Give us feedback


www.tide-project.eu

Project part-financed by the European Union (European Regional Development Fund)

The Interreg IVB North Sea Region Programme


Disclaimer:
The authors are solely responsible for the content of this report. Material included herein does not represent the opinion of the European Community, and the European Community is not responsible for any use that might be made of it.
Back to overview TIDE tools



10-step approach for ecosystem services valuation

Since economic values are very context dependent, for each decision-making situation original data on ecosystem services and their economic values should be collected. That is, however, very time and money consuming.

A ten-step approach is developed as guidance to estimate the value of the ecosystem services impacted by a restoration project in an estuary. A set of indicators help assess the impact on estuarine nature. This is helpful to make the value of ecosystem services more clear for communication but also to take them into account in decision support tools.

1. Who is the guidance aimed at?

The guidance document can help water managers and other people working in an estuarine environment (local authorities, city regions, local enterprise partnerships, port authorities, non-governmental organisations) to estimate the ecosystem services delivered in estuaries and how this can be influenced by infrastructure works or restoration projects.

2. Why was it developed?

“Biodiversity policy is not a new field. In recent decades, nearly all countries have adopted targets and rues to conserve species and habitats. Despite this progress, the scale of the biodiversity crisis shows that current policies are simply not enough” (TEEB, 2011)

A root cause of this biodiversity crisis is the neglect that biodiversity and ecosystems can be characterized as public goods:

  • Their benefits take many forms and are widespread.
  • Existing markets and market prices only capture a minor part of these benefits.
  • The cost of conservation and restoration has to be paid immediately often at local level, whereas many benefits occur in the future and occur at a different spatial level.

There is a need to make the value of ecosystem services more clear for communication but also to take them into account in decision support tools.

Since economic values are very context dependent (both in time and space), preferably for each decision-making situation original data on ecosystem services and their value should be collected. This is however very time and budget consuming. Often, the only realistic way to estimate the full economic consequences of planned changes in ecosystems (e.g. forest-conversion into plantations, mangroves into shrimp-farms or wetlands into farmland) is to use proxy data from areas that are ecologically comparable and have a similar socio-economic context through so-called benefit transfer techniques.

This guidance document provides a set of indicators to help assess the impact on services estuarine nature delivers and to translate this information into policy applications and decision support tools such as a cost-benefit analysis. 

3. Using the guidance

A number of steps need to be taken when you use this guidance document. These steps are reflected in the flowchart below.

Table 3: Flowchart steps in the valuation process

Preparation

Step1: Identification of the project

User guide 4.3.1

Step 2: Identification of current land use project area

User guide 4.3.2

Step 3: Identification of future land use of project area and changes within same landuse

User guide 4.3.3

Step 4: Selection of relevant ecosystem services

User guide 4.3.4 + Table 6

 

 

 

Valuation

Step 5: Gather input data needed for the calculation of relevant ecosystem services

User guide 4.3.5 + x.x.1 of every relevant ecosystem service

Step 6: Identification: qualitative analysis: provides qualitative assessment

User guide 4.3.6 + x.x.2 of every relevant ecosystem service

Step 7: Quantification:
Provides quantitative assessment of effects (e.g. hectares of habitat, tonnes of carbon).

User guide 4.3.6 + x.x.3 of every relevant ecosystem service

Step 8: Monetary valuation:
Estimate annual environmental cost or benefit in €/year

User guide 4.3.6 + x.x.4 of every relevant ecosystem service

 

 

 

Policy application and
reporting

Step 9: Apply results as part of an environmental impact assessment or cost-benefit analysis

User guide 4.3.7.

Step 10:
Make the assessment of economic value available to the wider decision-making process.

User guide 4.3.8

 

Phase 1: Preparation

Step 1: Identification of the project

Ask yourself the following questions.

My project has:

  • a direct positive or negative effect on estuarine ecosystems? Examples include the destruction, fragmentation or creation/restoration of wetlands.
  • an indirect (positive or negative) effect on estuarine ecosystems? Example effects include disturbance, drainage, impact on the aesthetic value.

If the answer is yes to one of these questions, it makes sense to estimate the impact on ecosystem services and to proceed to step 2.

Step 2: Identification of current land use (ecosystems) of the project area

If the project has an effect on the estuarine ecosystem, find information on the different types of land use situated in the study area in hectares for each land use class.

Table 4: Land use classes (ecosystems)


Land use class

description

Marshes

above mean high water (MHW)

Intertidal steep habitat

Between MHW and MLW, slope > 2.5%

Intertidal flat habitat

between MHW and MLW, slope < 2.5%

Subtidal shallow

between MLW and 2m beneath MLW

Subtidal moderately deep

between 2m and 5m beneath MLW

Subtidal deep

>5m beneath MLW

Agricultural (cropland, pasture)

 

Build-up area

 



 

Chlorinity

Salinity

Fresh water zone

 

 < 300

mg/l

 

 < 0,5

PSU

Oligohaline zone

300

3000

mg/l

0,5

5

PSU

Mesohaline zone

3000

11000

mg/l

5

18

PSU

Polyhaline zone

11000

18500

mg/l

18

30

PSU

Habitat categories were derived from physical maps of elevation and tidal prism in each estuary. Six habitat types were distinguished and described (see report “Comparison of Hydrodynamics and Salinity of TIDE Estuaries”). This allows to btain a common habitat definition along the estuaries and salinity gradient. Salinity zones were defined in four zones: freshwater zone, oligohaline, mesohaline and polyhaline zone based on the Venice approach as discussed in TIDE (Geerts et al. 2011).

We only mention here agricultural and build-up area next to the land classes in estuaries defined in TIDE. If an estuarine habitat is restored it may be possible that other more natural land use classes (e.g. forest) will be replaced by the estuarine nature. The supply of some ecosystem services will change or even get lost. We advise to look into manuals on ecosystem services of terrestrial habitats to take these changes into account. For Flanders, Belgium we refer to “the Nature Value explorer”, a webtool to explore the value of ecosystem services of different ecosystems (www.natuurwaardeverkenner.be). 

Step 3: Identification of future land use of the project area

Map how the land use will change after the project in hectares of each land use class. Which land uses disappear, which ones are new.

It is also possible that the project does not change the land use as such but influences some underlying parameters such as groundwaterlevels. In this case identify the chemical and biological processes that might be influenced.

Step 4: Selection of relevant ecosystem services

If a project impact estuarine ecosystems somehow, it also will affect the ecosystem services the study area provides. Ask yourself the following questions:

  • Which ecosystem services are delivered given the present land?
  • Which ecosystem services are influenced (positive or negative) by the project.
  • Which ecosystem services will be delivered considering the new land use?

To find an answer on these questions it is best to discuss with experts which relevant ecosystem services will be affected. This can be performed qualitatively using check lists. Table 4 gives a first indication on what ecosystem services are relevant for which estuarine land use class. 

We do not include supporting services as their impact is also reflected in other services.



Phase 2: Calculation

Step 5: Gather information needed for the calculation

Under the title “information needed” in every chapter in this guidance document dealing with specific ecosystem services the user will find which data to collect. This information reflects the underlying bio-physical factors that influence the service delivery.

While collecting this information for the present state, the user should also try to estimate the future state of these parameters e.g. lower groundwater level, accessibility for recreation...

Step 6-7-8: Calculation of qualitative, quantitative and monetary value

Methodologies to perform the calculation are described in this guidance document underneath every chapter dealing with specific ecosystem services.

We distinguish between qualitative, quantitative and monetary valuation methodologies.

The qualitative assessment is based on expert judgement. Data on relevance and importance of certain ecosystems for specific ecosystem services are collected in a TIDE survey (Jacobs et al. 2013). The following question was posed: Question: “How important is a certain habitat in a certain zone of the estuary for the supply of a certain ES?”

Score

Habitat has…in supply of ES

1

no importance

2

very low importance

3

moderate importance

4

Importance

5

Essential importance

The quantitative and monetary data are based on literature review for different ecosystem services in estuarine habitats. In this guidance we shortly explain the processes leading to the supply of the ecosystem service. More details are found in the separate TIDE-reports on specific ecosystem services or if such report was not available in attachment to this guidance.

As it is not always easy to find the necessary input data on biophysical parameters, we also give values per hectare applied in the international literature. These values are based on meta-analysis of different valuation studies on estuaries in the world. These values however hardly take into account local characteristics and should only be used for very rough first estimations.

Phase 3: Policy application and reporting

Step 9: Apply the results in e.g. a cost benefit analysis

Cost-benefit analysis (CBA) is an applied economic tool often used to guide economic agents in resource allocation or investment project decisions or policy alternatives. It is a technique that is used to estimate and sum up (in present value terms) the future flows of benefits and costs of society's resource allocation decisions or policy alternatives to establish the worthiness of undertaking the stipulated activity or alternative, and inform the decision maker about economic efficiency. (Balana et al., 2011)

Including the impact on ecosystem services is particularly useful to assess the impact of multi-purpose projects. By quantifying and valuing the different services these projects deliver, a better view can be obtained on the wider impact instead of the impact on a single environmental issue.
The calculations in this guidance are yearly benefits. To use it in a cost-benefit analysis we need to calculate the net present value. This is done by defining a time horizon (depending on the project with a maximum of 250 year) and a discount rate. Discounting is the practice of attaching a lower weight to future costs and benefits. There are different views about what an appropriate discount rate for nature benefits should be. We advise an discount rate between 2.5% and 5% with 4% as the central value. Some argue that it should be lower (see TEEB foundations, 2010).

Step 10: Reporting

The numbers in this guidance are a first rough estimation of the benefits of estuaries. Quantifying the different effects in detail depends on site-specific circumstances and requires tailor-made research and calculations. It is therefor important to report the constraints of the valuation exercise. Attention should be paid to: (i) uncertainty concerning estimates of environmental effects (e.g. timing, magnitude and significance); (ii) assumptions embodied in estimates of the relevant population; (iii) assumptions entailed in the transfer of economic values or functions; (iv) the potential significance of any incomplete information or non-monetised impacts, and (v) caveats associated with the resulting value estimates.