Valuation of Biodiversity Benefits (OECD)

Table 1.3 Policy Options for the Clinch Valley Conjoint ExampleOption A Option B Option C: Status QuoMussels No change 10% increase 10% decreaseFish (all species) No change No change 10% decreaseRecreation (fishing quality-small Catch rates increase 10% Catch rates increase 5% No changemouth bass)Songbird diversity/population 10% Increase 10 % increase 10% decreaseWildlife population/diversity 5% Increase No change 10% decreaseAir Quality 10 % improvement 10% decline No changeThe authors are also developing other indices that include different environmental variablesand quality of life variables. In addition, a set of surveys will be conducted where the choice setsinclude taxes, so that willingness to pay measures can be derived. The indices can be used to inferwhich state of the environment is preferred, holding non-ecological costs and benefits constant and todetermine which management scheme would achieve this desired result. The indices can also be usedto evaluate changes in environmental quality in terms of trade-offs with other types of costs andbenefits, such as economic benefits derived from a set of management decisions or actions. The indexcan be used to evaluate these types of trade-offs by computing the value of the index and the neteconomic benefits of each management alternative. These could then be plotted and managementscenarios with higher economic benefits and better ecological quality identified.The advantages of conjoint analysis is that it avoids many of the biases associated withcontingent valuation as it does not ask individuals to undertake a difficult task, i.e. to compute theirwillingness to pay for an environmental change. However, this method does not provide a completedecision making tool; it only eliminates inferior alternatives and then explicitly outlines the trade-offs(e.g. between environmental improvement and regional development or between environmentalimprovement and loss of farmers’ incomes) associated with the remaining management scenarios. Thefinal extension of the index is to develop a willingness to pay measure for changes in environmentalquality.Indicators of site conditions and landscape contextIn Chapter 7 King and Wainger assess the economic value of biodiversity using indicators ofsite conditions and landscape context. 2They contend that alternative methodologies to measure thevalue of biodiversity are needed because “most ecosystem services are ‘non-marketed’ and‘non-market’ valuation methods aimed at monetary measures of value are expensive to apply and yieldestimates that are controversial, site-dependent, and not widely accepted in legal and regulatorysettings.” Furthermore current techniques are not well suited to measuring ecosystem services andtherefore vastly understate total value. In addition to these theoretical difficulties with using standardvaluation techniques, they also provide examples of ‘valuation backfires’ where dollar-basedecosystem valuation techniques were used to influence environmental policy but had unintended(negative) outcomes for conservation (see Box 1.1). The remainder of their paper describes thepotential of relative (non-dollar) ecosystem valuation indicators compared to absolute (dollar-based)estimates of ecosystem value. The indicator system developed in their paper, is based on the notionthat it is easier, and sometimes more useful, to consider the factors that affect whether a particular siteis likely to provide values above, or below average, than to have an absolute measure of the averagedollar value itself.2King and Wainger also provide a good summary of valuation techniques.22