Economic valuation of wetlands: Case studies

Abstract

Economic valuation is recognized as an important tool to incorporate the value of nature into decision making on wetlands, but its application in the policy process is still a challenge. Valuation can be applied at different scale levels (from local to global) and a range of different methods is available. In this paper, four examples of valuation studies at different scales are reviewed: A global study estimating the value of the world's wetlands using the benefit transfer method; a study of the Kala Oya River Basin in Sri Lanka using a cost-benefit analysis of four management scenarios; a study of Randers Fjord in Denmark using a contingent valuation study to estimate the value of water quality improvement; a study of Nakivubo wetland in Uganda using market value and the replacement cost method; and a study of shrimp farming in Thailand which uses the production function and expected damage function approaches. These cases demonstrate that estimation of indirect use and of non-use values is more challenging than estimating direct use values, both in terms of the availabe valuation methods and in terms of uncertainty around the outcomes. However, the indirect use values are usually much higher than the direct use values, which emphasizes the need for governments to incorporate estimates of these values in their decision making processes to avoid the loss of the ecosystem services represented by these high values.