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Valuing ecosystem services from wetlands restoration in the Mississippi Alluvial Valley

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Author Info

  • Jenkins, W. Aaron
  • Murray, Brian C.
  • Kramer, Randall A.
  • Faulkner, Stephen P.

Abstract

This study assesses the value of restoring forested wetlands via the U.S. government's Wetlands Reserve Program (WRP) in the Mississippi Alluvial Valley by quantifying and monetizing ecosystem services. The three focal services are greenhouse gas (GHG) mitigation, nitrogen mitigation, and waterfowl recreation. Site- and region-level measurements of these ecosystem services are combined with process models to quantify their production on agricultural land, which serves as the baseline, and on restored wetlands. We adjust and transform these measures into per-hectare, valuation-ready units and monetize them with prices from emerging ecosystem markets and the environmental economics literature. By valuing three of the many ecosystem services produced, we generate lower bound estimates for the total ecosystem value of the wetlands restoration. Social welfare value is found to be between $1435 and $1486/ha/year, with GHG mitigation valued in the range of $171 to $222, nitrogen mitigation at $1248, and waterfowl recreation at $16. Limited to existing markets, the estimate for annual market value is merely $70/ha, but when fully accounting for potential markets, this estimate rises to $1035/ha. The estimated social value surpasses the public expenditure or social cost of wetlands restoration in only 1Â year, indicating that the return on public investment is very attractive for the WRP. Moreover, the potential market value is substantially greater than landowner opportunity costs, showing that payments to private landowners to restore wetlands could also be profitable for individual landowners.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 69 (2010)
Issue (Month): 5 (March)
Pages: 1051-1061

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Handle: RePEc:eee:ecolec:v:69:y:2010:i:5:p:1051-1061

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Web page: http://www.elsevier.com/locate/ecolecon

Related research

Keywords: Ecosystem service Economic valuation Wetlands Reserve Program Ecosystem markets Social value Market value;

References

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  1. Brian C. Murray & Bruce A. McCarl & Heng-Chi Lee, 2004. "Estimating Leakage from Forest Carbon Sequestration Programs," UWO Department of Economics Working Papers 20043, University of Western Ontario, Department of Economics, revised Mar 2003.
  2. Woodward, Richard T. & Wui, Yong-Suhk, 2001. "The economic value of wetland services: a meta-analysis," Ecological Economics, Elsevier, vol. 37(2), pages 257-270, May.
  3. Ribaudo, Marc & Hansen, LeRoy T. & Hellerstein, Daniel & Greene, Catherine R., 2008. "The Use of Markets To Increase Private Investment in Environmental Stewardship," Economic Research Report 56473, United States Department of Agriculture, Economic Research Service.
  4. Peter Feather & Daniel Hellerstein, 1997. "Calibrating Benefit Function Transfer to Assess the Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 151-162.
  5. Ribaudo, Marc O. & Heimlich, Ralph & Claassen, Roger & Peters, Mark, 2001. "Least-cost management of nonpoint source pollution: source reduction versus interception strategies for controlling nitrogen loss in the Mississippi Basin," Ecological Economics, Elsevier, vol. 37(2), pages 183-197, May.
  6. Luke Brander & Raymond Florax & Jan Vermaat, 2006. "The Empirics of Wetland Valuation: A Comprehensive Summary and a Meta-Analysis of the Literature," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 33(2), pages 223-250, 02.
  7. Edward B. Barbier, 2007. "Valuing ecosystem services as productive inputs," Economic Policy, CEPR & CES & MSH, vol. 22, pages 177-229, 01.
  8. Anderson, John D. & Parkhurst, Gregory M., 2004. "Economic Comparison of Commodity and Conservation Program Benefits: An Example from the Mississippi Delta," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(02), August.
  9. Loomis, John B. & Rosenberger, Randall S., 2006. "Reducing barriers in future benefit transfers: Needed improvements in primary study design and reporting," Ecological Economics, Elsevier, vol. 60(2), pages 343-350, December.
  10. Ibendahl, Gregory A., 2008. "An Accounting Tradeoff Between WRP and Government Payments," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6764, Southern Agricultural Economics Association.
  11. Ribaudo, Marc O. & Heimlich, Ralph & Peters, Mark, 2005. "Nitrogen sources and Gulf hypoxia: potential for environmental credit trading," Ecological Economics, Elsevier, vol. 52(2), pages 159-168, January.
  12. Toman, Michael, 1998. "SPECIAL SECTION: FORUM ON VALUATION OF ECOSYSTEM SERVICES: Why not to calculate the value of the world's ecosystem services and natural capital," Ecological Economics, Elsevier, vol. 25(1), pages 57-60, April.
  13. Cynthia Morgan & Ann Wolverton, 2005. "Water Quality Trading in the United States," NCEE Working Paper Series 200507, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jun 2005.
  14. Wilson, Matthew A. & Hoehn, John P., 2006. "Valuing environmental goods and services using benefit transfer: The state-of-the art and science," Ecological Economics, Elsevier, vol. 60(2), pages 335-342, December.
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Citations

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Cited by:
  1. Catherine L. Kling & Yiannis Panagopoulos & Adriana Valcu & Philip W. Gassman & Sergey Rabotyagov & Todd Campbell & Mike White & Jeffrey G. Arnold & Raghavan Srinivasan & Manoj Jha & Jeff Richardson &, 2014. "Land Use Model Integrating Agriculture And The Environment (Luminate): Linkages Between Agricultural Land Use, Local Water Quality And Hypoxic Concerns In The Gulf Of Mexico Basin," Center for Agricultural and Rural Development (CARD) Publications 14-wp546, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  2. Tait, Peter R. & Baskaran, Ramesh, 2011. "Incorporating Local Water Quality in Welfare Measures of Agri-environmental Policy: A Choice Modelling Approach Employing GIS," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116074, European Association of Agricultural Economists.
  3. Sergey Rabotyagov & Catherine L. Kling & Philip W. Gassman & Nancy N. Rabalais & R. Eugene Turner, 2012. "Economics of Dead Zones: Linking Externalities from the Land to their Consequences in the Sea, The," Center for Agricultural and Rural Development (CARD) Publications 12-wp534, Center for Agricultural and Rural Development (CARD) at Iowa State University.

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