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Assessing the Economic Value of Ecosystem Conservation

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Author Info

  • Stefano Pagiola

    (World Bank)

  • Konrad von Ritter

    (The Nature Conservancy)

  • Josh Bishop

    (IUCN-World Conservation Union)

Abstract

Valuation studies have considerably increased our knowledge of the value of ecosystems. Their usefulness has often been undermined, however, by a failure to properly frame them so as to address the specific question of interest. Valuation is not a single activity, and the seemingly simple question ‘how valuable is an ecosystem?’ can be interpreted in many different ways. This paper seeks to clarify how valuation should be conducted to answer specific policy questions. In particular, it looks at how valuation should be used to examine four distinct aspects of the value of ecosystems: (1) Determining the value of the total flow of benefits from ecosystems. This question typically arises in a ‘national accounts’ context: How much are ecosystems contributing to economic activity? It is most often asked at the national level, but can also be asked at the global, regional, or local level. (2) Determining the net benefits of interventions that alter ecosystem conditions. This question typically arises in a project or policy context: Would the benefits of a given conservation investment, regulation, or incentive justify its costs? It differs fundamentally from the previous question in that it asks about changes in flows of costs and benefits, rather than the sum total value of flows. (3) Examining how the costs and benefits of ecosystems are distributed. Different stakeholder groups often perceive very different costs and benefits from ecosystems. Understanding the magnitude and mix of net benefits received by particular groups is important for two reasons. From a practical perspective, groups that stand to ‘lose’ from conservation may seek to undermine it. Understanding which groups are motivated to conserve or destroy an ecosystem, and why, can help to design more effective conservation approaches. From an equity perspective, the impact of conservation on particular groups such as the poor, or indigenous peoples, is also often of significant concern in and of itself. (4) Identifying potential financing sources for conservation. Knowing that ecosystem services are valuable is of little use if it does not lead to real investments in conserving the natural ecosystems that provide them. Simply knowing that a protected area provides valuable watershed protection benefits, for example, does not pay the salaries of park rangers. Yet experience has shown that relying solely on government budget allocations or external donors for the necessary funding is risky. Valuation can help identify the beneficiaries of conservation and the magnitude of the benefits they receive, and thus help design mechanisms to capture some of these benefits and make them available for conservation. These four approaches are closely linked and build on each othe, often using similar data. They use that data in very different ways, however, sometimes looking at all of it, sometimes at a subset, sometimes looking at a snapshot, and sometimes looking at changes over time. Each approach has its uses and its limitations. Understanding under what conditions one approach should be used rather than another is critical: the answer obtained under one approach, no matter how well conducted, is generally meaningless when applied to problems that are better treated using another approach. In particular, using estimates of total flows to justify specific conservation decisions—although commonly done—is almost always wrong. Properly used, however, valuation can provide invaluable insights into conservation issues.

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File URL: http://128.118.178.162/eps/othr/papers/0502/0502006.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Others with number 0502006.

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Length: 66 pages
Date of creation: 08 Feb 2005
Date of revision:
Handle: RePEc:wpa:wuwpot:0502006

Note: Type of Document - pdf; pages: 66
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Web page: http://128.118.178.162

Related research

Keywords: ecosystem; valuation;

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References

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  1. 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.
  2. Shogren, Jason F. & Hayes, Dermot J., 1997. "Resolving Differences in Willingness to Pay and Willingness to Accept: Reply," Staff General Research Papers 1153, Iowa State University, Department of Economics.
  3. World Bank, 2004. "World Development Indicators 2004," World Bank Publications, The World Bank, number 13890, October.
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Citations

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Cited by:
  1. Sonja S. Teelucksingh & Paulo A.L.D. Nunes, 2010. "Biodiversity Valuation in Developing Countries: A Focus on Small Island Developing States (SIDS)," Working Papers 2010.111, Fondazione Eni Enrico Mattei.
  2. Gull, Katie, 2009. "The Economics Of A Payment For Watershed Services In The Western Baivaanskloof," Honours Students' Projects 2009 98757, Rhodes University, Department of Economics and Economic History.
  3. Laurent Debroux & Giuseppe Topa & David Kaimowitz & Alain Karsenty & Terese Hart & Awono Abdon & Fidele Amsini & Conrad Aveling & Alain Bertrand & Mohammed Bekhechi & Carlo Bravi & Eric Chezeaux & Ken, 2007. "Forests in Post- Conflict Democratic Republic of Congo: Analysis of a Priority Agenda," Selected Books, CIRAD, Forest department, UPR40, edition 1, volume 1, number 10, September.
  4. Hallegatte, Stephane & Heal, Geoffrey & Fay, Marianne & Treguer, David, 2011. "From growth to green growth -- a framework," Policy Research Working Paper Series 5872, The World Bank.
  5. Mariel Chladkova, Petr & Etxano Gandariasbeitia, Iker & Hoyos Ramos, David & Garmendia Oleaga, Eneko & Pascual, Unai, 2011. "The management of Natura 2000 Network sites: a discrete choice experiment approach," BILTOKI 2011-02, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
  6. Ian Bateman & Georgina Mace & Carlo Fezzi & Giles Atkinson & Kerry Turner, 2011. "Economic Analysis for Ecosystem Service Assessments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(2), pages 177-218, February.
  7. Sakuyama, Takumi, 2006. "Direct Payments for Environmental Services from Mountain Agriculture in Japan: Evaluating its Effectiveness and Drawing Lessons for Developing Countries," eJADE: electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization, Agricultural and Development Economics Division, vol. 3(1).

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