Challenges and Sensitivities in Assessing Total Ecosystem Service Values: Lessons From Vanuatu for the Pacific

• Date: 01 September 2020
• Author: Andrew J. Buckwell,Dan Ware,James C. R. Smart,Christopher Fleming,Brendan Mackey
• DOI: 10.1177/1070496520937033
• Published date: 01 September 2020
• Subject Matter: Articles

Article

Challenges and

Sensitivities in

Assessing Total

Ecosystem Service

Values: Lessons From

Vanuatu for the Pacific

Andrew J. Buckwell

1

,

Christopher Fleming

1

,

James C. R. Smart

2

,DanWare

3

,

and Brendan Mackey

3

Abstract

Ecosystem service valuation (ESV) can inform land-use change policy and adaptation

responses to climate change in Pacific Small Island Developing States. Despite Small

Island Developing States communities relying acutely and directly on ecosystem

service (ES) flows, methodologies must contend with limited valuation data and

challenges. We undertake ESV to generate coefficients we then apply to mapped

habitat extents for Vanuatu. We find the contribution of ESs to the people of

Vanuatu is considerable and significantly larger than its gross domestic product.

Therefore, policies that support ecologically sustainable exploitation of ESs are par-

amount in promoting community well-being. We also identify and discuss context-

specific methodological challenges, which, if not addressed, risk distorting valuations,

supporting perverse policy responses, and eroding confidence in ESV. We make

recommendations to address the challenges of accounting for ecosystem condition,

data gaps, and consideration of customary benefits, provide context to the inter-

pretation of our results, and suggest where further research can ameliorate risks.

1

Griffith Business School, Griffith University, Queensland, Australia

2

Australian Rivers Institute and School of Environment and Science, Griffith University

3

Griffith Climate Change Response Program, Griffith University, Queensland, Australia

Corresponding Author:

Andrew J. Buckwell, Griffith University, N72 Nathan Campus, Nathan, Queensland 4111, Australia.

Email: a.buckwell@griffith.edu.au

Journal of Environment &

Development

2020, Vol. 29(3) 329–365

!The Author(s) 2020

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DOI: 10.1177/1070496520937033

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Keywords

ecosystem services, economic valuation, subsistence farming, land-use change,

cultural ecosystem services

Environmental economics has built robust methods and a strong case for the

economic valuation of the contributions of nature to human well-being (Boyd

& Banzhaf, 2007; Braat & de Groot, 2012; Costanza et al., 2017).This has been

conceptualized through ecosystem service (ES) classif‌ication, originally developed

by the Millennium Ecosystem Assessment (MEA; 2005) and further developed

by de Groot et al. (2012) and the Common International Classif‌ication

for Ecosystem Services (Haines-Young & Potschin-Young, 2018). From the orig-

inal MEA conceptualization, ESs are classif‌ied into three broad categories:

(a) provisioning—biological products used by humans o btained directly from eco-

systems (b) regulating—benef‌its obtained through natural regulation of ecosystem

processes and (c) cultural—the nonmaterial benef‌its people receive from ecosys-

tems. The importance of ecosystems to human welfare has numerous dimensions

(ecological, sociocultural, and economic); however, expressing value in monetary

terms has proved useful in helping to consistently frame trade-offs between

options that have to address multiple assessment criteria (Costanza et al., 2017;

D



ıaz et al., 2018; Georgiou et al., 1997). Within this context, ecosystem service

valuation (ESV) has three broad purposes (Laurans et al., 2013): to be (a) infor-

mative, such as raising awareness of the value of biodiversity (Costanza et al.,

1997, 2017; Kumar, 2010) and providing data for ecosystem accounting for inte-

gration into green gross domestic product (GDP; Andrade & Garcia, 2015;

Secretariat of the Convention on Biological Diversity, 2010) and for full-cost

corporate accounting (Epstein et al., 2011; Natural Capital Coalition, 2016);

(b) technical, suchas setting compensation rates forloss of environmental amenity

(Aultman et al., 1993); and (c) decisive, such as informing policy making in land

use using benef‌it-cost analysis (Barbier, 2012; Gashaw et al., 2018; Sinner et al.,

2016; Sumarga & Hein, 2016). Unlike normal market goods, most ESs do not

lend themselves to “spatial arbitrage” to take advantage of higher willingness to

pay elsewhere (the exception to this rule is carbon sequestration services, which

provide benef‌its at a global scale as a public good or a private good if traded as a

permit; Boyd & Banzhaf, 2007, p. 622; UN Statistical Division, 2018); therefore,

many ESV applications involve integrating a spatial element, enabling analysts to

estimate the ES benef‌its for a spatially def‌ined unit.

Spatial aspects of ESV are codif‌ied in the UN Statistical Commission’s

System of Environmental Economic Accounting-Experimental Ecosystem

Accounting (SEEA-EEA; UN Statistical Division, 2018). SEEA-EEA integrates

environmental assessment with the human economy through the quantif‌ication of

330 Journal of Environment & Development 29(3)

ecosystem assets and measurement of the f‌lows of ESs into and out of human

society. SEEA-EEA takes a landscape view—assessing ecosystem assets in terms

of type,extent,condition, and the services they provide. The links between

ecosystem f‌lows and society are assessed in terms of both ES benef‌its and the

impacts of human activities on ecosystems that can inf‌luence their future capacity

to continue to deliver benef‌it f‌lows (externalities; Hein et al., 2006). Ecosystem

assets generate a specif‌ic, quantif‌iable combination, or “basket,” of potential

environmental material and nonmaterial f‌lows (Obst et al., 2016, p. 12),

analogous to (but not completely overlapping with) the MEA/Common

International Classif‌ication for Ecosystem Services conception of ES. SEEA-

EEA incorporates spatial units that are both natural/unmodif‌ied and inf‌luenced

by human activity (e.g., urban areas, subsistence gardens, and tree plantations).

SEEA-EEA is designed to be compatible with the UN system of national

accounts, which, among other measures, standardizes estimations of national

GDP. SEEA-EEA resolves to deploy only exchange values for ESs—the price at

which an ES is, or would be, exchanged if a market for the same, or similar,

service existed. It therefore determines the contribution of ecosystem assets by

the product of its quantity of service provided and derived exchange value, or

price. Importantly, this excludes valuations that estimate a consumer surplus—

the difference between what someone would be willing to pay and its price in a

market. Because most ES, particularly regulating and cultural services, are non-

excludable and thus “free” at the point of use (they are public goods, or

common pool resources), people can enjoy an increase in welfare without any

notional exchange. The ESV literature, more broadly, incorporates both

exchange- and surplus value–based approaches, from the full gamut of econom-

ic valuation methods, including those reliant on respondent stated preferences in

hypothetical scenarios. The inclusion of the broader set of ESVs allows valu-

ations of spatial units to be greater than GDP and SEEA-EEA-based ecosystem

accounting.

To date, with some exceptions (Chen & Zhang, 2000; Costanza et al., 1997;

de Groot et al., 2012; Deloitte Access Economics, 2017; Kubiszewski et al.,

2017; Sannigrahi et al., 2018), most ESV focusses on marginal changes in the

value of a narrow suite of ES f‌lows, commonly from a single, locally important

habitat (Baskara et al., 2017; Matthew et al., 2018; Pascal et al., 2016). In

application, these values are typically used in social benef‌it cost analysis of

specif‌ic proposals (Georgiou et al., 1997; van der Ploeg & de Groot, 2010).

However, from a policy maker’s or program funder’s perspective, what is

often required is an ESV of aggregated f‌lows from a particular habitat, or an

estimate of the value of all ESs within a particular biophysically or politically

def‌ined landscape, known as total ecosystem service value (TESV; Gashaw

et al., 2018; Mackey, Ware, Nalau, et al., 2017; Tolessa et al., 2018).

The context of this article is one such study, undertaken for the Republic of

Vanuatu and one of its islands, Tanna, to reveal the TESV of its habitats

Buckwell et al. 331