Valuation of Biodiversity Benefits (OECD)

Diversity at the ecosystem levelThe majority of CV studies that focus on biodiversity at the ecosystem level link it directlyto the non-use or recreational valuation of habitat protection programs. The main reason for this link isprimarily the difficulty associated with defining such an abstract concept as ecosystem diversity in asurvey. Indeed, some CV studies indicate that the concept of biodiversity is ill understood among thegeneral population (Hanley et al. 1995). A number of valuation studies have also attempted to valuebiodiversity conservation policies through other methods. Generally, we find studies that focus onecosystem functions and the value assessment of life-support, soil and wind erosion, or water qualitybenefits. Some of these studies are listed in Table 8.6.During the 1980s many contingent valuation studies dealt with the measurement of thenon-use benefits derived from the conservation of national parks and nature reserves - see Bennett(1984) and Richer (1995). The valuation applications continued through the 1990s – see Silberman etal. (1992), Batemann et al. (1992), and Hoehn and Loomis (1993) – but now also tackling thevaluation of non-use benefits of coastal and wetland habitats. Silberman et al. estimated the existencevalue for users and non-users of New Jersey beaches. The results show that the mean WTP for a useris about $15.1 per year, while the mean WTP for a non-user is about $9.26 per year. Batemann et al.(1992) undertook a contingent valuation to assess the monetary value of conserving the NorfolkBroads, a wetland site in the UK with three National Nature Reserves. A mail survey across Britainshowed that non-visitor respondents were willing to pay, on average, 4 pounds (circa $8) for an annualand once-for-all-payment. More recently, Nunes (2000) used the CV method for the first time inPortugal to assess the national WTP for the protection of a coastal natural area. The mean WTP resultsranged from $40 to $51 also for an annual and once-for-all-payment.In the recreation domain, the World Tourism Organisation (WTO 1997) estimated thatEcuador earned $255 million from eco-tourism in 1995. A major part came from a single park, theGalapagos Islands. Studies of less popular areas indicate lower values. The recreational value of aRegional Forest Park in Belgium was estimated to be around $23 per trip (Moons 1999). Norton andSouthey (1995) calculated the economic value of biodiversity protection in Kenya by assessing theassociated opportunity costs in terms of forgone agricultural production, which is estimated to be$203 million. This value can be compared with $42 million in net financial revenues from wildlifetourism and forestry. More recently, Chase et al. (1998) studied the eco-tourism demand in CostaRica. The value estimates result from the survey of foreign visitors to three national parks: VolcanIrazu, Volcan Poas, and Manuel Antonio. The highest WTP registered was about $25 per visitor peryear for the Manuel Antonio national park.When it comes to the monetary valuation of ecosystem functions, CV may not be the firstmethod of choice. This is because ecosystem life support is not an issue familiar to the general public.In addition, the complexity of the relationships involved makes an accurate and comprehensive surveydescription more difficult. Researchers frequently end up using other valuation methods such asaverting behaviour, production function, or hedonic pricing. In 1991, Andreasson-Gren (1991)estimated the costs of nitrogen abatement via wetlands restoration with the market costs associatedwith the use of standard abatement technologies. The estimated nitrogen purification capacity ofwetlands was based on the results of a Swedish island in the Baltic Sea, Gotland. According to thestudy results, the total value of a marginal increase in nitrogen abatement on Gotland was about SEK968 per kilogram. Turner et al. (1995) addressed the valuation of a wetland ecosystem in the Swedishisland in the Baltic Sea exploring the use of the production function method. Their value estimationsconfirmed that a considerable amount of additional energy would be necessary to the production ofsubstitute market goods in order to replace the loss of the wetland life-support functions – see resultsin Table 8.6. Ribaudo (1989) is responsible for one of the most comprehensive studies valuing waterecosystems. The author valued the economic benefits from the reduction in the discharge of pollutants171