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An overview of the potential An overview of the potential of environmental valuation to of environmental valuation to

inform protected area inform protected area management.management.

Dr Mike ChristieDr Mike ChristieUniversity of Wales AberystwythUniversity of Wales Aberystwyth

ICS-UNIDO workshop ‘Protected area management in Mediterranean coastal ICS-UNIDO workshop ‘Protected area management in Mediterranean coastal areas: the importance of wildlife refugia and corridors within an urban and areas: the importance of wildlife refugia and corridors within an urban and

industrial landscape’industrial landscape’Tunis, 11 – 13 September 2006.Tunis, 11 – 13 September 2006.

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OverviewOverview

• Background

• Overview of environmental valuation methods

• Case study: choice experiment valuation study of UK biodiversity

• Conclusions

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BackgroundBackground

• The Mediterranean coastal fringe is host to a wealth of important wildlife and natural areas.

• However, these areas are under increasing pressure from tourism, industrial development and urban expansion.

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BackgroundBackground

• Policy makers and planners need to make informed trade-offs between:– the tangible benefits associated with economic

development• Accounted for in traditional economic theory in terms of

market prices and income and job creation.

– the intangible benefits (such as biodiversity protection) that are derived from natural resources.

• Traditional economic markets tend to fail to account for natural resources. Other approaches required to assess this …

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Environmental valuationEnvironmental valuation• Although there is often market failure (and therefore no

market price) for natural resources

• … people do attain utility (value) from natural resources, e.g. people like to watch wildlife, or benefit from ecosystem services.

• It is important that we account for these values when we make decisions about natural resources.

• Environmental valuation aims to measure the ‘consumer surplus’ (i.e. value) of environmental goods and services.

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Total Economic ValueTotal Economic Value

c ro psm e at

tim b er

M a rke te d O utp u ts

re c rea tionla nd sacpe

lo ca l cu ltu re

U n p rice d B e n e fits

D ire c t u se va lu es

flo o d con tro lca rbo n s to ra ge

w a ter ca tch m e nt

B e ne fits

E co lo g ica l fun c tion va lu es

U se va lue

fu tu re d ru gsp o te n tia l ge ne po o lre c rea tion o p tio ns

B e ne fits

O p tion va lu es

sa tis fa c tionfro m kn o w le d ge

o f ex is ten ce

B e ne fits

E x iste n ce va lu es

p a ssin g b e ne fitsto fu tu re

g e ne ra tio ns

B e ne fits

B e qu e st va lu es

N o n -u se (p a ssive use ) va lue

T o ta l E co no m ic V a lue

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Environmental Valuation TechniquesEnvironmental Valuation Techniques

• ‘Revealed’ preference approaches.• Observes actions within surrogate markets (travel, house

prices) taken in response to environmental change.• Largely restricted to ‘use’ values• Examples: Travel Cost Method, Hedonic Price Method.

• Stated preference approaches.• Attempts to elicit preferences by experiments or questionnaires• May estimate both use and passive use values• Examples: Contingent Valuation Method, Choice

experiments.

• Combined approaches• Draws on the benefits of the above approaches• Examples: Contingent behaviour

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Case study: Valuing UK biodiversity Case study: Valuing UK biodiversity using choice experimentsusing choice experiments

• DEFRA funded project to value the attributes of biological diversity.

• Christie M, et al. (2006) Valuing the diversity of biodiversity Ecological Economics. 58(2), 304-317.

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Choice experimentsChoice experiments

• A survey based, stated preference valuation technique.

• Respondents are asked to choose from a series of three policy options: A, B, SQ

• Each option is described in terms of policy attributes and levels (including a price attribute).

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Example of choice taskExample of choice taskPOLICY OPTION

A

POLICY OPTION

B

DO NOTHING(Biodiversity

degradation will continue)

Familiar species of wildlife Rare familiar species protectedRare familiar species

protected

Continued decline in the populations of familiar

species

Rare, unfamiliar species of wildlife

Recovery of rare species to non-threatened status

Continued decline in the populations of rare, unfamiliar species

Continued decline in the populations of rare, unfamiliar species

Habitat (species interaction)

Habitat restorationWildlife habitats will continue

to be degraded and lostWildlife habitats will continue

to be degraded and lost

Ecosystem process

Continued decline in the functioning of ecosystem

processes

Only ecosystem services that have a direct impact on

humans, e.g. flood defence are restored.

Continued decline in the functioning of ecosystem

processes

Annual tax increaseYou will pay an extra

£80.00 tax annually over a 5 year period

You will pay an extra

£20.00 tax annually over a 5 year

period

Your tax bill will not be increased

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Choice experimentsChoice experiments

• A survey based, stated preference valuation technique.

• Respondents are asked to choose from a series of three policy options: A, B, SQ

• Each option is described in terms of policy attributes and levels (including a price attribute).

• Attribute and levels are assigned using a main effects orthogonal experimental design

• MNL analysis of respondent choices enables values to be estimated for each policy attribute and level.

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Survey administrationSurvey administration

• Survey of 800 households: Cambridge and Northumberland.

• MS PowerPoint presentation (25 minute) – Introduced the concept of biodiversity– Introduced attributes of biodiversity – Description of biodiversity in case study areas

• Respondents then presented with a series of 5 choice tasks

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Choice experiment attributes and levelChoice experiment attributes and level• Familiar species of wildlife

– Rare– Rare and Common

• Rare, unfamiliar species of wildlife– Slow down decline– Recover to stable populations

• Habitat (species interactions)– Restoration– Creation

• Ecosystem services– With human impact– All services

• Tax (7 levels)

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CE results:CE results:Attribute β Value

Familiar species (rare) 0.126* £35Familiar species (rare and common) 0.331 * £93Rare unfamiliar species (slow down decline) -0.165 * -£46Rare unfamiliar species (recovery) 0.408 * £115Habitat (restoration) 0.122 * £34Habitat (creation) 0.217 * £61Ecosystem services (human impact) 0.19 * £53Ecosystem services (all) 0.15 * £42Price -0.004 *

Pseudo R2 14%N (Individuals) 343

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What do the CE results tell us?What do the CE results tell us?

• Is there evidence that people value biodiversity?– Only 15% of CE respondent chose ‘Do nothing’

• What aspects of biodiversity do people most value?– CE provides evidence that people care about:

• Common and rare familiar species, • Rare unfamiliar species (but not a ‘slow down in decline’), • Habitat restoration and re-creation, • Ecosystem services which have direct impact on humans

(but not those which do not affect humans)

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How can the CE results be used to How can the CE results be used to inform policy?inform policy?

• The CE provides monetary valuations of the benefits arising from natural resources.

• These values are directly comparable with market values.

• These values can (and should) be incorporated in cost benefit analysis.

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‘‘Take home message’Take home message’

• There are a suite of environmental valuation techniques available to elicit the ‘intangible’ costs and benefits associated with natural resources.

• Estimating the economic value of protected areas in the Mediterranean will help to:– Demonstrate that these protected areas are valued by people;– Through cost benefit analysis, allow policy makers / planners to

directly compare the economic value of protecting natural areas with other economic development options.

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Thank you for your attention.

Any Questions