FIGURE 5   ILLUSTRATION OF INDICATOR DEVELOPMENT AND APPLICATION:

          IMPROVING FUNCTIONAL CAPACITY AT SITE A vs SITE B

 

                                                 WILDLIFE HABITAT                                   FISHERY SUPPORT                                NUTRIENT TRAPPING

 

SITE A

SITE B

SITE A

SITE B

SITE A

SITE B

FUNCTIONAL CAPACITY INDEX

   1.0

   1.0

   1.0

   1.0

   1.0

   1.0

CAPACITY UTILIZATION SUBINDEX

X 1.2

X 0.8

X 1.2

X 0.8

X 1.2

X 0.8

LEVEL OF FUNCTION

   1.2

   0.8

   1.2

   0.8

   1.2

   0.8

SERVICE CAPACITY SUBINDEX

X 1.2

X 0.8

X 1.2

X 0.8

X 1.2

X 0.8

LEVEL OF SERVICE

   1.44

   0.64

   1.44

   0.64

   1.44

   0.64

VALUE OF SERVICE SUBINDEX

X 1.2

X 0.8

X 1.2

X 0.8

X 1.2

X 0.8

VALUE

   1.73

   0.51

   1.73

   0.51

   1.73

   0.51

RISK OF SERVICE SUBINDEX

X 1.2

X 0.8

X 1.2

X 0.8

X 1.2

X 0.8

ADJUSTED VALUE

2.07

0.41

2.07

0.41

2.07

0.41

 

Value Index per unit Functional Capacity and, within limits, per unit change in Functional Capacity

               SITE A   2.074     (1 x 1.2 x 1.2 x 1.2 x 1.2)

               SITE B   0.410     (1 x 0.8 x 0.8 x 0.8 x 0.8)

 

Conclusion: Site A and Site B are identical in size, shape and biophysical characteristics.  However, based on differences in landscape context, the “value” of Site A is 4 times higher than the “value” of Site B [((2.074 – 0.410)/0.410)=4.06].  Within limits, increasing the functional capacity at Site A will result in 4 times the economic benefits as increasing the capacity at Site B.  If costs per unit of capacity restoration are the same at both sites, the benefit-cost ratio of restoration investments at Site A is 4 times higher than Site B.  Note that investments to improve the landscape context of Site B could yield greater payoff than investing directly at either site.