Valuing Ecosystem Services Toward Better Environmental Decision-Making (2005) / Chapter Skim
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5 Translating Ecosystem Functions to the Value of Ecosystem Services: Case Studies
5 Translating Ecosystem Functions to the Value of Ecosystem Services: Case Studies
Pages 153-208
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From page 153... ...
Chapter 3 focuses on the relevant ecological literature on aquatic and related terrestrial ecosystem functions and services, while Chapter 4 focuses on the economic literature on nonmarket valuation methods useful for valuing ecosystem goods and services. In this chapter, the focus is on the integration of ecology and economics necessary for valuing ecosystem services for aquatic and related terrestrial ecosystems.
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From page 154... ...
examined spatial relationships among natural and socioeconomic systems. Recent work on ecosystem services has broadened the set of goods and services studied to include water purification, nutrient retention, and flood control, among other things.
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From page 155... ...
Because ecosystems produce a range of services that are frequently closely connected, it is often difficult to discuss the valuation of a single service in isolation. However, valuing multiple ecosystem services typically multiplies the difficulty of valuing a single ecosystem service.
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From page 156... ...
The best-known example of a policy decision hinging on the value of a single ecosystem service involves the provision of clean drinking water for New York City, which is reviewed first. Other examples include cases where ecosystems provide habitat for harvested fish or game species and cases where they provide flood control.
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From page 157... ...
The agreement provided a framework for compliance with water quality standards and contained plans for land acquisition through mutual consent, watershed regulations, environmental education workshops, and partnership programs with community groups. For example, a farmer-led Watershed Agricultural Council provides programs for the approximately 350 dairy and livestock farms in the watershed to minimize nutrient input from agricultural runoff (Ashendorff et al., 1997)
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From page 158... ...
In this case, it was not necessary to value all or part of the services of the Catskill watershed; it was merely necessary to establish that protecting and restoring the ecological integrity of the watershed to provide clean drinking water was less costly than replacing this ecosystem service with a new water filtration plant. As discussed in Chapter 4, Shabman and Batie (1978)
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From page 159... ...
Despite the appearance of being a textbook case for valuing a single ecosystem service, several issues make the answer to ecosystem valuation less obvious than at first glance. The replacement cost approach assumes that the same service will be provided under either alternative.
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From page 160... ...
Model uncertainty that arises from imperfect understanding of ecosystem function and the translation to ecosystem services is a major issue for most ecosystem valuation studies. In this case, there is model uncertainty because the hydrologic modeling used for determining water supplies is affected by the definition of spatial and temporal boundaries.
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From page 161... ...
the value of providing clean drinking water is only a partial measure of the value of ecosystem services provided by the watershed, and (2) replacement cost is rarely a good measure of the value of an ecosystem service.
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From page 162... ...
Yet even viewed strictly through the lens of water supply systems, protecting natural processes within ecosystems may be superior to engineering solutions, and such a result may be sufficient for decision-making purposes. Replacement cost estimates for provision of clean drinking water, however, provide an estimate of just one source of value and should not be confused with the complete value of ecosystem services provided by watersheds.
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From page 163... ...
has monitored aquifer recharge rates since 1915 and water quality monitoring began in 1930. In 1970 the Edwards Aquifer was designated a "sole source aquifer" by the EPA under the Safe Drinking Water Act.
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to surface- and groundwaters associated with the Edwards Aquifer. Groundwater storage is critical in most aquatic ecosystems to provide persistence spring and stream habitats during dry seasons or during drought.
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Gonzalez of San Antonio to propose the Gonzalez Amendment to the Safe Drinking Water Act of 1974. The amendment dealt with protection of sole source aquifers used for water supplies (Wimberley, 2001)
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From page 166... ...
Uncertainties about potential climate change, local hydrology, and the likely future value of ecosystem services, such as provision of drinking water and habitat necessary for the survival of endangered species, complicate the task of informing decisionmakers about trade-offs between current extractive use value and in situ value of groundwater. Predictions about likely future aquifer recharge and water demand, as well as evidence about the value of other ecosystem services, such as habitat provision for endangered species, all would help in guiding decisions.
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From page 167... ...
Basing such a conclusion on the economic value of a single ecosystem service, however, is premature; only when the value of all ecosystem services provided by the wetland is less than the value of agricultural development can such a conclusion be justified. A major difficulty with the production function approach in the context of coastal wetlands and fisheries is the complex nature of the ecological relationships involved.
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From page 168... ...
Assumptions about fisheries management and market conditions will also influence estimates of economic value. Provision of Flood Control Services by Floodplain Wetlands Flood control is an important ecosystem service provided by riverine and coastal floodplains.
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From page 169... ...
In this sense, floodplain ecosystems perform a role in of flood control similar to that of coastal wetlands in fishery production -- one valuation method is to estimate how changes in the ecosystem lead to changes in production of the service in question and then to value the change in the service. The simplest method for economically valuing floodplain ecosystems in providing flood control is to multiply estimates of the change in probability of floods of various magnitudes with and without floodplain conservation by the estimate of damage that floods of various magnitudes would cause.
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From page 170... ...
For a discussion of replacement cost as a method to estimate the economic value of an ecosystem service see the discussion of the Catskill watershed above. The Napa River Flood Protection Project in California provides another example that includes both structural and nonstructural flood protection approaches.
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Trying to incorporate changes in human behavior or investments in flood control infrastructure are complications that can affect valuation estimates. As with the other cases of estimating the value of single ecosystem services, such estimates should not be confused with estimates of the value of the ecosystem itself, which would require estimates of a range of ecosystem services.
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From page 172... ...
One danger inherent in the economic valuation of a single ecosystem service is mistaking this value for the value of the entire ecosystem. Ecosystems produce a wide range of services and the value of a single service will necessarily represent only a partial valuation of the entire ecosystem.
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From page 173... ...
The basin is highly developed and contains a large number of dams, including 18 on the mainstem of the Columbia and Snake Rivers; most of the large dams are multipurpose (i.e., hydroelectric power generation, flood control, irrigation, recreation, municipal and industrial water supply)
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. Decision-making about fisheries management, land management, and the operation of the hydroelectric dams involves calculations of the effect on salmon populations and on other valued ecosystem services.
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The Pacific Northwest Electric Power Planning and Conservation Act of 1980 created the Northwest Power Planning Council to create a plan "to protect, mitigate and enhance fish and wildlife, including related spawning ground and habitat, on the Columbia River and its tributaries while assuring the Pacific Northwest an adequate, efficient, economical and reliable power supply." Despite legal authority and expenditures of more than $3 billion to date (Northwest Power Planning Council, 2001) , salmon populations have not recovered.
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raises the stakes further. Questions such as how to recover salmon populations and how to protect or restore other ecosystem services in the Columbia River basin have been, and likely will continue to be, contentious issues.
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From page 177... ...
Fully evaluating the consequences of many projects, such as dams and water diversions, requires assessment of the change in value of ecosystem services that may play out at different spatial scales. Some of the consequences may occur far removed from the site of the project, such as consequences to downstream environments (floodplains, deltas, etc.)
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From page 178... ...
Breakdown of dead organic matter through decomposition by microorganisms might be deemed an ecosystem service that maintains clean water in the lake, but its economic value is difficult to isolate from the recycling of nutrients needed for the productivity of plants and animals. Clean drinking water, food production, and recreation are all products of a lake ecosystem, but it is not easy to measure each one separately or to resolve conflicting views on which one is more or less important if trade-offs in management decisions are required.
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From page 179... ...
and similar lake ecosystems have considered costs and benefits of managing eutrophication relative to recreation, real estate values, drinking water quality, and other site-specific attributes (Boyle et al., 1999; Brock and de Zeeuw, 2002; Carpenter et al., 1999; D'Arge and Shogren, 1998; Wilson and Carpenter, 1999)
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that altered ecosystem services and lowered real estate values of surrounding property (Carpenter et al., 1999; Wilson and Carpenter, 1999)
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Valuing Ecosystems This section reviews three cases that in some sense attempt to cover the economic value of all ecosystem services either for a single ecosystem or, more ambitiously, for the entire planet. The policy context of these three sets of studies is quite different.
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Economic studies were conducted on recreational fishing losses (using a travel-cost model) , impacts on tourism, replacement costs of birds and mammals, and a contingent valuation study of lost passive nonuse values.
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That estimate was derived from a national in-person survey that asked respondents about their willingness to pay to prevent the ecological harm of an oil spill of the magnitude of the Exxon Valdez. The survey found that median household willingness to pay to avoid similar injury to the marine ecosystem of the Prince William Sound region was $31 per household -- which results in a value of $2.8 billion when summed across all households in the United States.
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Furthermore, it is difficult to disentangle the effects of the oil spill from other environmental changes. Therefore, some unavoidable uncertainty will remain in attempts to quantify the link between the oil spill and changes in the provision of ecosystem services valued by humans.
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between many different ecosystems within the Everglades makes quantifying the changes in ecosystem services due to restoration an extremely complex issue. The Everglades provide recharge water for aquifers across the state.
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This is being accomplished by back-filling the central portion of the dredged flood control canal (mainstem Kissimmee) and reestablishing side channels and backwaters (Toth, 1996)
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Not surprisingly, the results suggest that small increases in water retention can be achieved with minimal losses in agricultural income, while agricultural returns decline more significantly with higher water retention targets. To date there have been no attempts at a comprehensive economic valuation of the Everglades restoration efforts.
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(1997) estimated values for 17 ecosystem services4 from 16 ecosystem types including wetlands, forests, grasslands, estuaries, and other marine and terrestrial ecosystems.
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Problems arise because knowledge of the translation from ecosystem function to ecosystem services is often incomplete as is the translation from services to values. For studies of the value of a single ecosystem service, and to some extent for studies of the value of multiple ecosystem services, attention can be directed toward services that are easier and relatively straightforward to value, such as the economic value of reducing the likelihood of flood damage or providing clean drinking water without filtration.
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For some policy questions, enough is known about ecosystem service valuation to help in decision-making. A good example is the value of providing drinking water for New York City by protecting watersheds in the Catskills rather than building a more costly filtration system.
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In other cases, it is not necessary to understand the entire ecosystem in order to be able to estimate the production of an ecosystem service of interest with reasonable precision, such as the degree of flood control provided by wetlands. However, without adequate ecological understanding of ecosystem structure and function, it will not be possible to predict the level of some ecosystem services provided or the way provision levels may change under alternative management options.
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From page 192... ...
can be answered by a relatively narrow evaluation of ecosystem services, the value of ecosystem services can likely be estimated with a relatively high degree of confidence with existing methods. For example, it is possible to answer questions about whether to conserve watersheds to provide clean water is worthwhile, as in the Catskills, or to conserve floodplains for flood control, as in the Salt Creek Greenway in Illinois.
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From page 193... ...
A second difficulty with limiting the scope of coverage of an ecosystem valuation study is the interconnection of processes within an ecosystem. Changing the inflow of nutrients into a lake will change ecosystem function and result in changes in fish productivity, recreational opportunities, and other ecosystem services.
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A real danger of being too narrow in spatial scale is that important linkages in the production of ecosystem services or in the value of those services will be ignored. For example, focusing on upstream benefits from dams in the case of the Hadejia-Jama'are floodplain in northern Nigeria, while ignoring downstream losses, would give an incorrect assessment of the net benefits of dams and water diversions.
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From page 195... ...
The temporal scale to be considered also presents challenges to the economic valuation of ecosystem services. Just as ignoring downstream effects in a spatial sense generates an incorrect assessment of net benefits, ignoring the future costs or benefits of decisions will result in an incorrect assessment of the present value of net benefits.
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From page 196... ...
SUMMARY: CONCLUSIONS AND RECOMMENDATIONS This chapter has reviewed a series of case studies that value ecosystem services from aquatic and related terrestrial ecosystems, with a focus on their integration of ecology and economics. The case studies varied from those valuing a single ecosystem service, to multiple ecosystem services, to ambitious attempts to value all services from an ecosystem and even the entire planet.
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· Although valuation of multiple ecosystem services is more difficult than valuation of a single ecosystem service, interconnections among services may make it necessary to expand the scope of the analysis. · Ecosystem processes are often spatially linked, especially in aquatic ecosystems.
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2001. Conserving biodiversity and ecosystem services.
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1992. A Preliminary Economic Evaluation of Rec reational Fishing Losses Related to the Exxon Valdez Oil Spill.
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2004. Ecosystem services provided by freshwater benthos.
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Pp. 137-159 in Sustaining Biodiversity and Ecosystem Services in Soils and Sediments, D
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2000a. Valuing ecosystem services.
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2000. Recovery and management options for spring/summer chinook salmon in the Columbia River basin.
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2000. Measuring the total eco nomic value of restoring ecosystem services in an impaired river basin: Results from a contingent valuation survey.
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1991. Existence and sport values for doubling the size of the Columbia River basin salmon and steelhead runs.
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2000. Valuation of ecosystem services in institutional context.
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1998. Why not calculate the value of the world's ecosystem services and natural capital?
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2001. Establishing "sole source" protection: The Edwards Aquifer and the Safe Drinking Water Act.
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