000)

Floodplain FloodplainRiver

Influence of Beavers on the Structure of the

River


River

Increase in flooded Area




Lower runnig

velocity

Lower runnig

velocityDenitrification:

N-Compounds N2

Denitrification:N-Compounds N2

GIS


River System Jossa

11

Pro

ble

mM

od

els

De

nit

rifi

ca

tio

n-

Pro

ces

ses

Diffuse N-Imission

punktuelle N-Imission


River


River

+15.500 m²+15.500 m² Increase in flooded area

Increase in flooded area

Floodplain FloodplainRiver

+ 460 kg/a+ 460 kg/a

+ 710 kg/a+ 710 kg/a

+ 1.170 kgN/a+ 1.170 kgN/a

Hydraulic Load +15%

Hydraulic Load +15%


Valuation Procedure Valuation Procedure

QuantityQuantity

PricePrice

ValueValue

X

=

1. Quantification

Spessart: 4.700 kgN/a

Spessart: 4.700 kgN/a


Valuation Procedure (RCM)Valuation Procedure (RCM)


PricePrice

ValueValue

X

=



3. Determination of the economic benefits


PricePrice

Sewage PlantSewage Plant

+ similar process and output

- non-point emissions

- no cost-efficient alternative

+ similar process and output

- non-point emissions

- no cost-efficient alternative

Replacement Costs Replacement Costs

55 €55 € 7,5 €7,5 € 2,5 €2,5 €

Drinking WaterDrinking Water

+ non-point and point emissions

- Standard too high

+ non-point and point emissions

- Standard too high

Agricul. PoliticsAgricul. Politics

+ most efficient method

- atmospheric emissions

+ most efficient method

- atmospheric emissions

OverestimationOverestimation Not identicalNot identical UnderestimationUnderestimation



2. Replacement Costs

Avoidance of N-Emissions

Avoidance of N-Emissions

2,5 €/kgN2,5 €/kgN

QuantityQuantity

PricePrice

ValueValue

X

=



QuantityQuantity

PricePrice

ValueValue

X

=

3.Economic Value

2,5 €/kgN

ca. 4.700 kgN/a

ca. 12.000 €/aca. 12.000 €/a 12%12%


Reference-Scenario Reference-Scenario

1. Drinking Water1. Drinking Water 2. Sewage Plant2. Sewage Plant 3. Agricul. Pol.3. Agricul. Pol.

55 € 7,5 € 2,5 €

260.000 €/a260.000 €/a 36.000 €/a36.000 €/a 12.000 €/a12.000 €/a

290 % 12 %40 %

Factor >20


Summary Summary

An estimation of economic values is possible

The results depend highly on the reference scenario

A transparent procedure is essential to assess the quality of the results


Replacement Cost MethodReplacement Cost Method

Self-purification of o.E.Self-purification of o.E.

Recharge Ground WaterRecharge Ground Water

Flood PreventionFlood Prevention

etc.etc.

To

tal E

con

. Va

lue

Nitrogene-RetentionNitrogene-Retention Evaluated Compound

Evaluated Compound

Non-Evaluated

Compounds

Non-Evaluated

Compounds ??


The investigated Program:The investigated Program:

• When: 1987 Reintroduction of 18 Beavers

• Where: Spessart (n-w) Jossa und Sinn • What: Program included Purchase of

Land and Habitat-Develpoment

• 2001: Population of ca. 180 Ind. in severeal River systems (u.a. Kinzig)


Total Economic Value Total Economic Value (TEV)(TEV)

Recreation

Species Obs.

Direct UV

Ecosystem Functions

Indirect UV

geneticResources

Option Value

Use Values

Habitat

Bequest V.

Habitat

Species

Existence V.

Non-Use Values

TEVTEV

Species

Hedonic Pricing

Travel-Cost-Method

Replacement Cost Method

CVM CVMCVMCVM CVM

Valuation of Ecosystem Services

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