Download Ecosystems Approach Research Programme – briefing for researchers

Ecosystems Approach research programme – Valuation
1. Introduction
This note sets out key messages relating to the valuation of ecosystems and ecosystem
services arising from a synthesis of Defra’s Ecosystems Approach research
programme. In particular it focuses on:

The use of ecosystem valuation in policy and project appraisal

The barriers and difficulties in the practical application of ecosystems valuation in
policy and project appraisal

How the methodological difficulties raised in the ‘Introductory guide to valuing
ecosystem services’ were tackled.
2. What is an ecosystems approach?
An ecosystems approach is a way of looking at whole ecosystems, rather than just
individual species or processes, in decision-making and for valuing the goods and
services they provide, to ensure that we can maintain a healthy and resilient natural
environment now and for future generations.
Defra’s ecosystems approach is based on five core principles:

Taking a more holistic approach to policy-making and delivery, with the focus on
maintaining healthy ecosystems and ecosystem services – rather than protecting
particular species

Ensuring that the value of ecosystem services is fully reflected in decisionmaking

Ensuring environmental limits (as distinct to thresholds) are respected in the
context of sustainable development, taking into account ecosystem functioning

Taking decisions at the appropriate spatial scale while recognising the
cumulative impacts of decisions

Promoting adaptive management of the natural environment to respond to
changing pressures, including climate change.
1
3. Why is it important and what is the role of valuation?
We are increasingly aware that the environment is interconnected and decisions that
affect one species or feature can have profound effects elsewhere. An ecosystems
approach will help us take account of these interconnections in decisions.
Importantly, an ecosystems approach also aims to ‘value’ the benefits we get from
nature. Traditionally these have been very difficult to take into account in policymaking,
as their worth is not usually expressed in economic terms. But an ecosystems
approach recognises that it is possible (if sometimes difficult) to assign values to the
services from nature, and that it is vital to do so if these services are to be considered
properly in the decision making process. As part of this, we also need a methodology for
assigning values to these services.
4. What was the purpose of Defra’s research programme?
Developing and adopting an approach which is able to value and take account of factors
that were previously dealt with as externalities represents a significant shift for Defra
and other policymakers. To support this shift, Defra commissioned a programme of
research in 2005, which aimed to develop a robust interdisciplinary evidence base
relevant to an ecosystems approach and demonstrate how an ecosystems approach
can be applied in practical terms through a series of case studies. One of the aims of
the research programme was to explore some of the methodological issues raised in
the ‘Introductory guide to valuing ecosystem services’.
5. Key messages from the research that relate to valuation
A synthesis of the research programme has identified a number of key messages
relevant to valuation, summarised below and explored in more detail in sections 6 and
7. These are:

For policymakers, the relevant concept of ‘value’ is of a service’s contribution to
human welfare relative to other areas, in addition to any intrinsic value. This will
not always be expressed solely in monetary terms.

Total economic valuation (TEV) was not found to be a particularly helpful
concept. Instead, policymakers will gain more insight from looking at the
valuation of relatively small changes in the quality or quantity of ecosystem
services, as this more closely reflects the impact of most decisions on
ecosystems.
2
Data is already available to facilitate valuation, but there are significant gaps
across ecosystem services and only data generated by the most up to date
techniques will have the level of certainty necessary to be useful.

Valuation techniques are already in use, but not necessarily in the way in which
they would be used in an ecosystems approach.

Understanding, data gaps and uncertainty are still issues holding back the further
uptake of valuation techniques.
6. How is ecosystem valuation currently being used in policy and project
appraisal?
Valuation techniques appear to be already in use during policy and project appraisal,
but not necessarily in the way in which an ecosystems approach requires. This was
most starkly illustrated in the Heysham-M6 link road route case study, which compared
current planning appraisal to a theoretical ecosystems approach to the same appraisal.
The study found that:
 Current Environmental Impact Assessments (EIA) give very little consideration to
ecosystem goods and services, how we enjoy them and their importance to our
quality of life. For example, the EIA in this case looked at the value of the
habitat or species under consideration in terms of its scarcity at international,
national and local levels, rather than the contribution that the services provided
by the ecosystems in question offer.
 Valuation of environmental assets was limited and made at a late stage in the
impact assessment, without any real attempt to integrate the results with social
and economic valuations. For instance, the financial impacts of recreational
fishing and associated tourism were studied, but the main purpose was to
identify where compensation for loss of income should be considered and to give
indications of the level of compensation, to build into project budgets. The
decision makers were not looking at the value or economic costs of the
ecosystem services provided.
 Current planning and EIA approaches do not deal very well with the economic
context to reduce market distortions that affect biological diversity and to develop
incentives that promote biodiversity and sustainable use. The current system
also finds it hard to deal with non-monetary values of environmental goods and
services, especially where these are outside formally designated landscapes and
sites of recognised high quality. For example, a meadow within the route
corridor study area for a new road link may not be of any national nature
conservation interest but could be highly valued by the local community as a
3
recreational ‘green space’ providing aesthetic benefits, and useful as an
educational resource as well as somewhere to go for a healthy walk.
Looking more specifically at environmental goods and services, the research found that
where there are environmental resources that contribute to human welfare but are not
traded in markets, valuation techniques exist and are already in use. These techniques
fall broadly into two camps: methods attempting to express individuals’ preferences for
changes in the state of the environment in monetary terms (“economic methods”), and
methods which are more centred upon seeking and exploring how opinions are formed
or expressing preferences in units other than money (“deliberative and participatory
methods”). Amongst the economic methods are techniques which attempt to calculate
value based on:

The input of the natural environment to agricultural production;

The effects of environmental amenity on property prices;

The factors affecting the choices people make between recreational sites;

Asking individuals to choose between different environmental outcomes with
different price tags.
Deliberative and participatory methods range from discussion groups and processes
where members of the public are presented with expert opinion and asked to consider a
verdict, to means for synthesising expert opinion on specialised subjects.
7. What were the barriers and difficulties in the practical application of
ecosystems valuation in policy and project appraisal?
(i)
Remaining debate over what should be considered in determining value
Throughout the research programme, issues about understanding and uncertainty
about methodological issues were often raised – policymakers at different tiers of
government, as well as wider stakeholders, are unsure about what is being asked of
them by an ecosystems approach. This is particularly evident with regards to
valuation, where there appears to be some debate about whether or not everything
needs to be valued in economic terms or whether there are other equally valuable
measures of worth.
Those in favour of economic valuation argue that these are the terms on which
decisions are made – falling in with these and assigning monetary values would
mean that it was more straightforward to include these factors in the decisionmaking process and that the values would be given more serious consideration.
Those who do not favour economic valuation, argue that it is impossible and
ineffective to assign monetary values to everything – indeed this is what an
4
ecosystems approach is trying to move away from. Instead, we need to focus on
more deliberative evidence and work to make that as credible as monetary data.
The case study looking at the Parrett Catchment found further confusion about
methodology. While some stakeholders stressed the need to cost choices and
options using full lifetime costs and break out of short-term plan and political cycle
costings, they were unclear as to how this could be achieved.
(ii)
Concept of value
(iii)
Using an ecosystem services framework, the research concluded that for the
purposes of policymaking, the most relevant concept of ‘value’ is of a
service’s contribution to human welfare relative to other areas, (in addition to
any intrinsic value). This will not always be expressed solely in monetary
terms. It is important to bear in mind that, within a number of contexts, some
people consider the intrinsic value of the natural environment to be over and
above any value it has for human welfare.
(iv)
Data availability
The research found that although there are around 1000 relevant datasets that
could make up a valuation ‘data catalogue’, data gaps were evident in all of the
ecosystem service categories and so continued to be a barrier to the wider uptake
of the approach. Most datasets also interpret valuation solely in economic terms.
In most cases however, one good dataset might be all that is needed to monitor a
good or service. Importantly, any data needs to be available at a scale and form
that can be integrated with other data – it will have little meaning if it does not
relate to the same scale as the environmental data available for instance. The
scarcity of data in most areas is almost certainly because there has been no
impetus to collect and analyse data on how human well-being is influenced by
ecosystem goods and services until now.
(v) Data uncertainty
The case study looking at the Otmoor region in Oxfordshire, an example of an
ecosystems approach in the context of habitat management, raised questions
about the standard and standardisation of valuation data. This was a particular
problem because there is currently no agreed methodology for calculating
economic valuations and the data does not appear to be robust enough to do more
than estimates. The research argues that without an agreed methodology for
collection, interpretations from the data are open to challenge, a situation that is
unlikely to be satisfactory in the long run. The researchers in the air quality study
raise similar concerns about the certainty and quality of valuation data, arguing
that only the most modern methodologies will be appropriate to accurately value
5
the socio-economic benefits of implementing ammonia control and so the vast
majority of existing valuation studies will be unsuitable.
(v) Role of valuation evidence in policymaking
The research concludes that the overall role of valuation evidence is to support
rather than to make decisions. The choice is not a case of either economic or
deliberative and participatory methods, but using a combination, as the context of
the decision requires. To help policymakers use these different types of data, the
researchers argue that training and improving the links between researchers and
research commissioners would be valuable, as well as the development of tools to
combine different types of value evidence, so that policymakers can utilise as
much information as possible, rather than reduce the valuation to a single number
at the end of the analysis.
8. What did the research say about the methodological difficulties raised in the
‘Introductory guide to valuing ecosystem services?
(i) Interdependencies
The interdependency of data was raised as an issue in the research. The inventory
of valuation data highlighted the importance of valuation data relating to other
environmental data, for example.
The case studies also showed that the interconnectedness of ecosystem services
was not necessarily being looked at properly in existing environmental impact
assessments – the M6-Heysham route case study gave the example of an
assessment of the financial impacts of recreational fishing and associated tourism
being reviewed but with the purpose of identifying where compensation for loss of
income should be considered and to give indications of the level of compensation,
rather than finding the value or economic costs of the ecosystem services provided
and affected.
(ii) Spatial and temporal issues
Challenges around spatial and temporal issues were identified on a number of
levels:

Data availability: While it is at the local level that an ecosystems approach is
most likely to be implemented, there are problems in accessing locally useful
data at sufficient resolution and integrating data. As the focus until recently has
been on species and habitats rather than ecosystems, there are also issues
about ‘data islands’, whereby available data cannot be sufficiently related to
other relevant data (does not cover the same geography or scale, for instance).
6

Need for spatially explicit data: The case studies in particular highlight the
need for improved information on ecosystem services, including their value and
limits at a local scale. Mapping and GIS proved to be valuable tools and their
usefulness and accuracy could be enhanced with more spatially explicit data.

Making policy on an appropriate scale: The Parret Catchment case study in
particular demonstrated the importance of making policies on an appropriate
scale and taking account of wider stakeholder groups – while the ‘catchment
scale’ works from the perspective of natural resources management, the
concept of a ‘catchment’ was reasonably meaningless to many members of the
public who need to be engaged if an ecosystems approach is to be fully
adopted.
(iii) Limits and thresholds
The research concluded that for future policy debates, distinguishing between
environmental limits and thresholds will be useful. The concept of a limit – the
maximum level of damage or loss of service that is acceptable - is generally more
useful than thresholds however because it is relevant to all systems regardless of
whether or not we know they display thresholds. As we probably want to manage
ecosystems in a healthy state, rather than at the maximum tolerable level of
damage, the research recommends being cautious in using limits and setting
management targets above these limits. The research also points out that while the
definition of an environmental limit may be based on the biophysical properties of a
natural resource system, setting the limits must involve ‘deliberation’ as they will
depend on how people value the outputs of the system.
(iv) Cumulative impacts
The research found difficulties identifying trends and cumulative impacts, largely
due to the lack of long term datasets. It argued that this is partly to do the
‘unfashionable’ nature of long-term data collection – it is very difficult to justify
funding for such datasets unless the value has been demonstrated.
(v) Uncertainties
A number of the case studies showed that because work is needed to make
available data relevant to a local situation, some of the evidence arising from an
ecosystems approach can be provisional and needs to be presented with a
precautionary tone. This could be problematic to some stakeholders and
undermine the authority of the approach.
7
9. Further research needs
a. Valuation data
The lack of availability of data to value different benefits was a common theme running
throughout the research programme. Particular needs highlighted include:

Developing the valuation data base to cover all services

Developing the data at an appropriate scale - for example is the value of a
landscape based upon those who live immediately on the landscape or those
who live some distance away?

Discussing the format of the valuation data – does it always need to be in
monetary form?

Improving links between policymakers and researchers, so that there is a shared
understanding of what is available and what needs to be done

Ensuring the valuation data is able to work with other data that will be used in an
ecosystems approach – that data is available on a similar scale, for instance.
b. Valuation Tools
Just as valuation was identified as a key gap for data, the need for more or better
valuation tools was also identified in the research and in the workshops:
 Techniques to capture evidence of how public values Ecosystem services
 Tools to ensure that non-economic data is used in valuations and for balancing
non-economic and monetary values
 Ways of using data in and from different contexts
 Information on how to make tradeoffs between different services
 Tools for judging what are the best policy levers and when they should be used.
10. Further Information
Contact: [email protected]
11. Useful links
Defra’s 2007 Ecosystems Approach Action plan:
http://www.defra.gov.uk/wildlife-pets/policy/natural-environ/eco-actionplan.htm
8
Defra’s Ecosystems Approach research programme:
http://www.defra.gov.uk/wildlife-pets/policy/natural-environ/research.htm
National Ecosystem Assessment
http://www.unep-wcmc.org/eap/ukNationalEA.aspx
Parliamentary Office of Science and Technology (POST) note on Ecosystems Services:
http://www.parliament.uk/documents/upload/postpn281.pdf
9