Economic values of protected marine species: Empirical studies and challenges for ecosystem- based management*

Daniel K. Lew National Oceanic and Atmospheric Administration National Marine Fisheries Service Alaska Fisheries Science Center [email protected]

IIFET 2016 Aberdeen, Scotland UK July 11-15, 2016 *Opinions expressed are those of the author and do not reflect those of NMFS, NOAA, or the U.S. Department of Commerce. What economic values are measured?

• Willingness to pay (WTP) • For preservation of the species • For enhancement of the species • For conservation programs

• Primarily composed of nonuse (e.g., existence) and non- consumptive use (e.g., viewing) benefits

• Stated preference (SP) methods • Most use contingent valuation (CV) methods, but recent studies predominantly use choice experiment (CE) methods

2 Why care about non-market values of marine protected species? • Ecosystem-based management (EBM) • U.S. National Ocean Policy • EU’s Marine Strategic Framework Initiative • UN’s Millennium Ecosystem Assessment • Intergovernmental Platform on Biodiversity and Ecosystem Services • Ecosystem services valuation • The Economics of Ecosystems and Biodiversity (TEEB) initiative

• Benefit-cost analysis (BCA) • Evaluations of policies affecting marine protected species often employ some type of BCA • EO12866 (and EO13563) • U.S. Endangered Species Act

• Damage assessments

3 Review of Literature: Lew (2015, Frontiers in Marine Science)

• Focused on disaggregate species SP valuation studies • Enable estimation of species-specific values • Over 30 SP studies from peer-reviewed literature

• Most species valued were charismatic megafauna and well- known fish species

• Limited geographic coverage • U.S., Canada, Australia, U.K., Spain, and Greece

• Individual/household-level economic values vary widely (up to $356)

4 Benefits transfer

• Conducting primary data collection is often infeasible due to time and/or resource constraints

• Benefits transfer (aka environmental value transfer) • Methods for applying existing economic values and value functions to new applications (Johnston and Rosenberger 2010; Navrud and Ready 2007)

• Common benefit transfer methods • Unit value transfer • Value function transfer • Meta-regression function transfer

• Empirical studies • Sanchirico et al. (2013, Marine Policy): Incorporating conservation values into BCA of hypothetical fisheries policies revealed numerous challenges

5 Some challenges: Availability of quality values/studies

• Existing primary studies and values • Economic valuation databases: TEEB, Envalue, EVRI, et al. (see http://www.es-partnership.org/esp/80136/5/0/50) • Lew (2015) finds numerous coverage issues for protected species values • Are species values different? • Do values have expiration dates? (Temporal stability) • Lew and Wallmo (under revision)

• Quality of original studies/values • Changes to “state-of-the-art” methods • Researcher judgment/decisions and data quality; measurement error

• Assessing study quality requires significant expertise and knowledge of underlying methods

6 Some challenges: Minimizing transfer error

• Transfer error = transferred value – “true” value

• Choosing benefit transfer method to minimize transfer error • Unit value transfer < value function transfer ≤ meta-regression function transfer (Rosenberger and Phipps 2007; Rosenberger and Loomis 2003) • Depends upon availability of existing quality studies

• Choosing original studies to use • Similarity of good being valued (good/service definition) • Does the value you want to transfer precisely and accurately match up with the good/service you wish to value? • Similarity of population sampled • Are values/preferences for one population transferable to a different population?

7 More challenges: Matching primary value information to policy applications/models

• Aggregation and scaling issues • Adding up/embedding effects with other ecosystem service values? • Scaling up/down values? • Market size issues (e.g., region  nation?) • Translation issues to enable per unit estimates based on area or number of animals when original values are at the species level (e.g., work w/ Sanchirico and Lindsay)

8 Looking forward

• More and better values needed that cover the species and populations of interest – but we’re on the right track!

• Cautious application of benefits transfer is warranted (always), and particularly for applying values from the protected marine species valuation literature

• Challenges to transfer value information exist (in general), but many of the issues are actively being studied

From: www.seeturtles.com From: www.gowhales.com 9 Questions?

Special thanks to collaborators, co-authors, reviewers, and others – Kristy Wallmo (NMFS S/T), James Sanchirico and Amanda Lindsay (UC Davis), David Kling (OSU), Alan Haynie and Brian Garber-Yonts (AFSC), Rob Johnston and Daniel Jarvis (Clark University), David Layton (UW), Bob Rowe (Stratus Consulting), PSMFC; Jon Kurland, Mandy Migura, and Brad Smith (Protected Resources); Lew Queirolo (AKR); Lowell Fritz, Rod Hobbs, Tom Gelatt, and Kim Shelden (NMML); (current and former) AFSC and REFM management; and participants of the AFSC seminar series and the PICES conference special session on marine ecosystem services and the economics of living marine resources. 10 Are species values different?

• Are values different between species? • Wallmo and Lew (2012, Conservation Biology)

• Do values differ across spatial scale? • Johnston et al. (2015, Land Econ) and Wallmo and Lew (2016, JEM)

11 Recent disaggregate T&E marine species valuation studies

Species Reference Valuation Mean/Median Frequency of Unitsb Survey Good Valued Country Method WTP Range payment Year Short-nosed sturgeon Aldrich et al. (2007) CV -$9.38 – 58.89 One-time I 1997 Recovery program U.S. Harbor seal Boxall et al. (2012) Hybrid $78.84 – 201.61 Annual H 2006 Improved status Canada CV/CE Beluga whale Boxall et al. (2012) Hybrid $113.58 – 355.73 Annual H 2006 Improved status Canada CV/CE Steller sea lion Giraud and Valcic (2004) CV -$119.63 – 119.29 Annual H 2000 Recovery program U.S. Lew et al. (2010) CE $39.26 – 229.47 Annual H 2007 Improved status and U.S. population increase Mediterranean monk seal Kontogianni et al. (2012) CV $75.51 – 131.54 Unknownc H 2009 Protection program Greece Stithou and Scarpa (2012) CV $21.74 – 29.95 One-time I 2003 Protection program Greece $17.74 – 20.41 Per visit I 2003 Protection program Greece Gray whales Larson et al. (2004) CV $37.38 – 56.35d Annual I 1991 – Population increases U.S. 1992 Hawaiian monk seal Lew and Wallmo (2011), Wallmo CE $47.47 – 92.68 Annual H 2008 Improved status U.S and Lew (2011) CE $47.47 – 73.97 Annual H 2008 Improved status U.S. Wallmo and Lew (2012) CE $39.37 – 72.00 Annual H 2009 Improved status U.S.. Puget Sound Chinook salmon Wallmo and Lew (2011) CE $50.98 Annual H 2008 Improved status U.S. Wallmo and Lew (2012) CE $43.97 Annual H 2009 Improved status U.S.. Smalltooth sawfish Lew and Wallmo (2011) CE $36.74 – 69.79 Annual H 2008 Improved status U.S Wallmo and Lew (2011) Wallmo CE $36.74 – 57.97 Annual H 2008 Improved status U.S. and Lew (2012) CE $35.24 – 56.35 Annual H 2009 Improved status U.S.. Norwegian lobster Ojea and Loureiro (2010) CV $22.96 One-time H 2006 Protection program Spain Hake Ojea and Loureiro (2010) CV $35.63 One-time H 2006 Protection program Spain Manatee Solomon et al. (2004) CV $13.48 – 28.20 Annual H 2001 Protection program U.S. Loggerhead sea turtle Stithou and Scarpa (2012) CV $22.46 – 32.12 One-time I 2003 Protection program Greece Wallmo and Lew (2012) CE $17.22 – 19.51 Per visit I 2003 Protection program Greece $47.47 Annual H 2009 Improved status U.S. Upper Willamette River Chinook Wallmo and Lew (2012) CE $44.14 Annual H 2009 Improved status U.S. salmon North Pacific right whale Wallmo and Lew (2012) CE $45.30 – 79.44 Annual H 2009 Improved status U.S. North Atlantic right whale Wallmo and Lew (2012) CE $42.12 – 77.77 Annual H 2009 Improved status U.S.

Leatherback sea turtle Wallmo and Lew (2012) CE $41.22 – 73.81 Annual H 2009 Improved status U.S. aWTP is reported in 2013 U.S. dollars (all values converted using consumer price index and annual currency conversion rates). bUnits refer to the value’s unit measurement in terms of household (H) or individual (I). cThe payment vehicle was a contribution made on the water bill, but the frequency of billing was not mentioned. dAlso presents estimated WTP in non-monetary terms (hours donated). 12