Nearshore Natural Capital Valuation: Valuing the Aquatic Benefits of British Columbia’s Lower...
The David Suzuki Foundation estimates the ecosystem services provided by BC's lower mainland at $30 billion to $60 billion in benefits annually .
Molnar, Michelle, Kocian, Maya and Batker, David. (2012). Nearshore Natural Capital Valuation: Valuing the Aquatic Benefits of British Columbia's Lower Mainland. Vancouver, British Columbia: David Suzuki Foundation.
This study illuminates the connections between the economy and the aquatic ecosystems of B.C.’s lower mainland. By identifying and placing a value on the non-market goods and services sustained by these ecosystems and provided to 2.5 million residents, these connections are brought into the open. This is a vital step toward an informed discussion of how public and private decision-making can incorporate a wider range of interests into policies to improve prosperity for all.
The ecosystem services framework was developed within ecological economics as a tool for establishing nature’s value into economic decision making. Although most often used in economic models (as opposed to other cultural or social value systems), the concept of ecosystem services has proven effective for understand- ing the linkages between ecosystems and human well-being.
The Economics of Ecosystems and Biodiversity (TEEB) classification system was adopted for this study. The table below provides a synopsis of this study’s classification of services into four groups of services: provisioning, regulating, habitat, and cultural services.
Ecological economists have developed a number of techniques for putting dollar values on the non-market goods and services provided by ecosystems. A combination of primary and transferred studies was used, due to the lack of primary valuation studies on aquatic ecosystem services in the study area. in addition, because ecosystem services are physically different and more or less amenable to markets, a variety of different valuation techniques are required. By utilizing an appraisal approach, great cost and time can be saved.
The benefits of ecosystem services can be calculated by ecosystem service or land type. The top three ecosystem service values are aesthetic and recreation, estimated at $23 billion to $44 billion per year, water supply at $2.3 billion to $7 billion per year, and disturbance regulation at $2 billion to $5 billion per year. Top service values per hectare include disturbance regulation (up to $297,000/hectare/year), aesthetic and recrea- tion (up to $283,000/hectare/year), and waste treatment (valued at a maximum of $115,000/hectare/year).
An ecosystem produces a flow of valuable services across time. in this sense it can be thought of as a capital asset. This analogy can be extended by calculating the net present value of the future flows of ecosystem services, just as the asset value of a traditional capital asset (or large project) can be approximately calculated as the net present value of its future benefits. A range of discount rates has been applied to the results of this study. A zero per cent discount rate represents the view that natural capital does not depreciate over time; a 3 per cent discount rate represents the rate commonly used in socio-economic studies; and a 5 per cent discount rate represents a conventional rate used in net present value calculations. over a 50-year period, the net present value is $1,533 billion–$3,067 billion at a 0 per cent discount rate, $789 billion–$1,578 billion at a 3 per cent, and $560 billion–$1,120 billion at a 5 per cent discount rate.