[Coral-List] Value of Hawiian Reefs

Mon Nov 7 14:17:17 EST 2011

 Hello Francesca, All,

As a Marine Scientist turned Environmental/Natural Resource
Economist I am aware of the philosophical differences (ecological vs environmental
economics) that this type of study might bring to the surface.  I’d like to offer a few thoughts and hopefully
insight on some of the issues raised.  

First of all one could argue that (when dealing with this
topic) there are two definitions of “Value”

From an Ecologists perspective – Value is that
which is worthy of esteem for its own sake; thing or quality having intrinsic
worth,

Or from an Economists perspective– Value is a fair and
proper equivalent in money, commodities etc.  “Equivalent in money” here represents the sum of money that would have
an equivalent effect on the “welfare, utility, well being (feel-goodness) of
individuals.

Social scientists (including economists) would argue that value as a concept, is anthropogenic in
nature..  Because as sentient beings people/society
ascribe(s) their/its own values to things/concepts.

The economic value of something is a measure of its
contribution to human well being (welfare).  Hence use of this type of methodological approach attempt to estimate the economic
values of natural systems and the contributions that the variety of ecosystem
functions and services make to human well being.  Therefore, ecosystem services cannot be
defined independently of human values.  

The end goal of ecosystem service valuation is to be able to
demonstrate the tradeoffs in ecosystem services resulting from policy
decisions.  In some cases the incorporation of a monetary metric into cost-benefit
analyses or other quantitative or qualitative means of assessing the losses
and/or gains of ecosystem services is appropriate.  The basic premise is, if a resource is
value-less then society will tend to overuse (mis-allocate) said resource. 

With respect to the coral reef study, I will attempt to
answer some of your questions. Please note I was not a part of this study team.
Others can add/edit/correct/refute if they so choose.

What does it mean?
That if we find a (long term?) alternative use for these sites worth $40
billion per year we can feel fine to blow the Hawaiian reefs up? – NO.  It is unlikely that this course of action (blowing
up the reefs) would supersede the opportunity costs of keeping the reefs
healthy and protected.  See basic premise
above.

How is "the
willingness to pay to protect the coral reef ecosystem for future
generations" evaluated? – Individual WTP’s are aggregated and extrapolated
across the wider population based on the random sampling methods used in the
study. It is difficult to say what future generations will use. Typically
people use discount rates (“interest rates”) to project net present value into
the future.  There are ongoing academic arguments
about what is the correct rate for natural resources such as reefs or the price
of Carbon.  In typical benefit cost
analyses 3% is used as a discount rate.

I noted there is a
special category for people considering themselves environmentalists. Why? Are
their values taken more or less into account? 
Like for example if I
was one of those interviewed and I had no money on my account how much could I
have offered maximum to protect the reef?

Attempted Answer – The parameters (after regression analysis) associated
with these characteristics are called demand shifters. These individual characteristics may cause a shift
in the demand curve (inward or outward).  Sometimes Gender, age, income, political
affiliation etc may influence value (outside of your income). Why is this important? This is because
the area under the demand curve is what is typically estimated as the value or “consumer
surplus”.  It is important to take note
of these characteristics as these variables may have an impact on the slope of
the demand curve. It is also important to capture these differences as the data is
aggregated across the population and should represent the reality that some people will
have more value than others for the same resource.

I’ll stop here

But before closing, I will agree that this field young … that is if you consider 1947 recent. You may Google “Harold
Hotelling’s Letter on preserving national parks”. This letter is often credited
as the catalyst that spawned this “nascent” field of environmental economics.

Peter E.T. Edwards

+++++++++++++++++++++++++++++++++++
If you say you can't put a price on nature, then essentially
you are saying it has no value.

=

________________________________
From: "coral-list-request at coral.aoml.noaa.gov" <coral-list-request at coral.aoml.noaa.gov>
To: coral-list at coral.aoml.noaa.gov
Sent: Monday, 7 November 2011, 12:00
Subject: Coral-List Digest, Vol 39, Issue 8

Send Coral-List mailing list submissions to
    coral-list at coral.aoml.noaa.gov

To subscribe or unsubscribe via the World Wide Web, visit
    http://coral.aoml.noaa.gov/mailman/listinfo/coral-list
or, via email, send a message with subject or body 'help' to
    coral-list-request at coral.aoml.noaa.gov

You can reach the person managing the list at
    coral-list-owner at coral.aoml.noaa.gov

When replying, please edit your Subject line so it is more specific
than "Re: Contents of Coral-List digest....", e.g., cut and paste the
Subject line from the individual message you are replying to. Also,
please only include quoted text from prior posts that is necessary to
make your point; avoid re-sending the entire Digest back to the list.

Today's Topics:

   1. Value of Hawaiian Coral Reefs (Les Kaufman)

----------------------------------------------------------------------

Message: 1
Date: Sat, 5 Nov 2011 12:50:57 -0400
From: Les Kaufman <lesk at bu.edu>
Subject: [Coral-List] Value of Hawaiian Coral Reefs
To: Coral List <coral-list at coral.aoml.noaa.gov>
Message-ID: <D414E4B0-F850-46F0-879E-CBC1A9A22826 at bu.edu>
Content-Type: text/plain;    charset=us-ascii

Dear Francesca (and everybody),

Ecological and environmental economists have been struggling to find ways to explain the real value of nature without trivializing, bastardizing, or prostituting things that are important to us, yet very difficult to equate with more familiar currencies such as money.  Despite our ability to see far into the future, most of us rarely do so.  Consequently, we respond to stimuli that immediately impact us, like the possibility of suddenly acquiring, or losing, a lot of money.

This is especially true of ecosystem services- the essential things for life and health that nature provides to us without us lifting a pinkie, but that require intact, robust ecosystems to keep flowing.  These are the things we take for granted, like breathable air and clean water, as well as things we pay at least a little bit of attention to, such as the natural beauty that supports the tourism industry, all the way to more obviously valuable commodities like food, minerals, and fuels.   There are several classification schemes for ecosystem services, but the Millennium Ecosystem Assessment is the one most widely used right now.  Check out: http://www.pnas.org/content/106/5/1305.short for a short comment on where this is heading.

One way to express the value of nature is in terms of dollars.  It is not necessarily the best way, but it is the way that the greatest number of people understand.  There is a lot of baggage associated with it- the questions you raise come up all the time, plus "willingness to pay" doesn't always mean that when you ask people what they are willing to pay to keep something around, that they will actually fork over the money when things start hitting the fan.  

If you have a better way of expressing the value of Hawaii's coral reefs- or any coral reef- it would be useful to share it.  This is a young field, and people respond to the strangest things.

Les

Message: 1
Date: Fri, 4 Nov 2011 09:40:38 -0700 (PDT)
From: "frahome at yahoo.com" <frahome at yahoo.com>
Subject: Re: [Coral-List] NOAA news release: U.S. residents say
    Hawaii?s coral reef ecosystems worth $33.57 billion per year
To: "coral-list at coral..aoml.noaa.gov" <coral-list at coral.aoml.noaa.gov>
Message-ID:
    <1320424838.84622.YahooMailNeo at web32502.mail.mud.yahoo.com>
Content-Type: text/plain; charset=utf-8

What does it mean? That if we find a (long term?) alternative use for these sites worth $40 billion per year we can feel fine to blow the Hawaiian reefs up? 

I am very curious to understand how is "the willingness to pay to protect the coral reef ecosystem for future generations" evaluated? 

Like for example if I was one of those interviewed and I had no money on my account how much could I have offered maximum to protect the reef?
I noted there is a special category for people considering themselves environmentalists. Why? Are their values taken more or less into account?

I apologize in advance for not having time to read and understand the full report.

Greetings
Francesca
Les Kaufman
Professor of Biology
Boston University Marine Program
and
Senior Marine Scientist
Conservation International
lesk at bu.edu 