course on biod, module 1. lesson 4 what is the value of eco

8/14/2019 Course on BioD, Module 1. Lesson 4 What is the Value of Eco

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A course for PlannersDecision-Makers

M1L4S1

Prepared by Micael Junkov 2008/09

EPU/Danidas Environmental Programme The Biodiversity Component

Biodiversity

Module 1: Setting the stage for biodiversity

Lesson 4: What is the value of ecosystem services?

NRE


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Module 1: Setting the stageLesson 4: What is the value of ecosystem services?

What have we seen in Lessons 1 to 3of relevance to the value of biodiversity

and ecosystem services

Sustainable development is an almost universallyaccepted goal

Environmentally sustainable developmentrequires that critical resource stocks andecological functions are safeguarded

Maintaining the flow of ecosystem servicesrequires intact systems which retain theirstructure and diversity

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A functional definition of capital in general is "astock that yields a f low of valuable goods or

services into the future Biodiversity is important because it supports

ecosystem processes and the provision ofservices vital to our society and human well-

being

All our activities, including the global economy,are made possible thanks to the diversity ofservices that nature provides

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What have we seen in Lessons 1 to 3of relevance to

the value of ecosystem services


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The value of things

M1L4S41EC & GFEM. 2008.

Not all that is very usefulcommands a high value(water, for example) andnot everything that has ahigh value is very useful(such as a diamond)

Adam SmithsWealth of Nations (1776)(Paraphrased by TEEB 1)


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Land use transitions versus GDP

M1L4S5Modified from Foley et al., 2005.

Pre-settlement

Frontier

Natural ecosystems

Naturalecosystems

Frontierclearings

Subsi-stence

Intensi-fying

Subsistenceagriculture& small-

scalefarms

Intensive

Restoration/rehabilitation

Intensiveagriculture

Protected/recreational

Proportion

in

thela

ndscape

100%

0%

Time (stages in land use transitions)

Future

Urban

0

10

20

30

40

50

60

70

Global GDPin trillionof US$(1990)

20071700Year

1900


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Changing paradigms

The ecosystem services paradigm has enhancedour understanding of how the naturalenvironment matters to human societies

Societys most fundamental assets include:

natural; physical; human; social; andintellectual capital

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However Despite growing recognition of the importance

of ecosystem functions and services, they areoften taken for granted and overlooked inplanning and decision-making


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What are ecosystem services?

BioD underpins ecosystem services M1L3S7

What is Biodiversity ?Setting the stage for biodiversity

ProvisioningServices

Products obtainedfrom ecosystems

Food Fresh water Fuelwood Fibre Biochemicals Genetic

resources

Regulating Services

Benefits obtained fromregulation of ecosystem

processes

Climate regulation

Pest regulation Runoff regulation Water purification Pollination Mitigate erosion Mitigate tsunamis

Cultural Services

Non-materialbenefits obtained from

ecosystems

Spiritual & religious

Recreation &ecotourism

Aesthetic & inspirational Educational Cultural heritage Existence values

Supporting Services

Services necessary for the production of all other ecosystem services

Soil Nutrient Primary Provision Oxygenformation cycling production of habitat production

Biodiversity: Life on Earth

Modified from Pereira, H.M. and Cooper, H.D. 2006.


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A closer look at examples of ecosystemfunctions, processes, and flow of services

Function Process Service

Pro

visioningFood Conversion of solar

energy into edible plantsand animals

Farming/aquaculture(small/large scale)

Fodder and fertiliser

Hunting, fishing, gatheringof fruits, etc.

Regulati

ng

Gas Role of ecosystems inbio-geochemical cycles

UVb-protection by O3

Maintain good air quality

Climate Influence of land cover

and biol. mediatedprocesses on climate

Influence on climate (e.g.

temperature, wind, rainfall,rainfall intensity)

Mitigatedisturbances

Ecosystem structurewhich reduces impacts

Storm/tsunami protection(e.g. coral reefs, mangroves)

Flood mitigation (e.g. by

forests and wetlands)M1L4S8From: De Groot et al. 2002.


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Function Process Service

Regulating

Pollination Role of biota inmovement of pollen

Pollination of wild plantspecies

Pollination of cropsWastetreatment

Role of vegetation &biota in removal orbreakdown ofnutrients andcompounds

Pollution control /detoxification

Filtering of dust particles

Mitigate noise

Biologicalcontrol

Population controlthrough trophic-dynamic relations

Control of pests and diseases

Reduction in crop damage

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A closer look at examples of ecosystemfunctions, processes, and flow of services

From: De Groot et al. 2002.


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Total Economic Value

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Use Value Non-Use Value

Modified from Spurgeon, 2002.

Extractive:

ForestWildlifeFishAgricultural

ForageMedicalGeneticEnergyWater supplyWater transportNon-extractive:

RecreationLandscapeResearchEducation

Shorelineprotection

Storm protectionSediment

regulation

Nutrient retentionWater quality

maintenanceExternal support of

fish/habitatGroundwater

dischargeMicroclimatic

stabilizationCarbon sink

Decreasing ease of valuation

Value of theoption tomaintain

future use of:

Direct Use IndirectUse OptionValue Quasi-Option BequestValue ExistenceValue

Goods/servicesthat can beconsumeddirectly

Functions/servicesenjoyeddirectly

Value arising fromexpected newinformation fromavoiding irrever-

sible loss of:

Value arisingfrom leavingassets to

futuregenerations

Value arising fromknowledge ofcontinuedexistence

Biologicaland genetic

diversityUniquenessHeritage

HabitatSpecies

d l hh h l f


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Valuing a single ecosystem service

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In 1996 New York City invested US$1 - US$1.5billion in natural capital expecting savings ofUS$6 US$8 billion over 10 year

This means an expected Internal Rate ofReturn of 90-170% in a payback period of 4 7

years

How on Earth did that come about?

Chichilnisky G & Heal G. 1998.

M d l 1 S tti th tL 4 Wh t i th l f t i ?


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Watersheds 5,000 km2

Before high qualitywater, now housingdevelopment and

runoff from roads andagriculture a threat

In 1996 NYC twooptions:

1)Filtration system$2-6 billion +

$300 million p.a.

2)Protect watersheds

From NRC, 2004.

M d l 1 S tti th tL 4 Wh t i th l f t i ?


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M1L4S13

1997 WatershedMemorandum

Agreement

Federal, state, local

authorities, and NGOs NYC spend $250

million during 10-yearbuying undevelopedland (willing sellers)

NYC Investment plan Thorough monitoring

includes status offreshwater biodiversity

From NRC, 2004.



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M1L4S14

New York Citys water supply

Despite regulations and comprehensive frameworkuncertainties exists in sustaining long-term high qualitydrinking water

Provision through natural processes rather than humanengineering offered estimate of value of restoringecosystem service

Replacement costs for natural processes providing cleanwater estimated to $2-6 billion ($4,000 to $12,000 per

hectare)

Relative specific policy question meant that currentlyavailable economic methods of ecosystem service

valuation was sufficient to provide an estimate

From NRC, 2004.


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Pollination

More than 200,000 plant species worldwide depend onanimal pollination to produce seeds

Pollinators include in their ranks about 1,200 species ofvertebrates and at least 200,000 species of insects

Pollinators affect 35% of the worlds crop production,increasing output of 87 of the leading food crops

worldwide

The status of pollinators is or should be a matter of greatconcern particularly since reports of apparent pollinatordeclines around the world over the past decade has led to a

brewing international pollinator crisis.

Despite the utter centrality of pollination to terrestrial life,

there is an extraordinary deficiency of dependable data onpollinator populations in general

From NRC, 2004.



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Pollination

In the US the honeybee alonefacilitates production of over90 crops and amount to more than $15 billion per year.1

According to a French/German study published 20092:

Economic value of insect pollination for the world

agriculture in 2005 was 153 billion (i.e. 9.5% of the totalvalue of the world agricultural food production).

Vegetables and fruits were the leading crop categories invalue of insect pollination with about 50 billion each,followed by edible oil crops, stimulants, nuts and spices.

Pollinator disappearance would translate into a consumersurplus loss estimated between 190 to 310 billion.

Although this valuation clearly demonstrates the economicimportance of insect pollinators, it does not take intoaccount the strategic responses of the markets.

1Berenbaum MR, 2007.2Gallai et al. 2009.



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The value of everything

What is the value of natures life supportservices?

Some 30 + ecosystem services referred to inscientific literature

In 1997 an international team of economistvalued 17 services from 16 ecosystems including:

Wetlands

Forests Grasslands

Estuaries

Other marine and terrestrial ecosystems

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Multiple services in multiple ecosystems

Costanza et al., 1997.



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ServiceCategory

Ecosystem Services

ProvisioningWater supply Raw materials

Food production Genetic resources

Regulating

Waste treatment Climate

Disturbances Erosion

Gas Biological control

Water PollinationCultural Cultural values Recreation

Supporting

Nutrient cycling Soil formation

Habitat

The value of everythingMultiple services in multiple ecosystems




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g gy

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The value of everythingHow did they do it?

Estimated productivity of a hectare (ha) for eachecosystem type for each service and awillingness to pay estimate for the service

Multiplying these estimates generated a per havalue of the ecosystem service for eachecosystem type

Summed all services to establish a value per ha

for each ecosystem type Finally, multiplied this per-ha value by the

number of ha of each ecosystem type andsummed across ecosystem types to derive the

total value of ecosystem servicesCostanza et al., 1997.



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g gy

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The value of everythingThe bottom line

In 1994 the value of ecosystem services for theplanet ranged from $16 trillion to $54 trillion,with a mean estimate of $33 trillion. This valuewas notably higher than the value of global GDP

(Gross Domestic Product) at the time ($18trillion) i.e. almost twice the size.

GlobalEcosystem Services

(2 x global GNP)

GlobalGross National Product

(GNP)




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g gy

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The value of everythingWhat did people say?

Meaningless exercise since the true value ofecosystem services is infinite given that oureconomies would soon collapse without them

Environment

Society

Economy

Simple multiplication of a physical quantity byunit value cannot be done in natural systemssince they do not follow linear relationships

The approach assumes that ecosystem service

production is scale-free In one sense, it was a correct approach towards

complete accounting. However, presentunderstanding and methods is unlikely to

accomplish it anytime soon

Sustainable

Development



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Conclusions

The valuation of ecosystem services is anevolving discipline which requires theintegration of ecology and natural sciences witheconomy.

Examples of approaches and interdisciplinarystudies that provide such integration indicatesuccessful beginnings

The ability to generate useful information about

the value of ecosystem services varies widely forcase studies 1

For some policy questions, enough is knownabout ecosystem service valuation to help in

decision-making.1NRC, 2004.



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1. Insufficient ecological knowledge/information toestimate:

i. The quantity of ecosystem services produced; orii. How ecosystem service production would change

under alternative scenarios

2. Existing economic methods may be unable to

generate reliable and uncontroversial estimatesof value for the provision of various levels ofecosystem services

3. Lack of integration of ecological and economic

analysis.

Conclusions

Our constraints in supporting decision-makingwith reliable ecosystem values may arise from:

1NRC, 2004.



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Studies that focus on valuing a single ecosystem serviceshow promise of delivering results that can informimportant policy decisions

Even when the goal of a valuation exercise is focused on asingle ecosystem service, a workable understanding of the

functioning of large parts or possibly the entire ecosystemmay be required

Valuation of a single ecosystem service is easier thanvaluating multiple services. However, the interconnectionsamong services may make it necessary to expand the scope

of the analysis. Ecosystem processes are often spatially linked, especially in

aquatic ecosystems

The value of ecosystem services depends on underlyingconditions.

Conclusions

1NRC, 2004.



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Recommendations 1

There is no perfect answer to questions about theproper scale and scope of analysis in ecosystemservices valuation.

Estimates of value should be placed in context.

Concerted efforts should be made to overcomeexisting institutional barriers that prevent ready andeffective collaboration among ecologists andeconomists regarding the valuation of terrestrial,

freshwater and marine ecosystem services. Existing and future interdisciplinary programs

aimed at integrated environmental analysis shouldbe encouraged and supported.

1NRC, 2004.



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Value of ecosystem services:Case Studies 1

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Single ecosystem service Providing clean drinking water (p. 132)

Drinking water from ground water (p. 137)

Valuation of fish production provided by coastal

wetlands and estuaries (p. 141) Provision of flood control services (p. 143)

Valuing multiple ecosystem services

Fish production, irrigation waters, navigation,flood control, and clean drinking water (p. 146)

Upstream vs. downstream water use (p. 149)

Food production, recreational fishing, andprovision of drinking water from lakes (p. 151)

1NRC, 2004.



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Valuing ecosystems Oil spill (p. 154)

Restoration of water resources (p. 156)

Multiple services in multiple ecosystems (p. 159)

Value of ecosystem services:Case Studies 1

1NRC, 2004.



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ReferencesBerenbaum MR. 2007. The Birds and the BeesHow Pollinators Help

Maintain Healthy Ecosystems. Testimony before the US House ofRepresentatives, 26 June 2007.

Chichilnisky G & Heal G. 1998. Economic returns from the biosphere.Nature 391 (6668), pp. 629-630.

Costanza R, dArge R, de Groot R, Fabes S, Grano M, Hannon B, Limburg

K, Naeem S, ONeil RV,Pareulo J, Raskin R, Sulton P and van der BeltM. 1997. The value of the worlds ecosystem services and naturalcapital. Nature 387: 254-260.

De Groot RS, Wilson MA & Boumans RMJ. 2002.A typology for theclassification, description and valuation of ecosystem functions, goodsand services. Ecological Economics 41:393-408.

EC. 2008. The economics of ecosystems & biodiversity. An interimreport. European Commission and the Germans FederalEnvironment Ministry.

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ReferencesFoley JA, Defries R, Asner GP, Barford C, Bonan G, Carpenter SR, Chapin

FS, Coe MT, Daily GC, Gibbs HK, Helkowski JH, Holloway T, HowardEA, Kucharik CJ, Monfreda C, Patz JA, Prentice IC, Ramankutty N,and Snyder PK. 2005. Global consequences of land use. Science309:570-574, 22 July 2005.

Gallai N, Salles J-M, Settele J, Vaissiere, BE. 2009. Economic valuation ofthe vulnerability of world agriculture confronted with pollinatordecline. Ecological Economics 68 (3), pp. 810-821.

NRC. 2004. Valuing Ecosystem Services: Toward Better EnvironmentalDecision-Making. National Research Council. Water Science andTechnology Board. National Academies Press. Washington, D.C.

OECD. 2002. Handbook of biodiversity valuation. A guide for policy

makers. Paris.Pereira, H.M. and Cooper, H.D. 2006. Towards the global monitoring of

biodiversity change. TRENDS in Ecology and Evolution. Vol. 21, No. 3,March 2006.

Spurgeon, 2002. Rehabilitation, conservation and sustainable utilizationof mangroves in Egypt. FAO, Cairo.

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