1. 1 Social goods in prairie shelterbelts Surendra Kulshreshtha (Agricultural Economics, University of Saskatchewan, Saskatoon, SK) and John Kort (Agriculture and Agri-Food Canada, Indian Head, SK)

2. 2 Background & need for the study AAFC Shelterbelt Centre at Indian Head has been distributing tree seedlings since 1901 Private goods of shelterbelts are understood (mostly) The social goods are less well known Understanding of external economic benefits due to social goods are important for continued public/private partnership in agroforestry activities and programming

3. 3 Objective of the study To quantify external economic benefits due to the social goods of shelterbelts planted in the Prairie Provinces 1981-2001.

4. 4 Scope of the study Limited to tree seedlings distributed by AAFC’s Shelterbelt Centre over the 1981 – 2001 period Based on a review of studies - no primary research was undertaken Focused on social goods – not private goods

5. 5 Terminology used in the study GoodsNon-economic, beneficial impacts to private individuals or to society BenefitsEconomic value of the goods Social goodsGoods received by members of society (i.e. not the landowner/land manager). Equivalent to external goods Public goodsSocial goods in which all members of society can share Non-public goodsSocial goods from which some members of society are excluded External benefits (externalities) Economic benefits to anyone other than the landowner/ land manager

6. 6 Trend in distribution of tree seedlings 1901-2002 NOTE: Over 576 million tree seedlings have been distributed altogether – 150 million in the 1981-2001 period)

7. 7 Use of trees - 1981-96 Tree useNumber (thousands) Field43,087 Farmstead49,275 Wildlife3,403 Roadside846

8. 8 Two schools of thought Utilitarian / anthropocentric school People derive utility from the use of shelterbelts – therefore they have a value Non-utilitarian / ecocentric school These resources have an intrinsic value The utilitarian/anthropocentric approach was used in this study

9. 9 Utilitarian/anthropocentric values Utilitarian values can be estimated using a Total Economic Value (TEV) framework These values are relevant for policy-makers, since they indicate a contribution to the well-being of individuals / society Social preferences are relevant for policy making, whether or not they can be economically valued

10. 10 Total Economic Value Use valuesNon-use values Type of Value DescriptionType of Value Description Direct Use Values Output directly consumable (food, biomass, recreation, health-related benefits) Bequest Values Values of environmental legacy (habitats, prevention of irreversible changes) Indirect Use Values Benefits from ecosystem functions (flood control, storm protection erosion control, nutrient cycling, watershed protection, water quality) Existence Values Satisfaction from the knowledge of continued existence of shelterbelts (habitats, species, genetic resources, cultural values, ecosystem benefits) Option Values Future direct and indirect use values (biodiversity, conserved habitats)

11. 11 Practical side of TEV Very comprehensive framework Requires resources for surveys and other methods of getting information from members of society For the current study, values were limited to current use (direct and indirect) values (excluding Option Values) The method of Benefit Transfer was used Since many of the functions are not priced in the marketplace, values were approximated by Willingness to Pay (WTP)

12. 12 Taxonomy of benefits Private benefits - benefits to users External benefits - benefits to society (also called “externalities”) Public goods based Non-public goods based

13. 13 What is a public good? Two conditions must be met: No one can be excluded from enjoying the benefits Enjoyment of benefits by one party does not reduce it for others If not, they are non-public goods

14. 14 Example: Benefit identification PrivateExternal - Non-public goods based External - Public goods based Soil erosion by wind If the soil remains on the farm If the soil is deposited in ditches which local government must remove If soil is dispersed widely and general public suffers from effects of dust, i.e. cleaning, breathing problem etc. Field shelter- belt On-farm effects on crop productivity Prevention of snow on roads - lower road maintenance costs Lower traffic accident rates. Health improvement

15. 15 Information needs For estimation of value of social goods from shelterbelts, three sets of information are needed: Nature and scope of activities Nature and magnitude of bio-physical change Society’s valuation of the change

16. 16 Taxonomy of benefits from shelterbelts All benefits from shelterbelts divided into two types: Direct use benefits Indirect use benefits Soil Air Water Biota

17. 17 Source of BenefitsPathwayPublicNon-public Quantified Reduced soil erosionSoilX Reduced greenhouse gas emissionsAirX Protected or enhanced biodiversityBiotaX Energy conservationAirXX Air quality (non-odour)AirX Water qualityWaterX Consumptive wildlife (hunting)BiotaX Bird-watchingBiotaX Not quantified Odour reductionAirX Health impactsOtherX AestheticsOtherX Transportation activitiesOtherX Wastewater managementWaterX Property valuesOther (Economic)X Pesticide driftAir/WaterX

18. 18 Estimated benefits from public and non-public goods

19. 19 PathwaysBiophysical ImpactLevel of Benefits from Public Goods (Mill. $) Level of Benefits from Non-public Goods (Mill. $) Unquantified Benefits SoilReduced soil erosion$8.0 (range $8-$97)Shoreline stabilization AirImproved air quality (Non-odour related)$3.7Odour Reduction Reduced Greenhouse Gas Emissions through Carbon sequestration $56.0Reduced pesticide drift Reduced Greenhouse Gas Emissions through reduced cropped area $16.6 WaterImproved water quality$1.2Wastewater management BiotaBiodiversity$4.7 Consumptive wildlife based recreation$39.1 Bird Watching$3.7 OtherEnergy Conservation based GHG emissions reduction $0.2Aesthetics and Property values Transportation Health Impacts Total Benefits$89.4$42.8 Grand Total of External Benefits$132.2

20. 20 Summary Using secondary information (and a number of assumptions), the external benefits of the shelterbelts distributed 1981-2001 have a NPV of $132 million (CDN$). In addition, there are number of other benefits that could not be quantified The range in the values for different social goods reflect the level of confidence in the available information in different areas There were many information and data gaps

21. 21 Information and Data Gaps Shelterbelt impacts on aesthetics Contribution to biodiversity and its social significance Valuation of Option values and Non-use values associated with shelterbelts

22. 22 Needed approach Two major gaps in the literature are: Biophysical impacts of shelterbelts Economic value of environmental goods Few studies undertaken for the Canadian prairies in some areas A multi-disciplinary approach is required to address these gaps

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