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Analysis Of The Uncertainty In The Monetary Valuation Of Ecosystem Services -- A Case Study At The River Basin Scale

World Water Congress 2015 Edinburgh Scotland
9. Water allocation among competing uses and users
Author(s): Guy Ziv
Laurie Boithias
Marta Terrado
Lluis Corominas
Vikas Kumar
Montse Marquéss
Marta Schuhmacher
Vicenç Acuña

Guy Ziv

water@leeds, School of Geography, University of Leeds, Leeds, UK1, Catalan Institute for Water Research, Girona, Spain2, Universitat Rovira i Virgili, Tarragona, Spain3

Boithias, Laurie; Catalan Institute for Water Research (ICRA),
Terrado, Marta; Catalan Institute for Water Research (ICRA),
Corominas, Lluís; Catalan Institute for Water Research (ICRA),
Kumar, Vikas; University Rovira and Virgili, Departament d'Enginyera Química,
Marqués, Montse; University Rovira and Virgili, Departament d'Enginyera Química
Schuhmacher, Marta; University Rovira and Virgili, Departament d'Enginyera Química
Acuña, Vicenç; Catalan Institute for Water Research (ICRA),


Keyword(s): Sub-theme 9: Water allocation among competing uses and users,


Ecosystem services are the benefits we obtain from ecosystems, such as waste treatment by river ecosystems. These services are generated by ecosystem functions, and provide multiple benefits to human wellbeing (e.g. reduced water treatment costs, more opportunities for recreation due to a higher water quality), which in turn can be valued in either monetary or non-monetary units2. Specifically, the valuation of ecosystem services involves the quantification of the value of multiple benefits using the appropriate market and non-market valuation techniques, so that a value is assigned to each one of the benefits. Monetary valuations are often compared with management action costs to perform cost-benefit analyses and thus support decision-making, hence it is crucial to evaluate and minimize uncertainty to avoid bias or even fault in decision making. The uncertainty in ecosystem services monetary values rises from the uncertainty in the quantification of ecosystem services in biophysical units, as well as from the uncertainty in the quantification of the monetary values. Because of these two large sources of uncertainty, the monetary values might contain outstanding degrees of uncertainty. However, the uncertainty in ecosystem services valuation is commonly ignored, or only partly considered4. The objective of this work is to identify and quantify the different sources of uncertainty when performing monetary valuation of ecosystem services, in order to provide a series of guidelines or potential strategies to reduce uncertainty. Briefly, we believe that the different sources of uncertainty when valuing ecosystem services can be summarized as: (1) the number of services considered, (2) the number of benefits considered for each service, (3) the valuation metrics used to value benefits, and (4) the uncertainty in the parameters of the valuation metrics.

In order to assess the relevance of these sources of structural and parametric uncertainty, we have used data from 4 ecosystem services stemming from previous modeling works in the Llobregat River basin in NE Iberian Peninsula1,3,5. The 4 ecosystem services were: water provisioning, waste treatment, erosion protection, and provision of habitat for species. Biophysical values of all 4 ecosystem services were calculated with the InVEST model, which is a spatially explicit model consisting of a suite of models that use patterns of land use and land cover to estimate levels and economic values of ecosystem services. We used a set of monetary valuation methods were used to quantify both structural and parametric uncertainties.

Results and Discussion
We quantified the structural and parametric uncertainties in a practical exercise of ecosystem services valuation. Altogether, the average economic value of the Llobregat basin ranged between 82 and 723 M Euro yr-1. Within each service, the range of values of the benefits is wide. As it is, the range depends on the valuation metric used. Regarding uncertainty, depending on the number of ecosystem services included in the valuation exercise, the average economic value in the Llobregat River basin varied from 82 to 245 M Euro yr-1. Similarly, considering the 4 ecosystem services, and depending on the number of benefits per service, the average economic value varied from 327 to 695 M Euro yr-1. In the case of the valuation metric choice, the economic value varied between 561 and 1067 MEuro yr-1, whereas the parametric uncertainty involved a range between 475 and 1214 M Euro yr-1. Therefore, looking into the uncertainty sources encompassing the entire ecosystem services valuation, we found that the highest uncertainty appears to be related to the number of services considered in the study, such that the higher the number the closer to the TEV of the particular ecosystem and the lower the uncertainty. The easiest advice here would be to consider as many services as possible when valuing ecosystem services, but we are fully aware that usually the number of services considered is constrained by data availability, and that only a sub-set of ecosystem services might be relevant in each case study. The second most important source of uncertainty was the parametric uncertainty, followed by the number of benefits considered for each ecosystem service, and lastly by the choice of the valuation metric. A sensitivity analysis to identify the relative weight of the uncertainty of each parameter on TEV with a given structure of valuation therefore seems advisable

Ecosystem services provide multiple benefits to human wellbeing and are consistently considered by policy-makers in environmental management. However, the uncertainty related with the monetary valuation of these benefits is not yet adequately defined or integrated by policy-makers. In this study, we quantified the structural (i.e. selection of services, benefits, and valuation metrics) and parametric uncertainties in a case study using 4 freshwater related ecosystem services. Among these sources of uncertainty, the parametric uncertainty was less critical than the structural uncertainty, stressing the need for any practitioner to be aware of the relevance of each one of the steps when defining the evaluation structure. 1. Bangash RF et al. (2013) Ecosystem services in Mediterranean river basin: Climate change impact on water provisioning and erosion control. Sci Total Environ 458-460:246–255.
2. De Groot RS, Alkemade R, Braat L, Hein L, Willemen L (2010) Challenges in integrating the concept of ecosystem services and values in landscape planning, management and decision making. Ecol Complex 7:260–272.
3. Sánchez-Canales M et al. (2012) Sensitivity analysis of ecosystem service valuation in a Mediterranean watershed. Sci Total Environ 440:140–53.
4. Seppelt R, Dormann CF, Eppink F V., Lautenbach S, Schmidt S (2011) A quantitative review of ecosystem service studies: approaches, shortcomings and the road ahead. J Appl Ecol 48:630–636.
5. Terrado M, Acuña V, Ennaanay D, Tallis H, Sabater S (2014) Impact of climate extremes on hydrological ecosystem services in a heavily humanized Mediterranean basin. Ecol Indic 37:199–209.

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