1 / 20

REM 363/ENV 399 – Week 10 INTRODUCTION TO ENVIRONMENTAL VALUATION

REM 363/ENV 399 – Week 10 INTRODUCTION TO ENVIRONMENTAL VALUATION. Environmental valuation. “Non-market valuation imputes a price to environmental goods and services not traded in markets” Why value the environment? we do already for natural resources, e.g. timber

carissa
Download Presentation

REM 363/ENV 399 – Week 10 INTRODUCTION TO ENVIRONMENTAL VALUATION

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. REM 363/ENV 399 – Week 10 INTRODUCTION TO ENVIRONMENTAL VALUATION

  2. Environmental valuation “Non-market valuation imputes a price to environmental goods and services not traded in markets” Why value the environment? • we do already for natural resources, e.g. timber • when we don’t (non-market), environmental values are ignored, e.g. wilderness, biodiversity Uses of valuation • evaluating the full cost of environmental impacts • selecting the best use of natural capital • including the value of the environment in national accounts and sustainability indicators

  3. Valuing an improvement in environmental quality at a “free” recreation site MWTP ($/day) MWTP ($/day) MWTP with improvement Demand curve with improvement 40 30 20 10 0 40 30 20 10 MWTP without improvement Demand curve without improvement 1 2 3 4 5 6 1 2 3 4 5 6 Recreation days per year

  4. X X X X X X

  5. Sample Classification of Total Economic Value (TEV) for Temperate Rainforests Source: adapted from Barbier (1991), Panayotou and Ashton (1992), Myers (1992) and Pearce and Warford (1993) a/ Use values are now usually considered as encompassing option and quasi-option values. b/ Biodiversity is essentially an attribute of the forest; hence, it may also serve important direct and indirect use values. For example, the diversity found in a forest may have direct use value for scientific research, education and as a source of genetic material. Similarly, biological diversity may have an indirect use value in assisting the ecological stability of the entire forest system.

  6. Measuring environmental values • Market price approaches (where already traded), e.g. soil erosion → reduced yield of marketed crops • Possible approaches for non-market valuation: • surrogate markets, e.g. fuelwood & kerosene • constructed market, e.g. survey techniques (wilderness) • cost-based valuation, e.g. costs of preventing/replacing (e.g. wetlands and water treatment) • other methods … • We will consider a more formal classification system next class

  7. The Economics of Old Growth in BC: To Cut or Not to Cut? Duncan Knowler, Associate Professor, REM I would like to acknowledge the research assistance of Kristin Dust on this project and funding from WCWC, Ecojustice and DSF

  8. Chilliwack Forest District & Fraser Timber Supply Area

  9. Sample Classification of Total Economic Value (TEV) for Temperate Rainforests Source: adapted from Barbier (1991), Panayotou and Ashton (1992), Myers (1992) and Pearce and Warford (1993) a/ Use values are now usually considered as encompassing option and quasi-option values. b/ Biodiversity is essentially an attribute of the forest; hence, it may also serve important direct and indirect use values. For example, the diversity found in a forest may have direct use value for scientific research, education and as a source of genetic material. Similarly, biological diversity may have an indirect use value in assisting the ecological stability of the entire forest system.

  10. Assumptions – Management Strategies

  11. Annual Allowable Cut under the SOMPcurr, Suit100, and Terr100 Scenarios (m3/yr) Source: SELES output and Sutherland, et al. (2007)

  12. Conservation Values for BC Old Growth Forest Source: Calish et al. (1978)

  13. Mushroom Picking Assumptions • Average price to chanterelle pickers in 2006 $CAN was $3.54 per lb, or $7.80 per kg • We assumed an average of 6.7 hours per day spent picking from several studies • Chanterelle pickers harvest 4.68 lbs per hour, or about 14.2 kg per day. • Pine mushroom pickers harvest 0.89 lbs per hour, they will harvest about 2.7 kg per day • We assumed average agricultural wages of $10 per hour, for the opportunity cost of pickers’ time • Average daily costs for transportation and materials were assumed at $30 per day.

  14. Source: Kurz et al. (1992)

  15. Carbon Price Assumptions • Carbon ‘price’ is meant to capture the value of damages done by global warming • Some studies imply values in the range of $30 to 85/t C • The Stern Report used a carbon price of as much as $350/t C • We used a range from $20 to $150 per t C

  16. Comparison of the Suit100 and Terr100 Scenarios to the Baseline Scenario (SOMPcurr) assuming Rising Log Prices (Net Present Value in $millions over 100 Years )

  17. Concluding Comments There is a positive cost associated with implementing Suit100 or Terr100 in terms of lost timber value However, over most assumptions there is a net benefit from implementing Suit100 or Terr100 in place of SOMPcurr Limitations include Several missing values for standing forest A lack of current recreation value estimates No precise estimates of areas actually to be logged No consideration of intangibles, e.g. First Nations cultural values This is a “valuation” study and not an “economic impact” study

More Related