Economic valuation for the conservation of marine biodiversity

Abstract

Policy makers are increasingly recognising the role of environmental valuation to guide and support the management and conservation of biodiversity. This paper presents a goods and services approach to determine the economic value of marine biodiversity in the UK, with the aim of clarifying the role of valuation in the management of marine biodiversity. The goods and services resulting from UK marine biodiversity are detailed, and 8 of the 13 services are valued in monetary terms. It is found that a decline in UK marine biodiversity could result in a varying, and at present unpredictable, change in the provision of goods and services, including reduced resilience and resistance to change, declining marine environmental health, reduced fisheries potential, and loss of recreational opportunities. The results suggest that this approach can facilitate biodiversity management by enabling the optimal allocation of limited management resources and through raising awareness of the importance of marine biodiversity.

Introduction

Policy makers are increasingly recognising the role of a wide variety of economic methodologies, including valuation, to guide, influence and support environmental policy. Economic analysis can help to promote efficient strategies for biodiversity conservation (Bräuer et al., 2006) as the resources available to environmental managers are limited, and the application of valuation techniques can aid their optimal allocation (Baumgärtner et al., 2006). It is therefore not surprising that the current focus on biodiversity issues in policy has been mirrored with an increasing number of economic studies aspiring to value biodiversity.

The valuation of environmental resources began to gain attention in the 1970s, with notable marine examples including Whitehead, 1993, King, 1995, and Costanza (1999). Research effort within this area has gradually increased during the last 30 years and valuation studies now form a staple of the economics literature (Brody and Kealy, 1995, Ecological Economics, 1998, Ecological Economics, 2002) and increasingly the wider natural science literature (Costanza et al., 1997, Daily et al., 2000). Despite their increasing popularity, valuation methodologies are still developing and there remains significant controversy regarding their use (Brito, 2005). Indeed, in the UK the practical application of valuation studies in policy is still yet to be proven. Several reviews have been published detailing the different valuation methods and the associated difficulties of their application (Ledoux and Turner, 2002, Farber et al., 2002). It can be argued that valuing nature is implicit, by both individuals and society, whenever a decision is made about the environment. The use of monetary valuation only formalises this process. Without monetary valuation less apparent ecosystem services, such as nutrient cycling, can be overlooked or considered to be ‘free’ and therefore not considered within management strategies. This can lead to over-exploitation and degradation of the environment.

Valuing biodiversity has proved both difficult and controversial (Christie et al., 2006). A significant amount of literature has been published on the valuation of biodiversity (Barbier et al., 1994, Perrings et al., 1995, Swanson, 1995, Patterson, 1999, Tacchoni, 2000, Nunes et al., 2003, Mendonça et al., 2003, Kettunen, 2006). However, the majority of studies have not valued biodiversity per se, but individual species, habitats or ecosystem services. This misuse of the term biodiversity stems in part from a lack of a standardised quantitative descriptor of biodiversity amongst natural scientists (Sheppard, 2006). The commonly accepted but all encompassing definition of biodiversity is that of the Convention of Biological Diversity ‘…the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems.’ Biodiversity is, however, a truly multidimensional concept (Purvis and Hector, 2000), considered on many different levels from genetic variation between individuals and populations, to diversity of species, assemblages, habitats, landscapes and biogeographical provinces. ‘Biodiversity’ can encompass changes on a microscopic scale, to those spanning thousands of kilometres; many orders of magnitude in difference (Wilson, 1992). Biodiversity will mean different things to different people (Harper and Hawksworth, 1994). For ecologists, different elements of ecosystem goods and services will be dependent variously on the different elements and distribution of biodiversity such as the number and functional attributes of species, taxonomic relatedness of species and distribution of individuals amongst species. For example, is a community with 40 species that is highly dominated in terms of abundance by just two species more diverse than a community of 15 species where individuals are distributed rather evenly among species? To overcome this problem it is essential that economists collaborate more closely with biologists to develop a better understanding of biodiversity and to improve valuation methods. Poor understanding of the natural science by economists can lead to flawed results and the dissemination of inaccurate information (Brito, 2005).

Christie et al. (2006) and Turpie (2003) attempted to value biodiversity through the application of stated preference techniques which capture both use and non-use values of non-market goods and services, such as biodiversity. However, the accuracy of the results is heavily dependent upon the respondents understanding of the environmental good being investigated. The general public has a poor understanding of the term ‘biodiversity’ (Spash and Hanley, 1995, Turpie, 2003) and Defra (2002) observed that 26% of survey respondents had not heard of biodiversity. This does not indicate that the public do not care about biodiversity. To the contrary, Christie et al. (2006) found that the public does have positive values for biodiversity. This low level of understanding is, however, a cause of considerable concern when using a stated preference technique. In addition, Christie et al. (2006) found that the public has stronger preferences for ecosystem functions which directly affected human welfare. Whilst this is expected the result is that ecologically important services, such as nutrient cycling, may be under valued due to a lack of public understanding.

Valuing marine biodiversity suffers the added complication that the marine environment is extremely diverse. Of the plant and animal kingdoms, 32 of the 33 phyla are found in the marine environment; and 15 of these are endemic (Ray and Grassle, 1991). In addition the marine environment is difficult to sample and monitor (Ray and Grassle, 1991). This complexity results in significant limitations in current scientific knowledge of the effects of marine biodiversity on ecosystem functioning. As a result valuation studies have tended to focus on the terrestrial environment. A brief review of marine valuation studies is provided by Ledoux and Turner (2002). Patterson (1999) attempted to place a value on New Zealand’s biodiversity, but omitted a value for the open ocean from their final valuation as marine biodiversity was considered too difficult to value. Pimentel et al. (1997) undertook a study of the economic benefits of biodiversity in the United States, and included no marine examples except fisheries. The research we report here is currently unique in its aim to value marine biodiversity, defined as richness and composition at species and functional type levels.

A wide range of goods and services that are essential for the maintenance of the social and economic wellbeing of our society are supported by marine biodiversity. In a goods and services approach an ecosystem is valued by developing an understanding of the services which it provides (Ewel et al., 1998, Moberg and Folke, 1999, Groot et al., 2002, Millenium Ecosystem Assessment, 2006, Beaumont et al., 2007), and valuing these services in turn (Costanza et al., 1997, Pimentel et al., 1997). Pimentel et al., 1997, Patterson, 1999 took this approach to valuing biodiversity, in the US and New Zealand, respectively. However, both studies include only a selection of services and the examples were predominantly terrestrial.

The aim of this valuation process was not to determine a single value for UK marine biodiversity, but to assess each good and service in a UK context. We aim to investigate the linkages between marine biodiversity and the provision of the service to place an indicative monetary value on each service where possible. This approach is intended to detail current knowledge, provide a better understanding of the research required to value biodiversity, and to clarify the role of valuation in the management of marine biodiversity.