Amy Binner

Bringing Ecosystem Services into Economic Decision-Making: Land Use in the United Kingdom

Monitoring Land Use Land-use decisions are based largely on agricultural market values. However, such decisions can lead to losses of ecosystem services, such as the provision of wildlife habitat or recreational space, the magnitude of which may overwhelm any market agricultural benefits. In a research project forming part of the UK National Ecosystem Assessment, Bateman et al. (p. 45) estimate the value of these net losses. Policies that recognize the diversity and complexity of the natural environment can target changes to different areas so as to radically improve land use in terms of agriculture and greenhouse gas emissions, recreation, and wild species habitat and diversity. The value of using land for recreation and wildlife, not just for agriculture, can usefully factor into planning decisions. Landscapes generate a wide range of valuable ecosystem services, yet land-use decisions often ignore the value of these services. Using the example of the United Kingdom, we show the significance of land-use change not only for agricultural production but also for emissions and sequestration of greenhouse gases, open-access recreational visits, urban green space, and wild-species diversity. We use spatially explicit models in conjunction with valuation methods to estimate comparable economic values for these services, taking account of climate change impacts. We show that, although decisions that focus solely on agriculture reduce overall ecosystem service values, highly significant value increases can be obtained from targeted planning by incorporating all potential services and their values and that this approach also conserves wild-species diversity.

Bringing ecosystem services into economic decision-making

Monitoring Land Use Land-use decisions are based largely on agricultural market values. However, such decisions can lead to losses of ecosystem services, such as the provision of wildlife habitat or recreational space, the magnitude of which may overwhelm any market agricultural benefits. In a research project forming part of the UK National Ecosystem Assessment, Bateman et al. (p. 45) estimate the value of these net losses. Policies that recognize the diversity and complexity of the natural environment can target changes to different areas so as to radically improve land use in terms of agriculture and greenhouse gas emissions, recreation, and wild species habitat and diversity. The value of using land for recreation and wildlife, not just for agriculture, can usefully factor into planning decisions. Landscapes generate a wide range of valuable ecosystem services, yet land-use decisions often ignore the value of these services. Using the example of the United Kingdom, we show the significance of land-use change not only for agricultural production but also for emissions and sequestration of greenhouse gases, open-access recreational visits, urban green space, and wild-species diversity. We use spatially explicit models in conjunction with valuation methods to estimate comparable economic values for these services, taking account of climate change impacts. We show that, although decisions that focus solely on agriculture reduce overall ecosystem service values, highly significant value increases can be obtained from targeted planning by incorporating all potential services and their values and that this approach also conserves wild-species diversity.

Spatially explicit integrated modeling and economic valuation of climate driven land use change and its indirect effects.

We present an integrated model of the direct consequences of climate change on land use, and the indirect effects of induced land use change upon the natural environment. The model predicts climate-driven shifts in the profitability of alternative uses of agricultural land. Both the direct impact of climate change and the induced shift in land use patterns will cause secondary effects on the water environment, for which agriculture is the major source of diffuse pollution. We model the impact of changes in such pollution on riverine ecosystems showing that these will be spatially heterogeneous. Moreover, we consider further knock-on effects upon the recreational benefits derived from water environments, which we assess using revealed preference methods. This analysis permits a multi-layered examination of the economic consequences of climate change, assessing the sequence of impacts from climate change through farm gross margins, land use, water quality and recreation, both at the individual and catchment scale.

How Property Markets Determine Welfare Outcomes: An Equilibrium Sorting Model Analysis of Local Environmental Interventions

This paper examines the pivotal role played by property markets in determining the magnitude and distribution of welfare changes resulting from localised environmental change. We address that issue using an equilibrium sorting model (ESM) calibrated, by way of example, to the circumstances of a road infrastructure project in the English town of Polegate. Previous ESM research has tended to assume that all households rent property from a fixed property stock. The narrative that arises from those models concerns environmental gentrification, wherein access to environmentally improved locations is appropriated by the relatively wealthy through their ability to out-compete the less wealthy in the rental property market. Our research shows that to be only part of a much more complex story. We develop a model that extends the sophistication with which ESMs replicate property market dynamics, allowing for households to choose whether to rent or purchase their home and introducing greater realism into housing supply responses to changing market conditions. Our research shows that property markets redistribute welfare gains across the population in complex ways in which tenure choice and housing supply constraints play central roles.