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«The Economic and Social Aspects of Biodiversity Benefits and Costs of Biodiversity in Ireland REPORT PREPARED BY: CRAIG BULLOCK, OPTIMIZE CONSULTANTS ...»

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Exotic or non-native species could become more a problem in the future. At best, these represent replacement of indigenous species with other more common types. At worst, these include opportunist species, prolific weeds or disease vectors that would benefit from lower likelihood of sub-zero winter temperatures. Some new arrivals have been welcome additions to our fauna, for example the little egret, now breeding widely along the south coast. Others such as rhododendron, Japanese knotweed, ragwort, flatworm or various shellfish diseases are already serious pests that exert an economic cost on forestry and farming. Higher temperatures, including sea temperatures, will favour the spread of many non-native species.

Concurrent with this threat, the movement of many indigenous or less common species is dependent on an availability of suitable habitat. While Ireland may still have a good network of hedgerows and aquatic habitats, other habitats such as broad-leaf woodland are very patchy. Many habitats have become fragmented by agriculture and roads. Some environments, together with their associated species, are directly at risk from climate change. Montane habitats will be limited in the degree to which they can retreat upwards or northwards. Ireland’s peatlands, already severely damaged by peat extraction and drainage, will become further desiccated by rising temperatures and reduced summer rainfall. Salt marsh and dunes are also at great risk.

10.4 E CON O M I C A N D S O C I A L VA LU E S Loss of biodiversity due to climate change matters because of the ecosystem services provided, the value of which has already been discussed in preceding chapters.

- In agriculture, key species within the soil biota could be lost, reducing the decomposition of organic matter, particularly for land uses that are less protected by microclimate, for example pasture or crops. Replacement species would be unable to migrate from elsewhere. The implications of introducing species is unknown due to the complexity of the system and the minimal amount of research conducted. The damage presented by the introduced New Zealand flat worm demonstrates the problem.

- Aquatic systems would be under threat from increased temperatures and lower dilution of pollutants. The efficient functioning of these systems is already vulnerable to any increase in slight levels of nitrification. Water abstraction, particularly for drinking water, would be affected during summers that are forecast to become drier. Wetter winters would increase the vulnerability of the remnant corncrake population of the Shannon Callows to spring flooding. Even greater spending would be required under the Water Framework Directive and additional controls would be required on agricultural nitrates and phosphates.

- The marine ecosystem is at severe risk, threatening the food supply on which commercial fish species depend. Most of these species are at the top of the food chain so are especially vulnerable. Over-fishing has left many species highly vulnerable to environmental change.

Other stocks, such as cod and salmon are sensitive to water temperatures and already appear to be moving northwards (McElwain & Sweeney, 2007). To an extent these stocks could be replaced by warmer water species such as bass, but both are vulnerable to falls in primary production. Phytoplankton is vulnerable to temperature change and could decrease by as much as 50% (Schmittner, 2005). So too is kelp, another commercial crop (Sweeney et al., 2003). Disruption to the ecosystem means that simple species such as jellyfish could proliferate while more regular occurrence of toxic plankton blooms are likely in the higher temperatures. While aquaculture provides a partial insurance against declining wild stocks, it is perpetually threatened by toxic blooms and parasites, including exotics, particularly as shallow coves and estuaries respond more rapidly to temperature change. Sea lice are already producing extra annual generations in response to higher temperatures (Tully, 1989).

- Human health is also at risk. Changes in climate will disrupt ecosystems, causing species to attempt to move to new locations. There could be increases in warm weather parasites responsible for transmitting diseases such as Lymes Disease.

Each of these threats presented very significant costs. New opportunities could arise in agriculture, but only if the soil biota continues to function. Any arrival of new fish species will not replace the traditionally high productivity of the Continental Shelf.

Social welfare will be directly affected. As a rule, humans are adverse to change (Samuelson & Zeckhauser, 1994). Global warming threatens sudden and major change. We value the environment with which we are familiar, both from our own lives and experiences and those recorded from the historical past. Our quality of life would be greatly diminished by the loss of the incredible sea bird colonies around the Irish Sea or by the disappearance of peatlands or of wild cultural landscapes such as Connemara. The features that attract tourists to Ireland and which maintain a multi-million euro industry would be lost, but this loss would be minor compared with the erosion of national identity and the quality of life.

Fromm (2000) argued that customary economic values based on production and personal utility omit a key security value of biodiversity. Without doubt it is difficult enough to quantify the risk of adverse change without quantifying the scale of this change, in terms of lost production, mitigation measures and personal economic utility. This does, however, indicate a substantial quasi-option value, i.e. the value of preserving natural assets until such time that we know their significance. This option value certainly could be represented by a sizeable proportion of Ireland’s GDP.

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Berry, P.M., Dawson,T.P., Harrison, P.A. and Pearson, R.G. (2002), Modelling Potential Impacts of Climate Change on the Bioclimatic Envelope of Species in Britain and Ireland, Global Ecology and Biogeography, 11, pp453-462.

Fromm, O. (2000) Ecological Structure and Functions of Biodiversity as Elements of its Total Economic Value, Environmental and Resource Economics, 16, pp303-328.

IPCC (2007) Fourth Assessment Report McElwain, L. and Sweeney, J. (2007) Implications of the EU Climate Protection Target for Ireland.

Environmental Research Centre Report, prepared for Environmental Protection Agency by National University of Ireland, Maynooth.

Norton, B.G. and Ulanowicz, R.E. (1992) Scale and Biodiversity Policy: A Hierarchical Approach’ Ambio, 21, pp244-249. from Fromm Schmittner, A. (2005). Decline of the Marine Ecosystem caused by a reduction in the Atlantic Overturning Circulation. Nature, 434, pp628-633.

Stern, N. (2006) The Economics of Climate Change, Cambridge University Press..

Sweeney. J., Brereton,T., Byrne, C., Charlton, R., Emblow, C., Fealy, R., Holden, N., Jones, M., Donnelly, A., Moore, S., Purser, P., Byrne, K., Farrell, E., Mayes, E., Minchin, D.,Wilson, J. and Wilson, J. (2003).

Climate Change: Scenarios and Impacts for Ireland, Final Report. Prepared for the Environmental Protection Agency by the National University of Ireland, Maynooth.

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11.1 VA LU I N G B E N E F I T S A N D CO S T S Public policies which directly or indirectly protect biodiversity have a cost. It is therefore instructive to compare these with the benefits, be these in terms of biodiversity, in its own right, or for its contribution in terms of ecosystem services.

A fundamental problem is the difficulty of quantifying the benefits. In particular, we still have only a weak understanding of many ecological processes and a corresponding lack of data. Furthermore, many of the benefits are very indirect or non-market with price through which to indicate the scarcity of these services. A first step, however, is to identify as far as possible the range of benefits.

The Total Economic Value (TEV) approach introduced in Chapter 8 helps to categorise what the benefits are and by whom they are received.

Use values Under a TEV taxonomy, a direct use value could be the utility that people realise from activities that involve some direct connection with nature, for example angling, birdwatching or ecotourism. Using the aforementioned categories of provisioning, regulating, supporting and cultural services referred to by Kettunen and ten Brink (2006), direct benefits would include many of the ‘provisioning’ services. For instance, fish catches could be looked upon as being a harvest of biodiversity or, perhaps more correctly, as the final product of a food chain involving other non-harvested species.

Examples of an indirect use value could be where ecosystem services contribute ‘regulating’ and ‘supporting’ services that underpin productive activity or life systems. The wider understanding of biodiversity, including its full range of ecosystem services, is that which is now known to contribute to healthy fish populations. Similarly, biodiversity performs another regulating service by purifying water for consumption by farm animals or for irrigation. These indirect services present a challenge because it is so difficult to quantify their precise contribution compared with other inputs.

Other indirect values arise in terms of human utility. Some of these values can be substantial. They include ‘cultural services’ to any kind of recreation or leisure that has an indirect association with biodiversity. Water sports would be one example, in that the likes of kayakers or water skiers ideally require water that is clean. Likewise, almost any kind of countryside or coastal recreation involves biodiversity as an indirect use value because the whole character of these landscapes would be quite different, and much less attractive, without their distinct biodiversity.

P a s s i ve u s e v a l u e s Passive use values for biodiversity involve no interaction with nature, but could include the benefit of knowing that a valued wildlife species or valued landscape exists. From an economic perspective, these values are still instrumental, rather than intrinsic, in that a wildlife species is only valued insofar as people care about it. Passive use also includes the benefit associated with the value attached to knowing that others value a biodiversity-related good (a vicarious value) or valuing the knowledge that a healthy biodiversity can be bequeathed to one’s children or to future generations (a bequest value). Although they might seem a little peripheral, bequest values have always been a significant motivator for the protection of the environment given the shortness of our lifespans.

Much of the perceived value of planting trees, designing gardens or contributing to the purchase of nature reserves derives from the knowledge that these places are protected into a future time when we will not be here to enjoy them ourselves.

Option values are a related value in that these refer to an insurance value of protecting something that is not currently used, but which may be of use in the future. By taking measures that protect biodiversity against climate change we are acknowledging that biodiversity has an option value.

Similarly, there is a ‘quasi-option value’ to protecting biodiversity resources which we think have a direct or indirect value until such time that this value has been researched and understood. Much biodiversity, for example within the soil biota, has a quasi-option value in that, while we suspect it is of value, we cannot yet demonstrate this until such time as any redundancy in the ecosystem has been confirmed.

Essentially, option values arise from uncertainty. There is considerable uncertainty in relation to biodiversity loss because we know so little about ecosystem services. Furthermore, option values are likely to be greater the less certain we can be of our capacity to restore ecosystems, being especially high where there is a risk of irreversibility. Climate change, in particular, undermines our confidence in the future relevance of what we currently comprehend about biodiversity.

The level of uncertainty means that we only begin to address biodiversity impacts through scenario analysis, i.e. by examining the consequences of various scenarios such as “do nothing”, “do minimum” or “do something”. An important consideration for policy is the extent to which ecosystem services are threatened. If they are at risk, then current values should include a sizeable option value component.

11.1.1 E s t i m a t i n g t h e b e n e f i t s an d c o sts o f b i o d i ve rs i t y Issues arise in estimating the benefits of biodiversity. In the first instance, providing a gross value for all biodiversity, or even for many ecosystem services, is of little practical value. Such estimates are static. A figure for the gross value of ecosystem services to agriculture depends on agricultural production and the consequent price of that output in relation to demand. If the earth had been poisoned to the extent that it was only able to produce a tiny amount of food, this food would have a near infinite value as would the remaining ecosystem services needed to produce it.

Various methods are available to estimate the benefits or costs of biodiversity. There are questions over which to choose or for which data exists. In the first instance, benefits include the marginal value of the current provisioning, regulating, supporting or cultural benefits of ecosystem services.

Secondly, marginal benefits that cannot be expressed in relation to an improvement in biodiversity.

Costs include both public costs and private costs, although the former for policy costs is most relevant in this assessment. Costs can be related to either protection, and therefore to annual marginal benefits, or enhancement, and therefore to the additional marginal benefits, i.e.

- The implementation costs of policies which protect biodiversity

- The implementation costs of policies which enhance biodiversity.

Addition routes by which costs could be estimated include:

- The costs of future ecosystem restoration

- The cost of penalties due to our failure to protect biodiversity (e.g. fines for failure to implement EU Directives).

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