Estimating non-market values across scale and scope

John Rolfe

Participants

• Project run by Central Queensland University– John Rolfe, Jill Windle, Xuehong Wang & Galina

Ivanova

• Collaboration with – Jeff Bennett (ANU)

– Riccardo Scarpa (Waikato, NZ)

– Kathleen Broderick & Ingrid van Puten (GBRMPA)

Economic valuation

• Used to assess how important different issues are to people

• Market transactions are easy to value – we look at the monetary tradeoff revealed in markets

• Many tradeoffs are harder to value– Environmental issues – Recreation– Social and community tradeoffs

Non-market valuation techniques

• Revealed preference techniques – Travel Cost Method used to assess values for recreation

• Example – value per recreational fishing trip

• Stated preference techniques – Can be used to assess non-use and use values

– Give people scenarios with a potential cost and ask them to ‘state’ their tradeoff

– Contingent valuation

– Choice Modelling

Choice Modelling

• Presents people with a series of tradeoffs about issue in question

• Tradeoffs described in terms of key attributes

• Normally add a cost component as well

• Identify if people are willing to pay for additional improvement or protection

• Tradeoffs presented in a survey format

The policy needs

• Choice Modelling studies are slow and expensive to perform

• Often easier to transfer values from other studies

• Process known as Benefit Transfer – Prospector approach – Systematic database – Combination of previous studies

How to make Benefit Transfer more accurate

• There are four main strategies – Increase the pool of non-market valuation

studies– Increase the accuracy and understanding

of the conducted studies– Develop better systematic BT case studies– Improve the use of BT tools and databases

Issues with Benefit Transfer

• How easy is it to take values that have been estimated in one particular context and transfer them to another application?

• Scale issues – do values change according to the amount of an asset involved?– Small patch, large patch, regional area

• Scope issues – do values change according to the types of tradeoffs involved?– Forest versus forest + animals + birds

• Management issues – do values change according to the types of management actions taken?

Case study - GBR

• Major biodiversity and recreation icon

• Large scale – extends along most of Qld Coast (4 main sections), – 2900 different reefs, – about 6% of area covered by reef

• Extensive scope – Different assets – reef, fish, seagrass, mammals– Different areas – reef, beaches, islands, inner+outer– Different uses – biodiversity, fishing, recreation

Valuation challenges

• Scale challenges– Changes in geographic scope referred to as a scale issue

– Can values estimated at larger scale be transferred to smaller scale and vice versa

– Whole reef → regional areas → local reefs

• Scope challenges – Do values for key reef assets (fish + corals) change

when more GBR assets are considered?• Marine mammals, beaches, seagrass, biodiversity

Working with scale and scope

• Policy makers often need values at a focused level of scale and scope

• But communities often find more general tradeoffs easier to make– We want to be able to benefit transfer between different

levels

– Need ways of conducting studies at different levels of scale and scope and then linking them together

– What are key scale and scope issues for GBR?

Some approaches

• Run split sample experiments at different levels

• The scale issue– Whole GBR vs Regional GBR vs local areas

• The scope issue– Include different attributes to check if the

‘coverage’ of issues makes a difference

Question 6: Carefully consider each of the following three options. Suppose options A, D and E were the only options available, which would you choose?

How much I pay

Area of coral reef in good

health

No. of fish species

Area of seagrass in good health

Quality Recreation Area affected by poor

water visibility

I would choose

Current

condition 16,000 sq km

80% of total

1,500 species

100%

32,000 sq km

75%

86,000 sq km

25%

Condition in 15 years time

Option A

$0 14,000 sq km

70% 1275 species

85% 28,000 sq km

65% 121,000 sq km

35%

Option D

$300 17,000 (15% better)

1350 (5% better)

32,000 (10% better)

104,000 (5% better)

Option E

$125 16,000 (10% better)

1425 (10% better)

30,000 (5% better)

86,000 (10% better)

Some other complexities

• How values may be sensitive to different levels of uncertainty

• How values may be sensitive to different types of management actions

• Options to combine the different information in choice sets

Management actions

• Four main groups of actions – Improving water quality from agriculture– Restricting fishing (commercial and/or

recreational)– Increasing green zones– Climate change mitigation

• May be important for policy to identify if preferences are sensitive to actions

Risk and uncertainty

• As soon as there are management actions there should also be information about uncertainty– Uncertainty about whether the nominated actions

will lead to improvements• Green zones/fishing = low uncertainty

• Ag. Water quality = medium uncertainty

• Climate change mitigation = very high uncertainty

– Challenge of communicating uncertainty

This choice set is for the Whole Great Barrier Reef

Question 8: Carefully consider each of the following three options. Suppose options A, H and I were the only options available, which would you choose?

How much I pay

Area of coral reef in good

health

No. of fish species

Marine Mammals

Uncertain outcomes

Years for policy to take effect

I would choose

?

Current condition

16,000 sq km

80% 1,500 species

10 per sq km

75%

Condition in 15 years time

Option A

$0 70% 1275 species 4 per sq km 0

Expand Green zones

$60 75% 1500 6 per sq km 2

Reduce greenhouse emissions

$125 85% 1425 8 per sq km 25

Testing

• Test different formats and survey versions

• Workshops / focus groups

• Experimental lab (uncertainty issues)

• Major survey rounds (different cities)