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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
Ingo Bräuer • Institute 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
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
Replacement Cost MethodReplacement Cost Method Valuation Procedure Valuation Procedure
1. Quantification of the ecosystem function
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
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
Investigated RiverInvestigated River
Jossa-Insel
Distelbach
Sahlensee
Pfaffenhausen
Oberndorf
Pegel „Kreuzgrund"
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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
Influence of Beavers on the Structure of the
River
Increase in flooded Area
Increase in flooded Area
Increase in flooded Area
Increase in flooded Area
Lower runnig
velocity
Lower runnig
velocityDenitrification:
N-Compounds N2
Denitrification:N-Compounds N2
GIS
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
River System Jossa
11
Pro
ble
mM
od
els
De
nit
rifi
ca
tio
n-
Pro
ces
ses
Diffuse N-Imission
punktuelle N-Imission
Influence of Beavers on the Structure of the
River
Influence of Beavers on the Structure of the
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%
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
Valuation Procedure Valuation Procedure
QuantityQuantity
PricePrice
ValueValue
X
=
1. Quantification
Spessart: 4.700 kgN/a
Spessart: 4.700 kgN/a
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
Valuation Procedure (RCM)Valuation Procedure (RCM)
1. Quantification of the ecosystem function QuantityQuantity
PricePrice
ValueValue
X
=
2. Determination of the technical substitute and its marginal costs
2. Determination of the technical substitute and its marginal costs
3. Determination of the economic benefits
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
Valuation Procedure (RCM)Valuation Procedure (RCM)
2. Replacement Costs
Avoidance of N-Emissions
Avoidance of N-Emissions
2,5 €/kgN2,5 €/kgN
QuantityQuantity
PricePrice
ValueValue
X
=
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
Valuation Procedure (RCM)Valuation Procedure (RCM)
QuantityQuantity
PricePrice
ValueValue
X
=
3.Economic Value
2,5 €/kgN
ca. 4.700 kgN/a
ca. 12.000 €/aca. 12.000 €/a 12%12%
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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 ??
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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)
Ingo Bräuer • Institute of Agricultural Economics • University of Göttingen
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
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