Exploring welfare implications of resource equivalency analysis in natural resource damage assessments

Zafonte, Matthew; Hampton, Steve

doi:10.1016/j.ecolecon.2006.02.009

Cited by 65 publications

(52 citation statements)

References 22 publications

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“…Strange et al (2002) are to be applauded for carefully expressing the framework in a model that is cognizant of the role that discounting plays and, because of their assumptions. Zafonte and Hampton (2007) make this even clearer. The latter do consistently point out that the most relevant economic and biological models connected to the REA framework are dynamic and incorporate the dimension of time, but do not carefully consider any issues related to the discount rate, and therefore, our concerns about it are raised below.…”

Section: Some General Concerns About the Rea/ Heamentioning

confidence: 95%

“…Today, HEA has largely replaced the sole use of traditional non-market valuation approaches alone (NOAA 2000), especially in the context of NRDA (Zafonte and Hampton 2007). This replacement is in fact tied to controversies that arose in application of non-market valuation methods in damage assessments such as the Exxon Valdez oil spill case; in particular, the oil industry and their lawyers and economists attacked the scientific merit of the CVM with a great deal of effort.…”

Section: Background On Hea and Non-market Valuationmentioning

confidence: 99%

“…That means it takes time for a restored habitat to get back to ecological balance, thus service flows from it may not begin accruing until the future. Zafonte and Hampton (2007) directly indicate that ''values'' underlying the HEA or REA approaches are potentially economic ones, and are still part of an initial formulation of the HEA or REA equation, along with the discount rate. However, the former drop out of the equation altogether as long as the injured and restored values of resources are of the same type and quality.…”

Section: Resource/ Habitat Equivalency Analysismentioning

confidence: 99%

“…In contrast, Loureiro et al (2010) find a significant drop in WTP estimates related to the Prestige oil spill in Spain (in 2002) over a 4-year period, though it is difficult to discern what exactly causes this decline. Dunford et al (2004) demonstrated that HEA results are quite sensitive to a variety of factors, including price change scenarios, and Zafonte and Hampton (2007) describe three situations where the values on the left-and right-hand sides (i.e., the injured and restored resource values, respectively) do not cancel each other out, thus making elimination of monetary values suspect: (i) the resources are different, (ii) per unit value of injured and restored resources changes over time, and (iii) heterogeneous preferences over natural resources of interest violate the criterion that REA should satisfy, which is that the sum of all individuals' WTA compensation for injury is zero, including the cost of the correctly scaled restoration. The idea of the last criterion is simply that restoration costs and benefits are balanced for economic efficiency.…”

Section: Some General Concerns About the Rea/ Heamentioning

confidence: 99%

“…The central theme is that the gainers compensate the losers (the Hicks or Kaldor criteria for compensating wealth which were discussed by Jones and Pease 1997, among many, many others with a focus on welfare economics). Zafonte and Hampton (2007) also simulate different outcomes in a REA model to explore how it does when price changes and heterogeneity in preferences are introduced. Doing this requires development of a modified REA model that does include monetary values, as well as several assumptions, including a functional form for a demand function that yields the monetary benefit flows from the restoration project and implies various elasticities (i.e., sensitivity to price or other changes).…”

Section: Some General Concerns About the Rea/ Heamentioning

confidence: 99%

See 4 more Smart Citations

Ecosystems, Ecological Restoration, and Economics: Does Habitat or Resource Equivalency Analysis Mean Other Economic Valuation Methods Are Not Needed?

Shaw

Wlodarz

2012

AMBIO

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Coastal and other area resources such as tidal wetlands, seagrasses, coral reefs, wetlands, and other ecosystems are often harmed by environmental damage that might be inflicted by human actions, or could occur from natural hazards such as hurricanes. Society may wish to restore resources to offset the harm, or receive compensation if this is not possible, but faces difficult choices among potential compensation projects. The optimal amount of restoration efforts can be determined by nonmarket valuation methods, service-to-service, or resourceto-resource approaches such as habitat equivalency analysis (HEA). HEA scales injured resources and lost services on a one-to-one trade-off basis. Here, we present the main differences between the HEA approach and other nonmarket valuation approaches. Particular focus is on the role of the social discount rate, which appears in the HEA equation and underlies calculations of the present value of future damages. We argue that while HEA involves elements of economic analysis, the assumption of a one-toone trade-off between lost and restored services sometimes does not hold, and then other non-market economic valuation approaches may help in restoration scaling or in damage determination.

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Section: Some General Concerns About the Rea/ Heamentioning

confidence: 95%

Section: Background On Hea and Non-market Valuationmentioning

confidence: 99%

Section: Resource/ Habitat Equivalency Analysismentioning

confidence: 99%

Section: Some General Concerns About the Rea/ Heamentioning

confidence: 99%

Section: Some General Concerns About the Rea/ Heamentioning

confidence: 99%

See 3 more Smart Citations

Ecosystems, Ecological Restoration, and Economics: Does Habitat or Resource Equivalency Analysis Mean Other Economic Valuation Methods Are Not Needed?

Shaw

Wlodarz

2012

AMBIO

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Ecological Harm and Economic Damages of Chemical Contamination to Linked Aquatic‐Terrestrial Food Webs: A Study‐Design Tool for Practitioners

Kraus

Skrabis

Ciparis

et al. 2023

Enviro Toxic and Chemistry

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Contamination of aquatic ecosystems can have cascading effects on terrestrial consumers by altering the availability and quality of aquatic insect prey. Comprehensive assessment of these indirect food‐web effects of contaminants on natural resources and their associated services necessitates using both ecological and economic tools. In the present study we present an aquatic‐terrestrial assessment tool (AT2), including ecological and economic decision trees, to aid practitioners and researchers in designing contaminant effect studies for linked aquatic‐terrestrial insect‐based food webs. The tool is tailored to address the development of legal claims by the US Department of the Interior's Natural Resource Damage Assessment and Restoration Program, which aims to restore natural resources injured by oil spills and hazardous substance releases into the environment. Such cases require establishing, through scientific inquiry, the existence of natural resource injury as well as the determination of the monetary or in‐kind project‐based damages required to restore this injury. However, this tool is also useful to researchers interested in questions involving the effects of contaminants on linked aquatic‐terrestrial food webs. Stylized cases exemplify how application of AT2 can help practitioners and researchers design studies when the contaminants present at a site are likely to lead to injury of terrestrial aerial insectivores through loss of aquatic insect prey and/or dietary contaminant exposure. Designing such studies with ecological endpoints and economic modeling inputs in mind will increase the relevance and cost‐effectiveness of studies, which can in turn improve the outcomes of cases and studies involving the ecological effects of contaminants on food webs. Environ Toxicol Chem 2023;00:1–11. Published 2023. This article is a U.S. Government work and is in the public domain in the USA. Environmental Toxicology and Chemistry published by Wiley Periodicals LLC on behalf of SETAC.

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Considering pollinators' ecosystem services in the remediation and restoration of contaminated lands: Overview of research and its gaps

Meldrum

Larson

Hoelzle

et al. 2023

Integr Envir Assess & Manag

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The concept of ecosystem services provides a useful framework for understanding how people are affected by changes to the natural environment, such as when a contaminant is introduced (e.g., oil spills, hazardous substance releases) or, conversely, when contaminated lands are remediated and restored. Pollination is one example of an important ecosystem service; pollinators play a critical role in any functioning terrestrial ecosystem. Other studies have suggested that consideration of pollinators' ecosystem services could lead to better remediation and restoration outcomes. However, the associated relationships can be complex, and evaluation requires synthesis from numerous disciplines. In this article, we discuss the possibilities for considering pollinators and their ecosystem services when planning remediation and restoration of contaminated lands. To inform the discussion, we introduce a general conceptual model of how pollinators and the ecosystem services associated with them could be affected by contamination in the environment. We review the literature on the conceptual model components, including contaminant effects on pollinators and the direct and indirect ecosystem services provided by pollinators, and identify information gaps. Though increased public interest in pollinators likely reflects increasing recognition of their role in providing many important ecosystem services, our review indicates that many gaps in understanding—about relevant natural and social systems—currently impede the rigorous quantification and evaluation of pollinators' ecosystem services required for many applications, such as in the context of natural resource damage assessment. Notable gaps include information on non‐honeybee pollinators and on ecosystem services beyond those benefitting the agricultural sector. We then discuss potential research priorities and implications for practitioners. Focused research attention on the areas highlighted in this review holds promise for increasing the possibilities for considering pollinators' ecosystem services in the remediation and restoration of contaminated lands. Integr Environ Assess Manag 2023;00:1–15. © 2023 SETAC

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Exploring welfare implications of resource equivalency analysis in natural resource damage assessments

Cited by 65 publications

References 22 publications

Ecosystems, Ecological Restoration, and Economics: Does Habitat or Resource Equivalency Analysis Mean Other Economic Valuation Methods Are Not Needed?

Ecosystems, Ecological Restoration, and Economics: Does Habitat or Resource Equivalency Analysis Mean Other Economic Valuation Methods Are Not Needed?

Ecological Harm and Economic Damages of Chemical Contamination to Linked Aquatic‐Terrestrial Food Webs: A Study‐Design Tool for Practitioners

Considering pollinators' ecosystem services in the remediation and restoration of contaminated lands: Overview of research and its gaps

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