Economic valuation of aquatic ecosystem services in developing countries

Abstract

An important challenge of integrated water resources management (IWRM) is to balance water allocation between different users. While economically and/or politically powerful users have well developed methods for quantifying and justifying their water needs, this is not the case for ecosystems—the silent water user. A promising way of placing aquatic ecosystems on the water agenda is by economic valuation of services sustained by ecosystems. In developing countries, the livelihoods of rural people often depend directly on the provision of aquatic ecosystem services. In such situations, economic valuation of ecosystem services becomes particularly challenging. This paper reviews recent literature on economic valuation of aquatic ecosystem services in developing countries. “Market price” is the most widespread method used for valuating marketed ecosystem services in developing countries. “Cost based” and “revealed preference” methods are frequently used when ecosystem services are non-marketed. A review of 27 existing valuation studies reveals a considerable range of estimated total economic value of aquatic ecosystem services in developing countries, that is from US$30 to 3,000/ha/year. The paper concludes that economic valuation is vital for bringing ecosystems to decision-making agendas in developing countries and that great effort must be made to bridge the gap between scientists and decision makers.