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An ecosystem assesment needs to provide both an analysis of the natural environment by looking at the state of biodiversity and ecosystems, and by evaluating the level of ecosystem services provided to people by that particular ecosystem. It needs to consider both the ecosystem which delivers specific services and the people who depend on and are affected by those services or by any change in the provision of those services.  Deriving information on ecosystem services directly from land-use/cover or habitat maps (40). Such approaches may be appropriate at national or European scales, for areas where the dominant service relates directly to land use (e.g. c rop and timber production) or where data availability or expertise is limited, and where the focus is on the assumed presence of ecosystem services rather than on quantification of the supply. This method is often coupled to value transfer. Ecosystem service values are transferred from existing valuation studies to other areas using land cover data for value transfer (41). This approach cannot be so easily applied to the marine environment.  Primary data to map ecosystem services are used for provisioning services where statistics are available. Examples include timber, food, or water supply. Statistical data usually relate to certain administrative units. For the EU assessment, valuable socio-economic data may be extracted from national and EU reports/datasets (e.g. Eurostat, national statistics from MS). Socio-economic analysis linked to environmental assessments can be also obtained from the sources of information mentioned in the previous section (e.g. Water Framework Directive Art. 9, visitors to Natura 2000 sites).  Primary data are often not available for reg ulating and cultural services and we must re ly on proxies for mapping these services. For instance, the regulation of urban air quality by trees depends much on the size and density of the leaves. A dense canopy is able to capture more particulate matter or pollutants than sparse canopies. The leaf ar ea index is therefore a possible indicator to map this ecosystem service.  Recent mapping techniques are based on biological data such as functional traits of plants or ecosystem structure and habitat data (42). Functional traits, such as vegetation height, leaf dry matter content, leaf nitrogen and phosphorus concentration, flowering onset, c an be used to map several services (43). Habitat classification, such as the European Nature Information System (EUNIS) classification include detailed data on the associated biodiversity, which makes their use reasonable in mapping relationships between biodiversity and ecosystem services. An outlook or scenario analysis showing the implications for biodiversity and ecosystem services of different possible futures is an essential component of an ecosystem assessment. Contrasting policy scenarios with baseline changes that arise from policy measures can be valued in terms of change in well-being. A combination of methodologies needs to be utilised for data-gathering and the assessment process, including questionnaires, semi structured interviews, and a literature review. To be able to cre ate a fair and accurate assessment of a wetland ecosystem we must first define such an ecosystem with all it biological, chemical and phzsical parameters and their interactions that are providing ecological and economic functions (Mitsch and Gosselink 2000). A healthz wetland is one

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An ecosystem assesment needs to provide both an analysis of the natural environment by looking at

the state of biodiversity and ecosystems, and by evaluating the level of ecosystem services provided to

people by that particular ecosystem. It needs to consider both the ecosystem which delivers specific

services and the people who depend on and are affected by those services or by any change in the

provision of those services.

  Deriving information on ecosystem services directly from land-use/cover or habitat maps (40).

Such approaches may be appropriate at national or European scales, for areas where the

dominant service relates directly to land use (e.g. crop and timber production) or where data

availability or expertise is limited, and where the focus is on the assumed presence of ecosystem

services rather than on quantification of the supply. This method is often coupled to value

transfer. Ecosystem service values are transferred from existing valuation studies to other areas

using land cover data for value transfer (41). This approach cannot be so easily applied to the

marine environment.

  Primary data to map ecosystem services are used for provisioning services where statistics are

available. Examples include timber, food, or water supply. Statistical data usually relate tocertain administrative units. For the EU assessment, valuable socio-economic data may be

extracted from national and EU reports/datasets (e.g. Eurostat, national statistics from MS).

Socio-economic analysis linked to environmental assessments can be also obtained from the

sources of information mentioned in the previous section (e.g. Water Framework Directive Art.

9, visitors to Natura 2000 sites).

  Primary data are often not available for regulating and cultural services and we must rely on

proxies for mapping these services. For instance, the regulation of urban air quality by trees

depends much on the size and density of the leaves. A dense canopy is able to capture more

particulate matter or pollutants than sparse canopies. The leaf area index is therefore a possible

indicator to map this ecosystem service.

  Recent mapping techniques are based on biological data such as functional traits of plants or

ecosystem structure and habitat data (42). Functional traits, such as vegetation height, leaf dry

matter content, leaf nitrogen and phosphorus concentration, flowering onset, can be used to

map several services (43). Habitat classification, such as the European Nature Information

System (EUNIS) classification include detailed data on the associated biodiversity, which makes

their use reasonable in mapping relationships between biodiversity and ecosystem services.

An outlook or scenario analysis showing the implications for biodiversity and ecosystem services of

different possible futures is an essential component of an ecosystem assessment. Contrasting policy

scenarios with baseline changes that arise from policy measures can be valued in terms of change in

well-being. A combination of methodologies needs to be utilised for data-gathering and the assessment

process, including questionnaires, semi structured interviews, and a literature review.

To be able to create a fair and accurate assessment of a wetland ecosystem we must first define such an

ecosystem with all it biological, chemical and phzsical parameters and their interactions that are

providing ecological and economic functions (Mitsch and Gosselink 2000). A healthz wetland is one

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which can support biological communities and has similar physical and chemical attributes to those of

natural habitats within the same region. Wetlands are distributed by a number of factors which can be

measured directly. For example we can measure the effect of the introduction of a toxin on a specific

indicator species.

Due to the numerous disturbaces which can occur within a wetland ecosystem, and the numerous

pathways in which a single disturbance can occur, measuring all the potential disturbances or potential

responses to a disturbance within a wetland ecosystemis impractical and inconvenient. The challenge is

in finding methods to evaluate wetland health and the extent to which a wetland has been degraded by

measuring a few key parameters or indicators. Ideally, these will then show a cause and effect

response.However, it is important to keep in mind that using this approach will only give us a general

insight into wetland health and for more specific information, more detailed and intensive

measurements are required.

Indicators of wetland health can be divided into 3 main categories:

Biological

Chemical

Physical

Certain problems can arise due to the fact that many of these problems are interrelated and interact

with eachother. For example, if a wetland is chemically disturbed by an increase in the nutrient content

in the water, apart from seeing changes in the nutrient status, we could also see changes in the

biological make up of the wetland communities. Therefore, it seems logical to concentrate on a group of

parameters rather than just one to assess the health and quality of a wetland ecosystem.

Indicator Parameters used Possible responses to

disturbance

Biological Birds

Macro-invertebrates

Amphibians

Zooplankton

Algae

Vegetation

Microbes

Population structure,

diversity, species richness,

health of individuals

Shifts in species

composition, community

structure.

Disturbance tolerant

species dominate

Chemical pH

Turbidity

Dissolved oxygen

Phosphorus and Nitrogen

concentrations

Pesticides

Dissolved organic C

Major ionsCyanotoxins

Acidity, water clarity,

nutrient status of water,

metals, pesticides,

hydrocarbons, salinity,

organic compunds

Changes in water pH,

eutrophication and algal

blooms, anoxic water and

or sediments.

Changes to

biogeochemical cycling

Toxic responses from

organisms

Physical Water depth

Temperature

Hydrology

Sediment composition

Decomposition

Structure

Water availability and

permanence, water

recharge and discharge

capabilities, peat

accumulation, seasonality

of changes in water depth.

Changes in water storage

or discharge

Changes to ground or

water surface connectivitz

Increased or decreased

decomposition.

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When the chemical, physical and or biological aspects of a wetland ecosystem are disrupted, functions

and associated values can also be disrupted or lost. To assess the disturbance or the overallhealth and

quality if an ecosystem, we need to use indicators. Ideally, practical and efficient approaches to indicator

selection are chosen. Because it is is impossible to measure every biological, chemical or physical

indicator of a wetlands quality, and also cost ineffective, we want to measure only those attributes that

will accurately reflect the health of the system as a whole.

Physical indicators can include both structural and process-based measurements. Structural changes can

be easier to measure and link to physical processes. Measuring physical processes to indicate wetland

health can be difficult and time and cost-consuming. hysical changes to a wetland's hydrology may occur

slowly over time and it can be difficult to monitor those changes. Other physical changes are obvious.

Functions such as water storage, flood control, and peat accumulation may be disrupted by physical

disturbances. However disturbances like these may be difficult to actually quantify, especially when

the natural physical conditions and hydrology are variable. Instead, reflections or impacts of physical

disturbances may be more easily quantified in chemical or biological parameters of the system. For

example, changes in water table are often expressed in changes in plant species assemblages.

Water chemistry parameters may be useful for indicating overall wetland health and are typically the

first parameters investigated to assess water quality.

Chemical indicators, especially water chemistry parameters, can be problematic because of cost and

time requirements. Unless there is concern about a specific chemical or contaminant, direct

measurements may not provide a general picture of wetland health. Sediment chemistry may provide

a better and more long-term picture because chemicals can persist in sediment.

Biological indicators are often considered to be the most useful indicators (US EPA 2002d) because it is

generally assumed that the plant and animal communities of wetlands most accurately reflect wetland

health. Biological indicators considered most useful in assessing wetland health include microbes,vascular and non-vascular plants, invertebrates and birds.

Algal and vascular plant communities are very important in wetland ecosystems because they function

as an energy source for higher organisms. Algal community structure can indicate trophic status of a

wetland and therefore nutrient loading.

Changes in community composition, increases in biomass, and changes to plant health are useful

indicators. Invertebrate communities in wetlands are good indicators of wetland trophic status. ome

invertebrate species are specialized for feeding on certain types of aquatic plants (Murkin et al. 1991)

and as aquatic plant biomass increases so do the numbers of invertebrates.

Several indicators within a wetland system can be combined to form a multimetric index of the overall

health or condition of a wetland site. These metrics may be expressed as a number which is a rating that

indicates the amount of deviation of the system from the same values measured in undisturbed systems

(Karr and Chu 1999). Combining multiple indicators is useful because it encompasses sensitivity of the

system to a wider range of disturbances.

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Wetland functions evaluated by wetland values and assessment methods

Groundwater Water Quality Protection Sediment/Shoreli

ne

Wetlan

d

metho

d

Ground

water

recharge

Ground

water

discharg

e

Flood

flow

attenua

tion

Sediment/to

xicant

retention

Nutrient

removal/transfo

rmation

Sedime

nt

stabiliya

tion

Shoreli

ne

protec

tion

Produc

tion

export

Floral

diver

sity

Fish

and

shelf 

ish

habit

at

Descrip

tive

approa

ch

X X X X X X X X X

WIRAM X X X X X X X XVIMS X X X X XWET X X X X X X X XMDE X X X X X XNC

Guidance

X X X X X

Public use/aesthetics/recreation/education

Wetland

method

Wildlife

habitat

Endangered

species habitat

Public

use

Recreation Educational/Scientific

value

Heritage Visual

quality

Descriptive

approachX x X x x X

WIRAM X X X xVIMS X xWET X X xMDE X

NC Guidance x x X

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Economic Value of Wetlands 

and Valuation Methods

2.1. Economic Value of Wetlands

The economic value of wetland eco-systems can be divided into four categoriesbased on thebenefits/functions/services provided by the ecosystem: direct (DV), indirect (IV), option (OV) and

existence (EV) values (Figure 2-1). Direct value (DV) refers to physical use of resources such as wild fish

capture, timber, firewood, NTFP, etc. Indirect values (IV) refer to ecosystem services such as watershed

protection, carbon sequestration, water quality attenuation and supply. Option values (OV) refer to

future economic options such as industrial, pharmaceutical, recreational applications. Existence values

(EV) refer to intrinsic worth, regardless of use such as biodiversity, landscape, aesthetic, heritage,

bequest and culture (IUCN, 2006). However, most policy makers/planners consider only the direct value

of ecosystems and neglect the other values which leads to an underestimation of the true economic

value of the wetland.

Total Economic Value (TEV) = DV + IV+ OV + EV

Total Economic Values of Wetlands

Direct Values Indirect Values Option Values Existence Values

Physical use of

services

 

Wild foods Timber

 Firewood

Ecosystem

Services

 

Watershedprotection

 Carbon

sequestering

 Water quality

attenuation and

supply

Future Economic

Option

 

Industrial Agricultural

 Pharmaceutical

 Recreational

 Applications

Intrinsic worth

regardless of use

 

Biodiversity Landscape

 Aesthetic

 Heritage

 Bequest

 Cultural

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Table 2-1. Summarizing the methodology for estimating economic values of wetland

Valuation Direct Use Indirect Use Nonuse

Method Values Values Values

MarketAnalysis

(Productivity

 Losses)

(Production

Function)

Public Pricing)

Hedonic Price

Method (HPM)

Travel Cost

Method (TCM)

Contingent

Valuation

(CVM)

Damage

Costs Avoided

Defensive

Expenditures

(Relocation

Costs)

Replacement/

Substitute Cost

Restoration

Costs

Source: Turner, van de Bergh, Barendregt, (1997).

 

Costs of returning the degraded wetland to its

original state. A total value approach; improtant

ecological, temporal and cultural dimensions.

 

Expenditures involved in relocation of affected

agents or facilities:: a particular form of defensive

expenditure.

Potential expenditures incurred in replacing the

function that is lost; for instance by the use of

substitute facilities or ‘shadow projects’.

 potential biases.The costs that would be incurred if the wetland

function were not present; eg flood prevention.

Costs incurred in mitigating the effects of reduced

environmental quality. Represent a minimum value

 which incorporate particular environmental

characteristics.

 for the environmental function.

Costs incurred in reaching a recreation site as a

 proxy for the value of recreation. Expenses differ 

 between sites ( or for the same site over time) with

different environmental attributes.

Construction of a hypothetical market by direct

surveying of a sample of individuals and aggregation

market analysis.

Public investment, for instance via land purchase

or monetary incentives, as a surrogate for market

transaction.

Derive an implicit price for an environmental goodsfrom analysis of goods for which markets exist and

Description

Where market prices of outputs (and inputs) are

available. Marginal productivity net of humaneffort/cost. Could approximate with market price

of close substitute. Requires shadow pricing.

to encompass the relevant population. Problems of 

Change in net return from marketed goods: a form

of (does-response) market analysis.

Wetlands treated as one input into the production

of other goods: based on ecological linkages and

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STEP 1

Define the scope of the Wetland (type and area) to be

valued

You may need help from a wetland expert for this Step 

STEP 2

Identify the principle wetland benefits/functions /services to

be valued

See Figure 2.1 & Table 3.1

STEP 3

Identify principal wetland beneficiaries and stakeholders for

each benefit/function/service being valued 

You may need help from a wetland expert for this Step 

STEP 4Identify the Constraints to completing the valuation (time,

funding, experience and available data on wetland

characteristics) 

Identify the level of perceived constraint (see

Table 3.2)

STEP 5 Select the appropriate valuation method for each wetland

value/benefit/service based on constraints/resources

available.

STEP 6

LWP TOTAL ECONOMIC WETLAND VALUATION MEHODOLOGY

Follow Steps for selected method(s)

enefit Transfer Method (BTM) Chapter 4

arket Price Approach Chapter 5 

ontin ent Valuation Method CVM Cha ter 6 

STEP 7Sum the estimated value obtained for each principle

wetland benefit/function/service to obtain a Total Economic

Value for the Wetland

Figure 3.1 LWP Total Economic Wetland Valuation Methodology

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3.2  Step 3- Identify wetland beneficiaries and stakeholders

The stakeholders and beneficiaries of wetlands will vary depending on the type of wetland and

the benefit/function/service being valued. E.g. the people who get a direct benefit from wild

fisheries in a wetland may be limited to the people living around the wetland. However, a large

number of people who benefit from the flood control function of the wetland may live some

distance down stream of the wetland.

In addition, stakeholders and beneficiaries may be located both upstream and downstream of

the actual wetland. E.g. those benefiting from the water cleansing value of a wetland may live

upstream in a town that discharges waste water to the wetland while those living downstream

may benefit from the flood control function of a wetland.

Some stakeholders and beneficiaries may not live in the vicinity of the wetland at all. This is

particularly true when considering beneficiaries of the intrinsic/existence benefits of a wetland

such as biodiversity or cultural heritage. These aspects of a wetland benefit the wider public.

Thus it is important to identify you target group of benificaries and stakeholders for each of thewetland benefits/functions/services you want to value.

3.3 

Step 4 –Identify the constraints under which the valuation will be carried out

This manual has been developed for estimating the economic value of wetlands when the time

and budget available to complete the valuation is constrainted. It is important to consider the

time, budget, capacity of the person(s) carrying out the valuation and data (basic informationon wetland) available before selecting a of valuation . The criteria for constraints in time,

budget, capacity (staffs capacity), and basic information of wetland is identified as ‘highly

constrainted’, ‘medium constraints’, and ‘small constraints’ in Table 3-1.

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The following steps should be undertaken to identify the most appropriate method of valuation

based on the constraints on time budget and staff capacity;

Define constrains

It is important to identify the constraints for time, budget, capacity (staffs capacity), and basic

information of wetland. See criteria for each option in Table 3-2

Table 3-2 Criteria for each constraint option

Choose a constraint option

Based on your constraints perception, you will have 4 options for selecting an appropriate

valuation method.. Please choose an option in Table 3-3.

Highly constraints Medium constraints Small constraints

Time 2-5 days 3- 5 months More than 6 months

Budget No budget about 80US$/questionnaire* about 120 US$/questionnaire*

Capacity

No basic of naural

resouces economics

Bachalor/master on

environmental economics Ph.D in Economics

Do not have experience in

valuation

Some expriences in

valuation Have Expererience in valuation

Basic information No information of wetland Have some basic data Have all information

Note: *This base on author's experiences. However, it is important to note that cost of survey depend on

geographical condition and type of questionnaire.

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Table 3-3. Constraint Option and appropriate valuation method

Constraint Option 1 Option 2 Option 3 Option 4

Time 000 000 0 0

Budget 000 000 00 0

Capacity 000 000 00 0

Basic Information 000 0 0 0

Appropriate

Method

Benefit

Transfer

Method

Benefit Transfer

Method

Marked Price

Approach

Contingent Value

Method

Go to Chapter

Note 000; Highly constrained

00; Medium constraints

0; Low constraints

3.6 Step 5 - Choosing a valuation method

An appropriate valuation method is indicated in Table 3.2 for each of the 4 Options listed. After

choosing the relevant option base on perceived constraints, we could then go to the chapter

detailing the methodology indicated for that option; e.g. Option  –  Benefit Transfer Method

(BTM).

However, we can combine four options together based on our constraints. For example, we

might choose the BTM for valuing the flood control function of a wetland, the Market Price

Approach for estimating direct benefits of a wetland such as wild fish capture and the CTV for

estimating the biodiversity value of the wetland. 

3.7 Step 6 Calculating the Total Economic Value

This step simply requires the addition of all the values estimated for each of the wetland

benefits/functions/services considered to produce a Total Economic Value for the wetland.

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4.0 Benefit Transfer Method 

The Benefit transfer method (BTM) is a popular method when time and cost are constraints. BTM is

using previous study results for estimating the value of the current study site.

There are four steps to follow in order to implement BTM.

Step 1. Review studies on wetlands 

Step 2. Select relevant papers and studies to conduct BTM 

Step 3. Estimate economic value of wetland

Step 4. Adjust value

5.0. Market Price Approach

Market price approach is the simplest and most straight forward way of finding out the value of

wetland goods because we can find out directly what wetland goods such as sish and other

aquatic animals are consumed and sold.

This method uses a questionnaire to collect data about the market price of buying and selling

wetland goods. For example, catching fish from the wetland for sale in local markets. We can

estimate the economic value of a direct benefit/value (such as fish) by the amount of fish

consumed and sold based on the sale price of the fish.

There are six steps for conducting market base approach as follows.

Step 1. Setting scope of wetland valuation

Step 2. Design questionnaire 

Step 3. Decide on sample size

Step 4. Preparing for the survey

Step 5. Input data

Step 6. Estimating a direct value of a wetland

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6.0. Contingent Valuation Method (CVM) or Willingness To Pay (WTP) 

This approach, implemented by means of surveys, aims to assess how individuals would

hypothetically react to changes in environmental quality. In particular, it elicits from

respondents how much they would be willing to pay to access improved environmental quality

or avoid a hypothetical reduction in environmental quality. There are many approaches to

estimating “willingness to pay” (WTP), we use an open-end questionnaire which asks people

directly how much they are willing to pay to conserve a particular benefit/function/service of a

wetland. For example, “What is the maximum amount you would be willing to pay to preserve

the biodiversity of a particular wetland?”

There are seven steps for conducting Contingent Valuation Method (CVM) as follows.

Step 1. Select the wetland benefit you wish to value

Step 2 Select the relevant stakeholders/beneficiaries

Step 3. Questionnaire Design

Step 4. Decide sampling size and composition

Step 5. Preparing for the survey

Step 6. Input data

Step 7. Estimating Willingness to pay (WTP)

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