Valuing Ecosystem Services from Wetlands Restoration in the Mississippi Alluvial Valley

Written by: Brian Murray, Aaron Jenkins, Randall Kramer, Stephen P. Faulkner

2009/02/01

This study assesses the value of actions to restore wetlands via the Wetland Reserve Program (WRP) in the Mississippi Alluvial Valley (MAV) of the U.S. by quantifying and monetizing ecosystem services.

msvalley.pdf — PDF document, 948Kb

NI R 09-02

Abstract/Executive Summary:

Under appropriate conditions, restoring wetlands on crop fields can result in a net increase of ecosystem services and therefore a net benefit to society. This study assesses the value of actions to restore wetlands via the Wetland Reserve Program (WRP) in the Mississippi Alluvial Valley (MAV) of the U.S. by quantifying and monetizing ecosystem services. Focusing on hardwood bottomland forest, a dominant wetland type of the MAV, in situ measurements of multiple ecosystem services are made on a land use continuum of agricultural land, wetlands restored via WRP, and mature bottomland forest. A subset of these services, namely greenhouse gas (GHG) mitigation, nutrient mitigation, and waterfowl recreation, are selected to be monetized with benefit transfer methods. Above- and belowground carbon estimates and changes in methane (CH4) and nitrous oxide (N2O) emissions are utilized to project GHG flows on the land. Denitrification potential and forgone agriculture-related losses are summed to estimate the amount of nitrogen prevented from entering water bodies. Increased Duck Energy Days (DEDs) on the landscape represent the WRP-induced expansion of waterfowl habitat. We adjust and transform these measures into per-hectare, valuation-ready units and then monetize them with prices from emerging markets (GHG) and environmental economic literature (GHG, nutrient, recreation).

Valuing all services produced by wetland restoration would yield the total ecosystem value of the change; however, due to data and model limitations we generate a partial estimate by monetizing three ecosystem services. Social welfare value is found to be between $1,446 and $1,497 per hectare per year, with GHG mitigation valued in the range of $162 to $213, nitrogen mitigation at $1,268, and waterfowl recreation at $16 per hectare. Limited to existing markets, the estimate for annual market value is merely $74 per hectare, but when fully accounting for potential markets, this estimate rises to $1,068 per hectare. The estimated social value surpasses the one-time public expenditure or social cost of wetlands restoration ($2,526 per hectare) in the MAV in only two years, indicating that the ecosystem service value return on public investment appears to be very attractive in the case of the WRP. Moreover, the finding that annual potential market value is substantially greater than landowner opportunity costs ($401–$411 per hectare) indicates that payments to private landowners to restore wetlands could be profitable for individual landowners in addition to being value-enhancing to society. This should help to motivate the development of ecosystem markets to more fully integrate societal values into land use decisions.