2nd „ water science meets policy“ event
DESCRIPTION
2nd „ Water Science meets Policy“ Event. Economic valuation of dike relocation at the German Elbe An ecosystem services perspective Implementation of the WFD: when ecosystem services come into play 29-30 September 2011. Volkmar Hartje, Malte Grossmann TU Berlin. Topics. - PowerPoint PPT PresentationTRANSCRIPT
2nd „Water Science meets Policy“ Event
Volkmar Hartje, Malte Grossmann
TU Berlin
Economic valuation of dike relocation at the German Elbe
An ecosystem services perspective
Implementation of the WFD: when ecosystem
services come into play
29-30 September 2011
Topics
1. Decision-making situation and concept
2. Evaluation of ecosystem services of riverine floodplains
2.1. Flood protection services: avoided damages
2.2. Nutrient retention: replacement costs
2.3. Biodiversity: Benefit Transfer
3. Summary
Background
• Presentation is the result of a study funded by the German Federal Agency for Nature Protection (BfN)
• During the debate about flood protection strategy in Germany dike relocation vs. dike strengthening + creation of controlled storage
• Study proposed to contribute by assessing two alternative strategies with ecosystem services approach as a means to value multifunctional effects
• Study was not included in planning for WFD programme of measures for German part of Elbe
Status of riverine floodplains and potential measures
Map of lowland stretch of Elbe with historical and current floodplains
Conceptual approach: Function, Use, Value
FUNCTIONS OF RIVERINE LANDSCAPES
USES OF RIVERINE LANDSCAPES
Goods & Services (hydrological, biogeochemical, biotic)
VALUES OF RIVERINE LANDSCAPES
Structure Processes
Direct Use values
Indirect Use Values
Non-Use Values
= Total Economic Value
Logic of the value of ecosystem services
Coverage of wetlands ecosystem services
Ecosystem services Relevance for floodplains
Covered in study
Hydrological services
Flood water detention yes X property damages
Groundwater recharge yes
Sediment retention yes
Biochemical services
Nutrient retention yes X replacement costs
Trace element storage yes
In-situ-carbon retention yes
Ecological services
Biodiversity yes X WTP benefit transfer
Food web support yes
Recreation yes
Cost benefit analysis
Valuation of marginal changes in the relationship of diked to
active floodplains
On the basis of the total economic value of ecosystem services
Covered categories of costs and benefits
-Investment costs
-Changes in rehabilitation costs
-Changes in maintenance costs
-Changes in agricultural and forestry productive value
- Changes in biodiversity benefits
- changes in benefits from nutrient retention
- changes in flood protection benefits
Cost benefit analysis
Measures included in analysisOption description Polder
operationRiver stretch (Elbe km)
Number of sites
Polder-area (ha)
Relocation area (ha)
DR L Dike shifting (large scope)
-- 117-536 60 0 34 658
DR S Dike shifting (small)
-- 120,5-536 33 0 9 432
P L Polder (controlled retention large)
flood 117-427 31 25 576 0
P S Polder (Controlled retention small)
flood 180 5 3 248 0
P(e) S Polder (small) with ecol. flooding
ecological 180 5 3 248 0
P+DR Multi-functional flood 117-536 17 4 143 3 402
P(e)+DR Multi-functional ecological 117-536 17 4 143 3 402
Flood protection service
Valuation method: avoided flood damages
1. Assessment of flood risk (average annual damage
vs. expected value of damage)
2. Benefit of flood protection effect as the difference
between average annual damage with and without
measures
0 100 200 300 400 5000
1000
2000
3000
4000
5000
Elbe km
Beitrag der Nebenflüsse
Ist Zustand (100 Jahr Hochwasserereignis)
Beispiel mit Maβnahmen
Max
imal
er
Ab
fluss
m3s-1
0 100 200 300 400 5000
1000
2000
3000
4000
5000
Elbe km
Beitrag der Nebenflüsse
Ist Zustand (100 Jahr Hochwasserereignis)
Beispiel mit Maβnahmen
Max
imal
er
Ab
fluss
m3s-1
0 25 50 75 1000
1000
2000
3000
Tage
Abf
luss
(m
3 s
-1)
50-JAHR EREIGNIS100-JAHR EREIGNIS200-JAHR EREIGNIS
140 150 160 170 180 190
75
80
85
Elbe km
Wasserstand HQ200 (m NN)
Deichkronenhöhe (m NN)
140 150 160 170 180 190
75
80
85
Elbe km
Wasserstand HQ200 (m NN)
Deichkronenhöhe (m NN)
Downstream routing with retention
Inundation model
Generation of artificial flooding events Dresden
Elbe km
Höh
e (m
NN
)
Max
imal
er A
bflu
ss (
m3 s
-1)
Beitrag Nebenflüsse
1D-hydraulic model with HEC-6
0 500 1000 15000
10
20
30
40
50
60
70
80
90
100
Überflutungsvolumen in million m3 im Deichhinterland
Was
sers
tand
(m
NN
)
Beispiel Geländehöhe (m NN)
Überflutungshöhe (m)
Flooding modelling for Elbe river
Damage assessment on a macro-scale
0
100
200
300
400
Siedlun
g dic
ht
Siedlun
g loc
ker
Indu
strie
Verke
hr
Acker
land
Wal
d
Sonst
iges
Infra
struk
tur
Sp
ezi
fis
ch
e V
erm
ög
en
sw
ert
e [
€/m
²]
_bau _aus _ert
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4
Überflutungshöhe in m
Sch
aden
in
% d
es s
pez
ifis
chen
Ver
mö
gen
wer
tes
Macro map of land cover
+ Value density
Spe
cific
va
lue
for
land
co
ver
type
s
Effect: Number of overtopped dike stretches
Annual frequency of flood event
Num
ber
of
over
topp
ed d
ike
stre
tche
s
Benefits: avoided flood damagesA
void
ed
floo
d d
ama
ges
(Mio
.€)
options
Nutrient retention service
Nutrient retention yield
Retentions yield per day of flooding:
~ 1,5 kg TN ha/d and 0,8 kg TP ha/d
Method: replacement costs
Indirect valuation: Does not value the benefit of the
service (clean water), but the value of the service
based on ecosystem function as replacement of
other fmeasures which can be values
Prerequisite for application:
1. The valued measure (substitute) yields a
comparative services
2. The substitute measures is the most cost efficient
3. The demand for the service exist at the given price
(its costs)
Se
wa
ge
trea
tme
nt p
lan
ts
Urb
an
su
rfac
es
Dra
ina
ge
Atm
os
ph
eric
de
po
sitio
n
Gro
un
d w
ate
r
Su
rfac
e d
isc
ha
rge
s
Ero
sio
n
Nutrient discharge into the river
Nutrient load in the river
Nutrient load in coastal waters
Flo
od
pla
ins
/we
tlan
ds
Measures
Costs of measures
Min
imiz
ati
on
Sim
ula
tio
n
Indicators: - reduction potential - avoidance costs - cost-effectiveness
Model MONERIS
Se
wa
ge
trea
tme
nt p
lan
ts
Urb
an
su
rfac
es
Dra
ina
ge
Atm
os
ph
eric
de
po
sitio
n
Gro
un
d w
ate
r
Su
rfac
e d
isc
ha
rge
Ero
sio
n
Nutrient discharge into rivers
Nutrient load in rivers
Nutrient load in coastal waters
Flo
od
pla
ins
/we
tlan
ds
Measures in municipal water management
Rainwater treatment
Technologiy of sewage treatment
Decentralized sewagetreatment technology / connection rate
Model MONERIS
Se
wa
ge
trea
tme
nt p
lan
ts
Urb
an
su
rfac
es
Dra
ina
ge
Atm
os
ph
eric
de
po
sitio
n
Gro
un
d w
ate
r
Su
rfac
e d
isc
ha
rge
Ero
sio
n
Nutrient discharge into river
Nutrient load in the river
Nutrient load in coastal waters
Flo
od
pla
in/ w
etla
nd
s
Measures in agriculture
Reduction of surplus of N-balance
Erosion protection
Model MONERIS
Se
wa
ge
trea
tme
nt p
lan
ts
Urb
an
su
rfac
es
Dra
ina
ge
Atm
os
ph
eric
de
po
sitio
n
Gro
un
d w
ate
r
Su
rfac
e d
isc
ha
rge
s
Ero
sio
n
Nutrient discharges into river
Nutrient load in the river
Nutrient load in coastal waters
Flo
od
pla
ins
/ we
tlan
ds
Measures in water management
Drainage ponds
Gewässerrandstreifen
Rewetting wetlands
River restroration
Modell MONERIS
Cost minimization
i m
mimix
xcmi
)(min ,,,
(1)
s.t.
i
sm
simip TRxq ,, )( (2)
mimi xx ,, ' (3)
where indexes denote i spatial model units (sub-basins and waste water treatment plants) m measure p pollutant / nutrient (phosphorous and nitrogen) s location for nutrient reduction goals (river outlet, upstream location) and x is the implementation level of a measure c is a function describing the total costs of implementing a measure q is a function describing the reduction of nutrients emitted by implementing a measure
si, is the retention coefficient describing the share of nutrients emitted from a basin
reaching the sea TR is the targeted load reduction
'x is the upper limit to the possible implementation level of a measure in a basin First order conditions for cost minimisation:
i m i m i m mi
mimi
mi
imips
mi
mimi
x
x
x
xq
x
xC0
**)(*)(
,
,,
,
,
,
,, (4)
Minimize the sum of the
individual cost components
in relation to the desired
reduction of the load
Shadow value of floodplains
-
10.000
20.000
30.000
40.000
50.000
60.000
5 15 25 35
Reduktionssziel Fracht (%)
Sc
ha
tte
np
reis
Ja
hre
sk
os
ten
(€
/ h
a)
0 ha Aeff
1718 ha Aeff
Reduction target load (%)
Sha
dow
pri
ce a
s a
nnua
lized
cos
ts (
€/ha
)
Biodiversity benefits
Method: Willingness to Pay: Elbe example
Source: Meyerhoff, 2002
Method: Step 2 Benefit Transfer / Meta-Analyse
Meta-Analysis: systematic analysis if available studies
Evaluation of existing studies with wtp for the protection of riverine
wetlands
Problem: Divergent goods under the heading of wetlands
Own study:
- Only wtp for biodiversity and nature protection(non-use and use values)
for wetlands in Europa
- 28 studies from Europe, 60-90 observations
Estimate with a meta-model:
WTP = f (area of measures, covered population, income, method)
Result: decreasing marginal WTP with size
0
1
2
3
4
5
6
7
- 20.000 40.000 60.000 80.000 100.000
Wetland area (ha)
WT
P (
US
D 2
00
0)
Grossmann, in press
100 km
max distance
1000 km
Max distance
Costs of measures
• Cost of newly constructed new dikesRegression equation from different sources as a function of dike
heights• Costs of dike rehabilitation
references in the literature• Costs of dike cutting
references in the literature• Costs of dike maintenance
references in the literature• Costs of regulation of controlled polder
references in the literature• Costs of flood damages to agriculture for polder
estimate of expected damages to yield, valuation via contribution margin
• Costs for permanent land use changes
Costs for permanent change of land use
Opportunity costs: Loss of agricultural services
Land purchase:
Verkehrswert
=> Purchasing price differences (farmland / grassland/ forests
Uncultivated land/ forested wetland)
Ertragswert
capitalized land rent or lease payments
=> Correction by income transfer (EU Land payments) necessary
Results
Results of the cost benefit analysis
Total values for Elbe
according to cost and
benefit categories
Total values for Elbe
according to cost and
benefit categories
# Only direct effects
of dike relocation
no indirect effects
# Only direct effects
of dike relocation
no indirect effects
Net present value
PC SC AD CV NR Sum
Pro-gram
Area Dis-count rate
Pro-ject costs
Saved maintenance costs
Avoided flood damage#
Wtp for biodiv
Nutrient reten-tion
for flood only
Multi-functional
ha % Mio. €
DR L 34.659 3 -566 159 177 926 486 -230 1.182
1 -629 216 337 1.191 970 -76 2.085
DR S 9.432 3 -224 96 20 252 176 -108 319
1 -252 130 38 324 351 -84 591
P 3.248 3 -42 0 415 0 0 373 373
1 -52 0 792 0 0 739 739
P ecol 3.248 3 -70 0 415 87 27 345 459
1 -79 0 792 112 54 712 878
P+DR 7.545 3 -118 32 427 91 37 342 469
1 -140 44 815 117 74 719 910
Pecol+ DR
7.545 3 -156 32 427 202 54 304 559
1 -178 44 815 259 107 681 1.048
Results of the CBA: distribution along the Elbe
Program DR large
Only dike relocations (Large scope)
Program DR large
Only dike relocations (Large scope)
NPV: Net present value (3%)
PC: Project costs;
SC saved maintenance costs
FD: avoided flood damage
BD: WTP for Biodiversity in floodplain
NR: Nutrient retention
Results of the CBA: Distribution along the Elbe
Program DR small:
Only dike relocation
(small scope)
Program DR small:
Only dike relocation
(small scope)
NPV: Net Present Value (3%)
PC: Project costs;
SC: saved maintenance costs
FD: avoided flood damage
BD: WTP for Biodiversity in floodplain
N NR: Nutrient retention
Results of the CBA: distribution along the Elbe
Program P:
Only large flood protection polder upstream
Program P:
Only large flood protection polder upstream
NPV: Net present value (3%)
PC: project costs;
SC saved maintenance costs;
FD: avoided flood damage;
BD: WTP for Biodiversity in floodplain;
NR: nutrient retention.
Results of the CBA: Distribution along the Elbe
Program:
Combination DR + P
Program:
Combination DR + P
NPV: Net Present Value (3%)
PC: Project costs;
SC: saved maintenance costs
FD: avoided flood damage
BD: WTP for Biodiversity in floodplain
NR: Nutrient retention
Summary: Methods
• Economic valuation allows the integration of
multifunctional effects of restoring wetlands as an
option to improve the morphological quality of water
bodies
• Ecosystem services are a convincing and a
practical concept to structure the multifunctional
problem
• The spatially explicit identification/ analysis of
changes within the biophysical realm and on the
use side are very important
• Non-linearities are important
• Including uncertainties is critical for the estimates of
quantities and for values.
Summary: Relevance for WFD
• Economic valuation allows the comparison of alternative
strategies for flood protection in a multifunctional manner
• It enables us to take nature protection objectives into account.
• Dike relocations are an economic option to improve the
morphological quality of riverine water bodies in lowlands
• Dike relocations can be well assessed with the ecosystem
services approach
• The effects on the carbon budget and on recreation need to
be added
• Core requirement is the availability of a large scale
hydrological flooding model
• Thanks for listening!!
Source: Heimlich et al. (1998 modified)
Calculation of „optimal“ share of active and diked floodplains
Analysis of incremental changes with/ without social benefits