FOREST-PLUS: FOREST FOR WATER AND PROSPERITY (FOREST-PLUS 2.0) Ecosystem Services Valuation Methods Strategy Paper SEPTEMBER 2019 This publication was produced for review by the United States Agency for International Development. It was prepared by Tetra Tech. This publication was produced for review by the United States Agency for International Development by Tetra Tech, through USAID Contract No. 72038619C00001, Forest-Plus: forest for water and prosperity (Forest-PLUS 2.0). This report was prepared by: Tetra Tech 159 Bank Street, Suite 300 Burlington, Vermont 05401 USA Telephone: (802) 495-0282 Fax: (802) 658-4247 Email: [email protected] Tetra Tech Contacts: Ujjwal Pradhan, Chief of Party [email protected] Robert Kenny, Project Manager, [email protected] Cover photo: Indian Peafowl (Pavocristatus) in Pocharam Wildlife Sanctuary in the Medak landscape. FOREST-PLUS: FOREST FOR WATER AND PROSPERITY (FOREST-PLUS 2.0) ECOSYSTEM SERVICES VALUATION METHODS STRATEGY PAPER SEPTEMBER 2019 DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................... I LIST OF TABLES .............................................................................................................. II LIST OF FIGURES ............................................................................................................ II ACRONYMS AND ABBREVIATIONS ....................................................................... III 1.0 INTRODUCTION ...................................................................................................... 1 2.0 ECOSYSTEM SERVICES VALUATION .................................................................. 2 2.1 BRIEF HISTORY OF ECOSYSTEM VALUATION .................................................................................. 2 2.2 VALUATION STUDIES IN THE GLOBAL CONTEXT .......................................................................... 3 2.3 VALUATION STUDIES IN INDIA ......................................................................................................... 5 3.0 ECOSYSTEM SERVICES .......................................................................................... 7 3.1 CLASSIFICATION OF ECOSYSTEM SERVICES ..................................................................................... 7 3.2 ECOSYSTEM SERVICES IN FOREST-PLUS 2.0 LANDSCAPES ............................................................ 8 3.2.1 Medak Landscape .................................................................................................................. 9 3.2.2 Gaya Landscape ................................................................................................................... 11 3.2.3 Thiruvananthapuram Landscape ...................................................................................... 12 4.0 VALUATION METHODS ....................................................................................... 14 4.1 DESCRIPTION OF VALUATION TECHNIQUES ................................................................................ 14 4.1.1 Stated Preference Approaches ........................................................................................ 14 4.1.2 Revealed Preference Approaches ................................................................................... 15 4.1.3 Benefit Transfer ................................................................................................................... 17 4.1.4 Production Function Approach ....................................................................................... 17 4.2 PROPOSED METHODS OF VALUATION FOR FOREST-PLUS 2.0 ................................................. 19 4.2.1 Water for Agriculture: Production Function Approach ........................................... 20 4.2.2 Food and Medicinal Plants ................................................................................................ 21 4.2.3 Timber Flow and Timber Stock ...................................................................................... 21 4.2.4 Water for Urban-Industrial Use ..................................................................................... 22 4.2.5 Fuel, Fodder, and other NTFPs ....................................................................................... 22 4.2.6 Water Conservation .......................................................................................................... 22 4.2.7 Gene-Pool Protection........................................................................................................ 22 4.2.8 Water Purification .............................................................................................................. 22 4.2.9 Biological Control ............................................................................................................... 22 4.2.10 Pollination ............................................................................................................................. 23 4.2.11 Flood Regulation and Moderating Extreme Events .................................................... 23 4.2.12 Carbon Sequestration ........................................................................................................ 23 4.2.13 Air Pollution Control ......................................................................................................... 23 4.2.14 Soil Fertility .......................................................................................................................... 23 4.2.15 Tourism and Other Recreational Values ...................................................................... 23 4.2.16 Biodiversity as a Habitat For Species ............................................................................. 24 4.2.17 Erosion Control .................................................................................................................. 24 4.2.18 Cultural and Spiritual Values ............................................................................................ 24 5.0 ASSESSMENT APPROACHES .............................................................................. 28 5.1 PHYSICAL ASSESSMENT (GIS/RS) .................................................................................................... 28 5.1.1 Mapping of Water Resources Using RS/GIS ................................................................ 28 5.1.2 Carbon Stock Estimation .................................................................................................. 29 5.2 SOCIO-ECONOMIC ASSESSMENTS .................................................................................................. 30 5.2.1 Fuel Wood, Timber, Fodder, and NTFPs ..................................................................... 30 FOREST-PLUS 2.0: FOREST FOR WATER AND PROSPERITY ECOSYSTEM SERVICES VALUATION METHODS STRATEGY PAPER i 5.2.2 Water Provisioning Due to Forest Cover .................................................................... 30 5.2.3 Regulating Services: Moderation of Extreme Events .................................................. 30 5.2.4 Gender Dimension in the Discourse ............................................................................. 31 5.2.5 Income Classes, Distance from the Forest and Ecosystem Services ..................... 31 6.0 DISCUSSION AND IMPLICATIONS FOR FOREST-PLUS 2.0 .......................... 32 6.1 MONETARY VALUES ......................................................................................................................... 32 6.2 ECOSYSTEM SERVICES AS “GDP OF THE POOR” .......................................................................... 33 6.3 DEVELOPING THE ECOSYSTEM DEPENDENCY INDEX .................................................................. 33 6.4 TOTAL ECONOMIC VALUE .............................................................................................................. 34 6.5 VALUATION RESULTS FOR INFORMED INTEGRATED PLANNING AND DECISION MAKING ... 35 6.5.1 Trade-Off .............................................................................................................................. 35 6.5.2 Financing Decisions ............................................................................................................ 36 6.5.3 Compensation for Ecosystem Service Loss.................................................................. 36 6.5.4 Equity and Trade-Off ......................................................................................................... 36 6.5.6 Conservation and Development ..................................................................................... 36 6.5.7 Rights and Ecosystem Values ........................................................................................... 36 6.5.8 Gender Considerations ..................................................................................................... 37 6.5.9 Spatial Comparison of Institutional Arrangements ..................................................... 37 6.5.10 Payment for Ecosystem Services ..................................................................................... 37 6.5.11 Value-Chain .........................................................................................................................