Can Local Ecosystem Services Valuation Studies be Up-scaled for use in Global Assessments?

Dr Mike Christie

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Overview• Global assessments of biodiversity value

• Research question

• Case study 1: Value transfer within the UK BAP

• Case study 2: Valuation in developing countries.

• Conclusions

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Global assessments of biodiversity value: • Costanza (1997) Nature:

Value of all of the World’s ecosystem

services = $33 trillion / yr

• TEEB (2010) Annual global economic impact of

biodiversity loss = $2 - 4.5 trillion / yr

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Global assessments of biodiversity value … • tend to be based on ‘value transfer’ where local

empirical ecosystem service valuation studies are aggregated or up-scaled to the global assessment.

• Value transfer is the process by which values are transferred (and adjusted) from a study site to a new policy site.• Unit value transfer• Function value transfer

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Value transfer in global assessments

Study site

Policy sites

Can values be effectively

transferred across regions?

How suitable are local studies to feed into global assessments?

• Local valuation studies tend to: – Utilise a wide variety of valuation approaches; – Address different ranges of ecosystem services; – Have specific policy context settings; and – Be of varying quality.

• Arguably, this variation makes it difficult to extract synthesis conclusions to feed into global assessments.

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Can Local Ecosystem Services Valuation Studies be Up-scaled for use in Global Assessments?

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Key research questions

• Does value transfer work (in a controlled setting)?• How accurate are value transfers?• Can values be transferred across regions?

• If values can’t be transferred across regions, what are the implications for global assessments (and in particular assessments in developing countries)?

Case study 1: Testing consistency of value transfer across UK BAP

• Choice experiment used to value ecosystem services associated with the UK BAP

• Administered across 12 UK regions.

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Choice experiment

example: UK BAP

9I prefer:I prefer: No BAPI prefer: No BAP Action Plan A Action Plan B

Can VT consistently perform well if differences between the study and policy sites are controlled?

– Can the value from a single study site predict the value of another policy site?

– Can the value from a number of study sites predict the value of another site?

– Value transfer test

10Transfer error = (|Predicted WTP – Observed WTP|) . Observed WTP

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Policy sites

Scot

land

Wal

es

N. I

rela

nd

Nor

th E

ast

Nor

th

Wes

t

Sout

h Ea

st

Sout

h W

est

East

of

Engl

and

East

M

idla

nds

Gre

ater

Lo

ndon

York

and

H

umbe

r

Wes

t M

idla

nds

All U

K

Ave

rage

Stud

y si

tes

Scotland 0

(0)72

(74)68

(52)158

(215)376

(570)63

(45)131

(107)962

(1787)78

(31)87

(73)88

(50)78

(49)135

(151)191

(267)

Wales133227)

0(0)

65(39)

503(1205)

264(493)

66(30)

110(162)

370(565)

61(24)

73(77)

70(51)

46(28)

101(96)

155(249)

N. Ireland978

(2262)473

(1002)0

(0)543

(826)330

(357)63

(41)261

(230)1054

(1791)56

(30)396

(815)153

(140)57

(69)460

(750)402

(692)

North East113

(184)78

(58)83

(70)0

(0)327

(723)60

(34)117

(130)420

(679)65

(30)118

(103)65

(48)50

(30)282

(266)148

(196)

North West231

(330)100

(111)55

(34)417

(990)0

(0)63

(33)92

(112)368

(736)66

(33)93

(78)65

(35)50

(33)105(88)

142(217)

South East538

(981)281

(411)127

(178)399

(555)731

(1309)0

(0)295

(519)941

(1425)37

(28)358

(405)81

(37)61

(83)397

(378)353

(525)

South West267

(328)99

(103)122

(129)570

(1325)523

(1158)66

(40)0

(0)481

(710)54

(37)180

(195)68

(67)52

(41)174

(129)221

(355)

East of England578

(1178)252

(516)93

(86)468

(937)394

(847)61

(32)123

(111)0

(0)68

(28)266

(415)83

(49)54

(33)251

(381)224

(384)

East Midlands930

(1653)441

(726)155

(198)843

(1559)860

(1479)88

(115)410

(546)806

(960)0

(0)541

(582)220

(249)81

(73)588

(514)496

(721)

Greater London98

(121)39

(26)52

(22)282

(554)151

(186)52

(37)99

(83)533

(938)67

(30)0

(0)63

(22)59

(21)56

(67)129

(175)

York and Humber266

(406)137

(167)84

(62)248

(446)372

(701)44

(10)150

(275)743

(1186)58

(21)279

(335)0

(0)45

(23)181

(144)217

(314)

West Midlands475

(877)215

(377)86

(168)429

(874)601

(1274)38

(32)163

(196)610

(918)37

(22)279

(335)87

(89)0

(0)278

(256)274

(451)

All UK218

(344)56

(20)64

(18)191

(381)153

(263)67

(26)92

(73)428

(637)79

(20)63

(54)62

(21)66

(16)0

(0)128

(156)

% times that ‘pooled’ data reduced transfer errors 73% 91% 82% 91% 91% 9% 0% 73% 0% 100% 100% 18% 67%

Value transfer test: transfer errors

Value transfer: results

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• Large variations in size of the transfer errors when single study site used: 37% up to 1054%

• Pooling data across several study sites generally (but not always) reduces transfer errors: 56% to 428%.

• Implications: Even in a controlled setting (within same country and using same valuation instrument), the accuracy of VT is questionable!

If values can’t be transferred across regions, what are the implications for global assessments (and particularly

assessments in developing countries)?

– To what extent are there local valuation studies in developing countries to feed into global assessments?

– Do current approaches to valuation work in developing countries?

– What is current best practice for valuation in developing countries?

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An Evaluation of Economic and Non-economic Techniques for Assessing the Importance of Biodiversity and associated

Ecosystem Services to People in Developing Countries.

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Dr Mike Christie

Aims• To review the extent to which valuation has

been applied in developing countries.

• To review the methodological, practical and policy challenges associated with valuation in developing countries.

• To develop good practice guidance for valuation in developing countries.

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To what extent are there local valuation studies in

developing countries to feed into global assessments?

• No. of studies that valued biodiversity in developing countries:– EVRI:

• 195 economic studies – Web of Knowledge:

• 183 economic studies • 101 non-economic studies.

• Developing country studies represent 1/10th of all published biodiversity valuation studies.

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0

200

400

600

800

1000

1200

1400

1960-1964

1965-1969

1970-1974

1975-1979

1980-1984

1985-1989

1990-1994

1995-1999

2000-2004

2005-2008

NU

MB

ER O

FPA

PER

S

YEARS

HIGH INCOME

UPPER MIDDLE INCOME

LOWER MIDDLE INCOME

LOWER INCOME

TRANSITIONAL INCOME

Cumulative total of biodiversity valuation studies

sourced from EVRI for all National Income States from

1960- 2008.

Methodological challenges• Low levels of literacy, education and language

– Creates barriers to valuing complex environmental goods– Makes it difficult to utilise traditional survey techniques such as

questionnaires and interviews. – More deliberative and participatory approaches to data collection may

overcome these issues.

• Informal or subsistence economies– People may have little or no experience of dealing with money. – People find it difficult to place a monetary value on complex and

unfamiliar environmental goods / services.

• Valuation methods have been developed in developed countries– Are the current best-practice guidelines appropriate for applications in

developing countries?

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Practical challenges• Extreme environmental conditions

– Affect the researcher’s ability to access areas or effectively undertake research.

• Lack of local research capacity to design, administer and analyse research projects– Involvement of local people is considered essential within the research

process to ensure that local nuances / values are accounted for.

• Sometimes easier to administer valuation studies in developing countries– Response rates are typically higher– Respondents are receptive to listening and considering questions posed– Interviewers are relatively inexpensive (allowing larger sample sizes).

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Policy challenges• Lack of local research capacity

– Lack of awareness of valuation methods and of the importance of biodiversity to people.

• Lack of empirical valuation studies in developing countries– Little evidence to illustrate the importance of biodiversity to people.– Makes future value transfer difficult.

• Existing research is often extractive– Often little engagement with local communities, researchers or

decision makers. – Research therefore has very little impact on the welfare of local

people.

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Conclusions: Best practice guidance• The way people in developing countries think about the natural

environment is different to those in developed countries. – They have much closer ties to their natural environment. – Their knowledge is often implicit and / or experiential knowledge– Low levels of literacy and education mean that most people will have little or

no scientific understanding of their natural environment. – The above means that people from developing countries may have difficulty

in expressing their value for natural resources.

• Given the above, standard approaches to valuation are unlikely to effectively reveal the preferences of people in developing countries.

• Valuation may be more effective if: – Local researchers are used throughout the research process– Deliberative, participative and action research approaches are incorporated

into the valuation methods.

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Can Local Ecosystem Services Valuation Studies be Up-scaled for use in Global Assessments?

• Depends on level of accuracy needed!

• Generally, value transfer performs poorly (even in controlled settings) and therefore it may be questionable as to whether it can effectively be utilised in global assessments.

• Currently there are only a limited local studies in developing countries, and novel valuation approaches need to be developed to expand this knowledge base.

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References• Christie, M., Fazey, I., Cooper, R., Hyde, T., Deri, A., Hughes, L., Bush, G., Brander, L.,

Nahman, A., de Lange, W. and Reyers, B. (2008). An Evaluation of Economic and Non-economic Techniques for Assessing the Importance of Biodiversity to People in Developing Countries. Defra: London.

• Christie, M., Fazey, I., and Hyde T (2010). Economic Valuation of the Benefits of the UK Biodiversity Action Plan. Defra: London

• Kenter J, Hyde T, Christie M and Fazey I (2011 In press). The importance of deliberation in valuing ecosystem services in developing countries – evidence from the Solomon Islands. Global Environmental Change Human and Policy Dimensions.

• Fazey, I, Kesby, M, Evely, A, Latham, I, Wagatora, D, Hagasua, J-E, Reed, M, S, Christie, M (2010). A three-tiered approach to participatory vulnerability assessment in the Solomon Islands. Global Environmental Change. 20, 713-728., doi:10.1016/j.gloenvcha.2010.04.011

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