Monetary Value Estimates Research Articles

Valuing the plant species diversity of permanent grasslands: From the perspective of herders

Conserving plant species diversity is crucial to the sustainable development of human beings. Nevertheless, the trends toward declining species numbers and homogenization of species distributions have become increasingly evident. The monetary value of species diversity can make stakeholders put more serious attentions on the protection of species diversity, but which is difficult to evaluate. This paper combined survey data and ecological data obtained through plot sampling and geographic information system methods, to assess the value of plant species diversity in permanent grasslands for local herders who are the direct users of grasslands, and whose livelihoods and well-beings are tightly related with the ecosystem of grasslands. Based on the life satisfaction approach, we found that the monetary value of one plant species for each herder household is equivalent to 9.8% of the annual household income on average, which increases to 15.9% when the level of species evenness is higher. The results of a heterogeneity analysis revealed that the value of plant species diversity varies significantly among different groups of households. Our research introduced a new method to quantify the value of species diversity for stakeholders. The estimation of monetary value of plant species diversity will have far-reaching influence on stakeholders and policymakers involved in protecting species diversity of permanent grasslands.

Exploring Perspectives of the Validity, Legitimacy and Acceptability of Environmental Valuation using Q Methodology

The extension of market systems and economic appraisal methods to the natural world and allocation of scarce resources is highly controversial and viewed by some as unethical. This has resulted in questions about the appropriate role of valuation and appraisal methods in informing policy and decision-making. We address this issue by assessing the different points of view that exist in marine research, management and policy communities regarding the estimation of monetary values for marine ecosystems and services and their use in appraisal and policy settings. The principal perspectives emerging from a Q-sort survey of x respondents reveal a clear distinction between a group that is highly sceptical of the framing of human-environment relations in terms of ecosystem services and of the use of economic appraisal and valuation tools in this context, and two or three other groups that are broadly favourable towards that paradigm and its methods, but with slightly different reasons for supporting valuation in practice. Despite the distinguishing features, areas of consensus emerge, including a strong shared perspective that places avoiding damage to marine biodiversity and ecosystems as a fundamental obligation. Furthermore, it is shown that the sceptics do not entirely reject valuation out of hand, but rather express understandable concerns about applicability and appropriate uses that are to some extent recognised by the pro-valuation groups.

The effect of riparian woodland cover on ecosystem service delivery by river floodplains: a scenario assessment

AbstractSixteen ecosystem services were quantified for the riverine landscapes of the Nahe, Stever (Germany), Bresse plain, and Azergues (France), to assess the effects of riparian woodland cover. Future woodland cover in 2050 was modeled to reflect contrasting scenarios of river management aligned to the well‐established shared socioeconomic pathways. The scenarios are labeled as current, pessimistic, best practice, and ambitious riparian management practices (RMPs). We linked services to floodplain land use and river morphology and quantified them separately for spatial segments (0.5–1 km in length, n = 118–3419, depending on river length), using an analytical framework, the “Mononen cascade.” Conservative monetary value estimates were based on net producer income before tax and subsidy, a shadow market price for carbon, flood damage functions, or willingness to pay for recreation and non‐use. Most services were linked to land use, some affected the value of other services through simple rules (woodland shade affected trout survival hence angling benefit, a minimum of woodland affected pest regulation, hence crop productivity). In the current landscape state, provisioning, regulating, and cultural services all showed optimum curves with woodland cover: Provisioning services and cultural services were maximal around 45%, whereas this was around 30% for regulating services. More woodland was present in steeper near‐source segments. Averaged across rivers, mean total service provision was estimated at 1084 ± 4 €·ha−1·yr−1, with 40%, 36%, and 24% contributed by, respectively, provisioning, regulating, and cultural services. The three scenarios led to a limited change in total ecosystem service delivery, even if mean woodland cover was reduced from 27% to 17% in the pessimistic RMP and increased to 70% in the ambitious RMP for the most extreme case of the Stever. Provisioning services declined with increased woodland cover and cultural services increased. Regulating services did not change that much, because they are dominated by flood prevention in our assessment. The “best practice” scenario appeared to combine a modest increase in cultural services with a slight increase in provisioning service. An ambitious nature conservation objective as in the ambitious RMP appears possible without seriously compromising overall societal benefit.

Estimation of monetary value of street trees by i-Tree Eco using tree health surveys in Suita City, Osaka Prefecture

Estimation of monetary value of street trees by i-Tree Eco using tree health surveys in Suita City, Osaka Prefecture

Issue of agricultural lands exhaustion and land use planning and methodological approaches as solutions to this problem

The article considers one of the priority issues of global land management and land resources management – agricultural lands exhaustion. It was revealed that agricultural lands exhaustion processes are caused by the absence of a number of organizational and economic mechanism elements in land management, in terms of control over the quality condition and land fertility. In order to improve the agricultural land management system, there was proposed a mechanism composed of a combination of legal, land management and agroecological measures. The central element of the organizational and economic mechanism for monitoring the processes of agricultural lands exhaustion is the proposed methodological approach of assessing the level of agricultural lands exhaustion and subsequent estimation of monetary value of the economic damage caused by the identified processes of agricultural lands exhaustion. Economic calculations of the cost for soil fertility factors restoration up to their optimal parameters are composed of calculation of differential rent values in terms of fertility and location of the investigated and reference soil being capitalized taking into account the standard period of capitalization in agriculture. The monetary value of the economic damage caused by the identified processes of agricultural lands exhaustion is determined as the difference between the values of capitalized rent for the investigated and reference soil.

Cryptodamages: Monetary value estimates of the air pollution and human health impacts of cryptocurrency mining

Cryptocurrency mining uses significant amounts of energy as part of the proof-of-work time-stamping scheme to add new blocks to the chain. Expanding upon previously calculated energy use patterns for mining four prominent cryptocurrencies (Bitcoin, Ethereum, Litecoin, and Monero), we estimate the per coin economic damages of air pollution emissions and associated human mortality and climate impacts of mining these cryptocurrencies in the US and China. Results indicate that in 2018, each $1 of Bitcoin value created was responsible for $0.49 in health and climate damages in the US and $0.37 in China. The similar value in China relative to the US occurs despite the extremely large disparity between the value of a statistical life estimate for the US relative to that of China. Further, with each cryptocurrency, the rising electricity requirements to produce a single coin can lead to an almost inevitable cliff of negative net social benefits, absent perpetual price increases. For example, in December 2018, our results illustrate a case (for Bitcoin) where the health and climate change “cryptodamages” roughly match each $1 of coin value created. We close with discussion of policy implications.

Un no como respuesta: interpretación, tratamiento y análisis en estudios de valoración contingente

El método de valoración contingente (MVC) es extensivamente usado para asistir decisiones de carácter público. Preocupa, sin embargo, que una proporción importante de individuos proveen una disposición a pagar de cero que no es reconciliable con la teoría económica. Basado en tres ejercicios de MVC, este artículo examina las motivaciones detrás de estos ceros no económicos (protesta) y sus implicaciones para la estimación de valores monetarios. Los resultados muestran que detrás de las protestas hay motivaciones éticas y de equidad que deberían ser consideradas en los procesos de decisión, pero que quedan escondidas al seguir el procedimiento convencional del MVC.

A global meta-analysis on the monetary valuation of dryland ecosystem services: The role of socio-economic, environmental and methodological indicators

Monetary valuation of dryland ecosystem services may help to increase the salience of drylands in decision making. Yet, there is no comprehensive assessment of the indicators that determine the estimated monetary values for dryland ecosystem services (hereafter: dryland value). Having compiled a database consisting of 559 observations from 66 valuation studies in drylands worldwide, this study analyzes the relative importance of local socio-economic, environmental and methodological indicators in explaining the monetary value estimates for nine dryland ecosystem services by means of a multiple regression analysis. By explicitly quantifying the effect sizes of the indicators of dryland value, we shed new light on the driving forces behind monetary valuation of dryland ecosystem services. Our results show that local socio-economic and environmental conditions are marginal in explaining dryland value, indicating that local dryland conditions are not sufficiently captured with current valuation approaches. Simultaneously, we find that methodological factors, including valuation method and study extent, heavily influence dryland value, suggesting that monetary valuation outcomes are largely determined by the selected methodology. This emphasizes the need to improve monetary valuation methods so that they better capture local dryland conditions in order to be able to serve as a meaningful tool for decision making.

Costs and carbon sequestration potential of alternative forest management measures in Germany

The objective of this study is to assess the costs and the carbon sequestration potential of selected forest management measures in Germany, including effects on the harvested wood products (HWP) pool. We consider five different scenarios, each referring to an alternative level of wood harvests (due to changing rotation lengths or setting forest areas aside). The cost calculation is done within a framework that accounts for both financial impacts on downstream industries and impacts on the values of non-market goods and services of forests. To gauge the market-based costs of the scenarios in the national forest-based industries, different input-output methodological concepts are combined and applied in a novel fashion. A physical input-output table (PIOT) that shows the wood-based fiber flow through the forest-based industries of Germany forms the core of the model. The market-based costs of the mitigation measures are estimated as the aggregate of the value added losses in the German forest-based industries. Additionally, we include monetary value estimates of environmental costs and benefits based on a comprehensive choice experiment at the national level.

An Examination of the Methods and Discussions on Estimation of Monetary Value of Ecosystem Services

In 1980s the concept of “ecosystem services” has been used to indicate the nature’s functions. Ecosystem services are intangible and they do not have a price which reflects their scarcity. However, in 1990s ecosystem services have been included in economic processes of monetary valuation, exchange and appropriation. Thus discussions have been started about how ecosystem services’ monetary value would be determined with intense incorporation of ecosystem services to the economic analysis since 1990s. Environmental economics and ecological economics which are the new approaches of economics have conducted these discussions and developed a variety of valuation methods. In this study, these valuation methods and the discussions regarding estimation of monetary values of the ecosystem services, reasons for the estimation studies have examined.

Non-Market Values in a Cost-Benefit World: Evidence from a Choice Experiment.

In support of natural resource and ecosystem service policy, monetary value estimates are often presented to decision makers along with other types of information. There is some evidence that, presented with such ‘mixed’ information, people prioritise monetary over non-monetary information. We conduct a discrete choice experiment among New Zealand decision makers in which we manipulate the information presented to participants. We find that providing explicit monetary information strengthens the pursuit of economic benefits as well as the avoidance of environmental damage. Cultural impacts, of which we provided only qualitative descriptions, did not affect respondents’ choices. Our study provides further evidence that concerns regarding the use of monetary information in decisions with complex, multi-value impacts are valid. Further research is needed to validate our results and find ways to reduce any bias in monetary and non-market information.

Economic valuation at all cost? The role of the price attribute in a landscape preference study

In ecosystem services and landscape research, both monetary and non-monetary preference studies are applied to elicit values that people assign to landscapes. In this paper, we apply a split-sample approach to compare relative preferences for landscape attributes between a choice experiment with and an experiment without price attribute. Also, within the choice experiment with a price attribute, we examine the effect of non-attendance to the price attribute (i.e., ignoring the price) on landscape preferences. A comparison of the marginal rates of substitution of landscape attributes between the two experiments reveals a clear difference of preference patterns. In addition, 36% of the respondents in the monetary experiment ignored the price attribute. This group expressed similar preferences for landscape attribute as respondents in the non-monetary experiment. We also show that ignoring this type of non-attendance leads to a substantial upward bias in monetary value estimates. We conclude that adding a price attribute to choice experiments substantially affects trade-offs and choices made by respondents. Including a payment vehicle ensures that trade-offs between attributes are more pronounced, and that money has to be put where the mouth is. However, controlling for non-attendance appears crucial for obtaining accurate monetary value estimates.

The role of benefit transfer in ecosystem service valuation

The demand for timely monetary estimates of the economic value of nonmarket ecosystem goods and services has steadily increased over the last few decades. This article describes the use of benefit transfer to generate monetary value estimates of ecosystem services specifically. The article provides guidance for conducting such benefit transfers and summarizes advancements in benefit transfer methods, databases and analysis tools designed to facilitate its application.

The Effects of Changing Cost Vectors on Choices and Scale Heterogeneity

Choice Experiments (CE) are widely used to estimate the values of changes in non-market goods and services. A cost attribute is typically included in a CE questionnaire to enable the estimation of monetary values for changes in the non-market attributes presented. Notwithstanding the central importance of the cost attribute, relatively little research has been undertaken on the impacts of varying cost attribute levels on value estimates, or on individual heterogeneity. In this paper, I present results from mixed logit and generalised mixed logit models that account for unobserved idiosyncratic preference and scale heterogeneity. Respondents are found to anchor their choices on the relative cost levels presented in the survey with results suggesting that people are more sensitive to relative rather than absolute cost vectors. However, the higher cost levels do not lead to significantly higher value estimates, partly because of observed preference heterogeneity towards the environmental attributes. An important observation is that scale heterogeneity is important: accounting for scale— as well as preference—heterogeneity in the generalised mixed logit model leads to significantly improved model fit. The results indicate significant unobserved error variance across respondents, unrelated to whether a high or low cost vector is used.

Health Effects Associated With Passenger Vehicles: Monetary Values of Air Pollution

ABSTRACT Air pollution is regarded as one of the highest priorities in environmental protection in both developed and developing countries. High levels of air pollution have adverse effects on human health that might cause premature death. This study presents the monetary value estimates for the adverse human health effects resulted from ambient air pollution. It aids decision makers to set priorities in the public health relevance of pollution abatement. The main driver of policymaker is the need to reduce the avoidable cardiopulmonary morbidity and mortality from pollutant exposures. The monetary valuation involves 2 steps: (i) relate levels of pollutants to mortality and morbidity (concentration-response relationships) and (ii) apply unit economic values. Cost of air pollution associated with passenger vehicles running over a major traffic bridge (6th of October Elevated Highway) is presented as a case study to demonstrate the use of monetary value of air pollution. The study proves that the cost of air pollution is extremely high and should not be overlooked.

Monetary valuation of salinity impacts and microbial pollution in the Olifants Water Management Area, South Africa

This paper estimates costs associated with water pollution in the Olifants River Water Management Area (WMA) in South Africa, and, more specifically, the area represented by the Loskop Dam Water User Association. We focus on the impacts of salinisation on commercial irrigated agriculture, and of microbial pollution on the general population of the WMA, many of whom do not have access to municipal water and sanitation services, leaving them vulnerable to microbial pollution inthe water resource. Costs associated with salinity are estimates based on the impacts of increased salinity on the value of marginal product of certain irrigated crops. Costs associated with microbial pollution are estimated based on the direct and indirect costs of human health impacts as a result of microbial pollution in the study area. These monetary value estimates give an indication of the magnitude of the cost of water pollution to society in the WMA. It is concluded that the once-off cost required to provide some pollution prevention infrastructure will be lower than the current annual cost burden of pollution on society in the WMA, and that pollution prevention is therefore cost effective.

Les services écosystémiques des forêts et leur rémunération éventuelle

Forest ecosystem services, particularly those that do not give rise to commodity transactions, have been extensively studied in the last fifteen years so as to characterise, quantify and estimate their monetary value. These studies yield very diverse estimates due to the different types of forests studied, the methods of evaluation used and the content itself of the notion of ecosystem services. We deal with this latter aspect in Part I of the article. After clarifying the differences between ecosystem services, ecological services and environmental services, we show that the notion of “benefits derived from ecosystems”, which is often used to deal with economic assessments of services, in fact covers, particularly in man-managed ecosystems such as temperate forests, contributions that derive both from “ecological capital” and “human capital”. We conclude by underlining, on the one hand, the practical relevance of these distinctions and, on the other, the complexity of the relations between these ecosystem services and biodiversity. Part II presents a summary of available monetary value estimates for services provided by French forests. This summary places special emphasis on the importance of regulation services (carbon fixation, influence on the water cycle and the quality of the water resources, erosion control, etc.) in spite of the fact that we do not currently have estimated monetary values for all of these services. Cultural values, namely recreational ones, also appear on average to be more significant than timber production. In total, all the services evaluated are thought to represent some five times the value of timber production alone. However, this average estimate provides just an order of magnitude for the importance of these services; not only does it integrate just some services and considers use values alone, it furthermore needs to be developed so as to take into account the diversity of local contexts, be they ecological or socio-economic. In Part III, we broach the issue of possible payment ecosystem services; after describing the various possible uses (which in practice are rarely encountered) for these economic assessments of the services, we detail the concept of “payment for ecosystem services” (PES) which can be construed either as a general principle for action (the legitimacy of compensating a service provider in one way or another), or as a specific economic and legal instrument (e.g., and according to the more common definition, as a voluntary, explicit contract setting out the conditions of payment of one or several beneficiaries and one or several suppliers of services who are named). We stress the fact that the number of cases that follow the second definition is very small in practice. Two case studies relating to tropical forests in Costa Rica and Indonesia are then presented, leading us to the conclusion that the evaluation of PES is the outcome of multiple economic, social and political considerations that very rarely include the estimated monetary values of these services as presented in Part II. The concluding section reviews the various controversies relating to economic assessment and the possibility of paying for ecosystem services. It is suggested that a clear distinction should be made between the realms of legitimacy, feasibility and, finally, of applicability. Emphasis is placed on the fact that the road towards effective compensation for these services is no doubt still a very long one.

An assessment of the non-market value of the ecosystem services provided by the Catalan coastal zone, Spain

A spatial value transfer analysis was performed to generate baseline estimates of the value of ecosystem services in the coastal zone of Catalonia, Spain. The study used the best available conceptual frameworks, data sources, and analytical techniques to generate non-market monetary value estimates that can be used to identify scarce ecosystem services among competing coastal uses. The approach focused on natural and seminatural, terrestrial and marine systems, which provide essential services that are not considered in current economic markets. Results show that in 2004 a substantial economic value of $3,195 million USD/yr was delivered to local citizens by surrounding ecosystems. In a spatially explicit manner, the approach illustrates the contribution made by natural environmental systems to the well being of communities in the coastal zone of Catalonia. It is hoped that this study will highlight the need to consider these coastal systems in future management strategies to ensure their proper maintenance and conservation.

Erratum: Economic analysis of health effects from forest fires

A computational error has been discovered in the way that threshold levels were incorporated in the calculation of the health impacts and the associated calculation of conservative levels of health and monetary impacts. This resulted in an overestimate of the effects; the corrected effects are approximately 25% of the original estimates. Table 3 presents the results with the correct incorporation of the 30 mg/m3 threshold (no health effects below this level) and is the set of mean estimates from the simulation with only acute (particularly minimum mortality risk) levels of health impacts and the distribution of monetary value estimates as described in the paper. The range of these estimates for the monitoring station results are ($5.1 million 10th percentile) to ($1.7 million 90th percentile), while the range for the smoke dispersion models are ($3.8 million 10th percentile) to ($1.2 million 90th perecentile). These values represent the most conservative estimates on thresholds and health risks. In comparison, if a typical ambient baseline level of PM2.5 of 12 mg/m3 were used in the calculation, then total impacts would be estimated at $4 421 703 for the smoke dispersion model and $5 064 438 for the monitoring station model. The results place the impact of air quality changes at approximately the same level as the lost homes and buildings and damages to bridges (Table 4 in the paper), but much lower than the loss in timber supply. Qualitatively, the conclusion that air quality impacts can be potentially significant as a portion of impacts from fire remains. The authors express regret for any inconvenience caused by this error and apologize for any difficulties this has caused. The first two authors accept full responsibility for the error. Table 3. Mean values of health impacts related to increased PM2.5 levels from the Chisholm Fire on 24 May 2001.

Economic valuation of biodiversity: sense or nonsense?

This paper critically evaluates the notion and application of economic, monetary valuation of biological diversity, or biodiversity. For this purpose four levels of diversity are considered: genes, species, ecosystems and functions. Different perspectives on biodiversity value can be characterized through a number of factors: instrumental vs. intrinsic values, local vs. global diversity, life diversity vs. biological resources, etc. A classification of biodiversity values is offered, based on a system of logical relationships among biodiversity, ecosystems, species and human welfare. Suggestions are made about which economic valuation methods can address which type of biodiversity value. The resulting framework is the starting point for a survey and evaluation of empirical studies at each of the four levels of diversity. The contingent valuation method is by far the most used method. An important reason is that the other valuation methods are unable to identify and measure passive or nonuse values of biodiversity. At first sight, the resulting monetary value estimates seem to give unequivocal support to the belief that biodiversity has a significant, positive social value. Nevertheless, most studies lack a uniform, clear perspective on biodiversity as a distinct concept from biological resources. In fact, the empirical literature fails to apply economic valuation to the entire range of biodiversity benefits. Therefore, available economic valuation estimates should generally be regarded as providing a very incomplete perspective on, and at best lower bounds, to the unknown value of biodiversity changes.