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Estimating non-market values across scale and scope
John Rolfe
Participants
• Project run by Central Queensland University– John Rolfe, Jill Windle, Xuehong Wang & Galina
Ivanova
• Collaboration with – Jeff Bennett (ANU)
– Riccardo Scarpa (Waikato, NZ)
– Kathleen Broderick & Ingrid van Puten (GBRMPA)
Economic valuation
• Used to assess how important different issues are to people
• Market transactions are easy to value – we look at the monetary tradeoff revealed in markets
• Many tradeoffs are harder to value– Environmental issues – Recreation– Social and community tradeoffs
Non-market valuation techniques
• Revealed preference techniques – Travel Cost Method used to assess values for recreation
• Example – value per recreational fishing trip
• Stated preference techniques – Can be used to assess non-use and use values
– Give people scenarios with a potential cost and ask them to ‘state’ their tradeoff
– Contingent valuation
– Choice Modelling
Choice Modelling
• Presents people with a series of tradeoffs about issue in question
• Tradeoffs described in terms of key attributes
• Normally add a cost component as well
• Identify if people are willing to pay for additional improvement or protection
• Tradeoffs presented in a survey format
The policy needs
• Choice Modelling studies are slow and expensive to perform
• Often easier to transfer values from other studies
• Process known as Benefit Transfer – Prospector approach – Systematic database – Combination of previous studies
How to make Benefit Transfer more accurate
• There are four main strategies – Increase the pool of non-market valuation
studies– Increase the accuracy and understanding
of the conducted studies– Develop better systematic BT case studies– Improve the use of BT tools and databases
Issues with Benefit Transfer
• How easy is it to take values that have been estimated in one particular context and transfer them to another application?
• Scale issues – do values change according to the amount of an asset involved?– Small patch, large patch, regional area
• Scope issues – do values change according to the types of tradeoffs involved?– Forest versus forest + animals + birds
• Management issues – do values change according to the types of management actions taken?
Case study - GBR
• Major biodiversity and recreation icon
• Large scale – extends along most of Qld Coast (4 main sections), – 2900 different reefs, – about 6% of area covered by reef
• Extensive scope – Different assets – reef, fish, seagrass, mammals– Different areas – reef, beaches, islands, inner+outer– Different uses – biodiversity, fishing, recreation
Valuation challenges
• Scale challenges– Changes in geographic scope referred to as a scale issue
– Can values estimated at larger scale be transferred to smaller scale and vice versa
– Whole reef → regional areas → local reefs
• Scope challenges – Do values for key reef assets (fish + corals) change
when more GBR assets are considered?• Marine mammals, beaches, seagrass, biodiversity
Working with scale and scope
• Policy makers often need values at a focused level of scale and scope
• But communities often find more general tradeoffs easier to make– We want to be able to benefit transfer between different
levels
– Need ways of conducting studies at different levels of scale and scope and then linking them together
– What are key scale and scope issues for GBR?
Some approaches
• Run split sample experiments at different levels
• The scale issue– Whole GBR vs Regional GBR vs local areas
• The scope issue– Include different attributes to check if the
‘coverage’ of issues makes a difference
Question 6: Carefully consider each of the following three options. Suppose options A, D and E were the only options available, which would you choose?
How much I pay
Area of coral reef in good
health
No. of fish species
Area of seagrass in good health
Quality Recreation Area affected by poor
water visibility
I would choose
Current
condition 16,000 sq km
80% of total
1,500 species
100%
32,000 sq km
75%
86,000 sq km
25%
Condition in 15 years time
Option A
$0 14,000 sq km
70% 1275 species
85% 28,000 sq km
65% 121,000 sq km
35%
Option D
$300 17,000 (15% better)
1350 (5% better)
32,000 (10% better)
104,000 (5% better)
Option E
$125 16,000 (10% better)
1425 (10% better)
30,000 (5% better)
86,000 (10% better)
Some other complexities
• How values may be sensitive to different levels of uncertainty
• How values may be sensitive to different types of management actions
• Options to combine the different information in choice sets
Management actions
• Four main groups of actions – Improving water quality from agriculture– Restricting fishing (commercial and/or
recreational)– Increasing green zones– Climate change mitigation
• May be important for policy to identify if preferences are sensitive to actions
Risk and uncertainty
• As soon as there are management actions there should also be information about uncertainty– Uncertainty about whether the nominated actions
will lead to improvements• Green zones/fishing = low uncertainty
• Ag. Water quality = medium uncertainty
• Climate change mitigation = very high uncertainty
– Challenge of communicating uncertainty
This choice set is for the Whole Great Barrier Reef
Question 8: Carefully consider each of the following three options. Suppose options A, H and I were the only options available, which would you choose?
How much I pay
Area of coral reef in good
health
No. of fish species
Marine Mammals
Uncertain outcomes
Years for policy to take effect
I would choose
?
Current condition
16,000 sq km
80% 1,500 species
10 per sq km
75%
Condition in 15 years time
Option A
$0 70% 1275 species 4 per sq km 0
Expand Green zones
$60 75% 1500 6 per sq km 2
Reduce greenhouse emissions
$125 85% 1425 8 per sq km 25
Testing
• Test different formats and survey versions
• Workshops / focus groups
• Experimental lab (uncertainty issues)
• Major survey rounds (different cities)