ECOSYSTEM SERVICES FROM A SOCIOECONOMIC PERSPECTIVEHOW WE VALUE THE NATURAL ENVIRONMENT

Dr James TurnerRoyal Society of New Zealand Workshop9th August 2011

CONTRIBUTORS

Estelle DominatiBruce SmallOscar Montes de Oca MunguiaFemi Olubode-AwosolaPaula BlackettAlec MackayUpananda ParagahawewaLiz WedderburnMelissa Robson

OUTLINE

• What are the types of economic value and how are they measured?• What are the challenges with economic valuation?• Wicked problems and wider concepts of value

Regulating ServicesFlood mitigation, nutrient filtering,

pest control, waste removal

Supporting Processes

Provisioning ServicesFood, water, timber, fibre

Soil Degradation

Degradation Processes

Cultural ServicesRecreation, aesthetics, spiritual

Inherent Properties

Manageable Properties

Natural Capital

Human Needs

Ecosystem Services

Soil formation and

maintenance

External Drivers

Natural & Anthropogenic

ECOSYSTEM SERVICES TO MEET HUMAN NEEDS1

1 Dominati et al. 2010. A framework for classifying and quantifying the natural capital and ecosystem services of soils. Ecological Economics 69: 1858-1868

TYPES OF ECONOMIC VALUES1

Total economic value

Use value Non-use value

Option valueActual use

DirectIndirect

ExistenceFor others

Altruism Bequest

1 Modified from DEFRA. 2007. An Introductory Guide to Valuing Ecosystem Services

Consumptive Non-consumptive

MEASURING TOTAL ECONOMIC VALUE1

Value based on concept of substitutability“if quantity of one good is reduced, the quantity of another

good can be increased so the individual is no worse off”

Willingness to pay – “maximum sum of money an individual would be willing to pay rather than do without an ecosystem service”

1 Freeman 2003. The Measurement of Environmental and Resource Values: Theory and Methods.2 Yao. 2011. The Non-market value of biodiversity enhancement in New Zealand’s planted forests. PhD thesis

We would now like to know if you prefer to pay an additional amount in your income tax to support the programme to increase and sustain the bush falcon population in Kaingaroa Forest. Please respond just exactly as you would if you were really going to commit

an additional amount in your income tax over the next five years. Now, would you be willing to pay $20 per year for five years?2

□ Yes □ No

Falcon Nest

Forest Edge

ECONOMIC VALUATION TECHNIQUES1

Type Sub-type

Revealed preference Market price

Cost of replacement or substitutes

Productivity change

Travel cost

Hedonic pricing

Stated preference Contingent valuation

Choice experiments

Conjoint analysis

Benefit transfer

1 Freeman 2003. The Measurement of Environmental and Resource Values: Theory and Methods.

CHALLENGES WITH ECONOMIC VALUATION1,2

• Biophysical• Marginal analysis

– non-linearities– thresholds – scarcity or tipping

points• Jointness in production• High uncertainty

• Social• Marginal analysis – substitutability• Weak comparability• Multiple and competing social values• Changing social preferences• Intrinsic values

1 Freeman 2003. The Measurement of Environmental and Resource Values: Theory and Methods.2 Martinez-Alier et al.. 1998. Weak comparability of values as a foundation for ecological economics. Ecological Economics 26: 277-286

CHALLENGES WITH ECONOMIC VALUATION: INTRINSIC VALUES1

Economic value

1 Pojman. 2001. Environmental Ethics: Readings in Theory and Application

Intrinsic value

Multiple values

biocentric ecocentric deep ecology

CHALLENGES WITH VALUATION: WICKED PROBLEMS1,2

• Complex biophysical, social, and political systems• Highly uncertain outcomes, causes and effects• Multiple criteria for evaluation of solutions• Multiple stakeholders with radically different views and values

•What is? (and what if?)•What ought to be?

Some problems are so complex that you have to be highlyintelligent and well informed just to be undecided aboutthem. --Laurence J. Peter

1 Rittel & Webber. 1973. Dilemmas in a general theory of planning. Policy Sciences 4(2): 155-1692 Battie, S.S. 2008. Wicked problems and applied economics. American Journal of Agricultural Economics 90(5): 1176-1191

A WICKED PROBLEMHow should the effects of land use on water quality in the Hurunui catchment be managed?

• Sheep & beef, dairying, forestry, recreation, conservation• Environmental, economic, social and cultural values• Tension among stakeholders• Science uncertainty

• water quality outcomes• land use impacts

Ecosystem Service Values

Recreation, water quality, biodiversity, profitability, intrinsic

ScenariosStatus quoIntensificationDestockingIntensification + irrigation

StakeholdersIwiFarmersRecreationistsEnergy generatorsTourism operators

MULTICRITERIA EVALUATION: CAPTURING MULTIPLE & INTRINSIC VALUES1

1 Martinez-Alier et al. 1998. Weak comparability of values as a foundation for ecological economics. Ecological Economics 26: 277-286

INCLUDING MULTIPLE VALUES IN DECISION MAKING1

Establish:

1) Decisions or policies and strategies to address problem

2) What stakeholders are involved

3) The stakeholder values

Deliberation Matrix

Policy &

Stakeholder values

strategies

ach sta

keholder

group has a

layer

E

Conduct the deliberation- evaluate status quo and various management

options

All the groups share their assessment and - look for commonality in assessment - trade-offs between stakeholder groups transparent

Indicators Water quantity

Water quality

Recreation

ClarityBacterial count

Ecosystem services that are valuedScore

Values a combination of ecosystemservices, types of value and indicators

1 O’Connor, M. 2006. KerDST, Indicators & Deliberation. Centre d’Economie, Universite de Versailles

SUMMARY

• Ecosystem service values • valued for meeting human needs• links economy and environment

• Economic valuation to estimate values• revealed preference• stated preference

• Challenges with economic valuation• biophysical complexity and uncertainty• multiple competing social values and intrinsic values

• Wicked problems• biophysical and social complexity• multiple and competing values

• Including multiple values in decision making