Paulo A. L. D. Nunes

Economic valuation of biodiversity: sense or nonsense?

This paper critically evaluates the notion and application of economic, monetary valuation of biological diversity, or biodiversity. For this purpose four levels of diversity are considered: genes, species, ecosystems and functions. Different perspectives on biodiversity value can be characterized through a number of factors: instrumental vs. intrinsic values, local vs. global diversity, life diversity vs. biological resources, etc. A classification of biodiversity values is offered, based on a system of logical relationships among biodiversity, ecosystems, species and human welfare. Suggestions are made about which economic valuation methods can address which type of biodiversity value. The resulting framework is the starting point for a survey and evaluation of empirical studies at each of the four levels of diversity. The contingent valuation method is by far the most used method. An important reason is that the other valuation methods are unable to identify and measure passive or nonuse values of biodiversity. At first sight, the resulting monetary value estimates seem to give unequivocal support to the belief that biodiversity has a significant, positive social value. Nevertheless, most studies lack a uniform, clear perspective on biodiversity as a distinct concept from biological resources. In fact, the empirical literature fails to apply economic valuation to the entire range of biodiversity benefits. Therefore, available economic valuation estimates should generally be regarded as providing a very incomplete perspective on, and at best lower bounds, to the unknown value of biodiversity changes.

Identifying the warm glow effect in contingent valuation

Abstract This paper reports the results from a contingent valuation study designed to investigate the influence of warm glow in willingness to pay (WTP) responses. Interindividual differences in warm glow motivation are measured through a factor analysis, performed on a list of attitudinal items. The reported (WTP) measures fail to pass the scope test. Both socioeconomic variables and motivational factor scores are significant in the explanation of the individual WTP measures. We compute “cold” WTP measures by taking out the effect of the warm glow motivation. These “cold” measures satisfy both the scope test and Hausmans adding-up property.

European Forests and Carbon Sequestration Services: An Economic Assessment of Climate Change Impacts

This paper reports an original economic valuation of the impact of climate change on the provision of forest regulating services in Europe. To the authors’ knowledge the current paper represents the first systematic attempt to estimate human well-being losses with respect to changes in biodiversity and forest regulating services that are directly driven by climate change. First, selected 34 European countries are grouped by their latitude intervals to capture the differentiated regional effects of forests in response to climate change. Moreover, the future trends of forest areas and stocked carbon in 2050 are projected through the construction and simulation of global circulation models such as HADMC3 following four different future developing paths described by the four IPCC scenarios. Finally, the valuation exercise is anchored in an ecosystem service based approach, involving the use of general circulation models and integrated assessment models. Our findings address two dimensions in the evaluation of climate impacts on European forests: Firstly, future projections yield different states of the world depending upon the IPCC scenario adopted. Secondly, spatial issues matter in an assessment of the distributional impacts of climate change, as these impacts are not distributed in a uniform way across the European countries under consideration.

Mapping of forest biodiversity values: a plural perspective.

The Millennium Ecosystem Assessment is built on a conceptual framework that links biodiversity to the services ecosystems provide to society. Based on this framework, we first compile market and non-market forest valuation studies and, secondly, explore the potential of an econometric modeling exercise by conducting a world wide meta-analysis. This exercise aims to highlight the mapping of biodiversity indicators and assesses their respective role on the valuation exercise. Our results show that biodiversity loss is having an effect on forest ecosystem values. In addition, these effects reveal to be dependent on the type of services and global geo-climatic regions.

An Economic Assessment of the Impacts of the Mose Barriers on Venice Port Activities

Due to its hydro-geological features, the lagoon of Venice is especially vulnerable to climate change. In particular, it is strongly affected by gradual global warming that brings about the so-called ‘acqua alta’ (high water) phenomenon with greater frequency and intensity. In order to protect the city of Venice from the more and more frequent phenomenon of flooding, some protective measures have been adopted. Among them, the system of mobile barriers commonly known as MOSE: however, by separating the lagoon from the Adriatic Sea, it interferes with ship traffic and has negative impacts on port activities. Against this background, the aim of the present work is to provide an estimate of the direct costs of ship traffic interruption due to the functioning of the MOSE, i.e. the additional costs resulting from longer waiting time for ships passing through the Venice lagoon. The estimate uses inputs from the application of a specific hydrodynamic model and the elaboration of ship traffic data during the period 2000-2002. Results indicate that the additional costs would range between 347,943 and 1,288,067 €/year, depending on the hypothesis assumed.

Assessing the Impact of Biodiversity on Tourism Flows: A Model for Tourist Behaviour and its Policy Implications

This analysis provides an example of how biodiversity can be measured by means of different indicators, and how the latter can be used to assess the influence of the biodiversity profile of a region on the tourism flows towards it. Previous studies have considered environmental amenities as one of the determinants of tourism destination choice. The central hypothesis of this paper is that the destination’s biodiversity profile can be considered as a key component of environmental amenities. The main objective of this study is to propose a different perspective on this topic, considering the role of biodiversity on tourists’ choice of destination and duration of stay. Domestic Irish tourist flows have been chosen as a case study. The first step of the analysis required the construction of biodiversity indicators suitable for developing a biodiversity profile of each Irish county. Subsequently, a model was developed so as to explain the total number of nights spent in any location as a function of a set of explanatory variables including information about the socio-demographic characteristics of respondents, biodiversity and the landscape profile of the county of destination and features of the trip. Results show that most of the biodiversity and landscape indicators included in the analysis turn out to be statistically significant in determining tourists’ choices regarding the duration of their trip. As a result, policies pursuing biodiversity conservation appear to have a positive impact on the revenue of regional tourism.

A Hybrid Approach to the Valuation of Climate Change Effects on Ecosystem Services: Evidence from the European Forests

In this paper we present a systematic attempt to assess economic value of climate change impact on forest ecosystems and human welfare. In the present study, climate change impacts are downscaled to the different European countries, which in turn constitute the elements of our analysis. First, we anchor the valuation exercise in the Millennium Ecosystem Assessment (MEA) Approach and therefore the link between the different forest ecosystem goods and services, including provisioning, regulating and cultural services, human well-being and climate change. Second, climate change is operationalized by exploring the different storylines developed by the International Panel on Climate Change (IPCC) and applied, downscaled, for each of the European countries under consideration. Third, and bearing in mind the different nature of the benefits provided by the different types of forest ecosystems under examination, we shall explore different economic valuation methodologies so as to shed light on the magnitude of the involved welfare changes. According to the estimation results the four different IPCC scenarios, i.e. A1F1, A2, B1 and B2, are associated to different welfare impacts. First, these reveal to depend on both the nature of the forest ecosystem service. For example, cultural values reveal to be more sensitive to the four IPCC scenarios than the other ones, with the wood forest products being more resilient to climate change. Second, the distributional impacts of climate change on the provision of these goods and services do also depend on the geo-climatic regions under consideration. For the Scandinavian group of countries, B1 is ranked with the highest level of provision of carbon sequestration services, amounting to 46.3 billion dollars. In addition, we can see that cultural services provided by forest ecosystems have their highest levels in the Mediterranean countries, ranging from 8.4 to 9.0 million dollars, respectively in the B2 and B1 scenarios. Finally, we can see that the total value of wood forest products ranges between 41.2 and 47.5 million dollars for Central Europe to 5.4 and 7.2 million dollars in Northern Europe, respectively A1 and A2 scenarios. For this service, Mediterranean Europe provides a relatively weak role in the provision with values ranging from 6.4 million dollars in A1 scenario to 8.7 million dollars in the B2. In short, and to conclude, the valuation results (1) may contribute to a better understanding of the potential welfare loss in the context of climate change and the economic trade-offs between potential mitigation or adaptation strategies; and (2) confirm that climate change will be responsible for a re-distribution of welfare among the European countries, signalling the potential for a(n) agreement(s) among these same countries focus on the re-allocation of potential trade-offs among the countries.

Analyzing the Social Factors That Influence Willingness to Pay for Invasive Alien Species Management Under Two Different Strategies: Eradication and Prevention

Biological invasions occur worldwide, and have been the object of ecological and socio-economic research for decades. However, the manner in which different stakeholder groups identify the problems associated with invasive species and confront invasive species management under different policies remains poorly understood. In this study, we conducted an econometric analysis of the social factors influencing willingness to pay for invasive alien species management under two different regimes: eradication and prevention in the Doñana Natural Protected Area (SW Spain). Controlling for the participation of local residents, tourists and conservationists, email and face-to-face questionnaires were conducted. Results indicated that respondents were more willing to pay for eradication than prevention; and public support for invasive alien species management was influenced by an individual’s knowledge and perception of invasive alien species, active interest in nature, and socio-demographic attributes. We concluded that invasive alien species management research should confront the challenges to engage stakeholders and accept any tradeoffs necessary to modify different conservation policies to ensure effective management is implemented. Finally, our willingness to pay estimates suggest the Department of Environment of Andalusian Government has suitable social support to meet the budgetary expenditures required for invasive alien species plans and adequate resources to justify an increase in the invasive alien species management budget.

Using factor analysis to identify consumer preferences for the protection of a natural area in Portugal

Abstract This paper focuses on the application of factor analysis so as to identify consumer preferences for the protection of a Natural Area. We combine the use of factor analysis with the valuation data obtained by contingent valuation survey. The survey, conducted via in-person questionnaires in 1997, is targeted at the economic valuation of the protection benefits of the Parque Natural Alentejano e Costa Vicentina , a natural protected area along the southwest coastline of Portugal. Factor analysis results show that the consumer is characterized by a three-factor motivational structure: use, warm glow and non-use motivation factor, respectively. We introduce these motivation factors, together with the respondents socio-economic characteristics, in the economic valuation function of such natural protected area. Estimation results show that consumer motivation factors have an econometrically robust role. Therefore, consumer motivations are interpreted as crucial information for accurate social cost-benefit analysis of alternative protection scenarios, and thus serve as an important cornerstone in designing an effective and broadly accepted management policy for the Parque Natural Alentejano e Costa Vicentina.

Towards improved socio-economic assessments of ocean acidification’s impacts

Ocean acidification is increasingly recognized as a component of global change that could have a wide range of impacts on marine organisms, the ecosystems they live in, and the goods and services they provide humankind. Assessment of these potential socio-economic impacts requires integrated efforts between biologists, chemists, oceanographers, economists and social scientists. But because ocean acidification is a new research area, significant knowledge gaps are preventing economists from estimating its welfare impacts. For instance, economic data on the impact of ocean acidification on significant markets such as fisheries, aquaculture and tourism are very limited (if not non-existent), and non-market valuation studies on this topic are not yet available. Our paper summarizes the current understanding of future OA impacts and sets out what further information is required for economists to assess socio-economic impacts of ocean acidification. Our aim is to provide clear directions for multidisciplinary collaborative research.