Guide For Rapid Economic Valuation Of Wetland Ecosystem .

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Guide for RapidEconomic Valuation ofWetland Ecosystem ServicesMinistry of the EnvironmentJapan

Suggested citation:Chapter 1Chapter 2Chapter 3Chapter 4Chapter 5Chapter 6Merriman, J.C., Murata, N., (2016) Guide for Rapid Economic Valuation ofWetland Ecosystem Services. BirdLife International Tokyo, Japan.Merriman, J.C., Peh, K.S-H. (2016) IntroductionMerriman, J.C., Murata, N. (2016) Steps for measurementMurata, N., Merriman, J.C., Iwabuchi, T., (2016) Methods for economic valuationMerriman, J.C., Murata, N. (2016) Next stepsMurata, N., Merriman, J.C., Le, T.T., Nguyen, T.K.H.,(2016) Case study – ThaiThuy Wetland, VietnamPeh, K.S-H., Merriman, J.C., Dae We Aung, T., Theint, S.M., Murata, N., Suzue, K.(2015) Case study – Moeyungyi Wetland, MyanmarThis guide is prepared based on Toolkit for Ecosystem Service Assessment (TESSA).Citation:Peh, K. S.-H., Balmford, A. P., Bradbury, R. B., Brown, C., Butchart, S. H. M., Hughes, F. M. R., Stattersfield, A.J., Thomas, D. H. L., Walpole, M. and Birch, J. C. (2014) Toolkit for Ecosystem Service Site-based Assessments(TESSA). Version 1.2 Available at: otos provided by: BirdLife International, BANCA and Viet Nature

SUMMARYOver the past decade, several large-scale international studies, such as the MillenniumEcosystem Assessment and The Economics of Ecosystems and Biodiversity, haveemphasised the importance of biodiversity conservation due to the benefits (known asecosystem services) that nature provides to people. Through these and other studies,wetland ecosystems have often been highlighted for their important functional roles inproviding clean water, reducing the risk of flooding and in supporting the livelihoods ofnumerous people worldwide. One global study estimated that the economic value ofwetlands is 3.4 billion yr-1 based on the variety of services these ecosystems provide forhuman well-being (Schuyt and Brander 2004). Much of this value is over-looked when itcomes to decision-making about land use in wetlands because these values do notappear in national financial accounts. Thus, over half of the world’s wetlands have beendegraded or destroyed in the last century, with Asia being one of the most impactedregions globally (Davidoson 2014).The aim of this guide is to introduce a simple and rapid method for assessing economicvalue of wetlands for non-experts of economic valuation. It can be utilized to understandthe overall concepts and steps for economic valuation, as well as demonstrating thatwetlands have economic value for the purpose of awareness raising and decisionmaking. This guidance is compiled based on the Toolkit for Ecosystem ServiceAssessment (TESSA; Peh et al 2014) but developed specifically for wetland ecosystemsand includes experiences from the implementation of two cases in Myanmar andVietnam. The methods extracted and adapted from TESSA aim to minimise the amountof field work and statistical work involved. The use of simple methods reduces costs(time, resources), but with a lower accuracy of the results. Hence this guide is forcarrying out an introductory ecosystem services assessment only. If more detailedvaluation and analysis is required, refer to Chapter 4, TESSA and other publishedvaluation approaches. Chapter 1 introduces wetland ecosystems and the concept ofeconomic valuation. Chapter 2 illustrates steps for measurement of the economic valueof ecosystem services, and methods for valuing certain ecosystem services are explainedin Chapter 3. The ecosystem services covered in this guide are; 1) harvested wild goods,2) cultivated goods, 3) water services (water provision, water quality improvement), 4)global climate regulation and 5) disaster risk reduction. Chapter 4 addressed theimportance of using a comparative approach to valuation to aid decision-making andfinally Chapter 5 presents a case study from Thai Thuy wetland in Vietnam and Chapter 6demonstrates how the simple comparative approach can be used, presenting a casestudy of Moeyungyi wetland in Myanmar.1

TABLE OF CONTENTSSUMMARY . 1TABLE OF CONTENTS . 21INTRODUCTION . 41.1 Wetland ecosystems . 41.2 Ecosystem services from wetlands . 51.3 Why value wetlands? . 61.4 Economic valuation and its characteristics . 62STEPS FOR MEASUREMENT . 82.1 Preliminary work . 92.2 Preliminary Scoping Appraisal . 102.3 Method selection and data acquisition . 112.4 Analysis and communication. 122.5 Cautions and limitations. 123METHODS FOR ECONOMIC VALUATION . 133.1 Harvested wild goods and cultivated goods. 133.2 Water services . 153.3 Nature-based recreation . 173.4 Global climate regulation . 173.5 Disaster Risk Reduction . 204Next Steps . 214.1 The importance of comparative valuation . 214.2 Alternative methods for valuation . 225CASE STUDY - Thai Thuy Wetland, Vietnam. 245.1 Thai Thuy Wetland site information. 265.2 Objective of the project . 265.3 Economic Valuation approach . 275.3.1Preliminary scoping appraisal. 272

5.3.2Data collection and economic valuation . 275.4 Limitations . 305.5 Conclusion . 316CASE STUDY - Moeyungyi Wetland, Myanmar . 326.1 Moeyungyi Wetland site information . 346.2 Objective of the project . 366.3 Step and methods of valuation . 366.3.1Preliminary scoping appraisal. 366.3.2Alternative state . 376.3.3Field work and data collection . 386.3.4Economic Valuation . 396.4 Limitations . 436.5 Conclusion . 44GLOSSARY. 46REFERENCES . 48APPENDICES . 50Appendix 1. Example questionnaire form for harvesting wild goods. 50Appendix 2. Example questionnaire form for cultivated goods . 52Appendix 3. Example questionnaire form for water use . 55Appendix 4. Example questionnaire form for nature-based recreation . 593

1 INTRODUCTION1.1 Wetland ecosystemsWetlands are defined as areas of marsh, fen, peat land or water, whether natural orartificial, permanent or temporary, with water that is static or flowing, fresh, brackish orsalt, including areas of marine water the depth of which at low tide does not exceed sixmetres, according to the Ramsar Convention. They are highly productive, complex, dynamic,ecologically sensitive and adaptive systems, supporting significant biological diversity.Globally, wetlands cover approximately 12.8 million km2 (8.5%) of the Earth’s land area,of which inland wetlands cover at least 9.5 million km2 (Finlayson et al. 1999). However,in the last century, it is estimated that almost half of the world’s wetland area has beenlost (Davidoson 2014; UNWWAP 2003). Millennium Ecosystem Assessment (2005)identified that the major direct drivers are infrastructure development, land conversion,water withdrawal, eutrophication and pollution, overharvesting and overexploitation,and the introduction of invasive alien species; and the main indirect drivers have beenpopulation growth and increasing economic development. Although the rate of wetlandhabitat loss has slowed in some region such as Europe and North America, somegeographic areas, especially Asia continue to convert large tracts of wetland habitat intoother land uses (Davidoson 2014).Due to their complex nature, the functions that are lost when wetland areas areconverted are often irreversible (Mitsch and Gosselink 2000). The continued degradationand conversion of wetlands to other land uses is not just impacting on biodiversity butalso on the livelihoods of people living in and around wetlands and the wider humanpopulation. Action is needed both internationally and within nations to halt the loss ofsuch a unique and important habitat for both biodiversity and people alike.The Ramsar ConventionThe Ramsar Convention on Wetlands of International Importance is an intergovernmental agreement thatwas established in 1971 in the town of Ramsar, Iran. It provides a framework for national and internationalaction for the conservation of wetlands. As of 2016 there are 169 contracting parties that are committed tothe Convention’s mission of “the conservation and wise use1 of all wetlands through local and nationalactions and international cooperation, as a contribution towards achieving sustainable developmentthroughout the world”. The objective of the Convention is thus to conserve wetlands for the benefits ofpeople and nature.1Wise use is defined as “the maintenance of their ecological character, achieved through the implementation ofecosystem approaches, within the context of sustainable development”4

1.2 Ecosystem services from wetlandsEcosystem services are the aspects of ecosystems that, actively or passively, producehuman well-being (Fisher et al. 2009). These services are derived from ecologicalprocesses that occur within ecosystems such as nutrient cycling and soil formation(Figure 1), which when combined with some form of human input (such as labour orprocessing), result in benefits to people.Ecosystem functions andprocesses (e.g. nutrientcycling, soil formation)Ecosystem services andgoods (e.g. climateregulation, food)Human well-being(includes economic,health and socialbenefits)Figure 1. Conceptual framework of ecosystem services. Ecosystem services are produced as a result ofecosystem functions and processes and in turn provide goods and other benefits for human well-being. Ecosystemservices represent non-use and non-material outputs from ecosystems (such as bequest values and spiritual values) aswell as direct use values.Table 1. Inland wetland ecosystem services (adapted from Russi et al., 2013)Ecosystem serviceErosion controlRole of wetland structure / functionCapture of sediments and soil retentionFlood protectionRegulation of the flow of water; water storage capacityWater provisionRegular supply of water due to ability to store water in areservoir; groundwater rechargeNatural filtration through nutrient uptake; retention ofparticles and pollutantsHabitat for fish, molluscs, other plants and animal speciesused for foodHabitat for grasses, and other plants used for fibre and fuelWater purificationFoodRaw materials (fibre, fuel)Spiritual / cultural valuesNature-based recreation andtourismCarbon storage andsequestrationLocal climate regulationMany cultures have spiritual values and religious practisesassociated with wetlandsAesthetic features of wetlands; open water; habitats forbiodiversityVegetation and soils capture carbon dioxide and othergreenhouse gases from the atmosphereWater bodies are able to stabilise local temperatures. Themicroclimate at wetlands is often lower than surroundingareas5

Many of the benefits that people derive from ecosystems are dependent on water andwetlands are integral to the global water cycle upon which all of life depends. Thecomplex interactions of wetlands with the surrounding landscape underpin importantecosystem functions and processes. They provide, regulate and purify water so that itcan be used for domestic purposes (drinking, cooking, cleaning etc.) and for industry.Wetlands also have an important role in the cultural identity of people and in spiritualpractices and beliefs. They contribute to local climate control, erosion reduction andunderpin a suite of economic industries such as inland fisheries, harvesting of rawmaterials, tourism and agricultural production which rely on the provision of water (seeTable 1).1.3 Why value wetlands?The socio-economic benefits from wetlands have been over-looked and under-valuedwhich has resulted in widespread modification, degradation, over-exploitation andconversion of wetlands habitats in favour of land uses that are more ‘productive’ yet inthe long-term often lead to detrimental impacts and economic costs.Given current trends in the loss of wetlands and the potentially huge ecological, socialand economic impacts, it is becoming increasingly realised that the diverse values ofwetlands need to be better understood, communicated and incorporated into decisionmaking. Combining improved understanding of biophysical interactions, socio-economicdependencies and valuation of the benefits that wetlands provide to people can lead tobetter implementation of conservation, wise use and restoration.1.4 Economic valuation and its characteristicsValuation is simply a process to aid decision-making because it involves trading off theworth of something against another. Hence, economic value is measured by whatsomeone is willing to give up in other goods and services in order to obtain a good,service, or state of the world. Currently, most decisions are made on the basis ofmeasures of manufactured and financial capital (a proxy for value) and overlook theother forms of capital, most importantly, natural capital2 which is the foundation of allother types of capital (Figure 2). Informed decision-making therefore needs toincorporate the contribution of natural capital and ecosystem services to human wellbeing. One way of doing this is through economic valuation which enables some of thevalue of ecosystems and biodiversity to be presented in an accessible and policyrelevant way.2Natural capital is defined as the world’s stocks of natural assets which include geology, soil, air, water and all livingthings. It is from this natural capital that humans derive ecosystem services, which support all human life.6

There are five types of sustainable capital from where we derivethe goods and services we need to improve the quality of ourlives. Natural capital underpins all other forms of capital fromwhich we derive our well-being. (Source: Forum for the Future)Figure 2. The five capitals model extracted fromPorritt (2007)However, this type of valuation can only capture part of the total value of ecosystems(Figure 3). Although economic valuation can be a useful metric, care should be taken notto overlook other important values to society that cannot be quantified or measured inthis way. For example, ecosystems provide important livelihood benefits tocommunities, which may or may not be substantial in terms of financial rewards, butwhich are vital to sustaining their way of life such as ethical, cultural and othertraditional values. It is arguable that these benefits cannot be adequately captured in aneconomic framework. However, with appropriate caveats an economic approach servesto increase the visibility of many - otherwise overlooked - values of nature and presentsthem for inclusion in decision-making about land use change and its impacts on people.It is important to use a range of methods to assess thevalue and importance of the full range of ecosystemservices underpinned by biodiversity.Figure 3. The limitations to measuringecosystem services. Adapted from TEEB, 2010.7

2 STEPS FOR MEASUREMENTThe steps for measurement of ecosystem services introduced in this guide are asfollows.Preliminary work Define site, based on biologicalimportance and perceived threats Explore policy context Identify and engage stakeholdersPreliminary Scoping Appraisal Identify habitat Identify services and beneficiariesMethods selection Select relevant services to assess Select appropriate methods for eachserviceData aquisition Collect/collate data for siteAnalysis and communication Analyse data Communicate messagesFigure 4. The steps for measurement of ecosystem services (adapted from TESSA, 2014).8

2.1 Preliminary work Set clear objectivesFor economic valuation, the first step is to set clear objectives for the valuation.-Why do you want to do an economic valuation?How will the information be used?Who are you communicating to?What type of information are your audience interested in?The way you carry out the study will depend on the objectives and how youcommunicate the results will depend on the audience.Example: objective of valuation- To get an initial understanding of the value of the ecosystem services- To raise awareness of the importance of ecosystem services among localstakeholders by demonstrating economic value- To use as information for land use decision-making Define site, based on biological importance and perceived threatsIn accordance with the objectives for the valuation, select the site. A site is an operativeor potential management unit with a defined boundary such as a protected area,community forest, farm co-operative, Important Bird and Biodiversity Area (IBA) etc.A map is needed in order to define the boundary and also identify the habitat type andthe area that each habitat covers. Identify and engage stakeholdersIdentifying the stakeholders (e.g. local community, site managers,

The aim of this guide is to introduce a simple and rapid method for assessing economic value of wetlands for non-experts of economic valuation. It can be utilized to understand the overall concepts and steps for economic valuation, as well as demonstrating that wetlands have economic value

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