Valuation of Biodiversity Benefits (OECD)

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Figure 7.3 Illustration of indicator development and application:Improving functional capacity at Site A compared to Site BWildlife habitat Fishery support Nutrient trappingSite A Site B Site A Site B Site A Site BFunctional CapacityIndex 1.0 1.0 1.0 1.0 1.0 1.0Capacity UtilisationSub-index X 1.2 X 0.8 X 1.2 X 0.8 X 1.2 X 0.8Level of Function1.2 0.8 1.2 0.8 1.2 0.8Service CapacitySub-index X 1.2 X 0.8 X 1.2 X 0.8 X 1.2 X 0.8Level of Service1.44 0.64 1.44 0.64 1.44 0.64Value of ServiceSub-index X 1.2 X 0.8 X 1.2 X 0.8 X 1.2 X 0.8Value 1.73 0.51 1.73 0.51 1.73 0.51Risk of ServiceSub-indexAdjusted ValueX 1.2 X 0.8 X 1.2 X 0.8 X 1.2 X 0.82.07 0.41 2.07 0.41 2.07 0.41Note: Value Index per unit Functional Capacity and, within limits, per unit change in Functional Capacity.Site A 2.074 (1 x 1.2 x 1.2 x 1.2 x 1.2)Site B 0.410 (1 x 0.8 x 0.8 x 0.8 x 0.8).Conclusion: Site A and Site B are identical in size, shape and biophysical characteristics. However,based on differences in landscape context, the “value” of Site A is 4 times higher than the “value” ofSite B [((2.074 – 0.410)/0.410)=4.06]. Within limits, increasing the functional capacity at Site A willresult in 4 times the economic benefits as increasing the capacity at Site B. If costs per unit ofcapacity restoration are the same at both sites, the benefit-cost ratio of restoration investments at SiteA is 4 times higher than Site B. Note that investments to improve the landscape context of Site Bcould yield greater payoff than investing directly at either site.138
(1) Functional CapacityIndexFigure 7.4 Flow of Ecosystem Value Indicator DevelopmentLinks between indicators Question addressed by indictors Basis of indicators(1) Does this site have biophysicalcharacteristics that will allow it toprovide this function?(2) Capacity UtilisationSub-index(2) Does the landscape context ofthis site enhance or limit its abilityto provide this function?(3) Function index (3) Based on site condition andlandscape context, what level offunction will be provided?(4) Service CapacitySub-index(4) Does the landscape context ofthis site enhance or limit the amountof services that will result from thesefunctions?(5) Service Index (5) Based on expected level offunction and landscape context,what levels of service will beprovided?(6) Service ValueSub-index(6) Based on supply and demand forthe service, what is the relative value(WTP) for an additional unit ofservice?(7) Value Index (7) Based on level of service and perunit service value, what is therelative value (WTP) for the serviceprovided by this site?(8) Service RiskSub-index(8) What is the risk of service flowdisruptions as a result of natural orman-made changes affecting siteconditions, or landscape context, orboth?(9) Adjusted Value Index (9) Based on the relative value ofservices and the risk of service flowdisruptions, what is the risk-adjustedvalue of services?(1)Soil, hydrology, vegetativecover, biological diversity(2) Proximity to other naturaland man-made features and topeople.(3) Derived from above.(4) Proximity to other naturaland man0made features andto people (series # 2)(5) Derived from above.(6) Availability of substitutes,number of people with access,cost of access, income,wealth, preferences(7) Derived from above.(8) Exposure and vulnerabilityof the site to floods, droughts,fire, invasive weeds,development and otherfactors.(9) Derived from above.In this indicator system off-site features are measured by considering landscapecharacteristics that act to enhance or detract from the on-site features that are the basis of an ecosystemfunction. A variety of descriptive statistics, particularly spatial statistics (e.g., fragmentation indices),can be used to describe landscape context effects at various scales from data that is generally readilyavailable in the US. These statistics can be derived within a Geographic Information System (GIS)alone or in combination with spatial statistical programs (e.g., FRAGSTATS). They can be less easilydeveloped from other data sources such as paper maps and accessible regional data sets (e.g., CensusBureau data, state planning office data).Functional Capacity Utilisation Sub-indexThe level of function provided at a site depends partly on the functional capacity of the site,but also on the rate of capacity utilisation. A site with high capacity to support waterfowl, forexample, may not attract waterfowl if it is adjacent to a highway or a polluted river. The expected rateof capacity utilisation at a site depends in predictable ways on its proximity to other natural andman-made features of the landscape and to people and problems caused by people. Measures ofdistances to various landscape features that increase or decrease the expected rate of capacityutilisation form the basis of this sub-index.139
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«ENVIRONMENTValuation ofBiodiversi
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ORGANISATION FOR ECONOMIC CO-OPERAT
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TABLE OF CONTENTSPART 1 ...........
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PART 4 ............................
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Why value biodiversity?There are th
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Figure 1.1 Total economic value: us
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from biodiversity at the local leve
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in the database and also for undert
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in the policy context. This is high
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Table 1.3 Policy Options for the Cl
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Box 1.2 Value of Turkey’s Forests
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of the most important implications
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Additionally, valuation does not ju
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value is the habitat, many differen
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are very modest. More recently, new
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Table 2.2 Estimates of the Medicina
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The importance of indirect use valu
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pharmaceutical use, although the li
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McAllister, D., (1991). Estimating
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Simpson, D and Craft, A.. (1996).
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practice, the overlap between these
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aimed at giving more precise quanti
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structural values. There are a numb
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Reid (forthcoming) discusses the po
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Ecotourism as a Way to Generate Loc
Page 53 and 54:
endangered Indian rhino and other t
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ReferencesBann, C., and M. Clemens
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PART 261
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many European countries, CBA has a
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(1) Cost and time constraintsThe co
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activity day, there is greater vari
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added independent variable C s= cha
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error in valuing respiratory sympto
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ReferencesArrow, K.J., R. Solow, E.
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OECD (1995). The Economic Appraisal
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CHAPTER 5:by José Manuel LIMA E SA
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linkages usually lead to diverse co
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A discrete choice approach to quest
Page 79 and 80: Table 5.2 Model-based point estimat
Page 81 and 82: is potentially very large for multi
Page 83 and 84: P3 is already in the mix is 2.51, s
Page 85 and 86: PART 391
Page 87 and 88: measures of value. An appendix to t
Page 89 and 90: features (such as parks, beaches or
Page 91 and 92: included in cost-benefit analysis o
Page 93 and 94: A Discussion of Past Efforts to Dev
Page 95 and 96: Satellite AccountsIn addition to th
Page 97 and 98: which many people argue are associa
Page 99 and 100: approach to competing uses of water
Page 101 and 102: Figure 6.2 Trade-Off AnalysisEnviro
Page 103 and 104: However, the farmers need not bear
Page 105 and 106: Appendix 1: Theory and Application
Page 107 and 108: iwhere C is the income adjustment n
Page 109 and 110: complete. If there are more than on
Page 111 and 112: Horowitz, Joel. L. and Jordan. J. L
Page 113 and 114: CHAPTER 7:by Dennis M. KING and Lis
Page 115 and 116: Box 7.1 Definition of terms related
Page 117 and 118: Box 7.2 Categories of Ecosystem Ser
Page 119 and 120: Box 7.4 Dollar-based ecosystem valu
Page 121 and 122: Non-monetary indicators of ecosyste
Page 123 and 124: Figure 7.1 Effects of Wetland Locat
Page 125 and 126: description, and that the usefulnes
Page 127 and 128: 2) Service capacity sub-indexIndica
Page 129: wetlands, for example, results in F
Page 133 and 134: constituents of runoff can be predi
Page 135 and 136: Service(on or off site)Recreational
Page 137 and 138: Table 7.3 Service Risk Sub-index De
Page 139 and 140: Measuring Service Preference Weight
Page 141 and 142: Table 7.4 Illustration of Paired Co
Page 143 and 144: PART 4151
Page 145 and 146: Ecological foundations for biodiver
Page 147 and 148: Phenotic diversity is a measure bas
Page 149 and 150: Operationalisation of the biotic-ri
Page 151 and 152: ten attributes that could score a m
Page 153 and 154: The choice of the scale relates to
Page 155 and 156: Nature measurement methodIn 1995, t
Page 157 and 158: Table 8.4 Value orientations and en
Page 159 and 160: Table 8.5 Identification of monetar
Page 161 and 162: Table 8.6 Valuation studiesSingle s
Page 163 and 164: in waterway systems for nine impact
Page 165 and 166: to other contexts, conditions, loca
Page 167 and 168: ReferencesAkcakaya, H.R. (1994).
Page 169 and 170: de Groot, R.S. (1994). “Environme
Page 171 and 172: Mace, G. M. & S. N. Stuart. (1994).
Page 173 and 174: Turner, R.K., Perrings, C. and Folk
Page 175 and 176: John A. DixonJohn A. Dixon is Lead
Page 177 and 178: Robert O’NeillDr. O’Neill recei
Page 179 and 180: Steven StewartSteven Stewart is Ass
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OECD PUBLICATIONS, 2, rue André-Pa
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