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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 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 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

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.

Biological

Chemical

Physical

Indicator

Parameters used

Birds
Macro-invertebrates
Amphibians
Zooplankton
Algae
Vegetation
Microbes
pH
Turbidity
Dissolved oxygen
Phosphorus and Nitrogen
concentrations
Pesticides
Dissolved organic C
Major ions
Cyanotoxins
Water depth
Temperature
Hydrology
Sediment composition
Decomposition
Structure

Population structure,
diversity, species richness,
health of individuals

Possible responses to
disturbance
Shifts in species
composition, community
structure.
Disturbance tolerant
species dominate

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

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.

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.

Wetland functions evaluated by wetland values and assessment methods


Groundwater

Water Quality Protection

Sediment/Shoreli
ne
Sedime Shoreli
nt
ne
stabiliya protec
tion
tion

Wetlan
d
metho
d

Ground
water
recharge

Ground
water
discharg
e

Flood
flow
attenua
tion

Sediment/to
xicant
retention

Nutrient
removal/transfo
rmation

Descrip
tive
approa
ch
WIRAM

X
X
X
X
X

X
X
X
X
X

X
X
X
X
X

X
X
X

VIMS
WET

X
X

MDE
NC
Guidan
ce

Produc
tion
export

Floral
diver
sity

Fish
and
shelf
ish
habit
at

X
X
X
X
X

X
X

Public use/aesthetics/recreation/education
Wetland
method
Descriptive
approach
WIRAM
VIMS
WET
MDE
NC Guidance

Wildlife
habitat

Endangered
species habitat

X
X
X
X
x

Public
use

Recreation

Educational/Scientific
value

Heritage

Visual
quality

x
X
x

x
X

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 the
benefits/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 Values of Wetlands


Direct Values

Indirect Values

Option Values

Existence Values

Physical use of
services

Ecosystem
Services

Future Economic
Option

Intrinsic worth
regardless of use

Wild foods
Timber
Firewood

Watershed
protection
Carbon
sequestering
Water quality
attenuation and
supply

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

Industrial
Agricultural
Pharmaceutical
Recreational
Applications

Biodiversity
Landscape
Aesthetic
Heritage
Bequest
Cultural

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

Description

Where market prices of outputs (and inputs) are


available. Marginal productivity net of human
effort/cost. Could approximate with market price
of close substitute. Requires shadow pricing.
(Productivity Change in net return from marketed goods: a form
Losses)
of (does-response) market analysis.
(Production Wetlands treated as one input into the production
Function) of other goods: based on ecological linkages and
market analysis.
Public investment, for instance via land purchase
(Public Pricing) or monetary incentives, as a surrogate for market
transaction.
Derive an implicit price for an environmental goods
Hedonic Price from analysis of goods for which markets exist and
Method (HPM) which incorporate particular environmental
characteristics.
Costs incurred in reaching a recreation site as a
Travel Cost proxy for the value of recreation. Expenses differ
Method (TCM) between sites ( or for the same site over time) with
different environmental attributes.
Contingent Construction of a hypothetical market by direct
Valuation surveying of a sample of individuals and aggregation
(CVM)
to encompass the relevant population. Problems of
potential biases.
Damage
The costs that would be incurred if the wetland
Costs Avoided function were not present; eg flood prevention.
Defensive Costs incurred in mitigating the effects of reduced
Expenditures environmental quality. Represent a minimum value
for the environmental function.
(Relocation Expenditures involved in relocation of affected
Costs)
agents or facilities:: a particular form of defensive
expenditure.
Replacement/ Potential expenditures incurred in replacing the
Substitute Costs function that is lost; for instance by the use of
substitute facilities or shadow projects.
Restoration Costs of returning the degraded wetland to its
Costs
original state. A total value approach; improtant
ecological, temporal and cultural dimensions.
Source: Turner, van de Bergh, Barendregt, (1997).
Market
Analysis

Direct Use Indirect Use


Values
Values

Nonuse
Values

LWP TOTAL ECONOMIC WETLAND VALUATION MEHODOLOGY

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


valued

STEP 1

You may need help from a wetland expert for this Step
Identify the principle wetland benefits/functions /services to
be valued

STEP 2

See Figure 2.1 & Table 3.1


You may need help from a wetland expert for this Step
Identify principal wetland beneficiaries and stakeholders for
each benefit/function/service being valued

STEP 3

You may need help from a wetland expert for this Step

Identify 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 4

Select the appropriate valuation method for each wetland


value/benefit/service based on constraints/resources
available.

STEP 5

See Table 3.3


Follow Steps for selected method(s)

STEP 6

STEP 7

Figure 3.1

Benefit Transfer Method (BTM) Chapter 4


Market Price Approach Chapter 5
Contingent Valuation Method (CVM) Chapter 6
Sum the estimated value obtained for each principle
wetland benefit/function/service to obtain a Total Economic
Value for the Wetland

LWP Total Economic Wetland Valuation Methodology

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 the
wetland 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 information
on 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.

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


Highly constraints

Medium constraints

Small constraints

2-5 days

3- 5 months

More than 6 months

Time
Budget

Capacity

Basic information

No budget

about 80US$/questionnaire* about 120 US$/questionnaire*

No basic of naural
resouces economics
Do not have experience in
valuation

Bachalor/master on
environmental economics
Some expriences in
valuation

Have Expererience in valuation

No information of wetland

Have some basic data

Have all information

Ph.D in Economics

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.

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.

Table 3-3. Constraint Option and appropriate valuation method

Constraint

Option 1

Option 2

Option 3

Option 4

Time

000

000

Budget

000

000

00

Capacity

000

000

00

Basic Information

000

Appropriate

Benefit

Benefit Transfer

Marked Price

Contingent Value

Method

Transfer

Method

Approach

Method

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.

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

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)