1. Accounting for Ecosystem Good and Services in Coastal Estuaries
Matthew Wilson, Ph.D. & Poh Boon Ung, M.A.

2. Acknowledgements
Adapted from work by Wilson et al. (2005; 2006; 2007*)
Matthew A. Wilson, Senior Economist, Triangle Economic Research, an ARCADIS Company
Stephen Farber, Professor Emeritus, Graduate School of Public and International Affairs, University of Pittsburgh
Shuang Liu, Ph.D. Candidate, University of Vermont
*Wilson, Matthew A. and Liu, Shuang. (In Press). Non-Market Value of Ecosystem Services provided by Coastal and Nearshore Marine Systems. In M. Pattterson and B. Glavovic (eds.) Ecological Economics of the Oceans and Coasts. Edward Elgar. Northampton, MA.

3. Ecosystem Services
Ecosystem services are the benefits people obtain either directly or indirectly from ecological systems (Millennium Ecosystem Assessment 2003). They include products such as food, fuel, and fiber; regulating services such as climate and water regulation and flood control; and nonmaterial assets such as cultural or aesthetic benefits (DeGroot et al. 2002).
Ecosystem services are critical to the functioning of coastal systems and also contribute significantly to human well-being, representing a significant portion of the total economic value of the coastal environment. …substantial positive economic values can be attached to many of the marketed and non-marketed services provided by coastal systems (Agardy et. al. 2005, p533).
DeGroot, Wilson and Boumans 2002 “A typology for the description, classification, and valuation of ecosystem functions, goods and services” Ecological Economics 41(3) pp
Agardy, Tundy; Jackie Alder, Paul Dayton, Sara Curran, Adrian Kitchingman, Matthew A. Wilson, Alessandro Catenazzi, Juan Restrepo, Charles Birkeland, Steven Blaber, Syed Saifullah, George Branch, Dee Boersma, Scott Nixon, Patrick Dugan, Charles Vörösmarty Coastal Systems and Coastal Communities, in Millennium Ecosystem Assessment: Conditions and Trends, Volume I. Washington DC: Island Press. pp

4. Our Focus Today
Provide a framework for accurately defining and classifying ecosystem goods and services
Show how the inclusion of ecosystem goods and services is fundamental to evaluating trade-offs from restoration efforts
How do we agree upon what goods and services are?
How can we place $ values on goods and services not commonly exchanged in markets?

5. The Evolving Policy Arena
Increasing focus placed on good decision-making related to ecosystem goods and services and how they contribute to society’s well-being
Environmental Protection Agency (EPA)
Previous EPA efforts focused primarily on human health and risk effects
Ecological assessment have been on ecological endpoints (e.g., pesticide effects on fish, birds, etc.)
EPA’s (2006) Ecological Benefits Assessment Strategic Plan (EBASP) overall goal “is to help improve Agency decision-making by enhancing EPA’s ability to identify, quantify, and value the ecological benefits of existing and proposed policies. Our vision is one of rigorous, comprehensive, and interdisciplinary ecological benefits assessments supporting the design and selection of policy alternatives” (p. xv).
Science Advisory Board (SAB) working on report of an integrated and expanded approach for valuing ecological systems and services
Millennium Ecosystem Assessment (2003)
United Nations sponsored program to help understand linkages between ecosystems and human well-being. Goal is to enhance the contribution of ecosystems to human well-being without undermining their long-term productivity.

6. The Model for Assessing Ecosystem Goods and Services Values

7. Total Economic Value of Ecosystem Goods and Services
Processes
e.g. nutrient transport, primary production
Structures
e.g. biomass, minerals, bottom type
Goods & Services
Goods
e.g. fisheries, recreation, navigation
Services
e.g. coastal protection, waste disposal, habitat
Direct Use
e.g. consumption,
viewing, recreation
Indirect Use
e.g. value of climate regulation
Nonuse?
e.g. bequest value
Total
= Economic
Value + +
* Adapted from Turner (2000) and Wilson et. al. (2005)

8. A Taxonomy of Ecosystem Goods and Services

9. Millennium Assessment (MA) 2003 Categorization of Ecosystem Goods and Services
Provisioning: Goods produced or provided by ecosystems
food, fresh water, fuel wood
Regulating: Benefits obtained from regulation of ecosystem processes
climate regulation, disease regulation, flood protection
Cultural: Non-material benefits from ecosystems
recreational, aesthetic, educational
Supporting: Services necessary for production of other ecosystem services
nutrient cycling, soil formation, wildlife habitat

10. Provisioning Services
Provision of natural resources and raw materials
SERVICES
ESTUARINE EXAMPLES
Water Supply
Provision of potable water and water purification
Medium for transportation
Provision for irrigation and industrial use
Food
Hunting
Fishing
Crops
Grazing
Aquaculture
Medicinal and Plant Disease Resources
Medicines and pest control chemicals obtained from estuarine dependent species

11. Regulating Services
Maintenance of essential ecological processes and life support systems
SERVICES
ESTUARINE EXAMPLES
Disturbance Regulation
Storm and flood protection
Soil Retention
Prevention of soil loss from wind, wave action
Waste Assimilation
Pollution detoxification and sequestration

12. Cultural Services Emotional, psychological and cognitive well being
ESTUARINE EXAMPLES
Recreation
Eco-tourism
Bird-watching
Fishing
Beach-going
Aesthetic
Coastal beaches and wetlands
Clean water
Spiritual & Historic
Motifs in books, film, painting, folklore, national symbols, architect, advertising, etc.

13. Supportive Functions and Structures
Ecosystem structures and functions that are essential to the delivery of other goods and services
SERVICES
ESTUARINE EXAMPLES
Soil Formation
Formation of wetlands substrate and soils
Biological regulation and biodiversity
Control of pests and diseases
Reduction of herbivory
Pollination of wetlands plants
Habitat
Refugium for resident & migratory species
Spawning and nursery grounds for shrimp

14. Managing Coastal Estuaries to Provide Ecosystem Goods and Services

15. Trade-offs Ecosystem goods and services provide value to humans
Anthropocentric concept: presence of human beings as welfare-maximizing agents translate ecological structures and processes into value-laden entities
Economic valuation of ecosystem goods and services represent the trade-offs that individuals make between alternative conditions of these services
e.g., various competing uses of coastal environment and the goods and services provided by healthy, functioning ecosystems. Should a shoreline be cleared and stabilized to provide new land for development? Or should it be maintained in its current state to serve as wildlife habitat?
Proper assessment of these values are important for planners and decision makers

16. Total Economic Value (TEV)
Coastal restoration efforts should focus on anticipated changes in Total Economic Value (TEV)
TEV = $P x S
ΔTEV = $P x ΔS
$P = Economic value of Services per unit of service (e.g., value of recreational user day)
S = Service Flow (e.g., number of recreational user days per year)
ΔS = Change in Service Flows (e.g., increase in number of user days due to restoration)

17. Valuation Methods Market prices (i.e., goods traded in the market)
Example valuation methods
Market prices (i.e., goods traded in the market)
Avoided cost
Hedonic pricing
Recreation demand
Replacement cost
Travel cost
Contingent valuation

18. Recent Experiences: Case Studies
Shepard Point, Alaska
Deschutes Estuary, Washington
Southeast Maury Island, Washington

19. Concluding Remarks
Due to their complexity, coastal estuaries provide goods and services that are often “bundled” together
Multi-disciplinary team needed to evaluate goods and services provided by coastal estuaries (ecologists, biologists, engineers, economists, etc.)
Accurate definition and classification of ecosystem goods and services is an essential first step for evaluating different policy or restoration options
Economic methods exist to value these goods and services

20. Questions/Comments Contact Us www.arcadis-us.com www.ter.com
Dr. Matthew Wilson
Senior Economist
Highlands Ranch, CO.
Poh Boon Ung
Philadelphia, PA.
(ext 20)