Ecological Economics Foundation for the Habitat the Dollar Value of Ecosystem Services
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6.1 INTRODUCTION an estimate of high and low ranges in the dollar value of these ecosystem services in WRIA 9. As will be described later, these estimates probably understate The ecological economics foundation for the Habitat the dollar value of ecosystem services. The second Plan for the Green/Duwamish and Central Puget portion of the analysis examines the link between Sound Watershed (Water Resource Inventory Area 9 habitat conditions in WRIA 9, conservation hypoth- [WRIA 9]) is based on the fact that improvements in eses, and the enhanced value of ecological services. habitat conditions for Chinook salmon and other Specific habitat actions, the expected improvement in salmonids also restore a large basket of associated habitat conditions, and the dollar value of associated ecosystem services which are of significant financial ecological services enhanced by the habitat actions are value. These services include natural stormwater estimated in the second portion of the analysis. regulation, flood protection, drinking water produc- tion, recreational opportunities, aesthetic value, waste This work was based on the conservation hypotheses treatment, and a wide variety of other identified highly and hypothesized necessary future conditions summa- valuable ecological services. Thus, achieving the rized in Chapter 4, Scientific Foundation, and the Habitat Plan goals and objectives (Chapter 4 – Section proposed actions (Chapter 7). 4.3) both secures salmonid viability and contributes to economic prosperity and security for present and future generations. Salmon habitat actions enhance and restore economically productive natural capital 6.2 GUIDING PRINCIPLES providing services such as flood protection at least FOR THE ECOLOGICAL cost. The alternative is to replace self-maintaining ECONOMICS ANALYSIS ecosystems with capital-intensive infrastructure, such as flood control or stormwater facilities funded by The guiding principles included the following: taxpayers and which require ongoing maintenance. A • The framework and methodology for identifying healthy, efficient local economy depends on healthy and valuing ecosystem services (Daily, (Ed.)1997, ecosystems and the services they provide. and Boumans et al. 2004); and This chapter summarizes the relevant components of a • The conservation hypotheses, habitat informa- study conducted for WRIA 9 titled Ecosystem Services tion, and other socio-economic data specific to Enhanced by Salmon Habitat Conservation in the WRIA 9. Green/Duwamish and Central Puget Sound Watershed (Asia-Pacific Environmental Exchange 2005). The approach, guiding principles, and results of this work Ecosystem Services Valuation Framework and were reviewed, commented upon, and accepted by the Methodology Steering Committee. The framework and methodology for conducting The Seattle-based Asia-Pacific Environmental Ex- ecosystem service valuation have been widely dis- change (since re-named Earth Economics), with the cussed in the academic literature. In brief, taking the University of Vermont Gund Institute for Ecological lowest and highest dollar value range per acre for each Economics, worked with the WRIA 9 Watershed vegetation type (coniferous forest, woody wetland, Coordination Services Team to estimate the value of etc.) established in the academic literature and multi- ecosystem goods and services produced within the plying it by the acreage provides rough low and high Green/Duwamish and Central Puget Sound Watershed. dollar estimates for the value of ecological services The consultant team also developed and analyzed case provided by an ecosystem. studies for two habitat restoration projects. More specifically, using Geographic Information The ecological economics analysis included two parts: System (GIS) data for WRIA 9, the acreages of forest, an overview of ecological services and benefits within grass and shrublands, agriculture and pasturelands, WRIA 9 and an analysis of the enhancement of these wetlands, urban areas, lakes, ponds, rivers and services through restoration/rehabilitation actions. streams, and ice and rock were multiplied by the The first analysis included the identification of valu- estimated production per acre for each identified able ecological services produced within WRIA 9 and ecosystem services. Peer reviewed journal articles were Page 6-1 Green/Duwamish and Central Puget Sound Watershed Salmon Habitat Plan—August 2005 reviewed for each GIS classification and the values 6.3 VALUATION OF WRIA 9 associated with each of 23 ecological services. The high ECOSYSTEM SERVICES and low values for each ecosystem type and ecological service were selected to provide the high and low range Habitat Plan actions to restore viable salmonid popu- estimates. A benefit transfer methodology was applied lations also will preserve and restore 23 categories of to the GIS data to calculate a range of dollar values of ecosystem goods and services identified in the Green/ ecosystem services provided annually within WRIA 9. Duwamish and Central Puget Sound Watershed. This method is inexpensive. Though the range is large, Healthy ecosystems produce goods and services for indicating a lack of precision, the methodology does free and in perpetuity. They are essential to maintain- provide a broad picture of the value provided by the ing a healthy economy and livable communities within full range of ecosystems within WRIA 9. It also permits WRIA 9. Ecosystem goods and services enhanced by an examination of how habitat improvements for Habitat Plan actions include: salmonids will reduce flood risk, produce higher water quality, and increase recreation among other services • Flood protection; and thus contribute to the additional enhancement of • Natural stormwater maintenance; economic value within WRIA 9. • Drinking water production and filtration; The ecosystem valuation techniques developed within • Reduction of pathogens and pollutants; environmental and natural resource economics are • Waste absorption; widely accepted by the economics profession and in U.S. courts of law. All of the reference papers and • Storm protection; valuation studies for the WRIA 9 study were peer • Biodiversity preservation; reviewed and published in academic journals. A • Nutrient regulation; majority of the valuation techniques used in studies • Increased production of fish, shellfish, timber, and referenced in the study involve direct market pricing, other food and raw materials; replacement and avoided costs, and travel costs. In a few cases, contingent valuation figures are used. • Nursery and refugia services; • Erosion control; Conservation Hypotheses and Scientific • Biodiversity; Information • Aesthetic value (beauty); and • Recreational opportunities for fishing, hunting, The ecological economics analysis was based on the boating, hiking, bird watching, and educational conservation hypotheses and habitat information and scientific benefits. developed for the WRIA 9 Habitat Plan. WRIA 9 Water- shed Coordination Services Team selected the specific The ecological economics analysis for the Habitat Plan case studies to be examined. The conservation hypoth- is the first full valuation of the benefits provided by eses and expected future conditions resulting from ecosystems within WRIA 9. implementation of specific actions formed the basis for the ecological economics analysis and were directly The ecological economics study gives a more complete drawn from the specific habitat actions proposed. picture of the results of implementing the Plan recom- mendations. People will receive many other benefits in The Habitat Plan goals and objectives established by addition to ensuring the viability of Chinook salmon, the Steering Committee were also adopted as guiding bull trout, and other salmonids. The purpose of principles of the study (Chapter 4 - Section 4.3). valuing ecosystem services is to assist decision makers in recognizing all costs and benefits associated with alternative actions. The ecosystem infrastructure is a capital asset, and decisions about ecosystem services impact the maintenance of ecosystem infrastructure. Without valuing ecological services, vast amounts of benefits and the systems that produce them may be overlooked. This may result in significant losses and Page 6-2 Green/Duwamish and Central Puget Sound Watershed Salmon Habitat Plan—August 2005 real financial costs born by taxpayers, governments, which includes the addition of chlorine or the use of businesses, individuals, and communities over time. ozone or ultraviolet light to disinfect water supplies.) Often, economic analysis has omitted ecological goods Because upland watershed ecosystems provide water and services, giving them an implicit value of zero. In filtration for free, these municipally-protected water- turn, this error can lead to sub-optimal, if not very sheds save local ratepayers money every time they turn costly, outcomes in terms of land use patterns, infra- on the tap. structure expenses, private property damage, or public safety hazards. The quality, quantity, reliability, and exact mix of goods and services provided by ecosystems within water- sheds are highly dependent on the particular structure and health of those ecosystems. This is one of the most critical issues to understand about the production of goods and services by ecosystems within watersheds. Degraded ecosystems require initial restoration investments to reestablish viability and ecosystem service production. Healthy, intact ecosystems are self- organizing and provide