This document discusses the importance of ecosystem service valuation tools for municipal and regional decision makers. It provides an overview of the multi-step process involved in valuing ecosystem services related to policy changes. The document also outlines some of the challenges with ecosystem service valuation, including difficulties isolating services at a local level and integrating multiple disciplines. It reviews several existing web-based tools and databases available for conducting valuations and benefit transfers. Overall, the document advocates for continued development and standardization of ecosystem service valuation methods and tools to better inform environmental decision making.

1. Ecosystem
Service
Valuation:
Tools for
Decision
Makers
Margrethe Winslow, Ph.D.,
University of San Francisco
Jennifer Sant’Anna, MPA,
Urban Innovation Exchange

2. Importance of ES for Municipal/Regional
Decision Makers
• Ecosystems and their services are inextricably
tied to the public domain due in part to the public
goods nature of many ecosystem services.
• Ecosystems are being degraded at a high rate –
climate change exacerbating this  ES are
growing scarcer
• Demand for ecosystem services is increasing
– Population growth
– Improvement in living standards

3. Multiple Purposes for ESV in Relation to Policy
Making
Monitor changes in natural capital and the impact
of this on human welfare ex. Natural Capital Accounting
Natural Resource Damage Assessment
Evaluation of proposed policies/projects
Cost-
Benefit
Analysis
Cost-
Effectivenes
s Analysis
Multi-
criteria
Analysis
PES

4. Multi-Step Process in Ecosystem Service
Valuation Related to Policy Changes
Economic
Value of
Changes
Impact on
Human
Welfare
Changes in
Ecosystem
Services
Ecosystem
Impacts
Policy
Change
Challenging

5. Ecosystem Services can have Multiple Functions

6. Obstacles and Limitations
• Difficult to circumscribe and isolate ES at local level.
• Provisioning and flow of ES cut across policy-relevant
boundaries.
• Challenging to conduct ES research that is applicable in
policy contexts.
– Requires integration of multiple disciplines
– Methodology issues can affect credibility of valuation estimates
• Full CBA is sometimes precluded by legislative standards.
• Lack of consensus on goals in environmental regulation:
efficiency? justice? job creation? etc.

7. Data Collection Costs
• Decision makers need to compare the cost of collecting
ecosystem service data relative to the increased efficiency of
the program due to this data.
– A South African based study by Grantham et al. (2008) found that a
small investment in ecosystem data for conservation planning can
improve project performance, there is a diminishing return to
investment.
– Other South African studies supported these findings and also
suggested that the way information is shared can be as important as
the amount of information collected. (Tallis and Polansky, 2011)
• Farber et al (2006): “Full modeling is costly in terms of data
and measurability requirements. A practical alternative is to
consider service changes, or gradients, from the status quo
provided by a finite set of options. This may not provide for
the global optimum, but may result in the choice of superior
management options within a viable set of those
options”(p.118).

8. Methods for Assigning Monetary Value to Ecosystem Services
Revealed-preference Stated-preference Cost-based
Market methods: Valuations are
directly obtained from what
people must be willing to pay for
the service or good.
Contingent valuation: People
are directly asked their
willingness to pay or accept
compensation for some change
in ecological service.
Replacement costs: The loss of a
natural system service is
evaluated in terms of what it
would cost to replace that
service.
Production approaches: Service
values are assigned from the
impacts of those services on
economic out-puts (e.g.,
increased shrimp yields from
increased area of wetlands).
Conjoint analysis: People are
asked to choose or rank different
service scenarios or ecological
conditions that differ in the mix
of those conditions.
Avoidance or Damage costs: A
service is valued on the basis of
costs avoided, or of the extent to
which it allows the avoidance of
costly averting behaviors,
including mitigation.
Travel cost: Valuations of site-
based amenities are implied by
the costs people incur to enjoy
them
Hedonic methods: The value of
a service is implied by what
people will be willing to pay for
the service through purchases in
related markets, such as housing
markets. (from Farber et al. 2006, pg. 120)

9. Benefits or Value Transfer
Use the
ecosystem
service values
from one or a
series of studies
to estimate
the values in
a similar area
or situation
Better: Benefit Function Transfer

10. Databases for Benefit Transfer
• EVRI: Environmental
Valuation Reference
Inventory (Environment
Canada with support
from USEPA)
– Searchable database of
~2400 studies with
summaries included.
• EarthEconomics,
non-profit, Tacoma
WA
– Researches Library

11. Current Web-based Tools
• InVEST: Integrated Valuation of Environmental
Services and Tradeoffs
• ARIES: Artificial Intelligence for Ecosystem Services

12. Current Web-based Tools Cont.
• EarthEconomics:
– EVT: Ecosystem Valuation Toolkit
– SERVES: Simple and Effective Resource for
Valuing Ecosystem Services
• Others
– regionally focused or
– cover just one or two ecosystem services
• Consulting firms have proprietary tools –
ex. EcoMetrix, EcoAim, ESValue

13. EPA’s EnviroAtlas
• Web-based mapping application that allows users to view
and analyze multiple ecosystem services in a specific area
• EnviroAtlas can be used to forecast impacts on natural
resources due to future population growth and climate change

14. ESV tools are under development but are still not ready for off-
the-shelf use for more than single ecosystem service valuation.
Federal agencies are investing in developing better metrics, tools,
and decision guidelines.
These improvements could trickle down to the local level.
USGS/BLM Pilot of Tools 2012: “Ecosystem Services
Valuation to Support Decisionmaking on Public
Lands—A Case Study of the San Pedro River
Watershed, Arizona” (Ken Bagstad et al.)
Broad Conclusions

15. USGS/BLM Pilot of Tools 2012 (Ken Bagstad et al.)
To help solidify the field, decision makers need:
1. Development and support of data archives
2. Agreement on metrics
3. Training and education on understanding and accepting
uncertainty in relation to ESV
4. Training on tools and valuation and coordination with tool
developers
5. Policy guidance on when to use ESV tools and tool choice
6. Credible, Replicable and Legally defensible ESV tools

16. ESV Federal Focus in the Future
SUSTAINING ENVIRONMENTAL CAPITAL:
PROTECTING SOCIETY AND THE
ECONOMY
Executive Office of the President
President’s Council of Advisors on Science and Technology (PCAST)
JULY 2011

17. WRI Survey: Are Ecosystem Services Being
Addressed in Environmental Decision Making?
A 2010 online survey by WRI of 171 environmental
consultants, government employees, NGOs found:
• 79% of respondents knew about ecosystem services
• 40% have seen ecosystem services addressed in
environmental assessment
– Freshwater is the main service that is addressed
• Main perceived barrier is lack of guidance
on how to address ecosystem services

18. Broader Debate Over Using ESV
• Practical: Is some number better than no
number? How to deal with uncertainty?
– How much accuracy is needed?
– What are costs of incorrect decision?
– ESV helps inform decisions but does not make
decisions.
• Philosophical: Don’t ecosystems have
untold value?
– But will these be included if no number is
attached?

19. Primary References
Bagstad, K.J., Semmens, D., Winthrop, R., Jaworski, D., and Larson, J. (2012). Ecosystem
Services Valuation to Support Decisionmaking on Public Lands — A Case Study of the San
Pedro River Watershed , Arizona Scientific Investigations Report 2012 − 5251. Arizona.
Barbier, E. B. (2011b). Challenges in valuing ecosystem services. World Forum 2011.
Daily, G. C., Polasky, S., Goldstein, J., Kareiva, P. M., Mooney, H. a, Pejchar, L., Ricketts, T. H., et
al. (2009). Ecosystem services in decision making: time to deliver. Frontiers in Ecology and the
Environment, 7(1), 21–28.
Iovanna, R., & Griffiths, C. (2006). Clean water, ecological benefits, and benefits transfer: A work in
progress at the U.S. EPA. Ecological Economics, 60(2), 473–482.
doi:10.1016/j.ecolecon.2006.06.012
Liu, S., Costanza, R., Farber, S., & Troy, A. (2010). Valuing ecosystem services: theory, practice,
and the need for a transdisciplinary synthesis. Annals of the New York Academy of Sciences,
1185, 54–78.
Scarlett, L., & Boyd, J. (2011). Ecosystem Services : Capabilities, (March).
Tallis, H., &Polasky, S. (2009). Mapping and valuing ecosystem services as an approach for
conservation and natural-resource management. Annals of the New York Academy of Sciences,
1162, 265–83.