The Valuation of River Ecosystem Services

Abstract

This dissertation with the title “The Valuation of River Ecosystem Services” consists of three papers. It begins with the retrospect of the historical development of cost-benefit analysis and the non-market valuation techniques (Paper 1 and 2). We highlight that the origin of cost-benefit analysis in America rooted in the water resource management, including navigation, flood control, irrigation and water power, which are deemed ecosystem services of rivers today. This means that cost-benefit analysis has dealt with the valuation of ecosystem services from its very beginning. In the long history of cost-benefit analysis from France to America, the concept consumers’ surplus was introduced by Dupuit which provided a basis to the later development of non-market valuation methods, and market-based valuation methods were established by the Green Book. When economists took part in the work of cost-benefit analysis in the 1950s, they made great effort to develop a variety of non-market valuation techniques and applied them to value air quality, water quality and recreational activities. These methods, market-based together with non-market, have played and will still play a pivotal role in the current context of the economic valuation of ecosystem services. Focusing on the regulating services of floodplain ecosystems in Lower Saxony, the principle of cost-benefit analysis and market-based valuation methods are applied in the third paper to search suitable areas for the establishment of riparian forests, which have currently drawn great attention due to their contributions to flood control, nutrient retention, carbon storage, as well as their provisions of habitats and migration corridors for plants and animals. The identification of suitable areas is realized by an ecological-economic selection criterion, which consists of a net present value and a set of ecological factors. To calculate the net present value, the costs for land purchasing and afforestation, the benefits of flood control, nutrient retention, carbon storage and biodiversity are considered. The ecological factors include land use type, part of floodplain, floodplain status, area of land, priority area (e.g. conservation area), flood risk, as well as habitat quality. A data bank created from various data sources by means of ArcGIS shows the spatial position of all potential areas and all the attributes of every area. The areas selected by the ecological factors make clear, how much net benefit a specific area can yield through the establishment of riparian forest. From a methodological point of view this study supplement the traditional cost-benefit analysis by the fact that the method used attempts to define the possible alternatives (suitable areas for floodplain forest establishment) under certain political objectives (improving the floodplains) based on the net monetary benefit and ecological factors. In addition, the set of factors is flexible to change according to different policy requirements. The final paper turns attention to the cultural ecosystem services of rivers, which is a road less traveled. Through a case study on the Weser River in Germany, this paper aims to answer the questions what the cultural ecosystem services actually are and how these intangible services can be operationally assessed. In the MA framework we identify a set of clearly defined indicators for all categories of cultural services. Since these categories are usually interrelated and overlapping, the advantage of this approach is to avoid double-counting. Coats of arms are chosen as the indicator for the service category sense of place; bridges, ferries, canals, harbours, barrages and dikes for cultural heritage; legends, poems, novels, songs and paintings for the inspirational service; museums for the educational service; observation platforms for the aesthetic service; cycle route, swimming areas, landing stages for boating and shipping, and camping sites for the recreational service. Although the cultural services are assessed in a qualitative way, we hope that our findings will provide insight for the work of economic valuation in the future.