Valuation of improvements in coastal

environments

Based on the study

Östberg, K., Håkansson, C., Hasselström, L. & Bostedt, G. (2013). Benefit Transfer for Environmental Improvements in Coastal Areas: General vs. Specific Models. Canadian Journal of Agricultural Economics, Vol. 61, pp. 239-258.

Background

• The ocean and coastal environments is of huge importance for many species. The diversity contributes to many values, including recreation, food and tourism.

• There are today many threats against the ocean and coastal environments.• Pollution• Euthropication• Lack of protection for sensitive species and areas

• To safeguard benefits from ocean and coastal ecosystems is an important policy task.

Environmental objectives

• The EU water framework directive has the objective the all ground and surface water should reach good ecological status by 2015.• Member countries should formulate action plans that takes benefits and costs

into account• .

• Sweden's environmental objectives concerning euthropication in 2020.• The levels of euthropying substances in soil and water should have no

negative effect on human health, the basis for biodiversity and the opportunities for multiple use of soil and water.

• Sub-goal concerning noise and other disturbances.• Noise and other disturbances from boat traffic should be negligible in certain

sensitive designated archipelago and coastal areas by 2010.• Certain specially sensitive areas should be established.

Valuing improvements in coastal environments

• Willingness-to-pay as welfare measure of environmental changes• Valuation study based on ecological knowledge and connected to recent

policy issues

• Can the results be used for benefit transfer?• Time saving• Low cost

• Benefit transfer and socio-economic data• Better/more reliable results?

Study areas

• Two studies were conducted in the autumn of 2009 in the coastal areas:• Between Södertälje and Landsort (the southernmost point of the Stockholm

archipelago) on the east coast• Between Orust and Tjörn on the west coast

• Both are important fishing and recreational areas

• Meets similar environmental problems and possible solutions for them

• Availability of large amounts of ecological information

Environmental problems in these areas

• Algae bloom of blue-green algae (east coast only)

Environmental problems

• Murky water/increased water turbidity

Environmental problems

• Noise and littering

The surveys

• Webbased choice experiment survey• Four samples, two on each coast

• Locals, living in the area• Non-locals, living outside, but close to the area

• Socio-economic questions, connection to the area, knowledge of current conditions

• As similar attributes as possible were chosen, but:• Algae bloom is only a problem on the east coast

• Attributes:• Secchi depth and bladderwrack stands (blåstångsbestånd) as indicator of water

quality• Algae bloom (on the east coast)• Noise and littering• Cost

Attribute levels

Secchi depth and bladderwrack stands

Alae bloom Noise and littering

Present situation Very little, little or sparingly

High risk of large scale algae bloom every summer

No large scale efforts by authorities to reduce noise and littering in these waters.

Alternative attribute levels

Secchi depth becomes one class better

Or

Secchi depth becomes two classes better

High risk of large scale algae bloom every third summer

Or

High risk of large scale algae bloom every 10th summer

Decreased noise and littering through the establishment of special consideration zones

Measures to improve the coastal environment

• To improve the situation with murky water and algae bloom:• Reduce the emissions of nutrients from sewage treatment plants using new technology.

• To reduce noise and littering in the coastal environment• Establish special consideration zones with restrictions for boating, posting of waste

disposal stations etc.

• Funding• Monthly fee payed to a state fund between the years 2010-2029 by the citizens in the

region

Example of a choice set question

Alternative A Alternative B Alternative C

Secchi depth and bladderwrack stands

As today One class better As today

Algae bloom As today As today Every 3:rd summer

Noise and littering As today Less noise and littering As today

Cost for household 0 kr/month 100 kr/month 20 kr/month

I would choose alternative A I would choose alternative B I would choose alternative C

Method

• Two models to compare the effect of socio-economic variables• A model with general variables: gender, age, income, born in Sweden, education• A model with more specific information

• Benefit transfer• Can an estimated WTP value from the east coast be used as an estimate of the WTP on

the west coast, and vice versa?• How large are the transfer errors?

WTP from the specific models (SEK)

West coast East coast

Locals Non-locals Locals Non-locals

Secchi depth 1 class better

266 301 391 317

Secchi depth 2 classes better

432 488 490 441

Algae bloom every 3:rd summer

314 288

Algae bloom every 10:th summer

317 259

Less noise and littering

68 66 38 38

WTP from the general models (SEK)

West coast East coast

Locals Non-locals Locals Non-locals

Secchi depth 1 class better

294 318 389 313

Secchi depth 2 classes better

453 501 489 439

Algae bloom every 3:rd summer

316 290

Algae bloom every 10:th summer

317 254

Less noise and littering

80 73 43 40

Benefit transfer between the coasts

• The transfer error, the error that results from using values from one studied area as benefit estimate at another area (the policy site)• For an improvement of the Secchi depth/water quality: between 2% and 47%• For less noise and littering: between 43% and 88%

• Harder to make benefit transfer for noise and littering than water quality

Conclusions

• WTP is the largest for improvement in Secchi depth/water quality, but differ between groups: • 1 class improvement: 266-391 kr• 2 classes improvement: 432-501 kr

• WTP for less algae bloom (east coast only): • Every 3:rd summer: 288-316 kr • Every 10:th summer: 254-317 kr

• WTP for less noise and littering: • West coast: 66-80 kr• East coast: 38-43 kr

• More information (including socio-economic variables) does not reduce transfer errors