An Economic Assessment of UK Ecosystem Services
Contributing authors (and institutions):Barnaby Andrews (CSERGE, UEA), Viviana
Asara
(Cambridge), Tom Askew (Cambridge), Uzma
Aslam
(Leeds), Giles Atkinson (LSE), Ian Bateman (CSERGE, UEA), Nicola
Beaumont (PML), Nesha
Beharry‐
Borg (Leeds), Katherine Bolt (RSPB), Murray Collins (LSE), Emma Comerford
(RSPB), Amii
Darnell
(CSERGE, UEA), Carlo Fezzi
(CSERGE, UEA), Nick Hanley (Stirling), Caroline Hattam
(PML), Andreas
Kontoleon
(Cambridge), George MacKerron
(LSE), David Maddison
(Birmingham), Stephen Mangi
(PML), Dominic Moran (SAC), Paul Morling
(RSPB), Joe Morris, (Cranfield), Susana Mourato
(LSE),
Unai
Pascual
(Cambridge), Grischa
Perino
(UEA), Antara
Sen
(CSERGE, UEA), Daan
van Soest
(Tilburg
& VU), Mette
Termansen
(Leeds), Dugald
Tinch
(Stirling), Gregory Valatin
(Forestry Research).
Advisory Board: Sir Partha
Dasgupta
(Cambridge), Brendan Fisher (Princeton, USA), Karl‐Göran
Mäler, (Beijer
Institute, Sweden), Steve Polasky
(Minnesota, USA & Beijer
Institute, Sweden), Kerry Turner (CSERGE,
UEA).
Ian Bateman CSERGE, UEA and Head of NEA Economics
Presentation to the Norfolk Biodiversity Forum
Abbey Conference Centre, Carrow, Norwich NR1 2DDWednesday, 6 October 2010
Primary production
Decomposition
Soil formation
Nutrient cycling
Water cycling
Weathering
Climate regulation
Pollination
Evolutionary processes
Ecological interactions
Primary & intermediate processes
Physical and chemical inputs
Regulating
Supporting
Provisioning
Cultural
Millennium
Assessment
categories
From ecosystem services to their value
Ecosystem services
(what??!!)
Primary production
Decomposition
Soil formation
Nutrient cycling
Water cycling
Weathering
Climate regulation
Pollination
Evolutionary processes
Ecological interactions
Crops, livestock, fish
Water availability
Trees
Peat
Wild species diversity
Final ecosystem services
Primary & intermediate processes
Physical and chemical inputs
Natural enemies
Detoxification
Local climate
Waste breakdown
Purified water
Stabilising vegetation
Meaningful places
Wild species diversity
Regulating
Supporting
Provisioning
Cultural
Millennium
Assessment
categories
From ecosystem services to their value
Primary production
Decomposition
Soil formation
Nutrient cycling
Water cycling
Weathering
Climate regulation
Pollination
Evolutionary processes
Ecological interactions
Crops, livestock, fish
Water availability
Trees
Peat
Wild species diversity
Drinking waterFood
Fibre
Energy
Equable climate
Final ecosystem services Goods
Primary & intermediate processes
Physical and chemical inputs Other capitalinputs
Natural enemies
Detoxification
Local climate
Waste breakdown
Purified water
Stabilising vegetation
Meaningful places
Wild species diversity
Flood control
Natural medicine
Pollution control
Disease control
Good health
Recreation
Regulating
Supporting
Provisioning
Cultural
Millennium
Assessment
categories
From ecosystem services to their value
Primary production
Decomposition
Soil formation
Nutrient cycling
Water cycling
Weathering
Climate regulation
Pollination
Evolutionary processes
Ecological interactions
Crops, livestock, fish
Water availability
Trees
Peat
Wild species diversity
Drinking waterFood
Fibre
Energy
Equable climate
££££££££££££££
Final ecosystem services Goods
Value of goods...
Primary & intermediate processes
Physical and chemical inputs Other capitalinputs
Natural enemies
Detoxification
Local climate
Waste breakdown
Purified water
Stabilising vegetation
Meaningful places
Wild species diversity
Flood control
Natural medicine
Pollution control
Disease control
Good health
Recreation
Regulating
Supporting
Provisioning
Cultural
Millennium
Assessment
categories
From ecosystem services to their value
Primary production
Decomposition
Soil formation
Nutrient cycling
Water cycling
Weathering
Climate regulation
Pollination
Evolutionary processes
Ecological interactions
Crops, livestock, fish
Water availability
Trees
Peat
Wild species diversity
Drinking waterFood
Fibre
Energy
Equable climate
££££££££££££££
££££££££££££££
Final ecosystem services Goods
Value of goods...
..of which ES value
Primary & intermediate processes
Physical and chemical inputs Other capitalinputs
Natural enemies
Detoxification
Local climate
Waste breakdown
Purified water
Stabilising vegetation
Meaningful places
Wild species diversity
Flood control
Natural medicine
Pollution control
Disease control
Good health
Recreation
Regulating
Supporting
Provisioning
Cultural
Millennium
Assessment
categories
From ecosystem services to their value
ES contribution to well-being
Non- monetised
Primary production
Decomposition
Soil formation
Nutrient cycling
Water cycling
Weathering
Climate regulation
Pollination
Evolutionary processes
Ecological interactions
Crops, livestock, fish
Water availability
Trees
Peat
Wild species diversity
Drinking waterFood
Fibre
Energy
Equable climate
££££££££££££££
££££££££££££££
Final ecosystem services Goods
Value of goods...
..of which ES value
Primary & intermediate processes
Physical and chemical inputs Other capitalinputs
Natural enemies
Detoxification
Local climate
Waste breakdown
Purified water
Stabilising vegetation
Meaningful places
Wild species diversity
Flood control
Natural medicine
Pollution control
Disease control
Good health
Recreation
☺☺☺☺☺☺☺☺☺☺☺☺☺☺☺
Regulating
Supporting
Provisioning
Cultural
Millennium
Assessment
categories
From ecosystem services to their value
+
NEA Economic methodology
• Avoid ‘Total Value of Ecosystem Services’ approach:
o Of no policy use
o Wrong (total value of ecosystem = infinity)o The approach takes the value of a single unit
(the ‘marginal value’) of ecosystem service and multiplies by the total number of units
o But as the number of units decreases so their marginal value increases
NEA Economic methodology
• Estimate marginal values• Apply to valuing the changes in service levels
generated by feasible policies or scenarios. • For example: o Likely climate change and its impactso Planting new woodlandso Changes in agricultural land use o NEA Scenarioso etc
NEA Economics: Work to date
Habitat ('000 ha) England Scotland Wales NI UKCoastal Margins 194 85 49 7 339Enclosed Farmland 8030 1779 879 794 11519Freshwater 59 144 9 58 271Marine 2132 3909 733 327 66653MMH 554 3202 175 159 4106SNG 1589 1448 604 279 3934Urban 1382 152 87 48 1672Woodland 1398 1125 305 78 2911
Habitat/service type Goods assessedFreshwater, wetlands
& flood plainsProvisioning; regulating; cultural.
Enclosed farmland Provisioning; biodiversity (farmland bird diversity);
greenhouse gas emissions; carbon storage
WoodlandsTimber production; fuel; deer stalking; venison; carbon
storageSemi‐natural
grasslandsProvisioning; pollination; carbon storage; water quality
and quantity; water flow regulation. Mountains, moors and
heathlandsLivestock; game; peat (fertilizer); drinking water; natural
hazard mitigation; pollution remediationMarine and coastal
marginsCarbon storage; disturbance prevention; coastal
defence; fisheries and food; raw materials
Urbanaccess to urban parks; size of urban parks; urban
greenspace availability; access to greenbelt.
Cultural ServicesAmenity value of nature; education and ecological
knowledge; non‐use value; health; well‐beingRecreation Number & distribution of visits; value of visitsClimate amenity Amenity value of the climate
BiodiversitySpecies conservation (e.g. bird diversity) for use and
non‐use (existence) value; pollination; bioprospecting.
Analysed data on visit outset and destination locations.
Visits are a function of:
Outdoor Recreation
• Site characteristics & accessibility • Substitute characteristics & accessibility•
Complement characteristics & accessibility
•
Population distribution•
Socioeconomics & demographics
Outdoor RecreationAnalysis generates location
sensitive recreation values
NEA Final Phase (to end of 2010)
• Review and revise• Complete the analysis
o Address commonalities and overlapso Focus broadens from habitats to goodso Marginal values
o Per hectare valueso Value functions
• Feed into NEA Scenario analysis
Economic methodology: Limitations
• If feasible changes are substantial enough then the marginal values will begin to alter
• This links the value of service ‘flows’
to the size of the ‘stock’
of ecosystem assets they are
provided by: o E.g. the value of each tonne of fish landed will
rise as the stock of fish falls. • Need to adjust marginal values for this (tricky –
but attempting with a fisheries case study)• Alternative: Asset check (Defra project)
Economic methodology: Limitations
• While most ecosystem services can be valued in economic terms, some are problematic
• While in principle we can estimate the use
value of biodiversity
(e.g.
pollination
services,
bird‐
watching,
etc.),
the
non‐use
existence
value
of conservation is more difficult to assess.
o E.g. Non‐birdwatchers value for preserving bird species which don’t contribute to provisioning
• Here I argue for an ecological limits approach with economics confined to identifying cost‐effective
methods of ensuring safe minimum standards (which may be above present levels).
Decision making problem:
While
in
principle
we
can
estimate
the
use
value
of biodiversity
(e.g.
pollination
services,
bird‐watching,
etc.),
the
non‐use
existence
value
of
conservation
is
more difficult to assess.
• Can
we
use
economic
analysis
to
target
where
is
it
most cost‐effective to undertake conservation?
• Can conservation costs be compensated for?
Non‐NEA work: Policy targeting without benefit values
Combining Ecology & Economics to Maximise Conservation Efficiency
Case study: Targeting conservation in Sumatra
The opportunity cost of conservation (OCC) The opportunity cost of conservation (OCC)
OCC highest in existing oil palm plantation and near
the mill.
Lowest in unplanted areas distant from
the mill
• Over
1000km
of
transect
line
walks
across
all
areas
of the concession over a four year period.
• Animal sightings recorded using GPS
• Land
use
types
and
distances
to
different
areas
and features assessed using GIS
• Analysis of the variation in species density across areas
Modelling the effectiveness of conservation
Wild pig
Leopard cat
Smooth coated otter
East Asian porcupine
Pangolin
IUCN Red List mammals in
Central Sumatran study area
Long tailed macaque
Siamang
Siamang
Agile gibbon
Long tailedmacaque
Pig tailed macaque
Predicted probability of observing red list mammals Predicted probability of observing red list mammals The effectiveness of conservation
Red list mammals Leopard catCosts of conservation
Red list mammals Costs of conservationCost‐effectiveness of conservation for red list mammals
• The smallest scheme (5000ha) conserves viable populations for all but one species. • The intermediate scheme (11,000ha) conserves all species.
-10000
-5000
0
5000
10000
5,000ha 10,000ha 20,000ha
Cha
nge i
n pr
ofits
(m ID
R p
a)
Does the expected price premium cover conservation costs?
Change in profit under three conservation schemes(mid-level price premium)
Conclusions
• Efficient use of resources is always necessary, but especially so in times of austerity
• Integrated environmental economic analysis can target policy so as to optimise efficiency and make the most
of scarce resources. • Advances in valuation mean that, in many cases, CBA
of environmental policy is feasible. • Even where this is not the case, CEA can help target
policy
Long tailed macaque
Siamang
Thanks for listening
An Economic Assessment of UK Ecosystem Services
Contributing authors (and institutions):Barnaby Andrews (CSERGE, UEA), Viviana
Asara
(Cambridge), Tom Askew (Cambridge), Uzma
Aslam
(Leeds), Giles Atkinson (LSE), Ian Bateman (CSERGE, UEA), Nicola
Beaumont (PML), Nesha
Beharry‐
Borg (Leeds), Katherine Bolt (RSPB), Murray Collins (LSE), Emma Comerford
(RSPB), Amii
Darnell
(CSERGE, UEA), Carlo Fezzi
(CSERGE, UEA), Nick Hanley (Stirling), Caroline Hattam
(PML), Andreas
Kontoleon
(Cambridge), George MacKerron
(LSE), David Maddison
(Birmingham), Stephen Mangi
(PML), Dominic Moran (SAC), Paul Morling
(RSPB), Joe Morris, (Cranfield), Susana Mourato
(LSE),
Unai
Pascual
(Cambridge), Grischa
Perino
(UEA), Antara
Sen
(CSERGE, UEA), Daan
van Soest
(Tilburg
& VU), Mette
Termansen
(Leeds), Dugald
Tinch
(Stirling), Gregory Valatin
(Forestry Research).
Advisory Board: Sir Partha
Dasgupta
(Cambridge), Brendan Fisher (Princeton, USA), Karl‐Göran
Mäler, (Beijer
Institute, Sweden), Steve Polasky
(Minnesota, USA & Beijer
Institute, Sweden), Kerry Turner (CSERGE,
UEA).
Ian Bateman CSERGE, UEA and Head of NEA Economics
Presentation to the Norfolk Biodiversity Forum
Abbey Conference Centre, Carrow, Norwich NR1 2DDWednesday, 6 October 2010