Methods of economic valuation with a focus on marine

ecosystems
Rolf Willmann
FAO Fisheries and Aquaculture
Department

Main references

Nunes P.A.L.D., Ding,H., Markandy.2008. The economic valuation of marine

ecosystems lessons from the Millenium Ecosystem Assessment. Presented
at conference on economic valuation of coastal and marine ecosystems,
Bodrum, 22-25 October 2008.
World Bank. 2008. Valuation of Marine Ecosystem Services: Gap Analysis.
Environment Department. Washington, DC: World Bank.
World Bank. 2008. Environment Matters.
De Young, C. Charles, A., Hjort,A. 2008. Human dimensions of the
ecosystem approach to fisheries: an overview of context, concepts, tools
and methods, FAO Fisheries Technical Pepr No 489.
Department for Environment, Food and Rural Affairs, UK, 2007. An
introductory guide to valuing ecosystem services.
UNEP-WCMC. 2011. Marine and coastal ecosystem services: valuation
methods and their practical application.
World Bank and FAO. 2009. The Sunken Billions. The Economic Justification
for Fisheries Reform. Agricultural and Rural Development Department. The
World Bank. Washington. DC.
United Nations Statistics Division and FAO. 2004. Integrated Environmental
and Economic Accounting for Fisheries. White Paper Handbook.
Wikipedia

Contents
Framework to evaluate natural resources and ecosystems with
focus on marine resources
Methods to assess the value of ecosystems to human wellbeing as well as examples from marine ecosystems to illustrate
the different concepts and methods
System of integrated economic and environmental accounting
as a means to keep a continuous record of the use and status of
environmental resources of society
Critical valuation issues (scientific understanding of
ecosystems; variability and thresholds; income and wealth
distribution)

Some basics

The use (and mis-use) of ecosystems is governed by

human behaviour expressed in individual and societal
choices.
Choices are reflected in the allocation of scarce
resources in response to individual and societal
preferences and needs.
There are different means through which coordination
in the allocation and use of scarce resources can be
achieved (i.e. price mechanism; regulatory and
incentive policies that ideally are based on best
scientific analyses and democratic decision-making
processes)
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Features of natural resources (adapted from Nunes)

Typically resources are materials or other assets that are used
and/or transformed to produce benefit.
Resources have three main characteristics: utility, limited
availability, and potential for depletion or consumption.
From a human perspective, a natural resource is anything
obtained from the environment to satisfy human needs and
wants => distinguish renewable and non-renewable resources
Concepts of competition, sustainability, conservation and
stewardship are linked to natural resources and their
management => distinguish flows and stocks
Natural resources have typically common-pool or public goods
characteristics that cause the market-mechanism to perform
poorly or not at all.
Natural resources that have public (or global) goods
characteristics are also referred to as environmental resources
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Categories of goods => consequences for management

Excludable

Rivalrous

Nonrivalrous

Non-excludable

Private goods
food, clothing, cars,
personal electronics

Common goods
(Common-pool
resources)
fish stocks, timber, coal

Club goods
cinemas, private parks,
satellite television

Public goods
free-to-air television, air,
national defense

Africas marine ecosystems

(Source: WB Environment Matters)

Macro-economic contribution of marine ecosystems example Zanzibar

(Source: World Bank. Environment Matters )

Relative values of marine ecosystem services

10

Components of total economic value

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Total value of a fisheries ecosystem

(Source: Taken from Human Dimension of EAF)

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Steps in Valuation

13

Economic valuation methods

(Source: UNEP-WCMC)

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Economic valuation methods

Applicability of different valuation methods

Marine
ecosystem goods
and services

Market priced
benefits

Fisheries
products

Provisioning
services

Un-market priced
benefits

Eco-tourism

Market price
analysis

CO2

Regulating
services

Cost
Assessments

Recreation

Cultural
services

Nonuse values

Contingent valuation
methods
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Economic consequences of coral reef degradation

(Source WB Environment Matters)

17

Economic valuation of a fishery estimating resource

rent

18

Changes in productivity in global marine fisheries

19

Estimated resource rent loss, 1974-2007 (Source: WB&FAO)

20

Estimating the asset value of a natural resource:

projecting future resource rent (Source: UNSD & FAO)

21

Framework for Integrated Environmental & Economic

Accounts for Fisheries (SEEAF) (Source: UNSD & FAO)

22

The influence of income and wealth distribution

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Moving forward

Improve understanding of the consequences of human actions on

natural resources and ecosystems and their ability to provide goods
and services
Expand efforts to assess the impacts on human welfare of changes
in natural resources and ecosystems
Link better understanding of impacts and values to:

Everyday decisions of individuals, firms and communities

Societal policy and management decisions

Failing to make sound decisions the economic, social and

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