Estimating the Value of Non‐Use Benefits from Small Changes in the Provision of Ecosystem Services

Abstract: The unit of trade in ecosystem services is usually the use of a proportion of the parcels of land associated with a given service. Valuing small changes in the provision of an ecosystem service presents obstacles, particularly when the service provides non‐use benefits, as is the case with conservation of most plants and animals. Quantifying non‐use values requires stated‐preference valuations. Stated‐preference valuations can provide estimates of the public's willingness to pay for a broad conservation goal. Nevertheless, stated‐preference valuations can be expensive and do not produce consistent measures for varying levels of provision of a service. Additionally, the unit of trade, land use, is not always linearly related to the level of ecosystem services the land might provide. To overcome these obstacles, we developed a method to estimate the value of a marginal change in the provision of a non‐use ecosystem service—in this case conservation of plants or animals associated with a given land‐cover type. Our method serves as a tool for calculating transferable valuations of small changes in the provision of ecosystem services relative to the existing provision. Valuation is achieved through stated‐preference investigations, calculation of a unit value for a parcel of land, and the weighting of this parcel by its ability to provide the desired ecosystem service and its effect on the ability of the surrounding land parcels to provide the desired service. We used the water vole (Arvicola terrestris) as a case study to illustrate the method. The average present value of a meter of water vole habitat was estimated at UK£12, but the marginal value of a meter (based on our methods) could range between £0 and £40 or more.     

CONSTRAINTS IN WATER MANAGEMENT ON AGRICULTURAL LANDS1

ABSTRACT Whether the goal is minimizing water quality degradation in receiving streams or maximizing agricultural production on existing croplands; the solutions are identical - improved water management practices. Technology has succeeded in developing feasible solutions to improving irrigation water management, but the law has been slow to encourage or direct implementation. The villain of the western United States water problem is the property right concept of the appropriation doctrine. Improving water management also implies organizational improvements. Also, the so-called “human factor” involves questions of inefficiency and ineffectiveness, that when examined under the criteria of efficacy, may dictate a policy of continuing present practices in certain localities or regions with little technological intervention. The present effort for improving water quality management implies, therefore, a manyfold attack aimed at increasing project irrigation efficiency and effectiveness, under the larger rubric of efficacy and the achievement of larger social goals.     

A TREATISE ON THE USE OF EXPECTED VALUES IN WATER RESOURCE PROJECT EVALUATION1

This paper focuses on two factors that influence the acceptability of the expected value criterion as a method of handling risk or uncertainty in decision-making where damages from unusual physical occurrences such as hurricanes or floods must be considered. These are the length of time of project existence and the problem of obtaining accurate estimates of the probability of occurrence for different sizes of natural disasters. The problem of estimating accurate probabilities of occurrence for different sizes of natural disasters is not as great as it might appear and in most situations will not defeat the usefulness of the method. The time span during which the project is expected to exist has greater implications for the usefulness of the expected value approach appears highly applicable. However, it becomes less applicable for projects that are short-term in nature. The basis for distinguishing between short- and long-term projects is presented.     

Flood Risk Perceptions and Overdevelopment in the Floodplain1

ABSTRACT: There is a long standing hypothesis that overdevelopment has occurred in the nation's floodplains due to imperfect information about the potential flood hazard, an expectation of disaster relief and anticipation of future structural protection. This hypothesis is investigated with multiple regression analysis of data for a case study area. In particular the question of whether floodplain residential property values are fully discounted for expected flood damages is addressed by considering the impact of the National Flood Insurance Program on property values. The extent to which flooding risk perceptions are based on low cost information such as distance from and elevation above the river is also considered. Finally, implications for floodplain management policy are discussed.     

A VIABLE METHODOLOGY TO IMPLEMENT THE PRINCIPLES AND STANDARDS1

ABSTRACT: The “principles and standards for planning water and related land resources” were made effective October 25, 1973. The document was noticeably deficient in suggestions for the necessary implementing procedures to ensure its success. Current implementing procedures are based on an incorrect premise of maximizing a single objective subject to non-quantified constraints. A successful implementation of multiple objective planning requires optimizing simultaneously several competitive goals. A system of goal programming has been developed and applied to decisionmaking situations as a test of its usefulness in planning for multiple objective water resources projects. The result is a project planning process which can be replicated for adjustments in expected resource supplies or demands to provide a tradeoff matrix between economic and environmental objectives as well as traditional functional purposes. This procedure, tested on the Cross Florida Barge Canal, is an integrated analysis of economic and environmental values which may be as effective in implementing multiple objective planning as the “Green Book” was in developing the now inappropriate benefit cost analysis.     

AN IMPLICIT APPROACH TO PRICING AGRICULTURAL WATER TRANSFERS TO URBAN USES1

ABSTRACT: The increased agricultural efficiency of the American farmer has been a substantial impetus to this nation's rapid urbanization. In many western regions where total water supplies are limited, urbanization has required the transfer of heretofore agricultural water rights to the urban use. A major problem in such transfers has been the value or price of the water. A management level model of a typical urban water system was developed to optimize water supply, distribution, and wastewater treatment alternatives. The values of agricultural transfers were determined as the cost advantages of increasing allowable reuse levels of urban effluents which imply the use of a downstream right. This procedure is justified by the economic theory of alternative cost. Results for a test application to the Denver, Colorado area indicate values on the order of $1,000 per acre-foot of transferable water depending on effluent water quality restrictions and operational policies.     

Application of non-market valuation to the Florida Keys marine reserve management

The quality of the coral reefs in the Florida Keys is essential to sustain nature-based tourism in the Keys. The recently established marine reserves (MR) are expected to improve the reef environment, particularly coral and fish abundance and diversity. In this paper, a combined model of travel cost and contingent behavior was estimated in order to measure the non-market recreational benefits of reef quality improvements. The results indicated that an average visitor would undertake 43-80% more number of trips to the Florida Keys and experience a 69% increase in the use values per trip, as a result of the MR-induced reef quality improvements. The above non-market value estimates were further applied to evaluating alternative management proposals for funding the MR program. It was found that the annual management costs of the MR program would constitute an insignificant portion--only around one to 2%--of the annual recreational benefits that the MR would generate. The results provide a strong economic justification for designing user-based funding mechanisms in order to make the MR program self-sustaining in the future.     

Environmental Values and Popular Conflict over Environmental Management: A Comparative Analysis of Public Comments on the Clinton Forest Plan

/ Public participation in environmental management decisions has frequently led to conflict. This paper examines the role of environmental values in fueling these conflicts, based on a data base and sample content analysis of written public comments solicited in 1994 regarding the highly contentious Clinton Forest Plan (also known as Option 9) proposed for management of federal forests in the US Pacific Northwest. The analysis considered whether those respondents favoring more versus less environmental protection than was offered in Option 9 held entirely different values, identifying which antagonistic values appeared to be most fundamental and where (if at all) values consensus occurred. It also compared values emanating from respondents within and outside the affected region, although few major differences were detected in this regard. Results suggest that strong values differences did exist among those preferring greater versus less environmental protection, in particular as concerned the extent, form, and spatial and temporal scope of justification of their positions, their ideas of forests, and the appropriate role of people in forest management. Disagreement concerned far more than purely environmental values: a major point of difference involved human benefits and harms of the proposed forest plan. Indeed, both sides' positions were overridingly anthropocentric and consequentialist-a values orientation that almost inevitably spells conflict in light of the commonly differentiated social impacts of environmental management decisions. Although public involvement in environmental management thus cannot be expected to lead to a clear and consensual social directive, the Pacific Northwest case suggests that viable environmental management solutions that take this range of values into account can still be crafted.KEY WORDS: Environmental values; Public participation; Clinton Forest Plan; Pacific Northwest     

ESTIMATING PROBABLE MAXIMUM FLOOD PROBABILITIES1

ABSTRACT: Methods of computing probabilities of extreme events that affect the design of major engineering structures have been developed for most failure causes, but not for design floods such as the probable maximum flood (PMF). Probabilities for PMF estimates would be useful for economic studies and risk assessments. Reasons for the reluctance of some hydrologists to assign a probability to a PMF are discussed, and alternative methods of assigning a probability are reviewed. Currently, the extrapolation of a frequency curve appears to be the most practical alternative. Using 46 stations in the Mid-Atlantic region, the log-gamma, log-normal, and log-Gumbel distributions were used to estimate PMF probabilities. A 600,000-year return period appears to be a reasonable probability to use for PMFs in the Mid-Atlantic region. The coefficient of skew accounts for much of the variation in computed probabilities.