Economic valuation of goods and services

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Gas and climate regulation

Gas and climate regulation by photosynthetic fixation of carbon dioxide is of particular socio-economic importance because of climate change. The Isles of Scilly were used as a case study to value this service. Net annual carbon photosynthetic fixation values were estimated by mapping habitats of keystone species of seaweed and seagrass. Their productivity (O2 fixation) was estimated using literature data as well as remote sensing methods. The economic value of this service was then estimated. An adjacent Atlantic Ocean comparison site was used to indicate the relative importance of island biodiversity to this marine service. The Isles of Scilly were approximately twice as productive as the Atlantic Ocean region, fixing 136.495 ton C per year with a mean net present value of €59.109.529, while that of the Atlantic Ocean region was calculated to be €28.641.727[1].

Disturbance prevention

The role of coastal wetlands as buffer zones against waves and storms has been quantified and valued using two sets of methods: a) a valuation method (Contingent Valuation Method) using coastal householders’ willingness to pay to conserve salt marshes and mudflats, and b) a preventative cost method focusing on the savings made in sea defence construction.

An economic value for the sea-defence role of wetlands was obtained as well as indications that householders preferred natural sea-defences and are willing to pay to conserve them[1].

Bequest and existence

The value that people place on the existence of European marine biodiversity was assessed across four European sites. The monetary value of marine biodiversity was indirectly assessed by asking respondents their willingness to pay (WTP) to avoid reductions in abundance (10% and 25% of current levels) of various marine taxa including mammals, birds, fish, invertebrates and algae. A total of 1.732 face-to-face interviews were carried out in the Azores, Isles of Scilly, Flamborough Head and Gulf of Gdansk.

There were only small differences in the willingness to pay for different taxa. Mammals and fish were valued more highly than birds, invertebrates or algae. These results show that the general public do value marine biodiversity and, surprisingly, suggest that: charismatic animals do not have a disproportionately strong influence on human preferences for biodiversity conservation.

There are demographic differences in the value placed on marine biodiversity, and MarBEF research is exploring this further[1].

Goods and services

A goods and services approach was used to determine the economic value of marine biodiversity in the UK and to provide supporting evidence of a need for new UK marine legislation[2].

Economic valuation of goods and services provided by UK marine biodiversity.

The goods and services resulting from marine biodiversity in UK waters were detailed, including the habitats and species which provide them, and the likely impact of a decrease in biodiversity. Each service was valued (see figure), where possible, in monetary terms. The problems with monetary valuation were recognised. For example, nutrient cycling was valued through replacement, yet this service cannot in reality be replaced, so the very large value was unrealistic.

The aim of this valuation process was not to determine a single value for UK marine biodiversity, but to detail current knowledge, focus future research and clarify the role of valuation in conservation of marine biodiversity. The strength of the UK goods and services valuation data lies in its capacity to raise awareness of the importance of marine biodiversity. This valuation data, however, should only be used alongside the qualitative information and with a clear understanding of the associated limitations. Descriptive text for each of the goods and services is as important as the monetary data, and clarifies the linkages between biodiversity and the provision of these functions in UK coastal and shelf waters.

A decline in UK marine biodiversity could result in a varying and, at present, unpredictable change in the provision of goods and services. This could result in severe impacts on society and the economy, including reduced resilience and resistance to change, declining marine environmental health and water quality, reduced fisheries potential, loss of recreational opportunities, decreased employment and reduced carbon uptake. Effective management of marine biodiversity is critical to ensure the continued supply of goods and services[1].

All of these marine plants and animals contribute to the production of the food we have on our tables.

Related articles

Governance policies for a blue bio-economy
Valuation and assessment of biodiversity
Contingent Valuation Method
Non-use value: bequest value and existence value
Ecosystem services
Blue carbon sequestration
Seaweed (macro-algae) ecosystem services