Money can’t buy me love, but you can put a price on a tree



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Mountain ash in the Victorian Central Highlands.
Takver/Flickr, CC BY-SA

Heather Keith, Australian National University; David Lindenmayer, Australian National University, and Michael Vardon, Australian National University

What is something worth? How do you put a dollar value on something like a river, a forest or a reef? When one report announces that the Great Barrier Reef is worth A$56 billion, and another that it’s effectively priceless, what does it mean and can they be reconciled?

This contrast points to fundamentally different notions of value. Environmental accounting is a way of recognising and comparing multiple sources of value, in order to better weigh competing priorities in resource management.

In practice it is sometimes crude, but it’s been standardised internationally and its scope is expanding to include social, cultural, and intrinsic benefits.


Read more: What’s the economic value of the Great Barrier Reef? It’s priceless


Using environmental accounting we’ve investigated the tall, wet forests of Victoria’s Central Highlands to weigh the competing economic cases for continuing native timber harvesting and creating a Great Forest National Park. But first we’ll explain a little more about environmental accounting, and how we put a price on trees.

What we count

Essentially, environmental accounting involves identifying the contributions of the environment to the economy, summarised as gross domestic product (GDP). In Australia, the Australian Bureau of Statistics standardises the data and reporting of these contributions in the System of National Accounts. The Bureau also produces environmental accounts that extend the range of information presented – e.g. water and energy use and greenhouse gas emissions.


Read more: Why we need environmental accounts alongside national accounts


But there are other things of value, like positive environmental and social outcomes, worth incorporating into calculations. Ecosystem accounting gives researchers a framework for doing this, extending the accounting to look at the value of different “ecosystem services” – the contributions of ecosystems to our wellbeing – and not just goods and services captured in our national accounts or environmental accounts.

For example, businesses and homes pay a price for water delivery, but the supplier doesn’t pay for the water that entered the dam. That water is an ecosystem service created by forests and the atmosphere. By assessing costs in the water supply industry, we can estimate the value of the ecosystem service of water provisioning.

The value of Victoria’s Central Highlands

Victoria’s Central Highlands are contested ground. Claims and counter-claims abound between the proponents of native timber production and those who are concerned about the impacts of logging on water supply, climate abatement and threatened species.

Our research has, for the first time, directly compared the economic and environmental values of this ecosystem. It shows that creating a Great Forest National Park is clearly better value.


Read more: Why Victoria needs a Giant Forest National Park


With any change in land management, there will be gains and losses for different people and groups. Assessing these trade-offs is complex, made even more so by patchy and inconsistent data.

Through careful accounting, we synthesised the available data and calculated the annual contributions of industries to GDP. In 2013-14, the latest year for which all financial data were available, these came to A$310 million for water supply, A$312 million for agriculture, A$260 million for tourism and potentially A$49 million for carbon storage. (There is no current market for carbon stored in native forests in Australia – more on that in a minute.)

All of this far exceeds the A$12 million from native timber production. Although timber production is a traditional industry, its contribution to the regional economy is now comparatively small.

The GDP contribution in millions of dollars by primary industries in 2013-14.
Author provided

The industries that use ecosystem services are classified as primary production – agriculture, forestry and water supply. This classification is comprehensive (it covers all economic activities) and mutually exclusive (there is no overlap of categories). Downstream uses of the products from agriculture, forestry and water supply are an important consideration for the industries as a whole, but are included in manufacturing industries and not in ecosystem accounts.

Older forests are more valuable

Native timber production involves clearfell harvesting (removing the majority of trees at the site) and slash burning (using high-intensity fire to burn logging residue and provide an ash bed for regeneration). Regenerating forests are younger, with all trees the same age, and have lower species diversity.

This means these young forests contribute less to biodiversity, carbon storage, water supply and recreation. Therefore harvesting native timber requires a trade-off between these conflicting activities.

Trade-offs between industries in their use of ecosystem services can be complementary (green) or conflicting (red).
Author provided

But more than 60% of the native timber harvested in the Central Highlands is used for pulp. This can be substituted by production from plantations that are more efficient and increased use of recycled paper. Both softwood and hardwood plantations can provide substitute sawlogs.

If we phased out native forest harvesting, increases in the value of water supply and carbon storage would offset the loss of A$12 million per year contributed by the industry. (It would also most likely increase profits for the tourism and plantation timber sectors.)

Older trees use less water than young regrowth, and allowing native forests to age would increase the supply of water to Melbourne’s main reservoirs by an estimated 10.5 gigalitres per year. That’s worth A$8 million per year. Security of water supply for the increasing population of Melbourne is an ever-present concern, particularly with projected decreases in rainfall and streamflow.

Older forests also store more carbon than younger regrowth forests. The federal government’s Emission Reduction Fund does not recognise native forest management as an eligible activity for carbon trading, but if this changed the forest could earn carbon credits worth A$13 million per year. This would provide an ongoing and low-cost source of carbon abatement, which could be used to meet Australia’s emissions reduction targets, while the Victorian government could use the money gained to support an industry transition.

Of course, economic benefit is only one way of looking at land. We know that the Central Highlands is home to unique flora and fauna that cannot be replaced (much of which is increasingly under threat). But careful environmental accounting can help explicitly define the various trade-offs of different activities.

The ConversationIt’s particularly important when legacy industries – like native timber harvesting – are no longer environmentally or economically viable. The accounting reveals the current mix of benefits and costs, allowing management of this area to be reconsidered.

Heather Keith, Research Fellow in Ecology, Australian National University; David Lindenmayer, Professor, The Fenner School of Environment and Society, Australian National University, and Michael Vardon, Visiting Fellow at the Fenner School, Australian National University

This article was originally published on The Conversation. Read the original article.

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As a coastal defence, the Great Barrier Reef’s value to communities goes way beyond tourism



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Parts of the Great Barrier Reef’s outer reefs can form a natural barrier to coastal recession, thus protecting urban centres.
AAP

Mark Gibbs, Queensland University of Technology

Rising sea levels are widely recognised as a threat to coastal communities worldwide. In Australia, the Climate Council estimates that at least A$226 billion of assets and infrastructure will be exposed to inundation if sea levels rise by 1.1 metres. Another report recommended that global mean sea level rise of up to 2.7 metres this century should be considered in planning processes.

The Queensland state government has commissioned the QCoast2100 program. This program aims to help with the development of coastal climate adaptation plans for Queensland communities exposed to sea-level rise.

Although the largest population centres in Queensland are in the state’s southeast, several of the most populous regional centres in Australia are located along the Great Barrier Reef coastline between Gladstone and Cape York. These include Townsville, Cairns, Gladstone, Mackay and Port Douglas.

A major task in developing coastal adaptation plans under the QCoast2100 program is to model inundation from a range of scenarios for sea-level rises and assess how assets will be inundated in the future. However, another threat is on the horizon.


Further reading: What’s the value of the Great Barrier Reef? It’s priceless


How urban centres are protected

Urban centres along the reef’s coastline, which forms the majority of the Queensland coast, are protected from major ocean storms by natural deposits of coastal sediments. These include dunes and associated vegetation such as coastal forests, wetlands and mangrove systems.

These natural features continue to exist largely because the Great Barrier Reef’s outer reefs dampen incoming ocean waves. Although exposed to the occasional cyclone – which can lead to short-term erosion at specific locations – much of the coastal zone inside the reef is slowly growing out into the sea.

This increasing buffer zone can form a natural barrier to coastal recession.

A recently released report estimated the total economic, social and icon asset value of the Great Barrier Reef at A$56 billion. By design, this report did not include many of the ecosystem services the reef provides. One of these is its role in reducing the energy of waves that impact the coastline behind the reef.

However, an earlier assessment of the total economic value of ecosystem services delivered by the reef estimated the present coastal protection benefit is worth at least A$10 billion.

Despite the inherent uncertainties in such assessments, it is clear the reef acts to reduce incoming wave energy and its impacts on cities and towns along much of the Queensland coastline. The total economic value of these benefits is in the billions of dollars.


Further reading: Coastal communities demand action on climate threats


What role is bleaching playing?

The Great Barrier Reef’s ability to keep protecting the Queensland shoreline, and communities living along it, depends upon the ability of individual reefs in the system to grow vertically to “keep up” with rising sea level.

The jury is still out on whether the outer reefs will be able to keep up with predicted rises. This is an active area of research.

However, it is clear reefs that are extensively affected by coral bleaching will struggle to maintain the essential processes required for productive reef-building. Many reefs are now experiencing net erosion.

Predictions of ocean warming suggest that bleaching events will become even more common in coming decades. Increasing levels of atmospheric carbon dioxide are also making the oceans more acidic, which makes it more difficult for organisms such as corals to maintain their skeletons, which are made of calcium carbonate. This mineral dissolves more rapidly with increasing acidification, reducing the reef’s capacity to recover from storm damage and coral bleaching.

Therefore, as bleaching events and acidification continue, the outer reefs that protect the Queensland coast from ocean waves will increasingly struggle to perform this function.

The ConversationIn turn, over time the Queensland coast will potentially suffer from more coastal erosion, which may increase the vulnerability of coastal infrastructure. This effect, combined with rising sea levels leading to more coastal inundation events, multiples the risks to coastal settlements and infrastructure.

Mark Gibbs, Director, Knowledge to Innovation; Chair, Green Cross Australia, Queensland University of Technology

This article was originally published on The Conversation. Read the original article.

What’s the economic value of the Great Barrier Reef? It’s priceless


Neil Perry, Western Sydney University

Deloitte Access Economics has valued the Great Barrier Reef at A$56 billion, with an economic contribution of A$6.4 billion per year. Yet this figure grossly underestimates the value of the reef, as it mainly focuses on tourism and the reef’s role as an Australian icon.

When you include aspects of the reef that the report excludes, such as the ecosystem services provided by coral reefs, you find that the reef is priceless.

Putting a price on the Great Barrier Reef buys into the notion that a cost-benefit analysis is the right way to make decisions on policies and projects that may affect the reef. For example, the environmental cost of the extension to the Abbot Point coal terminal can be compared to any economic benefits.

But as the reef is both priceless and irreplaceable, this is the wrong approach. Instead, the precautionary principle should be used to make decisions regarding the reef. Policies and projects that may damage the reef cannot go ahead.

How do you value the Great Barrier Reef?

The Deloitte report uses what’s known as a “contingent valuation” approach. This is a survey-based methodology, and is commonly used to measure the value of non-market environmental assets such as endangered species and national parks – as well as to calculate the impact of events such as oil spills.

In valuing the reef, surveys were used to elicit people’s willingness to pay for it, such as through a tax or levy. This was found to be A$67.60 per person per year. The report also uses the travel-cost method, which estimates willingness to pay for the Great Barrier Reef, based on the time and money that people spend to visit it. Again, this is commonly used in environmental economics to value national parks and the recreational value of local lakes.

Of course, all methods of valuing environmental assets have limitations. For example, it is difficult to make sure that respondents are stating realistic amounts in their willingness to pay. Respondents may act strategically if they think they really will be slugged with a Great Barrier Reef levy. They may conflate this environmental issue with all environmental issues.

But more importantly, the methodology in the report leaves out the most important non-market value that the reef provides, which are called ecosystem services. For example, coral reefs provide storm protection and erosion protection, and they are the nurseries for 25% of all marine animals which themselves have commercial and existence value.

The Deloitte report even cites (but does not reference) a 2014 study that values the ecosystem services provided by coral reefs at US$352,249 per hectare per year. The Great Barrier Reef Marine Park covers 35 million hectares with 2,900 individual reefs of varying sizes. This means the ecosystem services it provides are worth trillions of dollars per year.

That is, it is essentially priceless.

The problem with putting a value on the Reef

Valuing the environment at all is contentious in economics. Valuation is performed so that all impacts from, say, a new development, can be expressed in a common metric – in this case dollars. This allows a cost-benefit analysis to be performed.

But putting a price on the Great Barrier Reef hides the fact that it is irreplaceable, and as such its value is not commensurate with the values of other assets. For instance, using Deloitte’s figure, The Australian newspaper compared the reef to the value of 12 Sydney Opera Houses. But while they are both icons, the Opera House can be rebuilt. The Great Barrier Reef cannot. Any loss is irreversible.

When environmental assets are irreplaceable and their loss irreversible, a more appropriate decision-making framework is the Precautionary Principle.

The Precautionary Principle suggests that when there is uncertainty regarding the impacts of a new development on an environmental asset, decision makers should be cautious and minimise the maximum loss. For example, if it is even remotely possible that the extension to the Abbot Point coal terminal could lead to massive destruction of the reef, then precaution suggests that it shouldn’t go ahead.

Assigning a value to the reef might still be appropriate under the Precautionary Principle, to estimate the maximum loss. But it would require the pricing of all values and especially ecosystem services.

While the Precautionary Principle has been much maligned due to its perceived bias against development, it is a key element of the definition of Ecologically Sustainable Development in Australia’s Environment Protection and Biodiversity Conservation Act 1999.

For a priceless asset like the Great Barrier Reef, it is perhaps better to leave it as “priceless” and to act accordingly. After all, if the Precautionary Principle is ever going to be used when assessing Ecologically Sustainable Development, in contrast with cost-benefit analysis and valuations, it is surely for our main environmental icon.

The ConversationUltimately, the protection and prioritisation of the Great Barrier Reef is a political issue that requires political will, and not one that can be solved by pricing and economics.

Neil Perry, Research Lecturer, Western Sydney University

This article was originally published on The Conversation. Read the original article.

Blackbutt Reserve


Kevin's Daily Photo, Video, Quote or Link

Since I was unable to visit Gap Creek Falls the other day, I decided I might pop in to have a look at the new animal enclosures at Blackbutt Reserve near Newcastle. I will say straight off the bat that I do have something of a prejudice against Blackbutt Reserve, as I see the place as nothing like a natural bush setting, it being far too ‘corrupted’ by human activity, weeds and the like. Having said that it is a good place for a family or group outing/event. It certainly has its place, but it is not a true nature reserve (in my opinion).

Visitor Centre

ABOVE: Visitor Centre

I do think that some well designed animal and bird enclosures at Blackbutt could lift the value of the reserve dramatically and make it a really great place for families, especially young families. There are opportunities for educational visits for kids, possible environmental…

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Latest News on the Web Site


Latest News on the Web Site

My website is currently down – for the most part anyway. I hope to have it back up in the near future. Why is it down? My previous hosting service put their prices up dramatically from the previous renewal of the site. It was nearly doubled and I found that sort of hike unacceptable. I have therefore sought out a new hosting service and believe I now have great value for money, as well as a far better service. The site will now have the same address as it has had for several years:

http://kevinswilderness.com

The site I was intending to move to at WordPress.com, will now become the Blog for site updates, news, etc. It can be found at:

http://kevinswilderness.wordpress.com/

For the time being the site will continue to be down, with improvements being made as the site is transferred across to the new hosting company. Please keep returning to the site as I hope to bring pages back online on a regular basis.

 

Copenhagen Summit Fails to Deliver


In news that has delighted the ears of climate change sceptics the world over, the Copenhagen summit on climate change has failed to deliver anything of real value that will actually make a difference. It is truly disappointing that even in the face of a massive environmental disaster that will affect the entire planet, global leaders have failed to lead and work together in finding solutions to the major issues we face over the coming decades and century.

Newspapers in Australia have reported the failure of the summit and are reporting on the leader of the opposition gloating over the failure of the summit. His solution is to ignore the real issue and hope that the Australian people prove to be as oblivious to climate change as the coalition he leads.

Typically, the usual anti-Kevin Rudd biased journalists and climate change sceptics of the newspaper (The Sunday Telegraph) I read this morning, were also quick to pour further scorn on the Prime Minister and the problem of climate change itself (which they deny). One particular vocal climate change sceptic in the Sunday Telegraph has very little credibility with me and I find his obsessive anti-Rudd tirades more than a little tiring. This self-opinionated buffoon is little more than an embarrassment for both the Sunday Telegraph and the Daily Telegraph for which he also writes. His columns are becoming more of a personal vendetta against Kevin Rudd than anything resembling real journalism.

I’ll be finding a better way to become acquainted with the daily news than continuing to read the biased diatribes that continue to be put forward by these papers in future. I’ll also be hoping that our leaders can overcome the various preoccupations each have with self-interest (whether it be personal or national) in order to reach a real workable agreement on dealing with the growing threat of climate change