Linking water quality and well-being for improved assessment and valuation of ecosystem services

B. L. Keeler, S. Polasky, K. A. Brauman, K. A. Johnson, J. C. Finlay, A. O'Neill, K. Kovacs, B. Dalzell
2012 Proceedings of the National Academy of Sciences of the United States of America  
Despite broad recognition of the value of the goods and services provided by nature, existing tools for assessing and valuing ecosystem services often fall short of the needs and expectations of decision makers. Here we address one of the most important missing components in the current ecosystem services toolbox: a comprehensive and generalizable framework for describing and valuing water quality-related services. Water quality is often misrepresented as a final ecosystem service. We argue
more » ... it is actually an important contributor to many different services, from recreation to human health. We present a valuation approach for water quality-related services that is sensitive to different actions that affect water quality, identifies aquatic endpoints where the consequences of changing water quality on human well-being are realized, and recognizes the unique groups of beneficiaries affected by those changes. We describe the multiple biophysical and economic pathways that link actions to changes in water qualityrelated ecosystem goods and services and provide guidance to researchers interested in valuing these changes. Finally, we present a valuation template that integrates biophysical and economic models, links actions to changes in service provision and value estimates, and considers multiple sources of water quality-related ecosystem service values without double counting. O ne of the fundamental challenges of mainstreaming ecosystem services into decision making involves linking ecosystem processes with changes in human well-being (1). This is especially true for water quality-related ecosystem goods and services. Water quality is highly valued by the public, and information on water quality values is increasingly demanded by decision makers. However, there is no generalizable framework for linking changes in water quality to changes in multiple ecosystem goods and services. This is problematic because limiting ecosystem service assessments to those services with direct use value and market prices systematically undervalues ecosystem services and fails to achieve a full accounting of all of the environmental and economic tradeoffs associated with decisions. Valuing water quality changes is particularly challenging relative to other ecosystem goods and services. Changing water quality affects many aspects of human well-being, and benefits and/or costs accrue to different groups of beneficiaries at varying spatial and temporal scales. This complexity contrasts with other ecosystem services, such as carbon sequestration, for which emissions are aggregated into a global atmospheric pool. Each unit increase in carbon emissions results in a more or less constant loss in value (i.e., costs associated with climate change). By contrast, each unit improvement in water quality may affect only a local area, the value of which varies widely with spatial context and may have strongly diminishing marginal benefits (e.g., additional reductions in nutrient pollution entering a clean lake generate minimal new benefits, and those benefits are further influenced by the condition and proximity to substitute lakes). Further, actions today can affect water quality far into the future, with the consequent challenge of predicting future values. High uncertainty and lack of appropriate data to populate biophysical and economic models are also barriers to comprehensive water quality valuation. Water quality affects people through numerous pathways, from drinking water to recreation to commercial fisheries. The consequences of decisions on the provision of water quality-related ecosystem services are often separated by space and time, modified by variation in baseline conditions, and characterized by nonlinearities and thresholds (2). The value of ecosystem services, especially for cultural and aesthetic values, is also likely to be highly uncertain. Previous work has made progress in identifying sources of water quality value and in developing nonmarket approaches to valuation, but most water quality valuation tools fall short of the needs and expectations of decision makers (3). First, few water quality valuation assessments account for the multiple costs and/ or benefits of water quality-related changes. Recent assessments of the water quality impacts of bioenergy policy in the United States (e.g., refs. 4 and 5) focus solely on the contribution of fertilizer-derived nitrogen to hypoxia in the Gulf of Mexico, neglecting other potential consequences for drinking water treatment costs, human health, and diminished recreational opportunities. Failure to consider all of the water quality-related consequences for wellbeing can lead to a serious underestimate of the true value of changes in ecosystem services associated with a given action or decision. A second shortcoming of existing work on water quality valuation, and ecosystem services research in general, is that valuation assessments often are not linked with changes in management, land use, or other actions that lead to water quality change (1). Assessments of the total costs of eutrophication (e.g., ref. 6) or the total value of ecosystem services from an ecosystem or land cover type (e.g., refs. 7 and 8) do little to help a decision maker trying to assess the consequences of alternative actions. The value attributable to conserving wetlands for improved sediment retention, for example, needs to be assessed relative to a specified alternative land cover or management action (i.e., draining wetlands for agriculture or urban development). Decision makers need models that are sensitive to the variation in local ecological conditions that affect the provision of ecosystem services, as well as to variation in local social and economic conditions that affect the value of ecosystem services to beneficiaries. By failing to link valuation estimates with specific actions and subsequent changes in human well-being, researchers also risk double-counting of value (9). Finally, economic models for valuing water quality-related ecosystem services are often poorly integrated with ecological and
doi:10.1073/pnas.1215991109 pmid:23091018 pmcid:PMC3494932 fatcat:juf73iv6gnezdensnp4fu7nxx4