Nature’s Value in Qinghai Province The Essential Economics of Ecosystem Services June 2010 Nature’s Value in Qinghai Province: The Essential Economics of Ecosystem Services v1.2 Acknowledgements This study was funded in large part by a generous grant of the William Kistler Trust. Earth Economics would like to thank Dr. Gaodi Xie for his continued support of Earth Economics’ work in China. Thank you also to Changshun Zhang and Yiheng Li for their assistance in study translation. Finally, thank you to our Board of Directors, Joshua Reyneveld, Ingrid Rasch, David Cosman and Joshua Farley. Earth Economics project team members for this study included Dave Batker, Jennifer Harrison-Cox, Maya Kocian, Rowan Schmidt, Jennifer McFadden, Zac Christin, Patrick Miller, Caleb Tomlinson and Janis Wignall. Earth Economics is responsible for the content of this report. 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Contents Table of Tables ........................................................................................................................................ iii Table of Figures ....................................................................................................................................... iii Table of Abbreviations ............................................................................................................................ iv Executive Summary ...................................................................................................................................... v Study Results ........................................................................................................................................... vi Recommendations .................................................................................................................................. vi This Document ........................................................................................................................................ ix Part 1: Introduction to Qinghai Province .................................................................................................... 1 Overview ................................................................................................................................................. 1 Population............................................................................................................................................ 1 Government ......................................................................................................................................... 1 Geography ........................................................................................................................................... 1 Industry ................................................................................................................................................ 2 Regional Hydrology ................................................................................................................................. 2 Yangtze River ....................................................................................................................................... 3 Yellow River ......................................................................................................................................... 3 Mekong River ....................................................................................................................................... 4 Qinghai Ecosystems in Peril .................................................................................................................... 4 Part 2: Key Concepts ................................................................................................................................... 5 Natural Capital and Asset Management ................................................................................................. 5 Understanding Natural Capital ............................................................................................................ 5 Economics of Natural Capital .............................................................................................................. 5 Ecosystems and Value Production .......................................................................................................... 6 Ecosystem Goods ................................................................................................................................. 7 Nature’s Value in Qinghai Province i Ecosystem Services .............................................................................................................................. 7 The Value of Ecosystem Services Relative to Ecosystem Goods ......................................................... 8 Process, Function, Structure and Value Production ............................................................................ 9 Integrated Ecosystems ........................................................................................................................ 9 Value Production “In Perpetuity” ........................................................................................................ 9 Payment for Ecosystem Services (PES) .............................................................................................. 10 Rural Provisioners and Urban Beneficiaries .......................................................................................... 11 Part 3: The Value of Natural Capital ......................................................................................................... 12 Provisioning Services ......................................................................................................................... 14 Regulating Services ............................................................................................................................ 15 Supporting Services ........................................................................................................................... 18 Cultural Services ................................................................................................................................ 21 Part 4: Valuation Analysis of the Qinghai Province .................................................................................. 22 Study Objectives .................................................................................................................................... 22 Study Method .................................................................................................................................... 22 Area of Study and GIS Data ................................................................................................................... 23 Valuation Results ................................................................................................................................... 25 Preservation of Present Values ............................................................................................................. 30 Part 5: Conclusion ..................................................................................................................................... 30 Study Results ......................................................................................................................................... 31 Recommendations ................................................................................................................................ 32 References ................................................................................................................................................ 35 Nature’s Value in Qinghai Province ii Appendix A: Benefit Transfer in Economic Valuation ................................................................................. 1 Appendix B: List of Value-Transfer Studies Used ........................................................................................ 1 Appendix C: Study Limitations .................................................................................................................... 1 Table of Tables Table 1. Examples of Ecosystem Services ................................................................................................... 8 Table 2. Categories and Definitions of Ecosystem Services...................................................................... 13 Table 3. Qinghai Province Land Cover Summary ...................................................................................... 23 Table 4. Temperate Forest Values ............................................................................................................ 25 Table 5. Forest Values ............................................................................................................................... 25 Table 6. Grasslands Values ........................................................................................................................ 26 Table 7. Swamps/Floodplains Values........................................................................................................ 26 Table 8. Agricultural Land Values .............................................................................................................