Assessing cost effectiveness of restoration outcomes

Context-based valuations of ecosystem services offer decision makers practical information on how to face specific environmental issues.

Following major international initiatives such as the Millenium Ecosystem Assessment, The Economics of Ecosystems and Biodiversity Initiative (TEEB) and the Intergovernmental Science-Policy Platform on Ecosystem Services and Biodiversity (IPBES), the concept of ecosystem services and their valuation received more attention than ever in the past decade. Packaging systematic processes from ecosystems as “services” allows us to get a better grasp of the benefits human beings receive from biodiversity and ecosystems.

Understanding ecosystem services, in context, can help decision makers understand what kinds of actions are needed to achieve an environmental goal, and when activities need to be implemented.

As economists, our objective is to help society understand the interactions and the trade-offs between biodiversity conservation and economic development. However, policy-makers and environmental NGOs generally expect economists to give a monetary value to these services. This often goes without consideration of whether or not the expressed value can be useful or harmful once the valuation is incorporated into the political process.

Non-commercial uses of ecosystems, like religious, spiritual or recreational purposes, cannot be easily monetized and can be shed off of economics analyses. We advocate for a more comprehensive approach to this analysis, based on the institutional context in which ecosystem services valuation (monetary and non-monetary) is applied, to understand how this valuation can be linked with specific environmental goals that correspond directly to environmental policies.

A tool for coordinating conservation actions based on valuation of ecosystem services

In this view, we adapted the Habitat Equivalency Analysis (HEA) methodology to assess how ecological restoration can contribute to achieving defined environmental goals. This methodology was developed in a specific policy context (the U.S. Oil Pollution Act) to determine the restoration measures needed to compensate for an accidental impact on ecosystems. HEA measures the loss of ecosystem services and the corresponding gains associated with compensatory restoration, using a unique ecological indicator (as a proxy) that is previously selected to reflect the functioning of the impacted ecosystem.

We expanded the use of HEA to assess restoration needed to reach other environmental policy objectives. One of the applications was on a strategy to address eutrophication of a bay in Brittany, France. Using HEA, we assessed the effectiveness of a proposed policy to alleviate nitrate inputs to the bay.

Using Habitat Equivalency Analysis to reduce nitrogen flows into the Douarnenez Bay

Kervigen Marsh is located on Brittany’s coast, at the northwestern corner of France. It is a coastal wetland of 22 hectares located at the confluence of a stream and the Douarnenez Bay. In the 1970’s, the stream was channeled to dry the marsh and create additional space for agriculture. Intensive agriculture in the broader watershed expels agrochemicals and nitrogen into the bay, causing eutrophication and an invasion of green algae (ulva) on the beaches — a phenomenon known as “green tides.”

Intensive agriculture in the watershed loaded extra inputs of nitrogen into the bay, causing algal blooms. These “green tides” became a common sight.

In 1997 the local municipality decided to rehabilitate the marsh by diverting a part of the flow back into the reed bed of the marsh. The goal was to take advantage of the marsh’s natural capacity to purify water, especially of nitrates, flowing into the bay. Monitoring programs to measure and contrast nitrate levels at the entrance and exit of the marsh demonstrated promise.

In 2010, a strategy for reducing green tides was implemented in eight bays in Brittany, among them the Douarnenez Bay. The main objective was to reduce the nitrate flows coming from farms and households. However, inspired by the success of the Kervigen Marsh rehabilitation, the local authorities of the Douarnenez Bay decided to add a rehabilitation program to its strategy. The goal: foster and harness ecosystem services of coastal marshes to reduce the amount of nitrate flowing into the bay by 50 tons.

Achieving environmental goals without breaking the bank

An expanded HEA methodology was applied in this context to determine different scenarios for marsh restoration. The model included a discounting parameter to account for the time lapse between when the negative impact occurred and when a restoration action is implemented. This parameter allows for a determination of what actions are needed to achieve the conservation objective and what the rehabilitation needs will be in the end.

The proxy is given by the institutional framework: the quantity of nitrates absorbed by the coastal marshes after rehabilitation. Calculations were conducted in 2012 and the results are summarized in the table below. HEA was used to determine the total surface area that needed to be restored according to the schedule of the proposed strategy. It showed that the longer the completion of the total goal (50 tons) is postponed, the more effort will have to be made to restore the marshlands. At the same time, the HEA analysis provided a suggestion for lowering the annual amount of rehabilitation throughout the duration of the project.

This example illustrates how HEA can be a simple tool that helps decision makers determine how best to invest time and resources to protecting, restoring and maintaining ecosystems and biodiversity. We applied this expanded HEA methodology in different institutional contexts associated with the restoration of natural capital. The methodology measures the level of ecosystem services associated with restoration with regards to an environmental objective and expresses this level as a common unit. As a result, we can compare different projects by using a cost-efficacy approach, reinforcing the argument for and utility of context-based assessments.

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Using Habitat Equivalency Analysis to Assess the Cost Effectiveness of Restoration Outcomes in Four Institutional Contexts

The photos featured above were provided by Communauté de Commune du Pays de Châteaulin et du Porzay.

Pierre Scemama is an economist at the French Research Institute for Exploitation of the Sea (IFREMER). Scemama’s research focuses on the institutions and the organizations that govern management and preservation of marine ecosystems and biodiversity. Scemama provided the photos featured in this post.

Harold Levrel is professor in economics at AgroParisTech (French institute of technology for life, food and environmental sciences). His research covers the study of environmental policies for biodiversity conservation, from valuation issues to regulatory mechanisms.