Estimating non-market values across scale and scope John Rolfe

Participants Project run by Central Queensland University –John Rolfe, Jill Windle, Xuehong Wang & Galina Ivanova Collaboration with –Jeff Bennett (ANU) –Riccardo Scarpa (Waikato, NZ) –Kathleen Broderick & Ingrid van Puten (GBRMPA)

Economic valuation Used to assess how important different issues are to people Market transactions are easy to value – we look at the monetary tradeoff revealed in markets Many tradeoffs are harder to value –Environmental issues –Recreation –Social and community tradeoffs

Non-market valuation techniques Revealed preference techniques –Travel Cost Method used to assess values for recreation Example – value per recreational fishing trip Stated preference techniques –Can be used to assess non-use and use values –Give people scenarios with a potential cost and ask them to ‘state’ their tradeoff –Contingent valuation –Choice Modelling

Choice Modelling Presents people with a series of tradeoffs about issue in question Tradeoffs described in terms of key attributes Normally add a cost component as well Identify if people are willing to pay for additional improvement or protection Tradeoffs presented in a survey format

The policy needs Choice Modelling studies are slow and expensive to perform Often easier to transfer values from other studies Process known as Benefit Transfer –Prospector approach –Systematic database –Combination of previous studies

How to make Benefit Transfer more accurate There are four main strategies –Increase the pool of non-market valuation studies –Increase the accuracy and understanding of the conducted studies –Develop better systematic BT case studies –Improve the use of BT tools and databases

Issues with Benefit Transfer How easy is it to take values that have been estimated in one particular context and transfer them to another application? Scale issues – do values change according to the amount of an asset involved? –Small patch, large patch, regional area Scope issues – do values change according to the types of tradeoffs involved? –Forest versus forest + animals + birds Management issues – do values change according to the types of management actions taken?

Case study - GBR Major biodiversity and recreation icon Large scale –extends along most of Qld Coast (4 main sections), –2900 different reefs, –about 6% of area covered by reef Extensive scope –Different assets – reef, fish, seagrass, mammals –Different areas – reef, beaches, islands, inner+outer –Different uses – biodiversity, fishing, recreation

Valuation challenges Scale challenges –Changes in geographic scope referred to as a scale issue –Can values estimated at larger scale be transferred to smaller scale and vice versa –Whole reef → regional areas → local reefs Scope challenges –Do values for key reef assets (fish + corals) change when more GBR assets are considered? Marine mammals, beaches, seagrass, biodiversity

Working with scale and scope Policy makers often need values at a focused level of scale and scope But communities often find more general tradeoffs easier to make –We want to be able to benefit transfer between different levels –Need ways of conducting studies at different levels of scale and scope and then linking them together –What are key scale and scope issues for GBR?

Some approaches Run split sample experiments at different levels The scale issue –Whole GBR vs Regional GBR vs local areas The scope issue –Include different attributes to check if the ‘coverage’ of issues makes a difference

Some other complexities How values may be sensitive to different levels of uncertainty How values may be sensitive to different types of management actions Options to combine the different information in choice sets

Management actions Four main groups of actions –Improving water quality from agriculture –Restricting fishing (commercial and/or recreational) –Increasing green zones –Climate change mitigation May be important for policy to identify if preferences are sensitive to actions

Risk and uncertainty As soon as there are management actions there should also be information about uncertainty –Uncertainty about whether the nominated actions will lead to improvements Green zones/fishing = low uncertainty Ag. Water quality = medium uncertainty Climate change mitigation = very high uncertainty –Challenge of communicating uncertainty

Testing Test different formats and survey versions Workshops / focus groups Experimental lab (uncertainty issues) Major survey rounds (different cities)