1 An overview of the potential of environmental valuation to inform protected area management. Dr Mike Christie University of Wales Aberystwyth ICS-UNIDO workshop ‘Protected area management in Mediterranean coastal areas: the importance of wildlife refugia and corridors within an urban and industrial landscape’ Tunis, 11 – 13 September 2006.

2 Overview Background Overview of environmental valuation methods Case study: choice experiment valuation study of UK biodiversity Conclusions

3 Background 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.

4 Background 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 …

5 Environmental 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.

6 Total Economic Value

7 Environmental 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

8 Case study: Valuing UK biodiversity using 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),

9 Choice 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).

10 Example of choice task POLICY OPTION A POLICY OPTION B DO NOTHING (Biodiversity degradation will continue) Familiar species of wildlifeRare 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 Habitat (species interaction) Habitat restoration Wildlife 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 increase You 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

11 Choice 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.

12 Survey 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

13 Choice 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)

14 CE results: Attribute βValue Familiar species (rare) * £35 Familiar species (rare and common) * £93 Rare unfamiliar species (slow down decline) * -£46 Rare unfamiliar species (recovery) * £115 Habitat (restoration) * £34 Habitat (creation) * £61 Ecosystem services (human impact) 0.19 * £53 Ecosystem services (all) 0.15 * £42 Price * Pseudo R 2 14% N (Individuals) 343

15 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)

16 How can the CE results be used to 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.

17 ‘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.

18 Thank you for your attention. Any Questions