/ Ecological resources are natural resources that provide certain necessary but overlooked system maintenance functions within ecosystems. Environmental economics is in search of an appropriate analysis framework to determine economic values of such resources. This paper presents a framework that estimates and compiles the components of value for a natural ecosystem. The framework begins with the ecological processes involved, which provide functions within the ecosystem and services valued by humans. We discuss the additive or competive nature of these values, and estimate these values through conventional and unconventional techniques. We apply the framework to ecological resources in a shrub-steppe dryland habitat being displaced by development. We first determine which functions and services are mutually exclusive (e.g., farming vs soil stabilization) and which are complementary or products of joint production (e.g., soil stabilization and maintenance of species). We then apply benefit transfer principles with contingent valuation methodology (CVM), travel cost methodology (TCM), and hedonic damage pricing (HDP). Finally, we derive upper-limit values for more difficult-to-value functions through the use of human analogs, which we argue are the most appropriate method of valuation under some circumstances. The highest values of natural shrub-steppe habitat appear to be derived from soil stabilization.KEY WORDS: Natural resource economics; Ecological economics; Ecological resources; Shrub-steppe; Environmental valuation; Cost; Benefit; Value
Executive SummaryEcological resources are resources that have functional value to ecosystems. Frequently, these functions are overlooked in terms of the value they provide to humans. Environmental economics is in search of an appropriate analysis framework for such resources. In such a framework, it is essential to distinguish between two related subsets of information: 1) ecological processes that have intrinsic value to natural ecosystems, e.g., provision of vegetative cover, and 2) ecological functions that are valued by humans, e.g., provision of cleaner air. The present study addresses these concerns by identifying a habitat that is being displaced by development, and by measuring the human and ecological values associated with the ecological resources in that habitat. It is also essential to determine which functions are mutually exclusive (e.g., farming vs. soil stabilization) and which are, in effect, complementary or products of joint production (e.g. , soil stabilization and recreation).We apply several resource valuation tools , including contingent valuation methodology (CVM) , travel cost methodology (TCM), and hedonic damage-pricing (HDP). One way to derive upper-limit values for more difficult-to-value functions is through the use of "human analogs," because humanengineered systems are relatively inefficient at supplying the desired services when compared with natural systems. Where data on the relative efficiencies of natural systems and human analogs exist, it is possible to adjust the costs of providing the human analog by the relative efficiency of the natural system to obtain a more realistic value of the function under consideration.We demonstrate this approach in an environmental economic case study of the environmental services rendered by shrub-steppe habitats of Benton County, Washington State. Shrub-steppe is the dominant land cover across vast areas of the Intermountain West and Northern Mexico. It is often considered unattractive, poor-quality grazing land, but can also be developed for farming or urban uses where In its natural state, shrub-steppe habitat jointly provides numerous functions, including recreation, soil stabilization, and biological diversity, regulation of water flow, education, carbon fixing, and climate iii moderation. Because they are not mutually exclusive, the values of these functions can be added together. However, data are very limited on all but the soil stabilization, recreational hunting, and biodiversity functions.Soil stabilization improves aesthetics, reduces traffic hazards due to blowing dust, reduces household cleaning costs, and may slightly improve respiratory health of the human population. Contingent valuation study results, when applied to Benton County, result in relatively low values for shrubsteppe habitat--between $4 and $14/acre/year. Traffk accidents and road closures cost between $15 and $52/acre/year, while extra cleaning costs may be between $48 and $169/acre/year. Costs of retaining soil range between $6 and $2l/acre/year if the land is...
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