CHAPTER 4

VALUING THE ENVIRONMENT:SEEKINGANSWERSFROM THE SWAMP

We must begin by accepting the fact that the life community, the community of aU living spec;.s,is the greater reo/ity and the greater value, and that the primary concern of the human must be

the preservation and enhancement of this larger community. (Berry, 1984, p. 76)

THE CHALLENGEOF CHOOSING

What parts of the environment have value,and how is that value recognized in ourmanagement decisions?Ouractions and choices are theresults of the values held byeach of us as part of theworld's cultures. Our envi-ronmental managementdecisions reflect thesevalues and our understand-ing of how the global sys-tem works to support them. Our choice ofoptions is strongly influenced by the mess-ages we receive - of what is good or bad,right or wrong, beneficial or harmful to oursuccess. No decision is value-free, howeverobjective and scientific we attempt to be.

For the most part, the global communiryof decision makers has adopted a Westernperspective and an economic standard asbenchmarks for development decisions.Mechanistic systemsto measure and comparecosts and benefits, both globally and locally,have become the central support mechanismfor decision makers. This decision-makingsupport system attempts to be "objective,"but encounters serious difficulties inencompassingmany societalvalues and manyof the functions of the environment that aremost central to the long-term maintenanceof a sustainable ecological and economicsystem.

At the 1992 Earth Summit in Rio deJaneiro, the world's leaders and the other

participants clearly ident-ified a broader set of valuesthan traditional approachesand instruments. In fact,non-market values were acentral point in much ofthe discussion.Various del-egations lobbied vigorouslyfor the explicit acknowl-

edgment of such values as:

Valuation: The evaluation or assess-ment of environmental functions,particularly non-market goods andservices, for the purpose of assigninga monetary value.

. intergenerational equity - affirmingthe rights of future generations and ourobligations to them;

. social equity - confirming the rights ofgroups formerly on the periphery ofdecision making;

. ecological integrity - maintaining theglobal life support system;

. biodiversity - protecting ecosystemsand species from irrettievable loss;

. cultural diversity - respecting and pre-serving a wide range of cultural values;

. security - ensuring global, regional,and local securiry; and

79

THE CHALLENGE OF SUSTAINABILITY

~ participatory democracy - promotingthe involvement of all groups in thegeneration of decisions.

To some, the value of maintaining a historicor religious site may be far more importantthan any of the values that are currentlyreflected in the marketplace. It may not bevisibly or immediately "economical" to takegreat pains to save the remaining stock of anendangered species or to maintain the tradi-tions of a remote village, but many wouldagree that the values represented by theseactions are real, are important, and must betaken into account in any decision-makingprocess that affects them. At the EarthSummit, the world's political, religious,business, and community leaders affirmedthis respect for a broader range of values.The challenge now is to find ways to allowthem to be effectively recognized in ourdecision-making processes at all levels.

Defining Values for Sustainability

Our measurement tools and our practices failto recognize many of the environmentalvalues that are most central to the goal ofsystem sustainability. The instruments mostoften used to justify invesrment, to supportspecific changes, and to evaluate resultstypically do not recognize or even ac-commodate such values. Our most commonassessment tools, such as economic account-ing, benefit/cost analysis, and other means ofcalculating economic efficiency, are designedto answer one central question - is it eco-nomically viable? Of equal importance arethe questions: Is it ecologically sound? Is itsocially beneficial? Is it religiously acceptable?Is it legally or politically feasible? Does itcontribute to social and intergenerationalequity? Does it reduce the future risks ofecological and human systems? Does itreflect a global ethical perspective, preserving

80

that which is of greatest value to the greatestnumber of people? In asking such questions,we begin to recognize other values that oureconomic instruments often do not pick up- values that are of immense and long-termimportance to the continuing ability of theecosphere to support human endeavors. Allof these are dimensions reflecting ctiteria formeasuring "good" or "well-being," but differ-ing from those that are normally included ineconomic valuation. Each culture has its own

inherent prioritization of these criteria; thesedifferences must be acknowledged andrespected. In fact, the value systems of sometraditional cultures may be far more benignto the concept of sustainability than is thecurrent consumption-dominated Westernethic. Such perspectives. need to be effec-tively recognized in our procedures for defin-ing problems, comparing solutions, andmeasuring progress.

The environment is managed by millionsof individuals, each of whom makes decisionsthat affect the use of parts of the environ-ment. Together, the cumulative effects of allthese decisions determine the state of the

global environment. Because most decisionsare responsive to the "economic" messagesreceived by the decision maker, much atten-tion has been focused on the modification of

these messages to better reflect the broader,longer-term, and equity-related values con-sidered important to a sustainable future(e.g., Daly and Cobb, 1989; Crerar, 1986). Inthe past two decades, there has been con-siderable discussion on how to reflect andaccount for critical values in our evaluation

processes. Some would maintain currentstandards, but begin to modify them toinclude shadow values, surrogate values, orother monetary means to express value - todevelop the means for comparing differenttypes of values in monetary terms. Othershave strongly argued that the developmentof new tools, to be used in parallel to the

current economic approaches, would helpdecision makers undersrand more clearly rheorher, non-marker values rhat they manage.Thus a traditional economic accountingprocedure would handle marketplace values,some form of environmental measure or set

of measures would represent environmentalvalues, and still other measures would beused to evaluate effects on cultural, religious,polirical, or legal values.

The way we measure our progress at thenational and regional scales is based on theuse of a limited number of indicators of

economic activity - a selective subset of thevalues that are importanr to our future well-being. Since the 1930s, economic accountingand, in particular, national-level indicatorssuch as Gross Domestic (or National) Prod-uct (GDPor GNP) and balance of trade havebeen used as key measures of overall econ-omic performance. As such, they have hadimmense influence on public (and private)perceptions of what benefits are, and whenor how they occur. These measures, based oncompilations of flows in all sectors of theeconomy, are publicly perceived as the foun-dation for derermining whether the welfareof the nation has changed for better orworse. But it has become increasingly clearthat these are incomplete indicators (e.g.,WCED,1987; Ahmad et al., 1989; MacNeill,1990). Managers need the means to betterunderstand the long-term social and environ-mental implications of their actions anddecisions - to allow them to manage risk inall of its dimensions.

Most currently used decision-supporttools have significant limitations, which mayresult in misleading advice to managers.Because marketplace values are easiest tomeasure, the tools that we have developedtend to respect and reflect those values thatare easily quantified in monetary terms(Manning, 1987). Most project-level deci-sions involve some form of benefit/cost

VALUINGTHE ENVIRONMENT

calculation, which is frequently limited tomeasurement of the direct costs and the

direct benefit flows to the proponent. Inapplication the following has become clear.

. It is much easier to compile and calcu-late benefits and costs in terms of an

individual enterprise (or political unit)than in terms of society as a whole.Efforts to expand benefit/cost applica-tions to social benefit/cost analysis,incorporating a broader set of values,have been complex, incomplete, andexpensive.

. Measurement of the dollar values of

goods and services for which there is anactive market is much easier than forthose goods and services for which nomarket exists. Efforts to "shadow price"non-market goods or services have gen-erally been weak and have often beencontroversial.

. Many of the goods and services providedby the environmenr are not actuallyperceived as goods and services by thegeneral public. In fact, most people areunaware of the exisrence of services like

erosion buffering, absorption of toxins,or groundwater recharge, and certainlymost have no clear perception of thevalue associared with these services.

. The tools that exist to help establishvalues for these non-market goods andservices do not work very well. Thisoccurs partly because too little is knownof the actual biophysical relationships,and partly because too little is knownabout human responses ro the presenceor absence of the goods and servicesthat are supported by particularelements of ecosystems.

81

THE CHALLENGE OF SUSTAINABILIlY

If the long-term objective of sustainabledevelopment is to be achieved, there is muchwork to be done to improve the tools at ourdisposal, so that they clearly reflect a broaderrange of values. The overall goal is toimprove the means by which we measure thetrue costs and benefits of actions - to

greatly enhance the information received bythose who make decisions regarding thefuture of nations, regions, ecosystems, andspecies.

THE WETLANDS ARE NOT WASTELANDS

PROJECT

To understand global interrelationships moreclearly, it is sometimes useful to fOcuson themicrocosm of a specific ecosystem. In 1986,a group of scientists from North Americaand Europe met in Canada to discuss prog-ress in the preservation of wetland resources.Wetlands are complex ecosystems, with bothterrestrial and aquatic components. In manyrespects, they are among the richest of theworld's ecosystems, yet they are commonlyregarded as worthless. Wetlands are oftenperceived to be wastelands - useless interms of the production of marketplace goodsand services unless they are drained, filled,or developed. The English language itselfreflects the negative values we normallyassociate with wetlands; the words "swamp,""b "" "" . " hog, morass, or quagmIre ave come tobe synonymous with useless, wasted, ormessy. Yet these same wetlands playa criti-cal ecological role both globally and locally,performing such functions as water storage,sediment retention, storm and erosion buffer-ing, nutrient recycling, provision of habitat,absorption of toxins, and many more.

If these ecosystems are so valuable, whyare they constantly losing out to develop-ment proposals? Clearly there is an anomalyberween popular perceptions of the "value"of the wetland environment and the reality

82

of its role and contribution to the overall

welfare of humanity, of other species, and ofthe planet as a whole. The lesson from theswamp is that there are real practical chal-lenges in identifying valuable environmentalattributes, in understanding their sensitivityto alterations, and in assessing their true rolein providing goods, services, and experiences.Why does development usually win over thewetland in our evaluation procedures - nomatter how special the wetland may be?Why are the outcomes of our assessmentssometimes counterintuitive? Why do ourplanning and decision-making procedureslead us to conclusions that do not seem to

make common sense? These questions werethe principal motivation for the WetlandsAre Not Wastelands Project, aimed at criti-cally examining how we value sensitiveenvironments and determining which valuesare truly reflected by the instruments we use.

How can we define what is important inthe environment and assess changes in theseelements that are critical to long-termsustainability and ecosystem viability? Acommon problem is that many importantfunctions of the environment cannot be

effectively demonstrated to be of value interms that are readily understandable bydecision makers. Research in the projectaddressed the central concerns of identifyingthe functions supported by particular envi-ronments and establishing their value tosociety in a way that could be directly usedin the decision-making process. Wetlandswere chosen as the pilot subject, bothbecause they were perceived to be amongthe most complex of environments andbecause they have been chronically under-valued or ignored by the planning process(Bardecki et al., 1988). The researchersfocused their attention at the local and

regional level, but they also considered thechallenge of evaluating broader scale objec-tives, supported in the aggregate by environ-

mental resources at a regional or even conti-nental scale. The ultimate targets for theproducts of the research were local andregional planners and municipal- andregional-level managers - the decisionmakers who are at the front lines of environ-

mental decision making. These decisionmakers often lack the needed tools and

methods to permit them to understand andinternalize the full range of environmentalvalues into their decisions.

The findings of five years of researchinto valuation methods, and four case studiesconducted on wetlands in different ecologicalregions, yield food for thought about how weidentify and measure the value of environ-ments at all scales. The research has helpedto clarify some of the challenges ahead intrying to build tools that are sensitive tothese factors (Manning et al., 1991; Bond etal., 1992). Methods currently applied to thevaluation of natural resources usually portrayonly a small part of the true environmentaland economic value to sociery (deGroot,1987, 1988). Nevertheless, there is increasingrecognition of the value of wetlands func-tions to sociery for wildlife and nature con-servation, active and passive recreation,commercial plant and animal production,mineral extraction, and risk reduction,among others.

Many of the functions of the environ-ment are common property functions, eventhough rights to certain locations or func-tions may be privately held and managed.Part of the problem for evaluators is thatthey need to compare values for marketedaspects of the environment - such as

access, the right to fill and farm, the right todrain - with common property attributes.These attributes are often ill-defined, withunknown current and potential users; theyinclude, for example, the provision of migra-tory bird habitat; function of the wetland asa carbon sink; maintenance of biodiversiry;

VALUINGTHE ENVIRONMENT

and contribution to landscape variety or tocultural importance. Yet in many cases, thesecommon property functions and the valuesthey serve are of considerable significanceand may be the source of major benefits at aregional or larger scale. One of the casestudies undertaken in the wetlands project- a study of a region of thousands of tinysloughs and wetlands in the CanadianPrairies - suggested that common property

benefits may, in fact, represent the mainbenefits from the ecosystem.

Another significant challenge is estab-lishing the marginal value of anyone wet-land. It has been possible to identify andquantify in dollar terms some of the directbenefits to residents from wetland uses, suchas use for recreation or trapping; however, ata continental scale, the broader benefits tomigratory waterfowl, to aquifer recharge, andto the maintenance of ecosystem integritymay actually be the primary source of valuesto sociery deriving from the continued exis-tence of the wetlands (Young et al., 1990).In the potholes region of the CanadianPrairies, where small wetlands exist in thou-sands, the marginal value of any individualpothole is very difficult to demonstrate; yettaken together the potholes region is thebreeding habitat for a major part of NorthAmerican migratory waterfowl. It may befeasible to determine a total (or average)value for wetlands, but impossible to ascer-tain the marginal value of the loss or impair-ment of a specific wetland (Bardecki, 1993).

Another important focus of the wetlandsproject was to develop methods for assessingthe impacts of change on the benefitsimparted by the continued existence ofwetlands. Globally, many of the most impor-tant changes we attempt to evaluate occur asmany seemingly insignificant, individual,incremental changes. Yet collectively theyconstitute a massive assault on some of the

key functions that underpin the planet's

83

THE CHALLENGE OF SUSTAINABILl1Y

capacity to continue to support a livingsystem. Examples include the urbanization offarmland, the cutting of natural forest, thepollution of watercourses and seashores, thedepletion of groundwater aquifers, and thecumulative stresses on natural habitats. Like

the Canadian potholes, no one action issignificant, yet together these actionsthreaten life support systems for all speciesand key values of all cultures.

APPROACHES TO VALUATION

What approaches to valuation canencompass the full range of values derivingfrom the environment? The Wetlands Are

Not Wastelands project selected threemethods for detailed examination (Manningand Cox, 1986). These were approaches thatappeared amenable to modification, withrespect to encompassing a broad range offunctions. The methods selected for field-

level testing were:

~ a multiple function approach, identifyinga broader range of societal goals andobjectives for the use of environmentalfunctions than those generally encom-passed by the term "economic" to usethem to screen wetland use proposals;

~ a social benefit/cost approach, involvingopportunity cost concepts to be appliedto net changes in measurable benefitssupported by the existing environment,and to the net benefits deriving fromthe proposed alternative use; and

~ a contingent valuation approach,measuring the willingness-to-pay forbenefits supported by the environment;to be used to provide estimates of thevalue of non-marketplace benefits andalso as inputs into a social benefit/costevaluation.

84

In the field, it soon became clear that thethree initially selected approaches were notmutually exclusive, but could operate inconcert to broaden understanding of therange of environmental functions and oflinks to valued benefits that are dependentupon them (Bond et al., 1992). Each of thethree approaches will be discussed in turn.

Multiple FunctionApproach

The multiple function approach entailsscreening a particular proposal for alterationor elimination of a wetland ecosystem againsta series of specific standards or benchmarks.These standards were designed to reflect therange of societal goals and objectives associ-ated with or served by the wetlands environ-ment (Bond et al., 1992). This necessitated,in the first place, identifying the valuesserved by the unimpaired functioning of theecosystem, and then determining which werelikely to be affected by a specific develop-ment proposal. A set of criteria both quanti-tative, such as recognized water qualitystandards, and qualitative, such as generalobjectives related to the conservation ofhabitat, were identified as benchmarks. Somewere derived from existing legislated andstated governmental goals and objectives.Proposals failing to satisfy existing standardsor guidelines could, in some cases, be elimin-ated in initial screening. This proved particu-larly applicable where legislated limits suchas protected habitat for endangered species,or pollution emission levels were in force,serving as a legal cutoff. But for most envi-ronments and functions, specific legislatedlimits may be missing. Where no policy goalsor legal limits were in place, other points ofreference were sought, such as scientificallysupported estimates of demand for the func-tion, particularly where thresholds could beidentified.

Application in the field proved to be

difficult and time-consuming, but cettainadvantages became evident. For example,this approach encourages the evaluator toconsider the full range of objectives that maybe associated with the functions detived from

the ecosystem. It also identifies specific gapswhere policies, guidelines, standards, ordocumented information on thresholds maybe missing. Thus, it may provide feedbackinto the policy or research agenda. Severaldifferent criteria are used in this approach toevaluate proposed changes; the analyst andthe decision maker are therefore providedwith a visible accounting of the range ofcosts of any given action. This is donethrough the explicit identification of specificvalues that may be jeopardized, and to whatextent, by a specific proposal. There are alsoadvantages in not quantifying or establishinga hidden weighting system that produces ayes/no response: the visible accounting mayserve to make decision makers more publiclyaccountable. This includes the explicit recog-nition of the full range of values that arecurrently or potentially derived from theecosystem, and the visible trade-offs resultingfrom management or policy decisions. Theresult is that the rationale for a particulardecision can be stated in the form of an

intentional trade-off. For example, on thebasis of this type of analysis, the decisionmaker might conclude that, "the benefits interms of jobs and reduced surface floodingdid not justify the loss of water storagecapability, groundwater quality protection,erosion control, and waterfowl habitat,"instead of making an opaque reference to theresults of an analytical procedure, "we wentahead because it had a benefit/cost ratio of1.6 to 1..."

Social Benefit/CostApproach

Valuating the opportunity costs of develop-ment involves deriving monetary values for

VALUINGTHE ENVIRONMENT

the range of benefits derived from an ecosys-tem. Therefore, an initial step in applyingthis method is to ascertain the presence ofany given function that may be providingbenefits, before assessing it within a socialbenefit/cost framework. In some cases, simpleinventory techniques and observation canconfirm many components of an ecosystem'svalue, through surveys of hunting use orbiological inventories of endangered species.In other circumstances, such data haveproven to be elusive, or may not be feasibleto obtain for monetary, time, or technicalreasons. Many key values are difficult toidentify, particularly in terms amenable torelatively sophisticated quantitative analyses.If key values can be identified, and if it ispossible to estimate the degree of enhance-ment or impairment of these due to theproposed project or alteration, the opportun-ity cost approach can be applied.

A variety of means exists by which toperform the economic analyses of ecosystemvalues once they have been identified (e:g.,Batie and Shabman, 1982). The key is tofocus on net costs and net benefits that

result from the use of the particular site,rather than focusing specifically on projectbenefits. That is, it is necessary to identifythe additional benefits that accrue from sitingthe development in that particular location,rather than the next best alternative. Simi-

larly, additional benefits might be realized asa result of leaving the site unimpaired asopposed to re-creating it elsewhere or replac-ing its valued functions in another way.

ContingentValuationApproach

The contingent valuation method for esti-mating willingness-to-pay is reasonably wellestablished (Mitchell and Carson, 1989). Amore or less hypothetical (contingency)market is defined for non-market goods orservices. This normally involves reliance on

85

THE CHALLENGE OF SUSTAINABILIlY

data collected directly from individuals inorder to assess their personal estimates ofvaluation, for example, the value to theindividual of a particular ecological area or ofparticular products or services that theycurrently obtain from it or may expect toobtain. In some circumstances, this valuationcan be used as an input to the estimation ofopportunity costs within a social benefit/costframework. A key difficulty encountered inthe field application of this approach towetland ecosysrems was in attempting to linkthe benefits obtained or perceived to beassociated with the wetland with particularaspects of the wetland, or even with specificwetlands.

In many cases, people may be unfamiliarwith a specific area or environment or withthe range of values or potential valuesinvolved. Even so, significant estimates ofbenefits for a range of current or potentialuses were obtained through this approach. Itis clear from the actual behavior of voters in

U.S. referenda to preserve natural or wetlandvalues that the willingness to pay is real, andreflects actual perceptions of values that arenot commonly accounted for in the market-place. An example of this occurred in thearea of Seattle, Washington, in the north-western United States. Area residents voted

to spend billions of dollars to preserve thegreen area of King County by purchasing therights to develop the land. Farmers, in effect,sold their development rights to urbanpeople, who retained them in order to guar-antee green space around their city andaccess to fresh produce, milk, and ruralvistas. Thus, despite its logistical problems,contingent valuation has proven itself as ameans for assessing the real social valuesassociated with non-market products andservices.

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LINKING ENVIRONMENTALFUNCTIONS AND SOCIAL VALUES

Figure 4.1 suggests some of the ways inwhich environmental functions can be inter-

preted in terms of benefits that are valued bysociety. The wetlands project helped toreveal the key steps needed if we are todetermine successfully which specific envi-ronmental functions are critically importantfor sustainable development. In practice,these steps are:

. establishing the presence of environ-mental functions;

. linking specific functions to social goals;

. assessing the benefits deriving fromspecific attributes of the environment;and

. analyzing the sensitivity of these benefitsto alterations in those specific attributesof the environment.

In the following sections, each of these stepsis examined in turn, from the perspectives ofboth practicality and relevance to the deci-sion-making process.

Establishingthe Presence ofEnvironmental Functions

What functions are present in a given envi-ronment? Because of the range of differentfunctions supported by any environment, ithas proven time-consuming in practice toidentify an inventory of functions for aparticular area. In the wetlands studies, somefunctions were relatively easy to initiallydocument, based upon direct observation,e.g., forest cover or the existence of priorstudies on fish habitat. Others, such asgroundwater recharge or life support for

VALUING THE ENVIRONMENT

Draining the Swamp to Put ina Supermarket

Often, development decisions at a local level are greatly in/luenced by theperceived relative value of one option over another. At first glance, forexample, a supermarket seems to have all the advantages over an apparentlyunused swamp. A supermarket pays taxes, creates jobs, and shows visible"progress"; a swamp does none of these. The value of the swamp may lie inmaintaining groundwater, providing recreation, or acting as a source of foodand breeding habitat for migratory birds. To the local decision maker thereappears to be no contest - the supermarket wins hands down.

From another perspective, however, the maintenance of the swamp maybe the best decision. If we move the supermarket 200 meters south, does itstill bting the same benefits? Will it be cheaper, or as cheap to build there?If we agree that the swamp has some value (it may be pretty, it may provide/lood control, etc.), then perhaps we can have both the supermarket and theswamp. If we agree that it is important to keep the values that we gain fromthe swamp,how much would it cost to replace, relocate, or recreate it? It maybe much more costly to our community in the long run to build the supermar-ket on the swamp. A supermarket built on the next corner may be just asvaluable to the owner and to the community. Ofren the answers we getdepend on how we phrase the question - if we phrase it properly, we mayfind that we can retain many more of the values that are important to ourlong-term futures.

individual species, could not be readily docu-mented (Bardecki, 1988). One of the studyareas, an estuarine marsh, was chosenbecause, according to many experts con-tacted, "it had been studied to death." Evenso, it was found that databases did not existto permit a clear assessment of the role ofthe wetland environment in the broader

regional ecosystem. Although there was goodinformation on the role of the estuary as fishand waterfowl habitat, little could be foundon other functions (Ferguson et al., 1989).Even for the variables most important to theproductive enterprises of the owners (agricul-ture and forestry, in these cases), field

studies uncovered only limited usable dataon basic biological and physical characteris-tics, and none on trends in the level ofstocks or condition of key resources. Someregional data on resource stocks wereencountered in each of the studies (e.g.,forest stands, fish stocks). However, there isvirtually no information that is widely avail-able on a consistent national or regionalbasis pertaining to many of the basicelements of the environment, such as soilquality, water quality, organic material, andhabitat use (Environment Canada, 1992). Insome localities, or for particular larger pro-jects where it can be compiled directly by

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THE CHALLENGE OF SUSTAINABILITY

The Wetlands Are Not Wastelands Project

From 1986-1991, field testing of approaches to the evaluation of environ-mental resources took place in four Canadian wetland ecosystems (GreenockSwamp, a forested marsh in Ontario; Minudie Marshlands, a coastal wetlandin Nova Scotia; Cowichan Estuary, a tidal marsh in British Columbia; and thePrairie potholes region in Saskatchewan). The objectives of the Wetlands AreNot Wastelands project were to:

. adapt existing methods and/or establish new methods for better evaluatingthe full socioeconomic and environmental values of wetlands to society;

. undertake pilot studies to test the selected methods vis-a.-vis alternateuses, in order to demonstrate the specific values of selected Canadianwetlands;

. produce a reference guide to be used by resource planners and decisionmakers as a set of screening procedures and methods for the evaluationof wetland areas in relation to proposed changes; and

. involve planners and decision makers in the improvement and use ofapproaches for natural resource analysis at local and regional levels,through participation and consultation.

As of 1992, the case studies were complete, and a reference guide for the useof decision makers, specifically supporting decisions regarding wetlands, hadbeen produced (Bond et al., 1992). The testing of these approaches in the fieldhas yielded results confirming that the valuing of current and potential benefitsderiving from environmental functions will not be an easy task. To summarizesome of the conclusions:

. many functions remain very difficult to identify, and most are not wellrepresented in any market;

. non-market values (maintenance of biodiversity, toxic absorption, floodand erosion control, waterfowl habitat) predominate in most cases; and

. where market values are present, they have proven very difficult to isolateand to attribute to particular aspects of the wetland environment.

These results suggest that attempts to internalize environmental values intoconventional economic models will immediately confront serious problems ofinformation gaps at all scales, just in identifying the presence of importantenvironmental functions, and will certainly encounter problems in matchingthem to the valued benefits they support.

88

the proponent, this type of information canbe gatheted. But such information is seldomavailable as a baseline fat latget scale analy-sis. Nevettheless, it is impottant that therange of functions be documented, if only tosensitize decision makets to the potentialeffects of theit decisions.

LinkingEnvironmentalFunctions to SocialGoals

What human goals are mer by the functionsof any parricular part of the environment?In the pilot studies for the wetlands project,efforts were made to document the existence

of social goals that could be specificallylinked to the functions of the environment.

Three of the four local jurisdictions in thestudy lacked comprehensive long-termplanning instruments - a situation typicalof rural regions in most parts of the world. Itwas therefore necessary to compile the list ofgoals from a broad range of sources: localplans, conservation authorities, water boards,provincial standards for water quality, lists ofendangered species and their habitat needs,particular studies that had defined a demandfor a specific recreational experience orproduct, and so on. Often the goals were notclearly articulated, and in most cases noquantitative measure, documented threshold,or definite target had been established.

As a result of the lack of clearly definedgoals, estimating thresholds and levels ofneed proved to be very difficult. How manyducks, how much water, how much access towaterfront, how much visual diversity isneeded or desired - by the local commun-ity, by the larger region? Without someexplicit measure of demand, we are leftlargely without a means to establish whichenvironments or which attributes of these

environments are most important. Somemeans to identify demand must necessarilyprecede any attempts to establish value in

VALUINGTHE ENVIRONMENT

any substantive or quantitative terms.

Assessing the Benefits Deriving fromSpecific Attributes of the Environment

Which aspects of the environment providespecific benefits? The pilot studies examiningparticular localities were relatively successfulin identifying the presence of certainattributes of the environments studied. In a

number of cases, the dependencies of certainbenefits could be linked to these attributes,for example, linking duck production towater levels. It proved much more difficult,however, to assess more specific relation-ships. For some commercial products, modelsexisted to permit estimation of the sensitivityof production to changes in attributes of theenvironment (e.g., production of commercialcrops relative to soil acidity or water avail-ability), but few of these models were specificto or validated in the wetland environment.

For a majority of the products and servicesderived from these environments, no empiri-cal information on productivity-responserelationships could be found. For example,few measures were located to relate services

such as the ability to support nesting habitat,flood and erosion control, absorption oftoxins, or recreational uses directly to speci-fic attributes of the environment such as

water levels, soil chemistry, vegetation cover,or proximity of other uses.

Analyzingthe Sensitivity of these Benefitsto Alterations

How much can we afford to change theenvironment before we lose or compromiseimportant benefits? Compounding the diffi-culties listed above is the concept of sensitiv-ity to disruption or change. Even where someinformation exists that shows that a specificvalued benefit is derived from the studied

ecosystem, it proved nearly impossible to

89

THE CHALLENGE OF SUSTAINABIUTY

Based on R.S. deGroot, -Environmental Function: An Analytical Framework for Integrating Environmental and EconomicAssessment,- in Proceedings, Workshops on IntegratingEnvironmentaland Economic Assessment: Analytical and NegotiatingApproaches. (Vancouver,Canada: Canadian EnvironmentalAssessmentResearchCouncil, 1966).

90

Figure 4.1 - Translating Environmental Functions into Benefits Valued by Society

functions capabilities examples of products, examples of benefitsselVices, and experi- to society derivedences supported by from wetlandswetlands

regulation (buffer) buffer/absorption climate reguladon, toxic /lood control, contam-absorpdon, stabilizadon inant reducdon, cleanof biosphere processes, water, storm damagewater storage, cleansing reducdon, health bene-

lits, erosion control

life-support (carrier) ecosystem health nutrient cycling, food environmental quality,chain support, habitat, maintenance of ecosys-biomass storage, genedc tern integrity, risk reduc-and biological diversity don

science/information specimens for research, greater understanding ofzoos, botanical gardens, nature - locadons for

representadve and nature study, research,unique ecosystems educadon (lield trips)

aesthetic/ non-consumpdve uses personal enjoyment andrecreational such as viewing, pho- relaxadon, benelits to

social/cultural tography, birdwatching, tourist industry, local(information) hiking, swimming economy

cultural! part of tradidons of social cohesion, mainten-

psychological communides, religious or ance of culture, behestcultural uses, future value to future gener-(opdon) opportunides adons, symbolic values

production subsistence natural producdon of food, liber, self-reliance

production birds, lish, plants (e.g., for communides, importberries, rushes, wild rice) subsdtudon, mainten-

ance of tradidons

commercial products producdon of foods (e.g., products for sale, jobs,fish, crops), liber (e.g., income, contribudon towood, straw), ferdlizers GDP

(e.g., peat)

identify the sensitivity of that benefit tochanges to the ecosystem. If the water levelis lowered (by what amount), do the ducksleave? How acidic or polluted can the wet-land get before it no longer has theattributes that draw tourists? How much canit be filled before the ~etland can no longeract as breeding habitat, groundwaterrecharge zone, or swimming hole? Recentwork from the tourism sector has also dem-

onstrated problems in the establishment ofrelationships betWeen specific environmentalattributes and the benefits obtained from

them (Manning, 1993). Each type of tourismhas different demands and different sensitiv-

ities to changes in temperature, water qual-ity, or aesthetic attributes. The answers tothese types of questions are critical in ident-ifying which environments and specificallywhich attributes of these environmentscontribute to the benefits accrued at local,regional, and larger scales.

VALUESAND VALUATION: WHAT ISSUSTAINABLE?

The selection of specific attributes of theenvironment to be incorporated into anyevaluation framework is dependent on per-spectives and priorities. All environmentalassessment approaches reflect human values;this is inescapable. The difficulties experi-enced in the wetlands project in evaluating- even at the local scale - the full wish

list for environmental goods, services, orexperiences translate into a serious initialbarrier for full assessment of environmental

management decisions.

VALUING THE ENVIRONMENT

Societies value environmental attributes,such as clean water or biological diversity orpristine forests, differently. Only when achoice has been made as to what is valuable

and desirable to sustain is it possible to beginto choose which attributes of the environ-

ment to include in the evaluation process,and to incorporate those attributes mostcritical to an acceptable outcome.

If system sustainability is to be our goal,then we need to broaden the range of factorsthat are recognized in our valuation pro-cedures. As our knowledge of the environ-ment expands, and as we become moresensitive to the needs and perspectives ofdifferent cultures and species, what we valuealso evolves. Traditional systems of valuationhave developed in response to the specificneeds of a growing industrial sector, and bydesign serve the needs of that sector and itsvalues: profit, efficiency, production. In thepast few decades, we have sought to modifythe instruments of business and commerce to

serve us better in the management of socialneeds and demands within a changing envi-ronment. Fundamental to our ability toreflect a broader set of values in our deci-

sions will be the education of managers anddecision makers concerning the existence ofenvironmental functions, and their import-ance to the success of human endeavors.

While some progress has been made, ourinstruments still fall far short of providingsatisfying answers to questions of sustain-ability. The closer one looks at the swamp,the deeper and more complex it is seen tobe. Our models do not yet do it justice.

91

THE CHALLENGE OF SUSTAINABIUTY

Questions for Review1. All environments have many functions. What are some of the "other"

functions provided by a forest, farmland, a beach? What are some of thevalues that owners, other people, and other species obtain from these?

2. Why are some values reflected in the marketplace and some not?

3. What values do we regularly pay people to sustain? Why do we payfarmers only for food, and forestersonly for wood, and not for all the othervalues we increasingly ask them to maintain?

4. Which approaches to evaluation are most amenable to the incorporationof a broader range of environmental functions? What were some of theproblems encountered in field-level testing of these approaches?

Questions for Discussion and Research

1. How does your society measure the benefits derived from developmentprojects? How does the government measure benefit? Which values aremost important in this process? Are they changing? Is the set of valuesand priorities used by governments the same as that used at the villagelevel?

2. How do you learn about the values important to others - globally orlocally - that are affected by your actions? Do you normally have enoughinformation to anticipate the major consequences of your projects and thereactions from affected individuals or regions, or are you often surprised?

3. Who makes the large-scale economic planning decisions (interest rates,money supply, conditions for loans, economic development priorities) inyour nation or region? Which of the values discussed in this chapter arereflected in these policiesand plans? Which are not? Who makes the localdevelopment decisions (a new factory, tourist resort, highway, school)?Which of the values discussed above are systematicallyreflected?

4. Does the ownership of environments or resources affect the choice orpriorities given to the values in the planning process? In your area ofresponsibility are any important values often missed in the planning oroperational activity? Who are the recipients of the positive or negativeeffects from these?

5. What are some of your assumptions regarding the human-planet relation-ship that underpin your values and actions vis-a.-visthe environment?

92

VALUING THE ENVIRONMENT

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Bardecki, M.J. 1988. An Application ofWiUingness-to-Pay,Opportunity Cost and Cumulati~eImpactMethodsto GreenockSwamp,Ontario.Report 3.Ottawa, Canada: Wildlife Habitat Canada and Envi-ronment Canada.

-. 1993. Personal Communication.

Bardecki,M.J., E.W. Manning, and W.K. Bond. 1988.Wedand evaluation and the decision-making process.In Water for World De~elopment.Vol.N: watersupply,economics. Proceedings of the Vlth IWRA WorldCongress on Water Resoutces. Urbana, Illinois:International Water Resources Association.

Bardecki, M., W.R. Bond, and E.W. Manning. 1988.Wetland Evaluation and the Decisinn-MakingProcess.Toronto, Canada: Ryerson Polytechnical Institute.

Batie, S., and L. Shabman. 1982. Estimating theeconomic value of wedands: Principles, methods, andlimitations, Coastal ZoneManagementJournal,10( 3).

Berry, T. 1984. Bioregion: The context forreinhabiting the earth. New York: The AmericanTielhard Association for the Future of Man.

Bond, W.K., K.W. Cox, T. Heberlein, E.W. Manning,D.R.W. Hy, and D.A. Young. 1992. Wetlands Are NotWastelands. Ottawa: Wildlife Habitat Canada andEnvironment Canada.

Crerar, A. 1986. Anticipate and prevent. PolicyOptions.Nov.: 3-8.

Daly, H., and J. Cobb. 1989. For the CommonGood:Redirectingthe Economy towardCommunity, the En~i-TORment,and a SustainableFuture. Toronto, Canada:Oxford University Press.

deGroot, R.S. 1987. "Environmental functions as aunifying concept for ecology and economics." TheEn~ironmentalist.7(2):105-109.

-. 1988. Environmental jUnctions: An analytical frame-work for integrating environmental and economic assess-ment. Workshop on Integrating Environmental andEconomic Assessment. Vancouver: Canadian Environ-mental Assessment Research Council.

Environment Canada. 1992. Stilteof the En~ironmentFor Canatla. Ottawa, Canada: State of the Envi-ronment Reporting.

Ferguson, A, G. Holman, and R. Kistritz. 1989.Application of Wetland E~aluatinn Methods to theCowichan Estuary, British Columbia. Report 4. Ouawa,Canada: Wildlife Habitat Canada and EnvironmentCanada.

MacNeill, J. 1990. Sustainable De~elopment, Economicsand the Growth Imperati~e. Ottawa, Canada: Institutefor Research on Public Policy.

Manning, E.W. 1987. Prophets and profits: A cririqueof benefit-cost analysisfor renewable resource projects.Alternati~es.Fall.

-. 1988. The Analysis of Land Use Determinants inSupportof SustilinableDe~elopment.Laxenburg,Austria:International Institute for Applied Systems Analysis.

Manning, E.W., 1993. SustainableTourism De~elop-ment, Meeting the PlanningChallenge.Madrid: WorldTourism Organization.

Manning, E.W., M. Bardecki, and W. Bond. 1991."Measuring the value of renewable resources: Thecase of wedands." First Annual Conference of theInternational Institute for the Study of CommonProperty Resources. Durham, North Carolina: DukeUniversity.

Manning, E.W., and K.W. Cox (co-chairs). 1986.Workshopon Alternati~eMethodsof E~aluatingRenew-able Resources (Wedands). Ottawa, Canada: LandsDirectorate, Environment Canada.

Mitchell, R.C., and R.T. Carson. 1989. UsingSuroeysto Value Public Goods: The Contingent ValuationMethod.Washington, D.C.: Resources for the Future.

93

THE CHALLENGE OF SUSTAINABILIlY

WCED. 1987. Our CommonFuture. Oxford: OxfordUniversity Press.

Young, D.A., D.V. Johannesen, J. Thompson, andR.C. Scace. 1990. PrairiePotholeWetlands;Functionsand Evaluation. Ottawa, Canada: Wildlife HabitatCanada and Environment Canada.

94