Transcript The Definition & Value of Chesapeake Bay Environmental Endpoints

The Definition & Value of
Chesapeake Bay Environmental
Endpoints
James Boyd and Alan Krupnick
Resources for the Future
November 1, 2011
Ecological Endpoints
 A special set of biophysical outputs
 Commodities that directly enter firm or
home production
 Akin to “final goods”
 Commodities that require little subsequent
biophysical translation to make clear their
relevance to utility
“Endpoint Theory”
 Distinction between “inputs” and “final
goods” is fundamental to
 Benefit accounting (to avoid double counting)
 Benefit comprehension by respondents in stated
preference studies (to avoid confusion & error)
Production Theory
 Key terms
 Inputs transformed into
 Outputs via
 Production functions
 Qi = f (Ii1, Ii2, ...)
 Same thing in natural systems except
functions are ecological
Examples
Input
Surface water pH
Acres of habitat
Wetland acres
Urban forest acres
Vegetated riparian
border
Biophysical Process Ecological Endpoint
Habitat and toxicity
Fish, bird abundance
effects
Forage, reproduction,
Species abundance
migration
Reductions in flood
Hydrologic processes
severity
Shading and
Air quality and
sequestration
temperature
Sediment loadings to
Erosion processes
reservoirs
Commodities that require
little subsequent biophysical translation
Note
 Focus on endpoints leads to a smaller set of
ecological commodities to be valued
The Problem With NonEndpoint Commodities
• Requires respondent to understand and translate
commodity’s role in subsequent ecological
production
 To value an “input” need to know
 The value of the output
 The production relationship between the input
and the output
Production Function Error
• What is the value of “more acres of eagle
habitat?”
• Need to know two things
(1) The value you place on eagle abundance
(2) The production function that translates eagle
habitat into eagles
Respondents will intuit a + relationship
But don’t know its magnitude
Principle 1
 Commodities should be as close as possible
to home production
 For accuracy and scenario acceptance*
 Obvious?
 Perhaps, but often/usually not practiced in SP
literature
 Note: “comprehension” alone is not the test
* A hypothesis to be tested empirically
Dual Commodities
 Many ecological commodities are both
input and output
 In production theory, a given commodity
can be both input and output
 Cars: output, but input when rented
 Lettuce: final good at Safeway, intermediate
good at McDonalds
Dual commodity
Process 1 output is Process 2 input
Examples
Endpoint
Biophysical Process Different Endpoint
Trout abundance
Forage and predation
Bird abundance
relationships
Forest acres
Hydrological
processes
Wetland acres
Hydrologic processes Flood pulse regulation
Endpoints /
final goods
Species abundance
But also inputs to
production of these
Respondent Confusion
 Am I being asked about the commodity as
an “end in itself”?
 Or its value as part of a larger system?
 Both?
Issues for Survey Treatments
 Different degrees of subjects’ ecological intuition
 “Naïve” respondents:
 Wetlands are open space, the value of open space to
me is $X
 “Sophisticated” respondents:
 The value of open space to me is $X but also
 Wetlands support crabs, the value of crabs to me is
$Y
Issue from above
 What are the appropriate endpoints?
 Combination of theory and stakeholder
interactions
 EPA Indicators Workshops

RFF & EPA ORD (Corvallis) sponsored (Boyd & Ringold)
 Natural scientists, social scientists, policy offices
 Charge: Identify monitorable “final ecosystem commodities” for a
range of resource beneficiaries
 To improve national stream monitoring programs (e.g., EMAP) or
EPA OW programs (e.g., National Aquatic Resource Surveys)
Principles used in EPA Workshop to
identifying indicators of final ecosystem
services
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Strictly biophysical features, quantities or
qualities that require little further translation to
make clear their relevance to human well-being
Comprehensive identification requires
identification of ecosystem beneficiaries
Exhaustive & non-duplicative, but clear desire
for parsimony
A Group Process
 Focus on types of users
 Industry, agriculture, recreation, aesthetics,
stewardship
 Concretely, what do different users want
more of or less of?
 No jargon! (the “next door neighbor test”)
Eco-check Index for the Bay
(NOAA and UMCES)
The “iconic” Bay
 Iconic is a stock concept; non-marginal
 Is “iconic” a word for “warm glow”?
 Resources that underlie being iconic
 Cultural: the Watermen, Smith Island
 Biological: Bay oysters, blue crabs
 Do changes in populations affect iconic
status?
Future Baseline
 Is sea level rise in the baseline? If so,
 Does this remove Smith Island and the
Watermen from further consideration?
 Do crabs and oysters go (locally) extinct in
the baseline? If not,
 Would increases in their population from
TMDLs affect their iconic status?
 Conveying the hidden problems
Other endpoint (SP) issues
 Bundling (CV) vs attribute valuation (CE)
 Non-market endpoint proliferation
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With our theory as a guide, are there that many?
Bundling of correlated attributes
Sample stratification approach
Don’t use jobs, livelihood
Focus groups help find indices
Boundaries
 Ocean health: spawning success
 Groundwater
 Ancillary benefits/costs to BMPs, etc.
 Increased trees in buffer zones – viewshed, but
positive or negative?
 Cultural losses: the Amish?
 Added urban green space from addressing
urban SWR
More Issues
 Uncertainty: tough to address
 Timing
 Design to impute discount rate
 Long-term benefits: tough issue. Most
analysts use shorter periods. Can do
adjustments to values off-line
 Interim benefits is latency. Not a big problem
Conclusion
 Use theory to guide commodity definition
 Along with stakeholder process
 Determine future baseline (perhaps use
multiple treatments)
 Solve/make decisions on other issues
Valuation Research Issues
• Confusion/scenario rejection rates comparing endpoint
Q’s to input, process or dual Q’s
 Validity test differences
 Test with and without “systems” information
treatments
 Effect of subject prior knowledge on the above
Approach
 Develop mental models of nature (e.g., degree of
decomposition into inputs, processes and outputs),
compare to those of experts
 Conduct focus groups to develop survey materials:
information treatments, commodity descriptions
 Conduct pilot studies: use sub-sampling to test treatment
effects; develop measures of performance (effect on
WTP; variance of WTP; answers to debriefs; passing
scope tests)
 Ecological science partnering to make necessary
linkages and development of protocols for ecological
science research and reporting
Metrics Categories
I. Water Quantity (Amount and Timing, Depth, Width,
Velocity)
II. Water Quality – Physical (Odor, temperature, clarity, biofouling)
III. Stream Bed Characteristics (Mud, rock, sand, sediment
accumulation)
IV. Health risks from contact and drinking water; eating fish
V. Species type, abundance, size, health, timing (flora and
fauna)
VI. Riparian viewshed characteristics
VII. Intertemporal “naturalness” – to avoid undesirable
resource changes linked to sense of place, culture, history