Baltic Sea ecosystem services and benefits · Baltic Sea ecosystem services and benefits ... Defining and classifying ecosystem services for decision making. Ecological Economics

© Natural Resources Institute Finland © Natural Resources Institute Finland

Management of environmental problems in aquatic ecosystems (ESCG-501)

Heini Ahtiainen

Senior Scientist

Natural Resources Institute Finland (Luke)

Baltic Marine Environment Protection Commission (HELCOM)

Baltic Sea ecosystem

services and benefits

20.11.2017 1

© Natural Resources Institute Finland

Topics in this lecture

• How does the Baltic Sea affect human well-being?

• How are ecosystem services linked to benefits and values?

• What is economic value?

• How to value environmental changes?

• What are current topics in regional economic and social

analyses in the Baltic Sea area?

2 20.11.2017


Where we are in the DPSIR framework

3 20.11.2017

Drivers

State

Impact

Responses

Ecosystem

services

Pressures


Ecosystem services

• ”…are ecosystem characteristics that are actively or

passively used to produce human well-being” (Fisher et

al. 2009)

• Relationship between human well-being and

ecosystems

• Benefits accrue to humans

• Several definitions/classifications

– E.g. MEA, TEEB, CICES

– Usable in different contexts

4 20.11.2017


Cascade model of ecosystem services (adapted from

Haines-Young & Potschin 2010)

5 20.11.2017


Classification of ecosystem services

6 20.11.2017

Intermediate services

• Supporting (primary production, nutrient cycling)

• Regulating (natural hazard regulation)

Final services

• Provisioning (fish and shellfish, water, energy)

• Cultural (landscape)

• Regulating (climate regulation, pollination)

Goods

• Objects of value

• Market and non-market

• E.g. food, recreation, healthy climate

Benefits/

values

• Monetary values

• Non-monetary values

• Health values


Source: Turner et al. (2014). UK NEA Follow-on. WP Report 4: Coastal and

marine ecosystem services. 7


Example: recreation and tourism (cultural service)

8 20.11.2017

Value of recreation and tourism

Recreation and tourism

Fish and shellfish

Algae

Clean water

Places and seascapes

Primary production

Larval and gamete production

Nutirient cycling

Water cycling

Habitat formation

Landscape formation

Waste breakdown and detoxification


What is value?

• Intrinsic value

– Independent of humans

• Economic value

– Anthropocentric

– Environmental state/ecosystem services as a source of

human well-being

– Trade-offs: how much money would a person be willing to

give up to obtain a better environment

9 20.11.2017


Why is valuation needed?

• No market prices for environmental goods and

ecosystem services – what is their value?

• Comparability

• Integrating environmental values into decision-

making

– Cost-benefit analysis

– Setting targets

– Prioritizing, allocation of resources

• Transparency and visibility

• Public participation

10 20.11.2017


Value categories

Total economic value

Use value

Option value Actual use

Non-use value

Existence For others

Bequest Altruism

11


Valuation of the environment/ecosystem

services

• Benefits (or damages) from changes in the environment

• Different approaches

– Qualitative

– Quantitative

– Monetary (economic)

• In principle, valuation of environmental goods = valuation of

ecosystem services

– Differences in the object of valuation/phrasing of the

research question

12 20.11.2017


Important considerations in valuation

• Value of changes instead of total values

• Spatiality

• Double-counting

• Ecological thresholds/nonlinearities

• Account for only ecosystem services part of the

total economic value

– Part of the value may result from human actions

13 20.11.2017


Valuation methods

14 20.11.2017

• Travel costs, property prices

Use values (recreation, tourism, landscape)

Revealed preference methods

• Contingent valuation, choice experiment

• Use and non-use values (recreation, existence)

Stated preference methods

• Applying existing data to new contexts

Benefit transfer, meta-analysis

• Food, energy, medicine

Market prices

• Avoided costs, replacement costs

• Climate regulation, flood control, waste breakdown

Cost-based methods


Critique on ecosystem services and valuation

• Ecosystem services as an anthropocentric concept

• ”Pricing” nature

• Commodifying nature and seeing it as a service provider

• Total value of nature

Valuation methods

• Stated preferences vs. ”true” preferences

• Hypothetical values

• Results do not comply with economic theory

15 20.11.2017


Value of Baltic Sea recreation (Ahtiainen et al. 2013,

Czajkowski et al. 2015)

• Travel cost method

• Identical surveys in 9 countries

• Value of recreation 15 billion €

per year

• Improvement in environmental

quality would lead to 7-18%

increase in value, about 2 M€

per year

16

Country Annual number of visits per

person

Annual value of Baltic Sea

recreation (M€)

Estonia 1.8 150

Finland 4 1040

Denmark 6 720

Germany 1.2 5140

Latvia 2.6 110

Lithuania 1.7 190

Poland 1.1 2070

Sweden 6.4 4430

Russia 0.5 940


Benefits from reduced eutrophication (Ahtiainen et al.

2014)

• Contingent valuation method

• Identical survey in 9 countries

• Willingness to pay for

reducing eutrophication

• Benefits of reduced

eutrophication in total 3800-

4400 M€ per year

17

Country Annual willingness to

pay per person (€)

Annual benefits of reduced

eutrophication (M€)

Denmark 29 – 37 125 – 158

Estonia 21 – 30 21 – 31

Finland 42 – 46 176 – 189

Germany 25 – 28 1572 – 1781

Latvia 5 – 6 8 – 9

Lithuania 9 – 10 19 – 22

Poland 12 – 13 368 – 383

Russia 11 – 12 1028 – 1129

Sweden 60 – 92 440 – 674

11/20/2017 18

Economic and social analyses at HELCOM (Baltic Marine Environment Protection Commission)

Regional economic and social analyses at HELCOM

• Important development area

• Coherent framework and information across countries – Regional results for the Baltic Sea

– Support for national implementation of EU directives

• HELCOM expert network on economic and social analyses

• EU co-funded projects 2016-2019 (TAPAS, SPICE, PanBaltic SCOPE)

• Regional workshops

• Holistic assessment of ecosystem health (HOLAS II)

• Marine spatial planning

11/20/2017 19

ANALYSIS OF THE USE OF

MARINE WATERS

Pressures

Human

activities State

Current contribution

to economy or

human welfare

Potential losses in

human welfare from

deteriorated state

ANALYSIS OF THE COST OF

DEGRADATION

Role of economic and social analysis in the HELCOM holistic assessment

• Second Holistic Assessment of Ecosystem Health of the Baltic Sea (2014-2018) and ’State of the Baltic Sea’ report

• First version published in July 2017 (final version summer 2018)

11/20/2017 20

Annual contribution from the use of marine waters to economy in the Baltic Sea region

• Selected sectors

• Monetary, employment and quantitative indicators

11/20/2017 21

FISH & SHELLFISH HARVESTING

Value of landings:

220 million € Employment:

9500 people

FINFISH AQUACULTURE

Gross value added:

14 million €

MARINE & COASTAL RECREATION (travel cost method)

Value to citizens:

15 billion €

TRANSPORT INFRASTRUCTURE

No. of ports:

200 Total port traffic:

840 million tonnes No. of passengers, all ports:

100 million

Losses of recreation

values:

1000 – 2200 million €

Losses from degradation of

perennial vegetation and fish stocks:

1800 – 2700 million €

Losses from eutrophication:

3800 – 4000 million €

Annual welfare losses for citizens if good environmental status is not reached

• Cost of degradation

• Selected degradation themes and ecosystem services

11/20/2017 22

Economic and social analyses in marine spatial planning (MSP)

• PanBaltic SCOPE project in the Baltic Sea region, 2018 →

• HELCOM coordinates the economic and social analyses

– Review of how economic, social and cultural impacts and existing models are included in national MSP

– Recommendations on how to develop a framework for ESA in MSP

– Regional platform for exchanging experiences and knowledge

11/20/2017 23


References and literature (1)

• Ahtiainen, H., Artell, J., Czajkowski, M. et al. 2014. Benefits of meeting nutrient reduction

targets for the Baltic Sea – a contingent valuation study in the nine coastal states. Journal of

Environmental Economics and Policy 3(3):278‐305.

• Bateman, I., Mace, G., Fezzi, C., Atkinson, G. & Turner, K. 2011. Economic Analysis for

Ecosystem Service Assessments. Environmental and Resource Economics, 48, 177–218.

• Boyd, J. and S. Banzhaf 2007. What are ecosystem services? The need for standardized

environmental accounting units. Ecological Economics 63: 616‐626.

• Czajkowski, M. et al. 2015. Valuing the commons: An international study on the recreational

benefits of the Baltic Sea. Journal of Environmental Management 156: 209-217.

• Costanza, R. et al. 2007. The value of the world's ecosystem services and natural capital.

Nature 387(6630): p. 253‐260.

• Fisher B, Turner RK, Morling P 2009. Defining and classifying ecosystem services for decision

making. Ecological Economics 68(3): 643-653.

• Haines-Young, R., & Potschin, M. 2010. The links between biodiversity , ecosystem services

and human well-being. In British Ecological Society (Ed.), Ecosystem Ecology: A new Synthesis

(pp. 110–139). Cambridge University Press.

• Haines-Young, R. and Potschin, M. 2013. Common International Classification of Ecosystem

Services (CICES): Consultation on Version 4, August-December 2012. EEA Framework

Contract No EEA/IEA/09/003

24 20.11.2017


References and literature (2)

• HELCOM ’State of the Baltic Sea’ summary report (HOLAS II):

http://stateofthebalticsea.helcom.fi/wp-content/uploads/2017/07/HELCOM_State-of-the-Baltic-

Sea_First-version-2017.pdf

• HELCOM Supplementary report on economic and social analyses (HOLAS II):

http://stateofthebalticsea.helcom.fi/wp-

content/uploads/2017/07/HELCOM_Economic_and_social_analyses_Supplementary_report_fir

st_version_2017.pdf

• Garpe, K. 2008. Ecosystem services provided by the Baltic Sea and Skagerrak. Swedish

Environmental Protection Agency Report 5873.

• Kosenius A-K, Ollikainen M. 2015. Ecosystem benefits from coastal habitats: A three country

choice experiment. Marine Policy 58:15-27.

• Millennium Ecosystem Assessment (MA) 2005. Ecosystems and human well‐being: Synthesis.

World Resources Institute: Washington D.C. p. 86.

• Obst et al. 2016. National accounting and the valuation of ecosystem assets and their services.

Environmental and Resource Economics 64(1): 1–23.

• Söderqvist, T. & Hasselström, L. 2008. The economic value of ecosystem services provided by

the Baltic Sea and Skagerrak. The Swedish Environmental Protection Agency Report 5874.

• TEEB 2010. The Economics of Ecosystems and Biodiversity (TEEB). Ecological and Economic

Foundations. Edited by Pushpam Kumar. Earthscan, London and Washington.

• Turner et al. 2014. UK NEA Follow-on. WP Report 4: Coastal and marine ecosystem services.

UK National Economic Assessment (UK NEA) 2011. The UK National Ecosystem Assessment.

Technical Report. UNEP-WCMC, Cambridge.

• WG ESA (Working Group on Economic and Social Assessment) 2010. Economic and social

analysis for the initial assessment for the Marine Strategy Framework Directive: a guidance

document. European Commission, 21 December 2010.

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http://stateofthebalticsea.helcom.fi/wp-content/uploads/2017/07/HELCOM_State-of-the-Baltic-Sea_First-version-2017.pdf















http://stateofthebalticsea.helcom.fi/wp-content/uploads/2017/07/HELCOM_Economic_and_social_analyses_Supplementary_report_first_version_2017.pdf




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Baltic Sea ecosystem services and benefits · Baltic Sea ecosystem services and benefits ... Defining and classifying ecosystem services for decision making. Ecological Economics