Accounting for Ecosystem Good and Services in Coastal Estuaries

1. Accounting for Ecosystem Good and Services in Coastal Estuaries Matthew Wilson, Ph.D. & Poh Boon Ung, M.A.

2. Acknowledgements • Adapted from work by Wilson et al. (2005; 2006; 2007*) • Matthew A. Wilson, Senior Economist, Triangle Economic Research, an ARCADIS Company • Stephen Farber, Professor Emeritus,Graduate School of Public and International Affairs, University of Pittsburgh • Shuang Liu, Ph.D. Candidate, University of Vermont *Wilson, Matthew A. and Liu, Shuang. (In Press). Non-Market Value of Ecosystem Services provided by Coastal and Nearshore Marine Systems. In M. Pattterson and B. Glavovic (eds.) Ecological Economics of the Oceans and Coasts. Edward Elgar. Northampton, MA.

3. Ecosystem Services • Ecosystem services are the benefits people obtain either directly or indirectly from ecological systems (Millennium Ecosystem Assessment 2003). They include products such as food, fuel, and fiber; regulating services such as climate and water regulation and flood control; and nonmaterial assets such as cultural or aesthetic benefits (DeGroot et al. 2002). • Ecosystem services are critical to the functioning of coastal systems and also contribute significantly to human well-being, representing a significant portion of the total economic value of the coastal environment. …substantial positive economic values can be attached to many of the marketed and non-marketed services provided by coastal systems (Agardy et. al. 2005, p533). DeGroot, Wilson and Boumans 2002 “A typology for the description, classification, and valuation of ecosystem functions, goods and services” Ecological Economics 41(3) pp. 393-420. Agardy, Tundy; Jackie Alder, Paul Dayton, Sara Curran, Adrian Kitchingman, Matthew A. Wilson, Alessandro Catenazzi, Juan Restrepo, Charles Birkeland, Steven Blaber, Syed Saifullah, George Branch, Dee Boersma, Scott Nixon, Patrick Dugan, Charles Vörösmarty. 2005. Coastal Systems and Coastal Communities, in Millennium Ecosystem Assessment: Conditions and Trends, Volume I. Washington DC: Island Press. pp.513-543.

4. Our Focus Today • Provide a framework for accurately defining and classifying ecosystem goods and services • Show how the inclusion of ecosystem goods and services is fundamental to evaluating trade-offs from restoration efforts • How do we agree upon what goods and services are? • How can we place $ values on goods and services not commonly exchanged in markets?

5. The Evolving Policy Arena • Increasing focus placed on good decision-making related to ecosystem goods and services and how they contribute to society’s well-being • Environmental Protection Agency (EPA) • Previous EPA efforts focused primarily on human health and risk effects • Ecological assessment have been on ecological endpoints (e.g., pesticide effects on fish, birds, etc.) • EPA’s (2006) Ecological Benefits Assessment Strategic Plan (EBASP) overall goal “is to help improve Agency decision-making by enhancing EPA’s ability to identify, quantify, and value the ecological benefits of existing and proposed policies. Our vision is one of rigorous, comprehensive, and interdisciplinary ecological benefits assessments supporting the design and selection of policy alternatives” (p. xv). • Science Advisory Board (SAB) working on report of an integrated and expanded approach for valuing ecological systems and services • Millennium Ecosystem Assessment (2003) • United Nations sponsored program to help understand linkages between ecosystems and human well-being. Goal is to enhance the contribution of ecosystems to human well-being without undermining their long-term productivity.

6. The Model for Assessing Ecosystem Goods and Services Values

7. Total Economic Value of Ecosystem Goods and Services Processes e.g. nutrient transport, primary production Ecosystem Structures e.g. biomass, minerals, bottom type Goods & Services Services e.g. coastal protection, waste disposal, habitat Goods e.g. fisheries, recreation, navigation Indirect Use e.g. value of climate regulation Direct Use e.g. consumption, viewing, recreation Nonuse? e.g. bequest value Total = Economic Value + + * Adapted from Turner (2000) and Wilson et. al. (2005)

8. A Taxonomy of Ecosystem Goods and Services

9. Millennium Assessment (MA) 2003 Categorization of Ecosystem Goods and Services • Provisioning: Goods produced or provided by ecosystems • food, fresh water, fuel wood • Regulating: Benefits obtained from regulation of ecosystem processes • climate regulation, disease regulation, flood protection • Cultural: Non-material benefits from ecosystems • recreational, aesthetic, educational • Supporting: Services necessary for production of other ecosystem services • nutrient cycling, soil formation, wildlife habitat

10. Provisioning Services

11. Regulating Services

12. Cultural Services

13. Supportive Functions and Structures

14. Managing Coastal Estuaries to Provide Ecosystem Goods and Services

15. Trade-offs • Ecosystem goods and services provide value to humans • Anthropocentric concept: presence of human beings as welfare-maximizing agents translate ecological structures and processes into value-laden entities • Economic valuation of ecosystem goods and services represent the trade-offs that individuals make between alternative conditions of these services • e.g., various competing uses of coastal environment and the goods and services provided by healthy, functioning ecosystems. Should a shoreline be cleared and stabilized to provide new land for development? Or should it be maintained in its current state to serve as wildlife habitat? • Proper assessment of these values are important for planners and decision makers

16. Total Economic Value (TEV) • Coastal restoration efforts should focus on anticipated changes in Total Economic Value (TEV) TEV = $P x S ΔTEV = $P x ΔS • $P = Economic value of Services per unit of service (e.g., value of recreational user day) • S = Service Flow(e.g., number of recreational user days per year) • ΔS = Change in Service Flows(e.g., increase in number of user days due to restoration)

17. Valuation Methods • Example valuation methods

18. Recent Experiences: Case Studies • Shepard Point, Alaska • Deschutes Estuary, Washington • Southeast Maury Island, Washington

19. Concluding Remarks • Due to their complexity, coastal estuaries provide goods and services that are often “bundled” together • Multi-disciplinary team needed to evaluate goods and services provided by coastal estuaries (ecologists, biologists, engineers, economists, etc.) • Accurate definition and classification of ecosystem goods and services is an essential first step for evaluating different policy or restoration options • Economic methods exist to value these goods and services

20. Questions/Comments • Contact Us • www.arcadis-us.com • www.ter.com