valuing the benefits of biodiversity - uk government...

Valuing the Benefits of Biodiversity

Economics & Funding SIG June 2007

2

Table of Contents

OVERVIEW ............................................................................... 3

SECTION 1: VALUING BIODIVERSITY....................................... 3

What is Biodiversity? ............................................................................3

Why is Biodiversity important? ...............................................................3

Why value Biodiversity? ........................................................................3

What is the value of Biodiversity? ...........................................................4

What does the TEV framework mean in practice? ......................................5

How can Biodiversity be valued?.............................................................6

SECTION 2: BIODIVERSITY BENEFITS...................................... 6

Economic Activity .................................................................................7

Cultural/Spiritual/Aesthetic..................................................................10

Recreation/Tourism ............................................................................11

Education/Information ........................................................................12

Health ..............................................................................................13

Regulating and Supporting Ecosystem Services ......................................16

Option/Existence................................................................................18

SECTION 3: KEY RESOURCES.................................................. 22

ANNEX 1: VALUING THE NATURAL ENVIRONMENT......................... 23

ANNEX 2: VALUING BIODIVERSITY.............................................. 24

ANNEX 3: ECOSYSTEM SERVICES FROM KEY HABITATS ................. 32

ANNEX 4: VALUATION STUDIES.................................................. 35

3

Valuing the Benefits of Biodiversity

Overview This paper provides evidence to support the case for protecting biodiversity. Biodiversity is recognised as important but can often be overlooked or given a lower weight. This is partly because decision-making involves weighing costs and benefits and it is difficult to include biodiversity in this because its value is not quantified or understood. Valuation becomes necessary therefore to illustrate the importance of biodiversity. Valuing biodiversity requires an understanding of the range of benefits it provides. This paper sets out how biodiversity provides these benefits and the evidence to support this, including some UK case studies.1

Section 1: Valuing Biodiversity

What is Biodiversity? Biodiversity can be defined in a variety of ways. A very narrow definition is to focus on genetic diversity (which occurs within species, e.g. subspecies/forms) or species diversity, perhaps taking into account the functional role different species play. A broader definition is to focus not just on species but also habitat and ecosystem diversity. Here varied landscapes, uplands, lowlands, wetlands and coastal areas all contribute to the diversity of the natural environment. This broader version follows the standard Convention on Biological Diversity definition, see http://www.biodiv.org/.

Why is Biodiversity important? Diversity within the natural environment is important. It provides variety that people enjoy, both in species and landscape. Species variety plays a dual role of ensuring and signalling the vitality of the natural environment. Protecting biodiversity protects the health of the natural environment and this enables it to provide services which people depend upon.

Why value Biodiversity? Valuing biodiversity may seem an odd thing to do. It is also a very difficult thing to do. However, it is necessary in order to illustrate the importance of biodiversity. As there are competing uses of the natural environment, for farming, development or as a natural space, society needs to be able to choose which is best. The benefits from farming or development can be seen from the value of their products in the market place. But the products from 1 This paper is based largely on an earlier paper, Benefits of Biodiversity Conservation, by Ian Dickie, RSPB.

4

the natural environment often do not appear in any market. It is worth highlighting that even though such natural products may not appear in markets, they are nonetheless just like any other good. For example, just as a person may purchase a cup of coffee for the satisfaction it gives them, so another may choose to take a walk in the countryside for the pleasure it provides. However, as taking a walk may not ‘cost’ anything it can appear free or worthless. Unless these products are valued to reflect the benefit they bring to people, preserving a natural space could be mistaken for an inferior option.

What is the value of Biodiversity? The Total Economic Value (TEV) framework (shown in Annex 1) can be used to value the natural environment. It breaks down why people value the environment by looking at whether the benefits they gain are Direct, Indirect or from ‘Non-Use’.

Direct and Indirect Use

People value the environment because they use it, both directly and indirectly. Visiting the countryside, walking in the woods or across hills are examples of directly using the environment. But natural processes in the environment also provide services to people. These include climate regulation through absorbing CO2 from the atmosphere, and water quality through natural filtration. Although these are ‘used’ by people, it is indirect as most people are not aware that they are benefiting in this way.

Non-Use There is a value in maintaining the natural environment separate to the benefits from using it directly or indirectly. Part of this is a bequest value that current generations may place on the ability to pass on pristine natural spaces to future generations. Another part is the value people place on simply knowing that certain species or natural spaces exist anywhere in the

Example of Direct & Indirect Use Benefits

Wetlands are a good example of the natural environment providing both direct and indirect use benefits to society. By hosting a variety of birds and wildlife, wetlands attract large numbers of visitors. These are people who are directly ‘enjoying’ the natural environment.

However, wetlands also provide other services of benefit to society, including water purification and flood control. Without these, society would have to pay higher costs to treat water or build flood defences. These are considered indirect benefits because people do not ‘consume’ these services directly, rather they impact on services people do consume directly, such as water from the tap.

5

world, even though they may never see or experience them. Finally there is an option value in maintaining the natural environment. This refers to the possibility that in the future the natural environment will yield benefits that are not currently enjoyed. This could be the discovery of new biochemical functions [can be in existing species] that aid new medicines, or it could be an insurance function of the natural environment to be resilient in the face of climatic disturbance.

What does the TEV framework mean in practice? The TEV framework is a very useful starting point in trying to understand the value of the natural environment, but it does not necessarily reveal all the benefits that the natural environment provides. It should be clear that the value people place on the environment reflects the benefits the environment provides them with. The bottom part of Annex 1 shows some of these principal benefits. Focusing on these helps to build a picture about how the environment is used, enjoyed, and therefore valued. These benefits will vary according to location, to scale, to landscape type, on the availability of substitutes, and from individual to individual. For some the quality of the natural environment is important, for example for aesthetic or water quality benefits, but for others it may be less so, such as a simple green space for sport. In other words the benefits depend on what ‘piece’ of the environment is being looked at and for what purpose. A significant benefit from biodiversity conservation is the impact on local economies of organisations that work to restore and maintain a high quality natural environment. These organisations provide employment and boost local GDP. Also, a high quality natural environment encourages the ‘visitor economy’, where day-trippers and tourists visit areas to enjoy wildlife and scenery, generating custom for local enterprises. While this economic activity lies outside the TEV framework, it serves to illustrate some of the tangible benefits to local communities from preserving a high quality environment.

Example of Non-Use Benefits

Charitable donations to wildlife organisations which endeavour to protect endangered species across the world are an example of non-use benefits, and amount to hundreds of millions of pounds worldwide each year. A small contributor is the £4 million raised in donations last year by the Whale & Dolphin Conservation Society in the UK. Here, individuals are willing to give up some of their income in order that species which they may never see or enjoy in any ‘direct’ sense may survive. It is also difficult to argue in the case of a single species that its survival provides some form of indirect benefit either. What ever the reason, individuals receive satisfaction from knowing that the species survives, and are willing to pay to ensure that it does.

6

How can Biodiversity be valued? It is difficult to put monetary values on the benefits people derive from the natural environment. However, a variety of valuation techniques do exist. These are described in more detail in Annex 2 along with a fuller discussion of the issues in valuing biodiversity. It should be noted that some of these attempt to value the benefit itself, while others try to find lower bounds for the true value. This reflects the methodological challenge in valuing the environment. Care must be taken with the approach used here of separating out all the benefits. There is a temptation to simply add them all up to give a total figure. There are many reasons why this is inadvisable. The figures presented below come from a variety of different sources for different parts of the environment using different valuation techniques, and so are simply not comparable. Another problem with ‘adding-them-up’ is double counting. For example, when someone takes a walk in the countryside this is recreation. However, there are clearly health benefits to such exercise. Also, the individual may well enjoy the aesthetic and spiritual aspects of the experience. Some techniques which ask people to value such activities will inevitably be recording a value which embodies all these benefits. Care must be taken not to use such a figure for one benefit only, or else multiple benefits will be counted more than once. This also shows how difficult it is to isolate separate values.

Section 2: Biodiversity Benefits This section discusses some of the key benefits the natural environment provides. This list is not meant to be exhaustive, but cover the main benefits from the literature. For each benefit there is a brief description of how the natural environment provides the benefit. This is supported by a discussion of some of the key studies that provide evidence that people actually value these benefits, although figures are not always available. Where possible case studies are presented to illustrate how benefits relate to conservation projects or areas in the UK. Where benefits are specific to particular habitats and landscapes, these are drawn out in some detail.

7

Economic Activity

Economic activity refers to the direct economic benefits that biodiversity can provide. These include resources that can be taken from nature for consumption, the economic impact of maintaining and enjoying a high quality natural environment and the regenerative effects an improved environment can bring to an area.

Case Study: Minsmere RSPB Reserve

Minsmere RSPB reserve lies on the Suffolk coast, and covers 935 hectares of a variety of habitats. Because of this diversity, the reserve supports a larger variety of birds than other area of its size in the UK. This helps to make the site a prime visitor attraction. A recent study by the RSPB investigated the impact on the local economy of RSPB reserves, including Minsmere. It examines the direct impacts of the reserves, through employment and expenditure on material and contractors in the locality.

It also calculates the impact visitors have on the local economy through their expenditure. The reserve attracts around 85,000 people every year, and directly employs the equivalent of 17 full-time workers. Direct expenditure on the site, its upkeep and on staff is estimated to be around £775,000 per year, of which some £500,000 remains within the local area, supporting an additional 4 FTE jobs. Using survey data, visitor expenditure in the region that could be attributed to the reserve was estimated to be £1.13 million per year in 2001. Of this, some £338,000 directly supports local income and 32 FTE jobs. In total, the combined economic impact of the reserve is around 53 FTE jobs, and worth some £840,000 per year to the local community. Source: RSPB Reserves and Local Economies (2002)

8

Evidence on Economic Activity Benefits The natural environment is rich in wild plants and animals that are harvested for food, for fuel or for medicine. This is additional to farm produce which comes from specially managed lands. Care must be taken to ensure these goods are harvested sustainably or else their extraction could damage the environment. A recent study, ‘Use of wild living resources in the UK’ mentioned below estimates that these resources are worth around £4.8 billion a year. There have been a number of studies which estimate the contribution to the economy of a high quality natural environment. The argument here is twofold. Firstly, in restoring and maintaining a high quality natural environment, conservation agencies employ a large number of people, and spend money in the economy. Secondly, the provision of a high quality natural environment attracts visitors who spend money. The combination creates an industry which is estimated to be worth £18.6 billion per year in the UK, and provides over 500,000 full-time equivalent (FTE) jobs, see chart below. The case study above shows the impact on the local economy of an RSPB reserve.

Comparison of Economic Activity Linked to Natural Environment with Other Sectors, England

(2004)

0

50

100

150

200

250

300

350

Publishing &Printing

NaturalEnvironment

Chemicals Rubber &Plastic Goods

MotorVehicles

Em

plo

ym

ent

(000s)

Finally, there is evidence to suggest that improving the biodiversity of an area, its green spaces and flora, helps to improve the perception of the area and the quality of life of its residents. This can help to foster the redevelopment of depressed urban areas. However, this is very difficult to quantify as it is a very intangible benefit where clearly establishing cause and effect is quite challenging. One example of a scheme to rejuvenate deprived areas is in Sheffield where the local wildlife trust has put forward £10 million to develop derelict estates into areas of natural beauty that can be used and enjoyed by local residents.

9

Studies and Evidence

Study Area looked at

Subject Matter Values

Revealing the Value of Nature (2004)

England High Quality natural environment in England

£7.6 billion, 299,000 FTE

Valuing our environment: The economic impact of the environment in Wales (2001)

Wales (NB: similar studies exist for regions)

High Quality natural environment in Wales


The role of the natural heritage in generating and supporting employment opportunities in Scotland. Scottish Natural Heritage SNH (2004)

Scotland High Quality natural environment in Scotland


Use of Wild Living Resources in UK (2003)

UK Wild living resources harvested in UK


Forestry Commission (2002)

UK Forests Direct economic impact of maintaining forests in UK

£309 million, 30,000 FTE or £110 per hectare

PACEC (2000) England Economic impact of forestry industry in England

£3 billion, 34,000 FTE (includes wood processing)

Valuing the Environment of the North East (2001). For a wider range, see * under key resources

North East High Quality natural environment in North East


RSPB Reserves & Local Economies (2002)

All RSPB Reserves

Economic impact of RSPB reserves on local economies across UK

820 FTE jobs and £15 million per year

Revealing the Value of Nature (2004)

England Value of tourist trade attracted to high quality natural environment

192,000 FTE and £5 billion

Valuing the Environment of the North East (2001)

North East Value of forest tourist trade in North East

£40 million turnover per annum

10

Cultural/Spiritual/Aesthetic The beauty of nature is something many people are enthralled by. There is something within the natural environment which people really connect to, and gives them an immense sense of satisfaction when they experience nature. For some there are cultural or spiritual meanings attached to the landscape, whereas for others it is simply the aesthetic quality of the natural environment which they enjoy so much. Anecdotally, this argument is quite well-founded, but finding empirical evidence with monetary values is difficult. Studies and Evidence

Study Area looked at Subject Matter Values Amenity value of forests in Great Britain and its impact on the internal rate of return from forestry (1992), Willis & Garrod

Forest of Dean Perceived improvement in quality of life from living close to woodland.

Property prices up by 7 %

Costs & Benefits of Natura 2000 Sites (2004)

Scotland Cultural benefits of Natura 2000 sites in Scotland

Qualitative assessment that benefits would be high and favour local and regional communities

Biodiversity & Poverty Reduction, (2006), WCMC

Developing Countries

Cultural benefits of natural environment to people in developing countries

Qualitative, cultures attach special significance to their natural environment

The Social & Environmental Benefits of Forests in Great Britain (2003) Willis et al

Great Britain Value to people of a woodland view from their home.

£150 million per annum

Evidence on Cultural/Aesthetic Benefits

A study valuing the benefits of forests in Great Britain, listed below, attempted to draw out the value people place on the contribution of forests to landscape. Clearly this is an aesthetic benefit, and the study focused on those households with a woodland view, asking them to place a value on the benefit they felt from having such a view. When the survey is scaled up for relevant households across Great Britain, the value is £150 million per year. This represents what residents would be willing-to-pay (WTP) to preserve their woodland view.

11

Recreation/Tourism Earlier, was referred to in the context of its impact on the economy. Here, recreation and tourism refer to the benefits people enjoy from taking recreation in the natural environment. As mentioned before, there is scope here to include other benefits in any valuation study. For example, part of the enjoyment of recreation in the countryside is aesthetic and it is difficult to separate these out. However, it clear that many people do take day trips and holidays to areas because of the quality of the natural environment as well as to visit wildlife.

Case Study: Osprey

Although once a familiar sight in England and Scotland, the Osprey suffered from human persecution and the last recorded breeding took place in 1916. However, in the 1950s the bird began to turn up in Scotland once more, and began breeding at Loch Garten.

The RSPB acted to preserve this site, and others, to ensure the bird’s survival. It also invited visitors to the sites to enjoy the bird and its surroundings. Since the 1950s, these have attracted over 2 million visitors as the Osprey has flourished. Loch Garten is just one of a number of Osprey sites around the country, which collectively attract some 290,000 visitors each year.

A study was carried out to estimate the recreational benefit people gain from the Loch Garten site. It asked people how much they would be willing to pay as a hypothetical entrance fee to the reserve. The resulting value lay between £1.96 and £2.65 per visitor. If this is applied to all visitors to Osprey reserves in the UK, it gives a value of between £0.57 million and £0.77 million per year. This represents an estimate of the benefit people enjoy from visiting these sites, predominantly for recreation. Source: Value of Biodiversity (2006); Watched Like Never Before (2006) RSPB

Visitors attracted to the sites derive benefits from watching Ospreys, particularly the chicks. The reserves also offer a wide range of landscapes and opportunities for recreation and leisure. Visitors, both tourists and day-trippers, have contributed significantly to the local economies surrounding the sites.

12


Education/Information Unique natural spaces have an important function in enabling society to improve its knowledge of the natural world. Scientists can use these areas to gather data and conduct research which can materially benefit society. Natural spaces also provide an arena in which children can learn outside of the classroom, and there is evidence to suggest that this is a more effective form of learning. This general and specialist education depends upon the provision of natural spaces across the UK.

Study Area looked at Subject Matter Values Business Case for the Environment Research Study (2003) RSK

North East Recreational benefits of visitors to natural environment

WTP of £8.9 million per year


Scotland Rest of UK

Recreational benefits of visitors to Natura 2000 sites

Recreation: Scottish general users, £910,000 per year Specialist Visitors: £52,000 per year Recreation: General non-Scot user, £627,000 per year Specialist Visitors: £47,000 per year


Great Britain Recreational benefits of visitors to woodlands in Great Britain

£393 million per year

Evidence on Recreation Benefits

The studies presented below most likely include other benefits than purely recreation. However, they do provide strong evidence of the value people place on the natural environment they can use for leisure. For example a recent study of the Natura 2000 sites in Scotland found that Scottish users would collectively be WTP £910,000 per year to gain access to the sites.

13

Another incredibly important function of natural spaces is environmental monitoring. Observing the natural environment allows scientists to understand underlying trends that indicate the health of the natural environment. The effects of climate change can be traced through geology and biodiversity, providing an invaluable resource to scientists predicting the effects of global warming. Studies and Evidence

Study Area looked at Subject Matter Value Costs & Benefits of Natura 2000 Sites (2004)

Scotland Impact on education benefits of Natura 200 sites in Scotland

Qualitative assessment that sites would bring moderate benefits to all visitors.

A review of research on outdoor learning (2004) Rickinson et al, NFER

UK Impact of natural spaces on educational performance in UK

Contact with nature is associated with improved discipline, emotional development, and improved community integration.

Marine Biodiversity (2006)

UK The information revealed through studying the UK marine environment

£317 million per year,

Health A key component in an individual’s health is their activity level. How much exercise they do, and how often, has a significant impact on the risk of a variety of illnesses. Despite this, many do not take regular exercise. One cited reason is a lack of convenient space. A recent study into obesity in Europe, listed below, found that in 99% of cases this lack of an area in which to exercise was a contributory factor to the obesity.

Evidence on Educational Benefits

Such benefits are hard to quantify as some of the information may never be ‘used’ in a commercial way. However, there are studies which try to estimate the ‘value-added’ of environmental research. That is, the commercial return on information gleaned from the environment. A recent study on marine biodiversity, listed below, found this value to be £317 million per year.

14

Case Study: Natural Fit

A recent study for the RSPB sought to investigate the evidence that green spaces promote more physical activity. The study sets out the health risks and costs associated with physical inactivity. These costs add up to some £8.2 billion a year. Most of this is for work absence, but some £1.7 billion is the direct cost to the NHS. The evidence shows that to reduce the risks, people need to undertake moderate exercise.

This can include walking, cycling or even gardening. The major health benefits are realised through this kind of moderate activity, and further exercise, say through sport or at the gym, does not appear to deliver greater health benefits. By providing green spaces, residents have the opportunity to take moderate exercise conveniently. Also, because the environment is improved, they are more likely to take up this opportunity and sustain it beyond the short term. While it is difficult to place a monetary value on the health benefits of a green space because it depends on how many people use it and how often, if certain assumptions are made it is possible to calculate the increase in physical activity and therefore the decrease in health risk. In the study, with an assumption that an urban park provides 20% of a local population’s total physical activity needs, a single park in an average urban area could save the economy around £4 million per year, including £910,000 to the NHS. Source: Natural Fit (2004)

15


Study Area looked at Subject Matter Value Costs & Benefits of Natura 2000 Sites (2004)

Scotland Impact on health benefits of Natura 2000 sites in Scotland

Qualitative assessment that benefits are high

Obesity in Europe, the Case for action (2002) International Obesity Taskforce

Europe Effect of green spaces on physical activity in Europe

For 99% of obesity, the overwhelming influence is environmental

Physical & Mental Health Benefits of Green Exercise (2005), Pretty et al

UK Effect of green spaces on physical activity in UK

Inactivity costs over £8 billion a year

Natural Fit (2004), Bird

UK UK Urban Areas

Effect of green spaces on physical activity in UK, and particularly Urban areas.

1. Mental health costs £9 billion a year, of which £1 billion is attributable to inactivity.

2. Health problems from inactivity can be prevented through moderate exercise

3. Green spaces make exercise

Evidence on Health Benefits

There is evidence to suggest that the provision of green spaces makes it more likely people will undertake and sustain physical activity. This refers back to the enjoyment most people feel from being in a more natural environment. A lack of physical activity also impacts on psychological well-being, and so physical inactivity is a root cause for a host of physiological and psychological ailments which cost society billions of pounds every year. While it is difficult to put monetary figures on the effect of green spaces on health, the case study above presents some work that suggests the figures could be quite significant. Another aspect is that living in a high quality environment obviously provides a better atmosphere, reducing health costs associated with pollution. These are discussed more fully in the next section.

16

more enjoyable and so increase take up and persistence.

4. Estimates that an urban park that accounted for 20% of total local physical activity would save economy £4.4 million, including the NHS £910,000 per year.

Regulating and Supporting Ecosystem Services

The natural environment provides many benefits to society that are often overlooked. Recently these have started to be classified as ecosystem services, see Millennium Ecosystem Assessment (2005). In this section the focus is on regulating and supporting ecosystem services, by which is meant those natural processes that provide benefits such as climate control, pollution attenuation, water purification, flood control, nutrient cycling and soil formation. These are all processes upon which society is heavily dependent and which it would be very expensive or impossible to replace. It is difficult to quantify exactly how much different landscapes or habitats on different scales provide of these services. It is equally difficult to put monetary values on these services, partly because of the interdependencies between all sites: the value of any one site depends on its relationship with wider ecosystems.

Evidence of Ecosystem Services Benefits

To value these, often techniques ask how much it would cost to institute man-made technologies to replace the natural services provided by a given ecosystem. An example from a study listed below looks at the role of salt marshes in food defence. By absorbing and dissipating the power of waves, salt marshes prevent erosion of the coastline. This means that flood defence banks of a lower engineering specification and cost can provide the required level of flood risk protection. The study estimates that where salt marshes are feasible, this could amount to a cost saving of £4600 per metre.

17

However, it is possible to qualitatively assess what services are provided by different habitats and Annex 3 shows some of the key services for the principal habitats in the UK, and suggests some suitable valuation techniques.

Case Study: Peat bogs

Peat bogs provide a valuable service to people by purifying water. As water coming from catchments with peat bogs is therefore cleaner, less money needs to be spent on artificial means to purify the water. In English Uplands, as increasing amounts of land have come under cultivation, farmers have drained peat bogs, clearing the way for livestock and limited arable farming. In using the land for the purpose of this single service, they have reduced its ability to provide other services.

Apart from reducing water quality, the draining of peat bogs has adversely affected the local wildlife, particularly birds, reflecting the trend that the biggest threat to wildlife comes from habitat destruction. United Utilities (UU) and RSPB have a mutual interest in restoring peat bogs, and have collaborated on a project to do so on UU’s estate in the North West of England, the Sustainable Catchment Management Programme (SCaMP). United Utilities owns over 58,000 hectares in the catchment area, a significant proportion of which is SSSI. The project is designed to restore these to favourable condition, operate sensitive and viable farming practices, and restore peat bogs. Although this will bring a wide range of benefits, by restoring the peat bogs it is estimated that UU will save around £2 million per year in water supply costs, illustrating the significant economic value of ecosystem services.

18


Study Area looked at Subject Matter Values Business Case for the Environment Research Study (2003) RSK

North East (urban)

Impact of trees in Urban areas

NPV of £200 for an urban tree.

Carbon Sequestration Benefits of Woodland (2003) Brainard et al [NB: this values additional emissions locked away each year, as opposed to stock of fixed carbon]

Great Britain

Carbon sequestration of forests in Great Britain

Capitalised value £1.7 billion to £5.9 billion (depending on Carbon value and discount rate) Annual Value: £94 million


Great Britain Air pollution attenuation of forests in Great Britain

Air pollution absorption of forests, annual value of £0.39 million.


Scotland Provision of ecosystem services by Natura 2000 sites in Scotland

Qualitative, but would be high and affect national and global community.

A guide to the understanding and management of Salt marshes (1995) National Rivers Authority.

England & Wales

Role of salt marshes as a form of sea defence

£400 per metre cost of using salt marshes as sea defence, compared to £5000 per metre using sea walls.

Review of the Design and Management of Constructed Wetlands (1997), Nuttal et al

UK Role of wetlands in effluent treatment

Cost of treating sewage, £162,011 using wetlands versus £249,791 for conventional sludge

Value of Biodiversity (2006) IEEP

Europe Role of peat bogs in water purification in Lake district

£1.2 million per year

Option/Existence Society benefits in many ways simply from having a natural environment regardless of whether it is used. This ‘non-use’ value can be divided to option and existence value.

19

Option value refers to the possible benefits society could gain in the future from the natural resource. This relates largely to the possibility of new discoveries of plant and animal functions or species that could herald new drugs and treatments. This ‘bioprospecting’ can have value to pharmaceutical companies but depends upon there being healthy natural environments around the world to maintain biological resources around the world and allow their exploration.

Another option value is the benefit society could receive in the future from the resilience of the natural environment to some sort of disturbance. As

Case Study: Halting biodiversity loss

A serious concern for wildlife conservation has been intensive agriculture, particularly on arable land. As hedgerows have been uprooted and fields cultivated to their boundaries, little space has been left for wildlife.

This loss of habitat has had a serious impact on biodiversity. Insect numbers have reduced, and farmland birds are fewer today as their food source and habitat have become squeezed. As a consequence, the government has initiated agri-environmental schemes which pay farmers to farm in more sensitive ways, for example by leaving field margins as shown above. A study by Defra in 2004 that investigated ways of valuing biodiversity asked residents in Cambridgeshire whether they were willing to pay for such a scheme on arable land in Cambridgeshire. As most would never ‘use’ the biodiversity benefits this would be bring, the values the study elicited were largely non-use, such as existence or bequest. The results showed a significant positive value for the benefit, with residents willing to pay £16.6 million per year to support the scheme; far in excess of the costs of the scheme. This reflects an often found result in the literature that non-use values tend to be large and outweigh most others. Source: Developing measures for valuing biodiversity (2004)

20

society is heavily dependent on the natural environment any disturbance would cause significant economic loss. However, the scale of this loss could be reduced if the natural environment were more resilient. Resilience is associated with more complex species diversity where a range of species fill ecological functions to ensure that natural processes continue in the face of disturbance. One major potential disturbance is climate change, adding to the importance of preserving a high quality natural environment today. This is explored further in a recent HM Treasury publication outlining the key pressures on natural resources and global climate. This can be found at: http://www.hm-treasury.gov.uk/media/298/55/csr_longterm271106.pdf


Existence value refers to the value placed on simply knowing there is a natural environment. Part of this is stewardship, a sense of responsibility as humans for the rest of the natural world. This can be clearly seen by support

Study Area looked at Subject Matter Values Costs & Benefits of Natura 2000 Sites (2004)

Scotland Rest of UK

The non-used cultural benefit provided by Natura 2000 sites in Scotland

Non-use value: £109 million per year £102 million per year


Great Britain The non-used cultural benefit provided by forests in Great Britain

Non-use value (for biodiversity that would not be directly ‘used’) £386 million per year

Biodiversity & Poverty Reduction, (2006), WCMC

Developing Countries

High species diversity in a range of habitats across globe

The argument here is about biodiversity underpinning ecosystem resilience, and acting as insurance in the face of change, say global warming

Evidence on Option & Existence Benefits

Some evidence to support existence value is found in the studies below. One study looked at Natura 2000 sites in Scotland and asked random households around the UK how much they would be willing to pay to preserve these sites. For many respondents it is unlikely they would ever visit the sites, and yet positive values were elicited. For the UK as a whole, the study estimated that the population would be willing to pay £211 million a year just to keep the sites in their natural state, far in excess of the cost of doing so.

21

for anti-whaling bodies, for example, as most people will not get to experience whales themselves but wish them to be protected anyway. Another reason may be the desire to bequeath to future generations a healthy natural environment for their enjoyment. This bequest value is increasingly significant in light of climate change where future generations may suffer because of the (lack of) actions of current generations, invoking in many a moral responsibility to curb global warming today.

22

Section 3: Key Resources

Value of Biodiversity (2006) IEEP http://www.ieep.org.uk/publications/pdfs/2006/Value_of_biodiversity-June_06.pdf RSPB Reserves & Local Economies (2002) RSPB http://www.rspb.org.uk/Images/Reserves%20and%20Local%20Economies_tcm5-36604.pdf *http://www.rspb.org.uk/policy/economicdevelopment/greeneconomy Revealing the Value of Nature (2004) GHK Consulting http://statistics.defra.gov.uk/esg/reports/rvne.pdf The Hidden Value of Nature (2002) English Nature http://www.english-nature.org.uk/pubs/publication/PDF/valueofnat.pdf An Economic Assessment of the Costs & Benefits of Natura 2000 Sites in Scotland (2004) Jacobs report to Scottish Executive http://www.scotland.gov.uk/Publications/2004/06/19426/38107 Developing Measures for Valuing Biodiversity (2004) Christie et al, report to Defra http://statistics.defra.gov.uk/esg/reports/biovalue/mainrep.pdf Natural Fit (2004) Bird, W. report to RSPB http://www.rspb.org.uk/Images/natural_fit_full_version_tcm5-60619.pdf England’s Ecosystem Services (2005) Eftec report to English Nature http://www.english-nature.org.uk/pubs/publication/PDF/701.pdf Ecosystems and Human Well-Being (2005) Millennium Ecosystem Assessment http://www.millenniumassessment.org/en/Products.aspx?

23

Annex 1: Valuing the Natural Environment

Consumptive Use Products Harvested

Direct Use

Non-Consumptive Use Cultural/Spiritual;

Recreation/Tourism; Health; Education; Information

Indirect Use Supporting/Regulating Ecosystem Services

Nutrient Cycling; Flood Control;

Water Regulation

Option Resilience; Bio-prospecting

Non-Use Existence Cultural; Stewardship; Bequest

Total Economic

Value

Benefits

Linking the benefits of Nature to the Total Economic Value Framework

24

Annex 2: Valuing Biodiversity Methods of eliciting values Many biodiversity functions result in goods and services that are not traded in markets and which therefore remain unpriced. It is thus necessary to assess the relative economic worth of these goods or services using non-market valuation techniques. Over the last 10-15 years, economics has developed a range of valuation techniques for assessing the economic value of biodiversity, and these are detailed in table 1, while more detailed information on the underlying theory of some of these techniques is given below. These methodologies are soundly based in economic theory and are generally seen as intellectually rigorous, with the values that emerge from good quality studies being viewed as robust. The type of valuation technique chosen will depend on the type of non-market good or service to be valued, as well as the quantity and quality of data available. Where market prices exist for resources, these may have to be adjusted to provide social or shadow prices, but otherwise they are likely to provide a relatively simple means of assessing economic value. Approaches related to market analysis include the assessment of productivity losses that can be attributed to changes in biodiversity and the incorporation of biodiversity as just one input into the production function of other goods and services. Investment by public (especially government) bodies in conserving biodiversity may represent a surrogate for aggregated individual willingness to pay and hence social value. These ‘public prices’ paid for resources have been used to approximate the value society places upon them, as for instance the costs of designating an ecosystem as a nature reserve. For a variety of reasons, these are unlikely to accurately reflect aggregated individual values, although techniques exist for attributing economic value based on such ‘collective choice’ decisions (Turner et al: 2005). In the absence of market prices, revealed preference methodologies may be used to estimate the benefits associated with non-market goods and services. These techniques attempt to use ‘surrogate’ markets to infer the value of environmental goods and services: The price or cost of other market goods and services is assumed to reflect the preferences for environmental resources. For example, individuals may spend considerable time travelling to a specific site for recreational purposes. Valuing the travel time (e.g. in terms of wages that could have been earned instead) gives some indication as to the value individuals put upon the environmental resources they are using. This travel cost method is one revealed preference methodology; others include random utility models (used to estimate the value of different individual features of a site), hedonic pricing models (to estimate the effect of environmental characteristics on property values) and averting behaviours (using expenditure on avoiding behaviour as a proxy for damage costs). However, these are based on preferences being ‘revealed’ through

25

observable behaviour, and are restricted in their application to where a functioning market exists. A drawback of such methods is that they can only be used to estimate use value and thus these methodologies may be less appropriate for the valuation of biodiversity.

Stated preferences: these techniques use survey methods to elicit individuals’ preferences and willingness to pay (WTP) for the non-market good in question. The advantage of such methodologies is that they can be used to estimate non-use as well as use value, which may be a significant part of the Total Economic Value for many biodiversity resources. Two types of stated preference techniques are contingent valuation (used to value the natural resource as a whole) and choice modelling (which focuses on the individual attributes of the resource in question). However, conducting a stated preference survey can often be a lengthy and resource-intensive exercise. . Cost-based approaches: infer a value of a natural resource by how much it costs to replace or restore it after it has been damaged. However, as these methods are based on costs they do not strictly measure utility. Examples of cost based approaches include:

• Replacement Cost Method: This technique looks at the cost of replacing or restoring a damaged asset to its original state and uses this cost as a measure of the benefit of restoration. The approach is widely used because it is often easy to find estimates of such costs. The approach is valid when it is possible to argue that the remedial work must take place because of some other constraint such as an environmental standard. Replacement will only be economically efficient, however, if the environmental standard itself was economically determined. Otherwise, the approach estimates only the costs of replacement; it is not a technique for benefit estimation.

• Damage Costs Avoided: Ecosystem services help to avoid economic

costs. The value of ecosystem services can be inferred from the value of losses avoided and costs saved. For example, by calculating the costs of destruction to houses, roads and farms caused by storms and flooding, which would occur as a result of the loss or irrevocable degradation of marine and coastal ecosystems.

• Preventative Expenditures. Ecosystem services can be valued by

looking at how much it would cost to set in place measures to prevent or mitigate the damage arising from their loss. For example, the cost of flood control barriers needed to offset or prevent negative impacts associated with the loss of flood control services (Turner et al: 2005).

It is important to distinguish between valuation techniques that estimate benefits directly and those that estimate costs as a proxy for benefits. For instance, estimating Damage Costs Avoided, Replacement/Substitute Costs

26

or Restoration Costs as part of an economic valuation exercise suggests that the costs are a reasonable approximation of the benefits that society attributes to the resources in question. The underlying assumption is that the benefits are at least as great as the costs involved in repairing, avoiding or compensating for damage. These techniques are widely applied due to the relative ease of estimation and availability of data, but it is important to be aware of their limitations in terms of the information they convey with respect to economic benefits. Where it can be shown that a) replacement or repair will provide a perfect substitute for the original function, and b) the costs of doing so are less than the benefits derived from this function, then the costs do indeed represent the economic value associated with that function.

27

Table 1: Valuation Methodologies

Valuation Method

Description Direct Use Values

Indirect Use

Values1

Non‐use Values

Valuation Methodology

Market Analysis

Where market prices of outputs (and inputs) are available. Marginal productivity net of human effort/cost. Could approximate with market price of close substitute. Requires shadow pricing.

√ √ Market valuation

(Productivity Losses)

Change in net return from marketed goods: a form of (dose‐response) market analysis.

√ √ Market valuation

(Production Functions)

Biodiversity treated as one input into the production of other goods: based on resource linkages and market analysis. √ Market valuation

(Public Pricing)

Public investment, for instance via land purchase or monetary incentives, as a surrogate for market transactions. √ √ √2 Market valuation

Hedonic Price Method (HPM)

Derive an implicit price for an environmental good from analysis of goods for which markets exist and which incorporate particular environmental characteristics.

√ √ Revealed Preference

Travel Cost Method (TCM)

Costs incurred in reaching a recreation site as a proxy for the value of recreation. Expenses differ between sites (or for the same site over time) with different environmental attributes.

√ √ Revealed Preference

Contingent Valuation (CVM)

Construction of a hypothetical market by direct surveying of a sample of individuals and aggregation to encompass the relevant population. Problems of potential biases.

√ √ √ Stated Preference

28

Damage Costs Avoided

The costs that would be incurred if the ecosystem function were not present; e.g. flood prevention.

√

Cost Based

Defensive Expenditures

Costs incurred in mitigating the effects of reduced environmental quality. Represents a minimum value for the environmental function.

√ Cost Based

(Relocation Costs)

Expenditures involved in relocation of affected agents or facilities: a particular form of defensive expenditure. √ Cost Based

Replacement /Substitute Costs

Potential expenditures incurred in replacing the function that is lost; for instance by the use of substitute facilities or ‘shadow projects’.

√ √ √3 Cost Based

Restoration Costs

Costs of returning degraded biodiversity to its original state. A total value approach; important ecological, temporal and cultural dimensions

√ √ √3 Cost Based

Source: Adapted from Turner et al: 2005. 1 Indirect use values associated with functions performed by an ecosystem will generally be associated with benefits derived off‐site. Thus, methodologies such as hedonic pricing and travel cost analysis, which necessarily involve direct contact with a feature of the environment, can be used to assess the value of indirect benefits downstream from the ecosystem. 2 Investment by public bodies in conserving ecosystems (most often for maintaining biodiversity) can be interpreted as the total value attributed to the ecosystem by society. This could therefore encapsulate potential non‐use values, although such a valuation technique is an extremely rough approximation of the theoretically correct economic measure of social value, which is the sum of individual willingness to pay. 3 Perfect restoration of the ecosystem or creation of a perfectly substitutable ‘shadow project’ ecosystem, which maintains key features of the original, might have the potential to provide the same non‐use benefits as the original. However, cultural and historical aspects as well as a desire for ‘authenticity’ may limit the extent to which non‐use values can be ‘transferred’ in this manner to newer versions of the original. This is in addition to spatial and temporal complexities involved in the physical location of the new catchment or the time frame for restoration.

29

Issues in valuing biodiversity There are numerous technical issues pertinent to the valuation methodologies described above, which will not be detailed here. More generally, however, there are some key issues which make the valuation of non-market goods, including biodiversity, challenging:

1) The understanding of biodiversity: There is limited understanding of the concept and worth of biodiversity amongst non-specialists, which could lead to its being undervalued by individuals. Linked to this problem of incomplete information is the issue of the credibility of values achieved using stated preference techniques. If, in order to reasonably respond to the survey questions, participants must first be educated about the concept of biodiversity, then it could be argued that the resultant values are not representative of the general population who have not had such education. Conversely, it could be argued that it is pointless to ask people to value something about which they have little or no knowledge. This issue can be addressed through the use of valuation workshops2, the use of focus groups and pilot surveys, and by translating basic biodiversity concepts into terms which are more readily understood by the general public.

2) Scientific understanding of ecosystems: Even amongst the specialist

community, there is much uncertainty about the range and scale of the species within ecosystems, as well as the functions and services provided. In such circumstance, it is difficult to correctly value these resources;

3) Marginal valuation: In terms of policy decision-making what is required

is the marginal value of biodiversity goods and services i.e. the value yielded by an additional unit of the good or service. This is because policy-making is focussed on making trade-offs between use of resources. A criticism of some of the valuation work that has been undertaken (e.g. Costanza et al 1997 quoted in the Annex) is that the values are derived for the entire ecosystem service or biome, using values established ‘at the margin’.

4) Scale: The geographical scale (or accounting stance) of a study is

determined by the extent of the population affected by the impact under investigation. The accounting stance should be as encompassing in this respect as possible. In practice, a pragmatic accounting stance has to be adopted in specifying the scale, where the gains in accuracy are balanced against the costs of spreading the scale wider.

2 Valuation Workshops: This type of approach generally incorporate a period of time in which participants are able to gather and assimilate information from a wide range of sources and then discuss this information within a group context. Such features make these approaches particularly useful for the valuation of complex goods; such as biodiversity

30

5) Aggregation and double counting: For example, if the nutrient

retention function is integral to the maintenance of biodiversity, then if both functions are valued separately and aggregated, this would double count the nutrient retention which is already ‘captured’ in the biodiversity value. This problem can be overcome through careful design of the study.

6) Allocation over time: It is frequently necessary to choose between

options that differ in temporal patterns of costs and benefits, or that differ in their duration. Discounting provides a common matrix which enables comparison of costs and benefits that occur at different points in time. Use of discounting is integral to cost benefit analysis and cost effectiveness analysis. Discounting converts the stream of costs and benefits over time into a stream of ‘present’ values. The difference between the value of the discounted benefits and costs is referred to as the ‘net present value’ (NPV). The Treasury Green Book suggests appropriate discount rates for natural resources values.

7) Irreversible change: Irreversible impacts, for instance the extinction of

species or exhaustion of minerals, are not accounted for in the standard procedures for economic evaluation. Under such circumstances, consideration needs to be given to the uncertain future losses that might be associated with potential irreversible change. Some protection to the interests of future generations can be offered through the imposition of the safe minimum standards decision, which recommends that when a development activity that impacts on the environment threatens to breach an irreversible threshold, that conservation is adopted unless the costs of foregoing the development are regarded as ‘unacceptably large’. It is based on a modified principle of minimising the maximum possible loss and therefore differs from routine trade-offs, which are based on maximising expected gains e.g. cost-benefit and risk analysis. However, activities that result in potential irreversible change are not rejected if the associated costs are regarded as intolerably high.

8) Data limitations: It is inevitable that some of the data required for an

economic evaluation will not be readily available. Budgetary constraints often limit extensive collection of original data. Where data are limited, this should be acknowledged and the measures taken in response to this limitation clearly specified. The results and recommendations should be made explicitly conditional on these limitations. The various techniques used to value non-marketed goods and services are each associated with specific data limitations.

While the concerns outlined above increase the complexity of valuing biodiversity, it should be noted that many of the issues can be resolved through selection of the most appropriate valuation methodology, and the

31

careful and rigorous design of the study, although this can make the procedure very expensive. It is also important to remember that the valuation methodologies discussed are soundly based in economic theory and are generally seen as intellectually rigorous, with the values which emerge from good quality studies being viewed as robust.

Benefits transfer It is not always possible for valuation studies to be conducted for all of the benefits accruing to biodiversity values. Thus, if a similar environmental good has previously been valued elsewhere, estimates of its economic value might be usable as an indicator of the impacts of the new project. Such an approach has been termed ‘benefits transfer’ because the estimates of economic benefits are ‘transferred’ from a site where a study has already been completed to a site of policy interest. Using a benefits transfer approach appropriately will yield significant time and cost savings as compared to the time and resource intensive process of designing, testing and implementing a new valuation study. The benefits transferred from the study site could have been measured using any of the direct or indirect valuation techniques outlined above. Environmental value transfer is commonly defined as the transposition of monetary environmental values estimated at one site (study site) through market based or non-market based economic valuation techniques to another site (policy site) (Turner et al: 2005). The most important reason for using previous research results in new policy contexts is cost-effectiveness. Applying previous research findings to similar decision situations is a very attractive alternative to expensive and time consuming original research to quickly inform decision making. However, this technique of ‘benefits transfer’ is still in its infancy and a number of methodological questions persist. It requires careful design of the benefits transfer function, that links the environmental goods and the beneficiary populations at the different sites. Therefore, any results and recommendations that transpire should explicitly be made conditional on these limitations. Nevertheless, benefits transfer may be useful in indicating where values lie, and their relative magnitude.

32

Annex 3: Ecosystem Services from Key Habitats The following tables come from a study by Eftec, ‘England’s Ecosystem Services’ (2005), submitted to English Nature. Ecosystem services for Broadleaved woodland, inter-tidal and freshwater wetland habitats � Service may be provided. ● Services of probable (relative) importance.

Habitat

Service Category

Services and goods Broadleaved woodland

Freshwater wetlands

Intertidal habitats

Filtration of air pollution ●

Production of oxygen ● � � Filtration of water ● ● �

Purification & detoxification

Detoxification of water and sediment ● ●

Nutrient cycling � ● ●

Translocation of water and nutrients from depth

�

Cycling processes

Carbon fixation and sequestration ● ● � Global climate regulation ● ● � Local climate regulation � � � Erosion control � ● ●

Flood risk mitigation � ● ●

Maintenance of surface water stores ●

Regulation & Stabilisation

Groundwater replenishment �

Habitats of conservation importance ● ● ● Habitat Provision

Association with species of conservation importance

● ● ●

High rates of primary production � � Fibre and construction products ● � � Food and drink products � � ●

Medicinal and cosmetic products � � � Ornamental products and other products

� � �

Consumptive recreation ● ● ●

Renewable energy sources ● � ●

Regeneration & Production

Regenerative services � � � Paleo-environmental data source ●

Preservation of archaeology � ● ●

Information

Historical importance ● ●

33

Habitat

Service Category

Services and goods Broadleaved woodland

Freshwater wetlands

Intertidal habitats

Education and scientific research resource

● ● ●

Gene bank for research and development of products

� � �

Recreation and tourism ● ● � Physical health benefits and promotion of personal wellbeing

● � �

Life-fulfilling

Historical meanings and cultural importance

● � �

Techniques for Valuation of Ecosystem Service Categories

Technique

Service Category Services and goods Pricing Valuation Comments

Filtration of air pollution

●

●

Production of oxygen ●

Filtration of water ● ● Purification & detoxification

Detoxification of water and sediment ●

Pricing techniques can be used for, e.g. avoided

health costs, costs of water treatment works etc.

Valuation techniques can be used to estimate the

contribution to e.g. recreation (but need to avoid double counting)

Nutrient cycling ● Cycling

processes Translocation of water and nutrients from depth

●

These are best valued through production function

pricing approaches, but typically data are not

available.

Global climate regulation ●

Local climate regulation ●

Erosion control ●

Flood risk mitigation ● ●

Maintenance of surface water stores ●

Regulation & Stabilisation

Groundwater replenishment ●

Pricing techniques can be used to estimate avoided

damage to property, replacement costs (e.g. sea walls), production inputs to

agriculture from erosion control, price of water

supply, etc. Valuation techniques can measure the health and psychological effects of

natural disasters.

Habitats of conservation importance ●

Association with species of conservation importance ●

Fibre and construction products ●

Food and drink products ●

Medicinal and cosmetic products ●

Habitat Provision

Ornamental products and other products ●

Pricing techniques can be used to estimate the

contribution of habitat provision to products sold in

the market. Valuation techniques: Only stated preference

techniques are capable of capturing the non-use

values of habitats, which can be a significant portion

34

Technique

Service Category Services and goods Pricing Valuation Comments

Consumptive recreation ● ●

Renewable energy sources ●

Regenerative services ●

of their value.

Paleo-environmental data source ●

Preservation of archaeology ● ●

Historical importance ● ●

Education and scientific research resource ●

Information

Gene bank for research and development of products ●

Pricing techniques are most relevant using a production function to

estimate the contribution of ecosystem services to the value of research outputs,

education, etc. Stated preference can be used to estimate the use

and non-use value of cultural heritage.

Recreation and tourism ● ●

Physical health benefits and promotion of personal wellbeing ● ●

Life-fulfilling

Historical meanings and cultural importance ● ●

Both pricing and valuation techniques can capture the contributions made to the

economy through tourism as well as the consumer surplus of informal

recreation and non-use value of ecosystems.

35

Annex 4: Valuation Studies

The studies below are provided to illustrate the positive value people place on biodiversity in the UK. This value is complex and entwined with appreciation of the wider environment many people hold. This is shown by the varying object of valuation in these studies. It should be noted that the list below includes prominent studies but cannot be considered exhaustive.

Study The use of willingness to pay approaches in mammal conservation. Author(s) White, P.C.L., Bennett, A.C. and Hayes, E.L.V Year 2001 Reference Mammal Review, 31, 2, 151 - 167 Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Otter North Yorkshire

Contingent Valuation

Direct Use & Non-Use Value

£0.84 m Regional WTP for BAP to increase population of rare species

Water Vole North Yorkshire




Red Squirrel

North Yorkshire



£2 m Regional WTP for BAP to increase population of rare species

Brown Hare

North Yorkshire




Study Benefits of environmentally sensitive area policy in England: a

contingent valuation assessment Author(s) Willis K. G., Garrod G. D. and Saunders C. M. Year 1995 Reference Journal of Environmental Management, 44, 2, 105 - 125

36

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Landscape Benefits

Somerset Levels ESA



£22.51 Resident’s per household WTP per year in preference to intensive agriculture

Landscape Benefits

Somerset Levels ESA



£128,000 Resident’s regional WTP per year in preference to intensive agriculture

Landscape Benefits

Somerset Levels ESA



£15.20 Visitor’s per household WTP per year in preference to intensive agriculture

Landscape Benefits

Somerset Levels ESA



£15 m Visitor’s regional WTP per year in preference to intensive agriculture

Landscape Benefits

South Downs ESA



£25 Resident’s per household WTP per year in preference to intensive agriculture

Landscape Benefits

South Downs ESA



£334,000 Resident’s regional WTP per year in preference to intensive agriculture

Landscape Benefits

South Downs ESA



£35.34 Visitor’s per household WTP per year in preference to intensive agriculture

Landscape Benefits

South Downs ESA


Direct Use & Non-Use

£77 m Visitor’s regional WTP per year in preference to

37

Value intensive agriculture

Study Valuing non-market wildlife commodities: an evaluation and

comparison of benefits and costs. Author(s) Willis, K. Year 1990 Reference Applied Economics, 22, 13 – 30 Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

SSSIs in North England

Upper Teasdale SSSI



£150,000 Upper Teasdale SSSI aggregate Visitor’s WTP per year


Skipworth Common SSSI



£1 m Skipworth Common SSSI aggregate Visitor’s WTP per year


Derwent Ings SSSI



£520,000 Derwent Ings SSSI aggregate Visitor’s WTP per year

Study The social and environmental benefits of forestry Author(s) Willis et al Year 2003 Reference http://www.forestry.gov.uk/forestry/ahen-5hzcbh Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Biodiversity in Forests

Great Britain

Focus Group preferences applied to existing Contingent Valuation study

Non-Use Value

£11 bn Capitalised WTP of GB population to preserve biodiversity, derived from annual WTP for increases in habitats supporting biodiversity

Study Developing measures for valuing changes in biodiversity

38

Author(s) Christie et al

Year 2004

Reference http://statistics.defra.gov.uk/esg/reports/biovalue/mainrep.pdf

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Improved biodiversity in arable fields

Cambridgeshire Contingent Valuation

Direct & Non-Use Value

£16.6 m

Regional WTP per year for biodiversity enhancements from expansion of agri-environment scheme

Recreating Wetlands to provide habitat and ecosystem services


Total Economic Value

£12.3 m

Regional WTP per year for habitat recreation

Recreating Wetlands to provide habitat and ecosystem services

Northumberland Contingent Valuation


£6.2 m Regional WTP per year for habitat recreation

Avoid loss of biodiversity



£10.1 m

Regional WTP per year to avoid biodiversity loss from housing development

Avoid loss of biodiversity

Northumberland Contingent Valuation


£4.8 m Regional WTP per year to avoid biodiversity loss from housing development

Recovery of rare unfamiliar species

Cambridgeshire Choice Experiment


£115 WTP per household per year for recovery of species to a stable level

Recovery Northumberland Choice Direct £189 WTP per

39

of rare unfamiliar species

Experiment Use & Non-Use Value

household per year for recovery of species to a stable level

Rare and common familiar species



£93.89 WTP per household per year for protection of species from further decline

Rare and common familiar species

Northumberland Choice Experiment


£97.71 WTP per household per year for protection of species from further decline

Restoration of existing habitats



£34.40 WTP per household per year for restoration of existing degraded habitats

Restoration of existing habitats



£71.15 WTP per household per year for restoration of existing degraded habitats

Habitat Creation



£61.36 WTP per household per year for recreation of habitat on farmland

Habitat Creation



£74 WTP per household per year for recreation of habitat on farmland

Ecosystem Processes


Indirect Use Value

£53.62 WTP per household per year for maintenance of ecosystem

40

processes that directly affect people

Ecosystem Processes


Indirect Use Value

£105.22 WTP per household per year for maintenance of ecosystem processes that directly affect people

Rare familiar species



£35.65 WTP per household per year for protection of rare familiar species

Rare familiar species



£90.59 WTP per household per year for protection of rare familiar species

Study Non-market benefits associated with mountain regions Author(s) Crabtree, B., Macdonald, D., Hanley, N. Year 2002 Reference Report for Highlands and Islands Enterprise and Scottish Natural

Heritage Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Non-market benefits from Upland areas

ESAs Scotland



£0.14 - £0.19 m

Resident’s WTP per year

Non-market benefits from Upland areas

ESAs Scotland



£0.18 - £2.04 m

Visitor’s WTP per year

Study Value of Biodiversity Author(s) IEEP Year 2006 Reference http://www.ieep.org.uk/publications/pdfs/2006/Value_of_biodiversity-

June_06.pdf

41

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Recreational Benefits of Visitors to Osprey Reserves

Loch Garten Reserve, Scotland


Direct Use

£1.96 - £2.65 per person

Estimate of the benefit a visitor enjoys per visit to the site.

Study An economic assessment of the costs and benefits of Natura 2000

sites in Scotland Author(s) Jacobs Babtie for Scottish Executive Year 2004 Reference http://www.scotland.gov.uk/Publications/2004/06/19426/38108 Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Natura 2000 sites, Scotland

Scotland Contingent Valuation

Direct Use £902,425 WTP per year of Scottish recreational users of sites


UK (except Scotland)


Direct Use £626,465 WTP per year of non-Scottish recreational users of sites


Scotland Contingent Valuation

Non-Use Value

£109 mn WTP per year of Scottish to preserve sites


UK (except Scotland)


Non-Use Value

£102, mn WTP per year of non-Scottish to preserve sites

Marine Biodiversity

Study Net benefits: a sustainable and profitable future for UK fishing Author(s) Cabinet Office Year 2004 Reference http://www.strategy.gov.uk/downloads/su/fish/pdf/NetBenefits.pdf Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Fishing Industry

UK Market-based

Direct £540 mn Value per year of catching industry

£800 - Value of

42

£1200 mn economic activity resulting from catch

Study Marine environment Author(s) Laffoley, D., Tasker, M. Year 2004 Reference http://www.strategy.gov.uk/downloads/files/marine2.pdf

Object of Valuation

Area of Study

Valuation Method

Type of

Value

Value Description

Food Provision UK Market-based Direct £800 - £1300 m

Value per year of foodstuffs harvested from the sea

Disturbance Protection

UK Wetlands Meta-analysis of Contingent Valuation

Indirect Use

£2616 m

WTP per year of UK population for flood protection

Nutrient Cycling

Not specific Replacement Cost

Indirect Use

£0.10 to £0.28 per cubic metre

Cost per year of replacing nutrient cycling

Gas and climate regulation

Miscellaneous Cost-based Indirect Use

£0.53 - £164 per tonne

Cost estimates per tonne of CO2, that could be applied to CO2 sequestration service of ocean

Bioremediation of Waste

UK Wetlands Replacement Cost

Indirect Use

£1100 - £1240 per acre

Potential cost savings of wetlands over conventional waste water treatment, discounted over 30

43

years. Raw Materials UK Market-based Direct

Use £15 bn

Value per year of resources extracted from sea, mainly oil and gas

Information Service

UK Cost-based Indirect Use

£83 m Expenditure per annum on research into marine environment. Does not reflect the gains this research brings.

Sea Mammals UK Contingent Valuation

Non-Use Value

£474 - £1150 m

WTP per year of UK population for continued survival of sea mammals

Study Whale watching in West Scotland Author(s) Warburton et al Year 2001 Reference http://www.multilingual-matters.net/jet/002/0093/

jet0020093.pdf#search=%22warburton%2C%202001 %2C%20whale%20watching%20in%20west%20scotland%22

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Whales in West Scotland

Scotland N/A Direct Use

N/A 12% of West coast tourism in Scotland may come directly or indirectly from whale-related activities

Study Valuing benefits from improved marine water quality: experiment

for the Swedish West Coast Author(s) Eggert, H., Olsson, B. Year 2004

44

Reference http://www.handels.gu.se/epc/archive/00003393/01/gunwpe0126.pdf

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Marine Biodiversity

Sweden Choice Experiment


1400 SEK

WTP per person to avoid biodiversity loss

Study Economic valuation of the coral reefs of Hawaii Author(s) Cesar et al Year 2002 Reference Report to NOAA Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Coral Reefs Hawaii Market and cost-based

Direct & Indirect Use value

US$ 364 Value of benefits provided by coral reefs, e.g. tourism, erosion control

Study Economic analysis of Indonesian coral reefs Author(s) Cesar, H. Year 1996 Reference http://www.icriforum.org/docs/indonesian_cr.pdf Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Coral Reefs Indonesia Market and Cost-based

Direct & Indirect Use value

US$ 0.14 to 1.16 m per square km, discounted over 25 years

Value of some services provided by coral reefs measured by loss of income (e.g. tourism) and cost of replacement (e.g. coastal protection).

Study Ensuring the sustainability of ocean living resources Author(s) NOAA Year 1998 Reference http://www.yoto98.noaa.gov/yoto/meeting/liv_res_316.html

45

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

World’s marine catch

Global Market-based

Direct Use $80 bn Estimated value of marine catch per year

Study The value of the world’s ecosystem services and natural

capital Author(s) Costanza et al Year 1997 Reference Nature, 1, 253 - 260 Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Open Ocean Marine Ecosystems: regulating services

Global Cost-based Indirect Use

$5.2 tr Estimate of the minimum value per year of open ocean regulating services based on damage cost if absent or replacement cost

Coastal Ocean Marine Ecosystems: regulating services

Global Cost-based Indirect Use

$11.7 tr Estimate of the minimum value per year of coastal ocean regulating services based on damage cost if absent or replacement cost

Study From ocean to aquarium – the global trade in marine ornamental

species Author(s) Wabnitz et al Year 2003 Reference http://www.unep.org/PDF/From_Ocean_To_Aquarium_report.pdf#

search=%22UNEP%202003%2C%20the%20ocean%20to%20aquarium%2 0the%20global%20trade%20in%20ornamental%20species%22

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Marine ornamental species

Global Market-based

Direct Use $200 - $330 m

Value of trade in species per year

46

Study The economics of worldwide coral reef degradation Author(s) Cesar et al Year 2003 Reference http://assets.panda.org/downloads/cesardegradationreport100203.p

df Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Coral Reefs Global Market, cost-based & contingent valuation


$30 bn Value per year from services provided by coral reefs

Study A meta-analysis of wetland ecosystem valuation studies Author(s) Brouwer et al Year 2003 Reference Chapter in Managing Wetlands: An Ecological Economics Approach,

Edward Elgar: Cheltenham Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Wetlands Biodiversity

Various Meta-analysis of contingent valuation


£80 Value per household per year to preserve biodiversity

Study The economics of a tragedy at sea Author(s) Doring, R., Holst, H. Year 2002 Reference http://assets.panda.org/downloads/tragedyatsea.pdf Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Cod Europe Market-based

Direct Use 400 mn euros

Inflated costs per year caused by over- fishing

Study Reefs at risk in the Caribbean Author(s) Burke, L., Maidens, J. Year 2004 Reference http://pdf.wri.org/reefs_caribbean_full.pdf

47

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Coral Reefs Caribbean Market-based

Direct Use $4700 m Gross revenue per year from reef-related tourism

Study Reefs at risk in South East Asia Author(s) Burke, L., Selig, L., Spalding, M. Year 2002 Reference http://www.wri.org/biodiv/pubs_description.cfm?pid=3144 Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Coral Reefs South East Asia

Market-based

Direct $2.4 bn Value per year of reef-related fishing

Study Marine biodiversity: an economic valuation Author(s) Beaumont, N., Townsend, M., Mangi, S., Austen, M Year 2006 Reference http://www.defra.gov.uk/wildlife-countryside/resprog/findings/mb-

economic/mbeconomic.pdf#search=%22Marine%20Biodiversity%3A%20an%20economic%20valuation%2C%20beaumont%2C%202006%22

Object of Valuation

Area of Study

Valuation Method

Type of Value

Value Description

Food provision

UK Market-based

Direct Use £513 mn Value per year of plants and animals taken from the sea

Raw materials

UK Market-based

Direct Use £81.5 mn Value per year of marine organisms taken from sea but not directly consumed

Leisure & recreation

UK Market-based

Direct Use £12 bn Expenditure per year of people to enjoy the marine environment

Climate regulation (Carbon)

UK Cost of avoidance

Indirect Use

£0.4 - £8.5 bn

Estimate of the damage cost avoided through this natural

48

process Marine biodiversity

UK Contingent Valuation

Non-Use £0.5 - £1.1 bn

WTP per year of UK population to preserve biodiversity

valuing the benefits of biodiversity - uk government...

Documents