[Coral-List] The economic valuation for natural resources damage

Robert Bourke rbourke at OCEANIT.COM
Wed Apr 27 17:50:30 EDT 2016

	There is a great deal of attention - and much disagreement - regarding methods to value and compensate for natural resources - particularly for marine natural resources.  In the US for instance the Compensatory Mitigation act of 2008 mandates that federally permitted projects compensate for "Ecosystem Functions and Services", but doesn't really do a good job in defining what these functions or services are, or how to judge their value, much less how to compensate for their loss.  As a result we have major agencies such as the EPA, NOAA, and the USACE all taking different and sometimes conflicting pathways towards achieving this goal.  The EPA is trying to define "Final Ecosystem Services" and NOAA is taking a completely different tact with their "Ecosystem Based Management" approach.   The US Army Corps of Engineers doesn't appear to have made up their mind on an approach to use, but several publications by Janet Cushing, Lisa Wainger, Richard Cole and others appear to be headed towards an approach that values "Ecosystem Goods and Services."  Fortunately, another approach has been developing on a more global platform stemming from work done primarily by economists to produce the Millennium Ecosystem Assessment (MEA, Costanza, et al., 2005).  This ecosystem functions and services approach divides the ecosystem into four major divisions (provisioning services, cultural services, regulating functions, and habitat support functions) and then divides these into multiple subcategories.  Valuation of each of the subcategories for your impacted reef system then becomes a much more solvable problem as compared to trying to come up with a rational for the value of the entire reef.   While the field is presently dominated by economists, it actually evolved from the work of ecologists (Hardin, Odum & Odum, DeGroot) and, in my opinion, embodies the essential elements necessary to conduct a true and representative assessment. 
	Mcmanus is obviously a much quicker typist than I, and I see he has already responded to you by recommending the use of The Habitat Equivalency Analyses.  I've used HEA on a number of projects to good effect and the HEA method is an excellent way to do accounting of known ecosystem (or any) values over time.  However, it does NOT establish the value of the resource.   Once you have established that your square meter of coral habitat worth $1 (or $1000), and you know how long it will take to recover, and the relative value of the recovered ecosystem, THEN using the HEA will help you determine the quantity of mitigation required. 
	I would be happy to provide you with a list of references upon request.  You may also wish to visit websites hosted by the World Resources Institute or the Marine Ecosystem Services Partnership.   The MESP offers on-line webinars  (http://www.peopleandoceans.org/pastwebinars/) and tomorrow (Ap 28, 10 am USA East Coast) will be offering a presentation by NOAA's incorporation of ecosystem services into their decision making process.  


Bob Bourke
Environmental Scientist

-----Original Message-----
From: coral-list-bounces at coral.aoml.noaa.gov [mailto:coral-list-bounces at coral.aoml.noaa.gov] On Behalf Of Mahmoud Sarhan
Sent: Wednesday, April 27, 2016 7:23 AM
To: coral-list at coral.aoml.noaa.gov
Subject: [Coral-List] The economic valuation for natural resources damage

Dear all

I work with a team to establish systematic procedures for the economic valuation and monetary calculation to support the natural resources damage assessment (NRDA) process in Egypt in order to help officials and staff in Ministry of Environment to deal with natural resources injuries and calculate the monetary value of compensations owed. We will focus on marine environment injuries especially oil spill and ship grounding on coral reefs. We are currently reviewing the international practice in the economic valuation for NRDA.

I highly appreciate sharing with us any experiences, case studies and resources related to this topic. I would definitely welcome any possible in-depth discussion in this interesting topic over phone or Skype.

Many thanks

Mahmoud Sarhan *MSc, MPS*

Research Associate

Center for Sustainable Global Enterprise

Cornell University

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