2. NZ: young
isolated country
• Large part of NZ economy is related to land
(1/3 GDP are exports, 70% from land)
• 1/3 of the land is under conservation estate
• Emphasis is on indigenous biodiversity and
protecting this from exotic species
• Understanding of multifunctionality low
• No subsidies for agriculture
3. What is Biodiversity?- Indigenous versus
exotic
• In NZ debate around indigenous biodiversity
• Controversy that any biodiversity is of value on
and around farm land – under 20% of area
• Concern re impact of agriculture on water
biodiversity and loss of remnant ‘bush’
• How to measure – biodiversity footprinting in
infancy – number of species, land area…
• Weeds and pests main issue eg: possums, pines
4. Policies for biodiversity protection
• Public ownership - conservation estate (1/3 land)
• Recent land tenure reform
• QE II covenants – voluntary removal of land in
perpetuity from production (small areas)
• NPS on protecting biodiversity on private land –
voluntary with very limited funds
• Pest free NZ – removal of possums, rats, mice,
stoats and cats!!! – philanthropy
5. Value proposition for biodiversity
• Citizens - total value - non market valuation
(Tbfree, DoC)
• Right to operate (Dairy, mining)
• Market positioning and premiums (AirNZ,
Icebreaker, Zespri)
• Eco System services – beneficial planting
(erosion control)
6. Methods to value biodiversity – vary
• Reduction in operating expenses – ecosystem
services
• Saved costs from extreme events
• Benefits from increased productivity
• Improved market returns from premiums
• Non- market valuation techniques
7. Market access – labelling schemes
• Global G.A.P. – conservation management plan
• Leaf – Farm Environmental Policy
• Zespri – Environmentally
friendly production, fantails
in orchards are encouraged
• Hard to calculate value of these eg ; leaf waitrose
8. Importance of attributes of NZ food
products
100%
80%
Don't Know
Not Important At All
60%
Somewhat Important
Neither Important Nor
Unimportant
40%
Somewhat Important
Very Important
20%
0%
UK
India
China
UK
India
China
UK
India
China
UK
India
China
UK
India
China
9. WTP of attribute as % of product price
in China, India and the UK
China
India
UK
Dairy
Lamb
Dairy
Lamb
Dairy
Lamb
Safety
74%
44%
73%
77%
16%
18%
Welfare
26%
13%
42%
41%
17%
22%
Water
16%
12%
19%
26%
3%
7%
GHG
25%
14%
38%
39%
7%
7%
Biodiversity
22%
15%
27%
42%
6%
6%
Foreign Origin
26%
10%
-20%
-
-4%
-5%
NZ Origin
49%
24%
10%
21%
3%
6%
Notes:
WTP derived using Krinsky and Robb method.
10. Biodiversity as ecosystem service
• Greening Waipara-
50 wineries
in N Canterbury (Pegasus pay and Torlesse
vineyards) – financial benefits currently low
•
Shelterbelts in native species
(3% increase in dairy production)
• Riparian panting for water quality
• Tree planting reduces erosion
(NZ$100m + per year)
11. How to value total benefits - WTP
• History of this in policy making and legislation
• Used to be contingent valuation now cutting
edge is choice modelling
• Has had a mixed history especially with
contingent valuation but non-market
valuation now established technique
• Used across range of areas from transport;
markets; and environmental valuation
12. Policy Relevance
• First study in the UK on ESA south downs and
Somerset levels by MAF to aid funding
• Few studies in NZ to inform policy and
nervous re large estimates which do not suit
policy environment
• Working with MPI, DoC Treasury re use of
technique especially embedded in policy
alternatives
13. Choice modelling
• Looks at a range of ‘attributes’ or outcomes
• Elicit WTP by respondents trading off between
these outcomes
• This improves the accuracy by embedding
attributes alongside other outcomes
• It gives more detail of preferences
14. Choice modelling of impacts of irrigation
• Assessing WTP for cultural; environmental;
social and economic impacts of irrigation
• Environmental attributes QMCI biotic index of
macro invertebrates
• Cultural attribute – culture health index;
presence of food; stream health and site
status
• 3 scenarios modelled (Miller et al 2013)
15. Results
• For environment – WTP $25 in rates for
improvement poor to good and $198 from
poor to excellent
• For cultural WTP $57 to go from poor to above
average
• To compensate for increase in irrigation $40 m
$1364 per hectare (benefit from increased
irrigation is around $4,000 per hectare)
18. Results
• Planting Purely native (trees) $120
• Planting mixture of natives and nonnatives (trees) were valued $112
• Yao, R. and Kaval, P. (2009)
19. Value of possum control
• Observable market prices are not available that can
reveal what New Zealand farmers are willing to pay for
many of the types of benefits that flow from TB-vector
control
• To estimate values we employed the non-market
valuation methodology of choice modeling
• This involved conducting an online survey of 6,000 New
Zealand farmers
• 1,021 responses (17%) with a good representation of
farm type, size and location
20. Choice Experiment
• Farmers presented with a series of choice tasks
• For each choice task, famers choose between at least two
options
• Each option is described by a number of characteristics or
attributes, which describe management outcomes
• Statistical information derived from these choice tasks is
modeled to reveal the relative importance of each attribute
• By including a monetary attribute in choice tasks, the
monetary value of other attributes can be calculated
21. Current
Management
Situation
Management
Alternative A
Management
Alternative B
Long term (>20yr)
TB infection rate
per year in your
area
1 farm per 1‚000
No infections
1 farm per 1‚000
Current TB
management levies
Same as now
Increase by one
third
Increase by two
thirds
Long term (>20yr)
cost of TB testing
of livestock
40% less than
current testing
cost
60% less than
current testing cost
50% less than
current testing cost
Presence of
possums sighted or
heard in VRA farms
Three to four
times a year
Once a fortnight
Almost Never
Low threat on
Low threat on
Possum threat to
Substantial
farms‚
farms‚ significant
native plants‚ birds
damage, increase in
improvement in
widespread
and animals on and
threats to pre-1990
most off-farm bush
improvement in offoff farm in VRAs
levels
areas
farm bush areas
Possum damage
on farm to pasture‚
crops‚ trees and
gardens in VRAs
Selection
Same as now
20% increase
Slight decrease
>>
22. Key Findings
• Strong farmer support for the TbFree programme. Generally, farmers
indicate a high level of satisfaction with the performance of the programme
• 80% of all farmers think that the value of the benefits of the TbFree
programme equals or exceeds what they pay towards the programme
• Farmers in VFAs are still willing to pay for benefits that are only enjoyed by
farmers in VRAs, but not by as much as VRA farmers
• The national value of benefits to farmers from reduction in threat to native
plants, birds and animals on and off-farm in VRAs is approx. $1.46 to $3
million more than current levies annually (that is around $40 million)
23. Valuing conservation benefits from TB-vector control
• Pilot method in three habitat-strategic contexts
– Kahurangi
– Hauhugaroa / Pureroa
– Hawkes Bay farmland
• This is to be expanded in another study to all of NZ
• Survey under construction
28. Issues with the technique
•
•
•
•
•
•
Cost – and limited transfer of results
Biases – hypothetical, mental account…
Ensure comparison with real policy alternatives
Ensure payment vehicle realistic
Careful design reduces these biases
In fact some studies found people underestimate
what they are actually did pay
• Complex survey technique
29. Issues in NZ
•
•
•
•
•
How to characterise different biodiversity areas / types
What are the units to be valued (area v species)
The impact of distance to urban areas and size of areas
How to scale to the policy relevant area
How to ensure the outcomes are based on what is
achievable
• Science to provide relevant measures of the attributes
• Complexity biological heterogeneity hard to capture
everything
• Multi disciplinary research - can biophysical scientists
communicate with economists and then the general public
30. Future research
• Calculate and communicate the value proposition from
biodiversity – market/ecosystem services/ NMB
• Represent ecological complexity in a manner that could
enhance benefit transfer of valuation
• Research into the relative value of biodiversity
compared to other goods and services
• Validate results linking with other disciplines and
experimental and behavioural economics
• Valuation of biodiversity eco-system services
• Assess consumer demand for biodiversity
