Monetization of Ecosystem Services from Nature-Based Solutions for Agricultural Diffuse Pollution Control: Simplified Value Transfer Method at European Scale
Abstract
:1. Introduction
2. Material and Methods
2.1. Literature-Based Review of Benefits
2.2. Literature-Based Review of Economic Valuation
- the economic valuations must have addressed only study sites located in regions at similar latitudes and which share similar socio-economic characteristics with the target areas of the application of the methodology (i.e., EU and North America were considered);
- the environmental goods and services valued must be relevant to the benefits of the policy sites, thus economic valuations of the ecosystem services benefits deriving from the implementation of NBS for diffuse pollution control have been preferred. Some exceptions have been allowed for those benefits that report comparable values even in the case of generic ES valuations (as for Water Quality) and other exceptions have been allowed for those benefits of interest that have not been extensively assessed in previous NBS studies (i.e., Nuisance and Awareness/Education).
- summary studies, such as meta-analyses or value transfers of primary valuation literature using either conventional or non-conventional environmental valuation techniques;
- primary empirical analyses that use conventional techniques to determine individual preferences on environmental services;
- non peer-reviewed publications (master and doctoral thesis, technical reports and proceedings).
2.3. Value Transfer Methodology
- NBS characteristics;
- The monetary valuation technique used to calculate the economic value; ref. [50] claim that the introduction of a rank ordering on monetary valuation techniques allows to better compare different studies, guiding the valuation process;
- The indicator used to quantify the extent of the benefits.
- 1 when confidence level final scores [(i) + (ii) + (iii)] is 7
- 0.9 when confidence level final scores [(i) + (ii) + (iii)] is 6
- 0.8 when confidence level final scores [(i) + (ii) + (iii)] is 5
- 0.7 when confidence level final scores [(i) + (ii) + (iii)] is 4
- 0.5 when confidence level final scores [(i) + (ii) + (iii)] is less than 4
- is the value transfer of the ecosystem service in the policy site (PS) for the NBS of interest in 2021, expressed in EUR (VT steps 1 + 2 + 3 + 4 + 5)
- is the value transfer of the ecosystem service in the study site (SS) for the NBS of interest in 2021, expressed in USD (VT steps 1 + 2)
- is the Correction Factor assumed by the decision maker (VT step 3)
- is the GDP per PPP for the SS country, expressed in USD (VT step 4)
- is the Gross Domestic Product (GDP) per capita based on Purchasing Power Parity (PPP) for the PS country, expressed in USD (VT step 4)
- is the Dollar to Euro exchange rate in 2021, equal to 0.845494 EUR/USD (VT step 5)
2.4. Case Study Application
3. Results
3.1. ES Identification and Classification
3.2. Study Site Collection
3.3. Application of Adjusted Value Transfer Methodology—VT Steps (1) to (3)
- values expressed in per hectare per year have been preferred; this is because the benefits computed through monetary valuation techniques based on stated preference method (i.e., Contingent Valuation and Choice Experiment) are based on subjective measures and represent more demand for ES (involving preferences) rather than supply [48]. In the case of Awareness/Education, the per beneficiary unit has uniquely been considered the most appropriate. Both the unit per beneficiary and the per hectare per year were gathered for the Recreation and tourism benefit. In the case of Nuisance, the unit EUR/house/year has also been kept.
- study site characteristics such as the type of wetland, surrounding environment, and threats to ecosystem stability have been weighted, reflecting the confidence level of the attribute; to this end, we tried not to select study sites with a low policy-site-fit values.
- the year of calculation of the value also assumed great importance in the choice. Since calculation methods vary over time, and so do people and preferences, recent studies have been preferred over older ones.
3.4. Application of the Adjusted Value Transfer Methodology Steps (4) to (5)—Case Study
4. Discussion
5. Conclusions
Supplementary Materials
Author Contributions
Funding
Data Availability Statement
Acknowledgments
Conflicts of Interest
References
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Step | Year | Currency | Country | NBS | Description |
---|---|---|---|---|---|
(0) | year of the latest update of the value | currency used in the latest update of the value | study site | study site | Original value from the study site. |
(1) | 2021 | currency used in the latest update of the value | study site | study site | To account for inflation, values have been adjusted to the general price level of the same year. To compare ecosystem service values computed in different years, they have been harmonized using the annual Consumer Price Index [45] *, with 2015 as the base year, transforming the values in the latest available “original” currency, which corresponds to the year 2021. |
(2) | 2021 | USD | study site | study site | To control for differences in price levels, values have been transformed into USD 2021, using 2021 exchange rates [46] **, in order to proceed with step number (4) (which involves using a monetary measure expressed in USD). |
(3) | 2021 | USD | study site | study site | To transfer the value to the NBS of interest, a correction factor was used, capable of taking into account the uncertainties due to the different evaluation contexts, evaluation methods, and indicators used to estimate the value of the ecosystem service. (This is applied after expert selection of the most appropriate study sites.) |
The final steps in the methodology are left to the single study; when selecting an NBS benefit value, decision-makers should consider that the site-specific application of the methodology requires further adjustments in order to account for some effects. | |||||
(4) | 2021 | USD | study site | policy site | To control for the effect of income on the demand and value of ecosystem services, estimates have been adjusted for differences in Gross Domestic Product per capita based on Purchasing Power Parity (PPP) [47] *** between study and policy site. |
(5) | 2021 | EUR (or selected currency) | policy site | policy site | The values have finally been transformed into EUR 2021, using exchange rates [46] **. In the same way the practitioner may select a different currency, relevant to the policy site of interest. |
To explicate the variability of the estimates, the values can be proposed as ranges: the maximum value corresponding to the adjusted economic value without applying the Correction Factor (the highest value may be chosen in case more than one suitable study site was selected); the minimum value corresponding to the economic value with the application of the Correction Factor (in case more than one study site was selected, the lowest value may be chosen). |
Confidence Level Attributes | Type | Evaluation Method | |
---|---|---|---|
(i) | Evaluation of the suitability of the NBS characteristics of the study site with the NBS of the policy site (object of the application of the methodology). | Categorical Score: 1–5 | Expert-based evaluation 1 = very low 2 = low 3 = sufficient 4 = high 5 = very high |
(ii) | Monetary valuation technique used for the economic value calculation. | Binary Score: 0–1 | 0 = Value Transfer 1 = Cost-based/direct market pricing if per hectare terms; Contingent Valuation/Choice experiment if per beneficiary terms |
(iii) | Indicators used to quantify the extent of benefits—ecological, biophysical, or other appropriate indicators such as ES in the case of VT. | Binary Score: 0–1 | Expert-based evaluation 0 = low reliability 1 = high reliability |
Benefit | Reference | (i) Policy-Site-Fit | (ii) Monetary Valuation Technique | (iii) Biophysical Indicator | Confidence Level | Correction Factor | ||
---|---|---|---|---|---|---|---|---|
Water Supply (Wet) | [63] | 5 | Value transfer | 0 | ES. Water supply: Filtering, retention AND storage of fresh water (e.g., aquifers) → Provision of water for consumptive use (e.g., drinking, irrigation, industrial) | 1 | 6 | 90% |
[79] | 3 | Cost-based | 1 | Total calculated floodplain water storage was multiplied by the unit cost of water storage (EUR/m3/year) assessed on the basis of economic evaluation of artificial reservoirs. | 1 | 5 | 80% | |
Natural Habitat And Biodiversity Support (Wet) | [63] | 5 | Value transfer | 0 | ES. Suitable living space for wild species → Maintenance of biological AND genetic diversity; thus the basis of most other functions (e.g., community structure of sea grass meadows) AND Suitable reproduction/grow habitat → Maintenance of wild/commercially harvested species (e.g., sea grass meadows, coraligen AND littoral rock for fish juveniles) | 1 | 6 | 90% |
Water Quality (Wet) | [87] | 5 | Cost-based | 1 | Quantification of nitrogen retention within the flooded area resulting from the decreased running velocity. Two substitutes for the service ‘improvement of water quality’ are considered: (a) the marginal costs of waste water treatment in sewage treatment plants: mean 7.7 EUR/kg N (ranges from 5–8 EUR/kg N) (b) the marginal costs of avoidance of nitrogen loads by agricultural measures: mean 2.5 EUR/kg N (with a wide range depending on measures and production systems considered). | 1 | 7 | 100% |
[63] | 5 | Value transfer | 0 | ES. Role of vegetation AND biota in removal of xenic compounds → Pollution control, detoxification, decomposition, filtering of particles by bacteria and other organisms; removal of nutrients such as nitrogen and phosphorous; beneficial trophic dynamics; abatement of noise pollution | 0 | 5 | 80% | |
Carbon Sequestration (Wet) | [82] | 2 | Direct market pricing | 1 | The social welfare value of GHG mitigation captures the value of the damages avoided by mitigating the risks of climate change. This is typically estimated with the use of integrated assessment general equilibrium models to capture the social cost of carbon, or SCC. The stream of total GHG flux per hectare is multiplied by the market and social value prices and then discounted back to the present with a 4% real discount rate. | 1 | 4 | 70% |
Flood Risk (Wet) | [72] | 4 | Cost-based | 1 | Reduction in house price from external cost caused by odor from an animal waste processing facility depending on odor perception distance. | 0 | 5 | 90% |
Nuisance (Odours, Rumors, Obstacles To Common Farming Practices) (Wet) | [74] | 5 | Hedonic Pricing | 1 | Reduction in house price from external cost caused by odor from an animal waste processing facility depending on odor perception distance. | 0 | 6 | 90% |
Recreation and tourism (Wet) | [72] | 4 | Value transfer | 0 | Recreational value: adjusted value transfer of willingness to pay for access | 0 | 4 | 70% |
[63] | 5 | Value transfer | 0 | ES. Attractive land/seascape features → Enjoyment of scenery (e.g., scenic roads, housing, coastal/seascape) AND Land/seascapes with recreational uses → Travel to natural ecosystems for eco-tourism, rural-tourism AND nature study/enjoy; coast related cultural AND sports events | 1 | 6 | 90% | |
[59] | 3 | Travel Cost | 1 | Travel costs calculated as: Opportunity costs, which are based on the fact that a person who devotes time for leisure activities is paying for it, because he/she will not receive any wages during this time. Salaries are usually accepted as a proxy variable that reflects the opportunity costs of taking part in this recreational activity and therefore have been used in this study. (minimum interprofessional wage 18 EUR/day) → 1.5 h (time spent to reach the park + time spent at the park) × opportunity cost | 0 | 4 | 70% | |
Visual impact/Amenity And Aesthetic (Wet) | [63] | 5 | Value transfer | 0 | ES. Natural features with cultural AND artistic value → Use of nature as motive in books, films, painting, folklore, architecture, marketing AND Natural features with spiritual AND historic value → Use of nature for religious or historic purposes (e.g., heritage value of natural ecosystems AND features, small fisherman) | 0 | 5 | 80% |
Awareness/Education (Wet) | [62] | 2 | Travel cost | 1 | Environmental education: estimate of total cost visit to a national forest interpretive facility | 1 | 4 | 70% |
Water Supply (BF) | [63] | 4 | Choice Experiment | 1 | Marginal WTP for an improvement in wetland management attribute: educational, research and cultural information that may be derived from the existence of the wetland, including visits by scientists, students, and school children to learn about ecology and nature | 1 | 6 | 90% |
Natural Habitat And Biodiversity Support (BF) | [73] | 5 | Value transfer | 0 | ES. Water supply: Filtering, retention AND storage of fresh water (e.g., aquifers) → Provision of water for consumptive use (e.g., drinking, irrigation, industrial) | 1 | 6 | 90% |
Water Quality (BF) | [91] | 1 | Cost-based | 1 | Net benefit from reduced nitrate concentrations (−50%) in shallow groundwater estimated through average annual drinking water costs for the residents | 0 | 2 | 50% |
Carbon sequestration (bf) | [73] | 4 | Value transfer | 0 | Climate regulation (local temperature/precipitation, GHG sequestration, etc.): transition from values in the literature for permanent grassland towards those derived for wetted, carbon accreting soils or to wet woodland, using a marginal cost of carbon of £27 per tonne | 0 | 4 | 70% |
Flood risk (bf) | [63] | 5 | Value transfer | 0 | ES. Influence of ecosystem structure on dampening environmental disturbances → Storm protection (e.g., natural beaches, dunes, small bays or calas); flood protection (e.g., wetlands, forest, rieras) | 0 | 5 | 80% |
Nuisance (odours, rumors, obstacles to common farming practices) (bf) | [74] | 5 | Hedonic Pricing | 1 | Reduction in house price from external cost caused by odor from an animal waste processing facility depending on odor perception distance. | 0 | 6 | 90% |
Recreation and tourism (bf) | [63] | 5 | Value transfer | 0 | ES. Attractive land/seascape features → Enjoyment of scenery (e.g., scenic roads, housing, coastal/seascape) AND Land/seascapes with recreational uses → Travel to natural ecosystems for eco-tourism, rural-tourism AND nature study/enjoy; coast related cultural AND sports events | 1 | 6 | 90% |
Visual impact/amenity and aesthetic (bf) | [73] | 4 | Value transfer | 0 | Local amenity and informal enjoyment: attractive river walk alternative of the upper Bristol Avon in its poached state (Assuming that 1 person per week might otherwise drive 10 miles −40 p per mile- for an alternative) | 0 | 4 | 70% |
Awareness/education (bf) | [80] | 2 | Travel cost | 1 | Environmental education: estimate of tc visit to a national forest interpretive facility | 1 | 4 | 70% |
Wetlands | Buffer Strips | |||||
---|---|---|---|---|---|---|
Value | Units | Value | Units | |||
Water Supply | 1417 | 7509 | EUR/ha/yr | 8409 | 9343 | EUR/ha/yr |
Natural Habitat And Biodiversity Support | 494 | 549 | EUR/ha/yr | 16 | 20 | EUR/ha/yr |
Water Quality | 3261 | 10,157 | EUR/ha/yr | 76 | 151 | EUR/ha/yr |
Carbon Sequestration | 120 | 223 | EUR/ha/yr | 2261 | 3230 | EUR/ha/yr |
Flood Risk | 209 | 232 | EUR/ha/yr | 342 | 427 | EUR/ha/yr |
Nuisance (Odours, Rumors, Obstacles To Common Farming Practices) | 5066 | 49,268 | EUR/house/yr | 5066 | 49,268 | EUR/house/yr |
Recreation And Tourism | 6154 | 6838 | EUR/ha/yr | 5996 | 6662 | EUR/ha/yr |
4 | 6 | EUR/person/visit | - | |||
Visual Impact/Amenity And Aesthetic | 3462 | 4328 | EUR/ha/yr | 1840 | 2628 | EUR/ha/yr |
Awareness/education | 19 | 21 | EUR/person/once | 2 | 4 | EUR/student/trip |
Benefit | Sub-Basins: Marzenego and Dese-Zero | |||
---|---|---|---|---|
Wetlands | Buffer Strips | |||
Min (EUR/Year) | Max (EUR/Year) | Min (EUR/Year) | Max (EUR/Year) | |
Water Supply | 2,447,604 | 12,967,047 | 6,696,159 | 7,440,176 |
Natural Habitat and Biodiversity Support | 853,480 | 948,311 | 13,001 | 16,251 |
Water Quality | 5,631,403 | 17,539,990 | 60,248 | 120,496 |
Carbon Sequestration | 208,035 | 385,829 | 1,800,662 | 2,572,374 |
Flood Risk | 360,073 | 400,081 | 272,091 | 340,113 |
Nuisance (Odours, Rumors, Obstacles to Common Farming Practices) | 8,747,849 | 85,064,599 | 4,033,840 | 39,225,301 |
Recreation and Tourism | 10,627,201 | 11,808,001 | 4,774,910 | 5,305,455 |
88,420 | 197,588 | |||
Visual Impact/Amenity and Aesthetic | 5,979,457 | 7,474,322 | 1,465,069 | 2,092,956 |
Awareness/Education | 33,355 | 53,532 | 1892 | 7567 |
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© 2024 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
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Zanini, S.F.; de Carli, A.; Rizzo, A.; Conte, G.; Masi, F. Monetization of Ecosystem Services from Nature-Based Solutions for Agricultural Diffuse Pollution Control: Simplified Value Transfer Method at European Scale. Water 2024, 16, 898. https://doi.org/10.3390/w16060898
Zanini SF, de Carli A, Rizzo A, Conte G, Masi F. Monetization of Ecosystem Services from Nature-Based Solutions for Agricultural Diffuse Pollution Control: Simplified Value Transfer Method at European Scale. Water. 2024; 16(6):898. https://doi.org/10.3390/w16060898
Chicago/Turabian StyleZanini, Sara Floriana, Alessandro de Carli, Anacleto Rizzo, Giulio Conte, and Fabio Masi. 2024. "Monetization of Ecosystem Services from Nature-Based Solutions for Agricultural Diffuse Pollution Control: Simplified Value Transfer Method at European Scale" Water 16, no. 6: 898. https://doi.org/10.3390/w16060898
APA StyleZanini, S. F., de Carli, A., Rizzo, A., Conte, G., & Masi, F. (2024). Monetization of Ecosystem Services from Nature-Based Solutions for Agricultural Diffuse Pollution Control: Simplified Value Transfer Method at European Scale. Water, 16(6), 898. https://doi.org/10.3390/w16060898