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05/23/2014

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B i o d i v e r s i t y, e c o s y s t e m s e r v i c e s a n d h u m a n w e l f a r e : a n e c o n o m i s t ’s r e s p o n s e t o t a c k l i n g global biodiversity loss

Mike Christie

Th e c h a l l e n g e : g l o b a l b i o d i ve r s i t y l o s s

The world’s biological resources are currently being lost at unprecedented rates. The Worldwide Fund for Nature’s (WWF) recent ‘Living Planet Index’ suggests that global biodiversity has declined by 27% since 1970 - most of which has occurred in developing countries. In addition, the 2005 UN Millennium Ecosystem Assessment predicted that 60% of the ecosystem services linked to biodiversity are being used unsustainably or are being degraded. These figures suggest that the world will fail to meet the targets to reduce biodiversity loss set by the 2002 Convention on Biological Diversity. Much of this loss in biodiversity will be the direct consequence of human-induced pressures. The global

population is being estimated to increase from 6 billion to 9 billion by 2050. Over the same period, per capita growth of GDP is predicted to increase between two- and four-fold. Atmospheric global CO2 stocks are predicted to rise to double the level of the pre-industrial era, with significant implications for global biodiversity through alterations in climate. In all cases, it is likely that these pressures will have a disproportionately higher impact on those developing countries which harbour the majority of the world’s biodiversity and which have the least capacity to manage the problem.

Figure 1.1: The links between ecosystem services and human welfare.

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the most widely recognised being the UN Millennium Ecosystem Assessment (http://www. Biodiversity may increase an individual’s welfare through direct use of provisioning and cultural services (e. whereas changes in the other categories have relatively direct and short-term impacts..g. Price-based approaches may be used to assess the market value of a provisioning service or to assess 6 . The ‘cultural’ services relate to those non-material benefits which people obtain from ecosystems and landscapes through spiritual enrichment.org/) which sets out the four main categories from which people benefit (Figure 1. A number of frameworks have recently been developed to categorise the ecosystem services provided by biodiversity.1). while the ‘regulating’ services provide benefits from the control of important ecosystem processes such as climate regulation and water purification. Methods to assess how people value biodiversity Biodiversity is clearly important to people’s well-being. fuel and materials for building that can be obtained directly from biodiversity. fuel or recreational use of natural areas) or indirectly through its contribution towards the maintenance of regulating Figure 1.millenniumassessment. the knowledge that biodiversity is being protected for future generations to enjoy). ‘Cultural’services also include the value that people place on the existence of plants and animals. which comprises both use and non-use (or passive) factors (Figure 1). for food. regulating and cultural services in that their impacts on people are often indirect or occur over a very long time. while stated preference techniques are more suited to capture non-use values (e. recreation and aesthetic experience. revealed preference techniques are more suitable for capturing use values (e. Finally.The human impacts of biodiversity loss Human welfare and livelihoods are inextricably linked to b i o d i ve r s i t y a n d a s s o c i a te d e c o s y s te m s e r v i c e s. People may also value the cultural services associated with biodiversity through non-use benefits (e.g.. services such as the water and carbon cycles. we can think of it as contributing to different elements of ‘Total Economic Value’ (TEV). reflection.g. They differ from provisioning. The‘provisioning’ecosystem services relate to products such as food.g. In economic terms. a relationship that is now recognised within the UN Convention on Biological Diversity.. Environmental economists have developed a range of techniques to capture some or all of the economic elements of TEV.‘supporting’ecosystem services relate to those factors which enable all of the other categories to take effect.2: The elements of Total Economic Value.. It is likely that the predicted losses in the Earth’s biodiversity will have a substantial detrimental effect on the provision of all of these ecosystem service categories and thus on both human welfare and livelihoods. contingent valuation and choice modelling methods may be used to assess how much people are willing to pay to protect an endangered species or habitat). For example. the travel cost method utilises information on the costs incurred in travelling to a natural area to assess the recreational value of that area).

which requires respondents to consider a series of scenarios for the future management of BAPs. I am working on two projects funded under Defra’s research programme. leading to regular undervaluation of ecosystem services and their subsequent over-exploitation. These trade-offs can be used to establish people’s willingness to pay for their biodiversity and environmental benefits. Furthermore. 7 . biodiversity is a complex concept and attempts to assess the value that the public place on it have proved to be very challenging. the first stage is to establish the links between the various habitat and species BAPs and their associated ecosystem services. Economic valuation of the UK Biodiversity Action Plan The first of the projects aims to estimate the value of changes in biodiversity and associated ecosystem services which will result from the delivery of the UK Biodiversity Action Plan (BAP). very little research has Where does IBERS fit into this? As an environmental economist within IBERS.the costs of environmental degradation of an important habitat by assessing the monies involved in artificially replacing the lost regulating services. and then asks them to make trade-offs between the ecosystem services delivered through these scenarios and some form of monetary payment.Where is the Wealth of Nations? Assigning monetary values to biodiversity is important since it allows the associated benefits to be directly compared with the economic value of alternative resource use options. The results from this research will be used to help inform government on the future management of the UK BAP. ‘Secure a healthy natural environment for today and the future’ . Currently. Why monetary valuation of biodiversity is important to policy makers? Many of the direct and passive values of biodiversity are left unaccounted for in national financial statistics. as well as help to establish the‘ecosystems approach’ as a tool for future policy appraisals. The workshops will utilise the choice modelling method. Although environmental valuation methods have been subject to considerable debate and scrutiny concerning their validity. However. This will be enabled during a series of 45 ‘valuation workshops’ administered throughout the UK this summer. IBERS is uniquely placed for this type of research as it can provide both sets of skills in-house. The second step will be to assess how greatly people value these ecosystem services. thereby helping to derive a value for the range of ecosystem services investigated. such as payments for ecological services. thus allowing more efficient resource allocation decisions to be made. An evaluation of economic and non-economic techniques for assessing the importance of biodiversity to people in developing countries The second Defra-funded research project aims to evaluate the effectiveness of a range of valuation methods related to biodiversity in developing countries. I have spent much of the last 12 years developing economic tools that can capture. This failure to value ecosystem services effectively has been recognised in the World Bank’s 2006 report . This has been achieved through an iterative process of consultation with ecological experts. In terms of the research approach. the extent to which people value changes in the provision of environmental goods and services.The background to this research is that. in monetary terms. although environmental valuation is well established in developed countries. measurement of a diverse range of biodiversity values can provide a platform for the design of mechanisms to provide incentives for greater biodiversity conservation. Such an assessment clearly requires an interdisciplinary approach that draws on the expertise of both social scientists (particularly economists) and natural scientists (ecologists). they are now generally accepted within both the academic and policy-making communities.

ac. we suggest that the application of economic valuation in developing countries will require the integration of elements from non-economic techniques. As an alternative.been undertaken in developing nations. b) five case studies to illustrate the difficulties. Rwanda. the continuation of the status quo. is an unsustainable position in the long term. this improved awareness of the structure of human relationships with the environment will help to develop better decision-support tools to aid the conservation of this fragile and threatened resource. and iii) produce results that are meaningful to policy-making. strong spiritual and cultural values associated with biodiversity. both within the UK and globally.uk 8 . Only then will communities become fully involved in the valuation process and develop a greater understanding of why biodiversity is important to them. and highly distorted markets. water management services in Nepal. an economic valuation of the benefits of protected area management to households in the Volcanoes National Park. Key challenges include low literacy levels. Our initial analysis suggests that simply applying the economic valuation methods from developed countries will be problematic in the context of a developing country. some form of valuation is required to capture the complexity of uses and values that are associated with biodiversity and ecosystem services. The research undertaken for this project is largely desk-based and will involve: a) a review of both the academic and grey literature to assess the ability of a range of economic and noneconomic techniques to: i) reveal the complex relationship between people and their natural environment. issues and solutions encountered as these techniques deliver results. thus enabling ecosystem managers to understand the dynamic nature of the relationship between people and their environment. Mike Christie email: mec@aber. In turn. and the ecosystem services provided by the Central Hills region of the island of Montserrat. the high reliance on subsistence economies. such as the introduction of participatory and action research approaches. thus providing the motivation for managing their biological resources more sustainably. ii) reveal meaningful preferences. with biodiversity and ecosystem services being continually undervalued or treated as ‘free goods’. The case studies to be examined include: a participatory rural development project in the Solomon Islands. The research currently being undertaken within IBERS will help to provide a greater understanding of the human benefits associated with biodiversity and its associated ecosystem services. To counter this. Concluding comments With biodiversity coming under increasing pressure from human activities. the Southern Africa Millennium Ecosystem Assessment.

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