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Valuation of Ecosystem Services from Nordic Watersheds

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Valuation of Ecosystem Services from Nordic Watersheds TemaNord 2012:506 TemaNord Ved Stranden 18 DK-1061 København K www.norden.org Valuation of Ecosystem services from Nordic Watersheds Valuation of Ecosystem services from Nordic Watersheeds – from avareness raising to policy support? (VALUESHED) – from avareness raising to policy support? (VALUESHED) The emergence of the ecosystem services concept suggests that econo- mic valuation studies are already fulfilling a role in raising awareness by demonstrating the loss of nature’s goods and services using monetary indicators. In order to have future relevance in capturing value and giving support to policy-makers, valuation methods must specifically address resource accounting, priority setting, and instrument design. This report provides an overview of economic valuation methods of eco- system services from watersheds in the Nordic countries. The study was commissioned by the Nordic Council of Ministers and conducted by The Norwegian Institute for Nature Research, The Norwegian Institute of Water Research and Sweco Norge during the period May – November 2011. The study indicates that economic valuation methods can be applied to watershed management in multiple ways. However, policy makers should be wary of “one size fits all” valuation estimates that appear ready to use across different watershed types and stakeholder interests. TemaNord 2012:506 ISBN 978-92-893-2319-2 TN2012506 omslag.indd 1 20-02-2012 13:45:40 Valuation of Ecosystem Services from Nordic Watersheds From avareness raising to policy support? (VALUESHED) David N. Barton, Henrik Lindhjem, NINA. Kristin Magnussen, Sweco Norge and Silje Holen, NIVA TemaNord 2012:506 Valuation of Ecosystem Services from Nordic Watersheds From awareness raising to policy support? (VALUESHED) David N. Barton, Henrik Lindhjem, NINA. Kristin Magnussen, Sweco Norge and Silje Holen, NIVA TemaNord 2012:506 ISBN 978-92-893-2319-2 http://dx.doi.org/10.6027/TN2012-506 © Nordic Council of Ministers, Copenhagen 2011 Print: Arco Grafisk A/S Copies: 300 Cover photo: Johannes Jansson/NMR Printed in Denmark This publication has been published with financial support by the Nordic Council of Ministers. But the contents of this publication do not necessarily reflect the views, policies or recommen- dations of the Nordic Council of Ministers. www.norden.org/publications Nordic co-operation Nordic co-operation is one of the world’s most extensive forms of regional collaboration, involv- ing Denmark, Finland, Iceland, Norway, Sweden, and Faroe Islands, Greenland, and Åland. Nordic co-operation has firm traditions in politics, the economy, and culture. It plays an im- portant role in European and international collaboration, and aims at creating a strong Nordic community in a strong Europe. Nordic co-operation seeks to safeguard Nordic and regional interests and principles in the global community. Common Nordic values help the region solidify its position as one of the world’s most innovative and competitive. Nordic Council of Ministers Ved Stranden 18 DK-1061 København K Phone (+45) 3396 0200 www.norden.org Content Foreword ................................................................................................................................................... 7 Preface........................................................................................................................................................ 9 Summary ................................................................................................................................................ 11 1. Introduction ................................................................................................................................... 15 1.1 Objectives .......................................................................................................................... 15 1.2 Policy relevance .............................................................................................................. 16 1.3 Report overview ............................................................................................................. 17 2. Approach ......................................................................................................................................... 19 2.1 Definition of “watershed services” – ecosystem services from watersheds ........................................................................................................................ 19 2.2 Spatial characteristics of watershed services ...................................................... 23 2.3 Selection of watershed services ................................................................................ 25 2.4 Valuation methods reviewed ..................................................................................... 28 2.5 Stepwise conceptual approach to valuation of watershed services ............. 29 3. Overview of Nordic and inter national studies of watershed services ..................... 31 3.1 Some key international valuation studies ............................................................. 31 3.2 Overview of Nordic valuation studies and some examples ............................. 34 3.3 Norway ............................................................................................................................... 34 3.4 Sweden ............................................................................................................................... 37 3.5 Denmark ............................................................................................................................ 40 3.6 Finland ................................................................................................................................ 45 3.7 Iceland ................................................................................................................................ 50 4. Demonstration watershed I: Glomma River Basin .......................................................... 55 4.1 Watershed description ................................................................................................. 55 4.2 Flood reduction ............................................................................................................... 57 4.3 Run-off and pollution regulation .............................................................................. 77 5. Demonstration watershed II: Odense River Basin........................................................... 85 5.1 Watershed description ................................................................................................. 85 5.2 Run-off and pollution regulation .............................................................................. 87 6. Discussion ....................................................................................................................................... 95 6.1 Gap analysis for watershed services in Nordic countries ................................ 95 6.2 Methodological challenges .......................................................................................... 96 7. Conclusions and recommendations .................................................................................... 113 7.1 Conclusions ..................................................................................................................... 113 7.2 Recommendations........................................................................................................ 115 8. References .................................................................................................................................... 121 9. Sammendrag ................................................................................................................................ 125 9.1 Hovedfunn ....................................................................................................................... 125 9.2 Anbefalinger for videre arbeid ................................................................................ 127 10. Appendix 1 Valuation methods ............................................................................................ 129 10.1 Benefit –based valuation methods ......................................................................... 129 10.2 Benefit –based valuation methods ......................................................................... 130 10.3 Production function approaches ............................................................................ 136 10.4 Cost-based valuation methods ................................................................................ 139 10.5 Deliberative valuation methods .............................................................................. 140 10.6 Valuation and value transfer issues ....................................................................... 141 References to Appendix 1 ....................................................................................................... 151 11. Appendix 2 Stepwise conceptual approach to valuation of watershed services .......................................................................................................................................... 153 References Appendix 2 ............................................................................................................ 160 Foreword David N. Barton (NINA), Henrik Lindhjem (NINA), Kristin Magnussen (Sweco Norge) and Silje Holen (NIVA) have written the report. We would like to thank participants in the Nordic
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