Linus Hasselström

Non-Market Valuation of the Coastal Environment - Uniting Political Aims, Ecological and Economic Knowledge

In this paper, we examine the feasibility of using an approach for estimating Willingness-To-Pay for marine environmental improvements, based on a holistic, policy-determined scenario. Conducting valuation studies based on a policy-determined scenario is beneficial for decision-makers in terms of practical applicability but also for research in terms of e.g. data availability. Using a case study in two Swedish coastal areas, we examine whether respondents are able to understand and attach a monetary value to these types of scenarios. The tested scenarios are based on improving water quality according to the EU Water Framework Directive and reducing noise and littering according to standard-type measures in a Swedish archipelago setting. The results are promising, paving the ground for future valuation studies using this approach. However, there might be tradeoffs, since the use of scenarios like this require much preparation by researchers and much efforts by respondents. We recommend environmental managers to adopt this approach when possible, but to have these potential tradeoffs in mind. Mean monthly WTP per household for the water quality improvement scenario is estimated to 71 and 102 SEK(1) in the two study areas, respectively. The corresponding numbers for the less noise and littering scenario are 38 and 46 SEK. Valuation of noise and littering in archipelago areas has previously not been very common, making these estimates especially important for marine policy.

Valuing the commons: An international study on the recreational benefits of the Baltic Sea

The Baltic Sea provides benefits to all of the nine nations along its coastline, with some 85 million people living within the catchment area. Achieving improvements in water quality requires international cooperation. The likelihood of effective cooperation is known to depend on the distribution across countries of the benefits and costs of actions needed to improve water quality. In this paper, we estimate the benefits associated with recreational use of the Baltic Sea in current environmental conditions using a travel cost approach, based on data from a large, standardized survey of households in each of the 9 Baltic Sea states. Both the probability of engaging in recreation (participation) and the number of visits people make are modeled. A large variation in the number of trips and the extent of participation is found, along with large differences in current annual economic benefits from Baltic Sea recreation. The total annual recreation benefits are close to 15 billion EUR. Under a water quality improvement scenario, the proportional increases in benefits range from 7 to 18% of the current annual benefits across countries. Depending on how the costs of actions are distributed, this could imply difficulties in achieving more international cooperation to achieve such improvements.

Baltic Sea nutrient reductions--what should we aim for?

Nutrient load reductions are needed to improve the state of the Baltic Sea, but it is still under debate how they should be implemented. In this paper, we use data from an environmental valuation study conducted in all nine Baltic Sea states to investigate public preferences of relevance to three of the involved decision-dimensions: First, the roles of nitrogen versus phosphorus reductions causing different eutrophication effects; second, the role of time - the lag between actions to reduce nutrient loads and perceived improvements; and third; the spatial dimension and the roles of actions targeting the coastal and open sea environment and different sub-basins. Our findings indicate that respondents view and value the Baltic Sea environment as a whole, and are not focussed only on their local sea area, or a particular aspect of water quality. We argue that public preferences concerning these three perspectives should be one of the factors guiding marine policy. This requires considering the entire range of eutrophication effects, in coastal and open sea areas, and including long-term and short-term measures.

Marine Ecosystem Services

Marine Ecosystem Services (MARECOS) is an interdisciplinary study that provides relevant information for national, Nordic and international ecosystem services assessments and valuation in the imple ...

Valuation of oil spill risk reductions in the Arctic

ABSTRACT In this study, data from a contingent valuation (CV) study in Lofoten, Norway, are used to assess the value of ecosystem services at risk from oil spills in the Arctic. It is investigated to which extent subjective opinion about the probability of a potential oil spill steers respondents’ willingness to pay (WTP) for reducing risk. The respondents’ preferences are analysed for ecosystem services. Finally, differences in WTP for two hypothetical spill scenarios are considered: one where measures are taken to reduce the probability of a spill and one where measures are taken to reduce the probability and impacts in the event of an accident. The findings indicate that measures should focus on alleviating the impacts of oil spills on ecosystem services generally, rather than on any specific ecosystem service. Furthermore, respondents’ perception of risk is higher than the estimated objective risk. The findings also suggest that respondents are more concerned about preventing the occurrence of oil spill accidents (usually considered to be more frequent than they actually are) compared to preventing the impacts of a spill. One policy implication is to focus more on policies that decrease the probability of spills than on policies that decrease the subsequent ecological impact.

Detailed vs. fuzzy information in non-market valuation studies: the role of familiarity

We apply a split-sample contingent valuation survey to test whether the level of ecological information affects the willingness to pay (WTP) and valuation uncertainty for improved water quality. For respondents who are unfamiliar with water quality problems, the WTP is significantly different between the sample that received detailed ecological information and the sample that received fuzzy information. This study also provides new empirical evidence for the counterfactual; in a situation with high familiarity, more information does not affect mean WTP. The main recommendation to future valuation practice is to provide detailed ecological information in the case when many respondents are unfamiliar with the good. The level of information did not influence valuation uncertainty.

Arctic games: an analytical framework for identifying options for sustainable natural resource governance

Abstract Changes in the Arctic are fuelled by a variety of drivers, including global warming, economic growth, improved access to natural resources, technological advances and globalisation processes. Further, the region is characterised by a diverse set of international agreements, national legislations and common pool resources. This presents challenges for actors to suggest, evaluate and agree on sustainable development alternatives. We propose an analytical framework to better understand (1) the types of trade-offs associated with Arctic futures and (2) actors’ incentives for strategic behaviour. In the framework, game theory illuminates incentives and strategies among actors, cost-benefit analysis and economic valuation of ecosystem services help identify socially desirable outcomes and institutional analysis provides insight on how governance structures can support or interfere with policy intervention. We apply the proposed framework by analysing possible oil development futures for Lofoten in Northern Norway. For example, institutional analysis and estimates of costs and benefits of reducing oil spill risk and their distribution among actors are used for discussing incentive structures, including the use of side payments as a mechanism to mitigate conflicting interests.

Benefit Transfer for Environmental Improvements in Coastal Areas: General vs. Specific Models

In this study, we used choice experiment data to analyze the accuracy of benefit transfer (BT) between two case study areas in Sweden for attributes relevant to the implementation of the EU Water Framework Directive and special consideration zones in marine areas. The accuracy and reliability of a BT based on a model including only easily available socioeconomic information is similar to the accuracy of a BT based on a model that gives the best statistical fit, but requires time-consuming data collection. Further, the former model has almost as good a fit as the latter. The BT error varies significantly across the attributes, regardless of which model is used. The results are inconclusive as to whether socioeconomic adjustments improve transfer or not.

Environmental compensation : Key conditions for increased and cost effective application

Environmental impacts are increasing due to human activities. The overuse of the benefits nature provides us is the direct result of our failure to put a price on these benefits. One way of address ...

The Remede Project: A Useful Framework for Assessing Non-Market Damages from Oil Spills?

As vessel traffic in the Baltic increases, in particular oil transports from Russia to the international market, so too does the risk of oil spills which above the environmental impacts impose costs on society including direct costs, market costs and non-market costs (e.g., losses in welfare from a damaged environment not easily valued in a market). While financial compensation addresses direct and market costs, environmental compensation (compensatory restoration) offsets welfare declines from the loss of resources or the services they provide. Although a clear international system for recovering environmental restoration costs from oil spills is still un-established, the EUs Environmental Liability Directive (ELD) from 2007 introduces a number of useful terms and concepts that may be applicable in the Baltic context. The European Commission (EC) funded development of the REMEDE Toolkit to help Member States carry out the ELD requirements. The Toolkit provides a useful framework for assessing non-market costs associated with oil spill damages by defining the types of ecological losses suffered by the public and providing interdisciplinary methods for scaling resource-based compensation projects whose cost should be incurred by the responsible polluter(s). This paper suggests that the ELD concepts and REMEDE methods could be transferred to the Baltic to help authorities recover environmental restoration costs from responsible polluters. We illustrate application of REMEDE-like concepts and methods to oil spill damages in the context of US regulations and the UN Compensation Commission and discuss the legal acceptance of these methods. The fact that the ELD cannot legally be invoked to address an oil spill in Europe should not preclude a discussion about how these relatively new European legal concepts, including the REMEDE methodology, could be used to establish a more consistent, transparent, and replicable framework for damage assessment in the sensitive marine environment of the Baltic Sea.