Analysis of the Costs and Benefits of Alternative Solutions for Restoring Biodiversity

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Analysis of the Costs and Benefits of Alternative Solutions for Restoring Biodiversity ANALYSIS OF THE COSTS AND BENEFITS OF ALTERNATIVE SOLUTIONS FOR RESTORING BIODIVERSITY Defra Competition Code: WC0758/CR0444 BUILDING AND EVALUATING ALTERNATIVE MANAGEMENT SCENARIOS Appendix 1 to Final report to Defra - December 2010 . Hodder, KH; Douglas S; Newton, A; Bullock, JM; Scholefield, P.; Vaughan, R. Cantarello, E; Birch, J. Contact: Dr Kathy H. Hodder CCEEC, School of Conservation Sciences Talbot Campus Bournemouth University Talbot Campus Poole, Dorset BH12 5BB Tel: 01202 966784, Fax: 01202 965046 Mobile: 07905 161180 [email protected] 1 CONTENTS 1. CREATING SCENARIO MAPS ....................................................................................................................3 2. VALUATION APPROACH FOR THE SELECTED ECOSYSTEM SERVICES.....................................3 2.1 FOOD , RAW MATERIALS /F IBRE , AND FUEL / ENERGY ..................................................................................3 2.2 FRESH WATER PROVISION .............................................................................................................................5 2.3 CARBON STORAGE ........................................................................................................................................5 2.4 FLOOD PROTECTION ......................................................................................................................................7 2.5 RECREATION /TOURISM .................................................................................................................................9 2.6 AESTHETIC BENEFITS ..................................................................................................................................11 3. VALUATION APPROACH FOR BIODIVERSITY CONSERVATION .................................................12 3.1 AREA OF PRIORITY HABITAT .......................................................................................................................13 3.2 ECOLOGICAL IMPACT ASSESSMENT ............................................................................................................13 3.3 CONNECTIVITY ...........................................................................................................................................15 4. ASSESSMENT OF COSTS ...........................................................................................................................17 4.1 PRODUCTION COSTS ....................................................................................................................................17 4.2 IMPLEMENTATION AND RUNNING COSTS .....................................................................................................17 4.3 OPPORTUNITY COSTS ..................................................................................................................................18 5. THE CASE STUDIES ....................................................................................................................................19 5.1 WILD ENNERDALE ......................................................................................................................................19 5.2 THE GREAT FEN PROJECT ...........................................................................................................................33 5.3 HEATHER AND HILLFORTS PROJECT ............................................................................................................45 5.4 THE KNEPP WILDLAND PROJECT ................................................................................................................54 5.5 PUMLUMON PROJECT ..................................................................................................................................66 5.6 FROME CATCHMENT ....................................................................................................................................81 2 1. Creating scenario maps The scenarios were created in ArcGIS in collaboration with case study representatives: full details are given in section 5. The pre-project scenarios were made by reference to existing vegetation survey, such as NVC survey or remotely sensed land cover data. Mapping the future scenarios then involved modification of the existing maps using a combination of stewardship and management plans or strategy documents, where available, and expert opinion. 2. Valuation approach for the selected ecosystem services Where possible, the values were mapped to land-use / land-cover (henceforth ‘land cover’) for the scenarios, enabling visualisation of differences. While many recent studies have provided ecosystem service valuation (Natural England 2009a; O'Gorman & Bann 2008b; Tinch & Provins 2007b), there are few examples where the spatial dimension has been considered in detail. Mapping these values is a relatively novel approach and is important because benefits are not uniformly produced or used across the landscape. 2.1 Food, Raw materials /Fibre, and Fuel / Energy These three benefit categories can be assessed using market price because they are tangible goods, frequently traded in established markets, with observed or estimated market prices. The approach has been widely adopted and advocated (Chan et al. 2006; Christie et al. 2008; Kettunen et al. 2009a; Natural England 2009a; Nelson et al. 2009; Pascual et al. 2010). However, a number of caveats should be considered when using market price. Firstly, it has been suggested that valuation should be based on sustainable production/extraction only, so that value is not ascribed to goods harvested at unsustainable levels incurring more damage to the ecosystem than they are worth (Eftec & Just Ecology 2005a; Kettunen et al. 2009a). This is a valid position: however, determining the sustainability of each benefit would be an enormous task, prone to difficult and potentially subjective decisions. Therefore, this has not been adopted. Secondly, market price may underestimate values because the price a consumer pays for a good or service is a minimum expression of their willingness to pay - i.e. consumer surplus is not accounted for (Eftec 2006b; O'Gorman & Bann 2008b). Currently though, the lack of reliable and locally relevant data on willingness to pay make market price a better choice of method. Finally, market prices can be distorted through monopoly, government intervention, taxes, subsidies, and so on (Eftec 2006b; Kettunen et al. 2009a). As this study is based on comparisons between scenarios this issue is of reduced importance. If comparisons were to be made between services within each site it should be given greater consideration. Method Valuation methods were developed for the food and fibre categories using a combination of site- based and UK standard or generalised data sources. The fuel and energy category was investigated but there was insufficient data available in the case studies to enable quantitative evaluation. (i) Food Recorded or predicted crop and dairy yields, and livestock number, were sourced for most scenarios. Ideally, locally available prices and production costs of these services would also be 3 used. However, as there may be many products, produced by different means, by a large number of land managers, the local pricing approach was not feasible for some of the case studies, especially those covering a large area with complex ownership. Instead, our method used net standard values, giving a generalised estimate, which has reduced accuracy, but is valid for comparisons of relative values between scenarios. Estimates based on local monetary data were also made where possible, enabling comparison of the conclusions reached using the two approaches. For all data, yield or stock was given a value using the net market price. (ii) Fibre / Raw materials This service generally equates to timber, although reed production may also become a factor on the wetland site (Great Fen). Timber products may be recorded as both stock and yield, where data are available, and costs were subtracted to give a net value as above. Local sources such as farm business plans, forest design plans, and site management plans were used in consultation with local experts to assess production. (iii) Fuel / Energy The potential for development of fuels is acknowledged at the sites but there is currently not sufficient data for any quantitative evaluation. Values are available for quantity of hydroelectricity produced in two of the sites, Pumlumon and Ennerdale (although in Ennerdale it is negligible as it is only produced by 3 properties) so this does give an indication of the relative importance of this service; however, the potential impacts of land cover changes on production would be too complex to model. Local pricing Local pricing gave values for the business as usual scenarios and also projections for the landscape-scale scenarios. Annual yield or stock data was compiled from site-based sources. This was expressed as a net value per hectare in each land cover category where the benefit is produced by subtracting the variable production costs for each service. For some benefits, such as timber production, the yield will typically vary conspicuously due to extraction or production variation between years. In these cases estimates of an appropriate yield were based on a mean figure over a time period appropriate to that crop and site. Where possible, spatially variable costs were also be factored into the assessment to avoid overestimations of value. UK standard pricing For crops, livestock
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