Performance differences and trade-offs in the provision of ecosystem goods and services
This paper approaches valuation of biodiversity and ecosystem services from a supply perspective utilizing the concept of trade-offs or opportunity costs. A new method is presented to provide spatial information on trade-offs between biodiversity and marketed and non-marketed ecosystem services at the spatial scale at which they are generated. With this method we are able to (a) assess regional performance differences in terms of the joint generation of biodiversity and ecosystem services in a region, (b) explain differences in regional performance by showing the importance of the conditions of the given environment, and to (c) estimate marginal rates of transformation or each region included in the analysis, which reflect the trade-offs between biodiversity and ecosystem services.
The method is based on a two-stage frontier approach. In the first stage, a non-parametric robust estimator is used to estimate the efficient frontier and determine relative performance with which regions generate biodiversity, ecosystem services and income. In the second stage, the estimated nonparametric frontier is approximated with a flexible translog production function such that opportunity costs can be derived.
The two-stage approach is illustrated with synthetic data for 1166 grid cells in 18 countries in middle and eastern Europe generated by the integrated assessment model IMAGE and biodiversity model GLOBIO. Based on the analysis, regional performance is evaluated and opportunity costs for biodiversity and ecosystem services and their dependence on income are assessed. It is observed that opportunity costs differ substantially between regions and that more developed countries generally combine ecosystem services and biodiversity in a more efficient way. In addition, carbon opportunity costs decrease with increasing carbon sequestration levels, exhibiting economies of scale characteristics. On the other hand, opportunity costs of biodiversity generally increase with increasing biodiversity, showing that reasonable levels of provisioning services and biodiversity can be combined.
|Author(s)||Arjan Ruijs, Mika Kortelainen, Ada Wossink, Nynke Schulp, Rob Alkemade|
|Remarks||PBL-Working Paper 5|