1. Determining and Scaling Habitat Services
Natural Capital Meeting
April 20, 2009
Wilmington, DE

2. Overview of Presentation
Habitat service flows
HEA as scaling tool
Metrics used in HEA

3. Habitat Equivalency Analysis (HEA)

4. Habitat Service Flows B C A Time Resource Services Compensatory
Interim Lost
Services
Resource Services B
Baseline
Service C
Level A
Time
Incident
Primary
Compensatory
Restoration
Begins
Full Natural
Restoration
Recovery
Begins

5. Brief History of Habitat Equivalency Analysis
Originally developed in 1992 to quantify damages associated with oiled wetlands
Applied to cover injuries due to chronic contamination, spills and vessel groundings in variety of habitats
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6. When to Consider Use of HEA
When values per unit of replacement services and lost services are comparable (same type, quality, comparable value) or value differences are known
When definition of injury and benefits using a common metric is possible
Metric defines the injury more specifically and becomes the basis for restoration
When replacement of habitat/resource services feasible
When replacement methodology is sufficiently understood to determine model parameters
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7. Graphical Representation of HEA

8. HEA Methods Measuring Resource Services Discounting Through Time
How big are areas A and B?
Discounting Through Time
How do we compare A and B despite differences in the timing of service flows?
Resource-to-Resource Conversions
How do we compare A and B when the resources are different?

9. HEA Steps Quantify injury (loss) Determine discount rate
Determine shape of path and time to recovery
Identify/evaluate/select compensatory restoration alternative
Determine parameters for compensatory restoration
Compute total discounted measure of lost service flows (debit)
Compute total discounted measure of services provided by compensatory project (credit)
Calculate size of compensatory project

10. Measuring Resource Services
Losses from injury and gains from restoration must be quantified
Metrics may be selected to represent resource function
E.g., stem height and density of Spartina in an oiled or restored marsh; abundance of benthic organisms in contaminated sediments
Injury may be quantified directly (e.g. bird mortality)

11. Importance of Metrics For Assessment
HEAs simplify very complex ecosystems
Properly implemented HEAs based on metrics that are highly correlated with most relevant resource services for that case
Critical HEA parameters, such as recovery, maturity and relative productivity only make sense in context of specific metric
Common metrics include:
Percent vegetative cover, short-shoot density, benthic biomass, species abundance, etc.

12. Measures vs. Metrics
Two hypothetical wetlands - each 100 acres and each with an expected lifespan of 50 years
Both wetlands will provide 5,000 acre-years of services over their lifespans (undiscounted)
Only in the context of metrics can we talk about the relative services
that each marsh actually provides

13. Array of Possible Metrics for Marshes

14. Factors Influencing Metric Choice
Nexus with relevant injured and restored services
Appropriate metric may differ by case, even for the same type of habitat
Ability to quantify
Cost of quantification
Sampling methods required
e.g., destructive vs. non-destructive

16. Discounting Over Time
Since multiple time periods involved, need to consider discount rate
Also known as rate of time preference – describes preference for present use vs future use
Method for putting all measurements (dollars or DSAYs) into present value terms

17. Discounted Service Flows
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18. Summary
HEA used to scale services lost from injury to services gained from restoration
Can be used to scale differences in services between existing and future scenarios
Choice of metric important
Other valuation methods for human uses of natural resources

19. Questions?

20. Extra Valuation Slides

21. Stated Preference Methods

22. Stated Preference Techniques
Unlike HEA, can directly address issue of resource value
Used in Value-to-Value and Value-to-Cost Approaches
Focuses on most important resource characteristics
Commonly applied in market and non-market settings (e.g. product development and resource valuation)
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23. Sample Survey Question

24. Obtaining an Estimate of Value
Econometric model fits payments and environmental characteristics to a statistical distribution
Loss can be expressed in monetary terms, or in units of required restoration
A variety of potential restoration scenarios can be evaluated
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25. Revealed Preference Methods

26. Scaling Recreational Services
Travel Cost Models estimate the value of recreational sites and site characteristics
Exploit analogy to market behavior
Price, Quantity, Consumer Surplus
Benefits Transfer borrows information from previous analysis
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27. The Travel Cost Method Recreation Site
If people drive 75 miles to get to a resource, and the cost of driving is $1.00 per mile in time and expense, the trip must be worth at least $150
75 miles
Recreation Site
Those who travel only 25 miles are getting surplus value of $150 – $50 = $100.
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25 miles

28. The Travel Cost Demand Curve
Consumer Surplus
Price
Recreation Site 50 25 3
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Quantity
50 miles
75 miles
Price = ƒ(distance) = Out-of-Pocket Travel Cost + Time Cost

29. Obtaining an Estimate of Value
Estimate consumer surplus values for many sites
Compare (using regression analysis) site values to site characteristics
Estimate value of characteristics (e.g. urban environment, fish consumption advisories)
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30. Benefits Transfer Previous studies are applied to new problems
Some measure of impact at the affected site is required, usually involving observed levels of recreational activity
Important to consider characteristics of site where value/parameter obtained and methods used
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