Steps in Developing Relative Value Indicators

Links Between "Green Payments" and Environmental Benefits

Prioritizing public investments in conservation practices on the basis of intuition or a few "rules of thumb" can work sometimes. However, the essential links between "green payments" and environmental benefits are often too complicated to expect that general decision rules will  be effective and avoid waste.

The table below presents seven stages of benefit development that link  "green payments"  with expected environmental benefits. Each stage and each of the links between successive stages link can be evaluated separately with respect to each type of expected environmental benefit. What is good for fish may not be good for fowl, or for downstream water quality. Links that favor one type of benefit, in other words, may not favor others. The accessibility of a site to certain types of wildlife and to people may generate certain benefits, but have an adverse effect on the survivability of some species. Restoring a small degraded wetland that provides a critical wildlife corridor or is the only source of environmental amenities in a community may generate more of some kinds of benefits than restoring a much larger wetland or constructing a forested buffers in a more remote area. There are always tradeoffs involved in selecting among competing investments, and indicators that reflect critical linkages with respect to different types of benefits help clarify these tradeoffs. 

Indicators based on the linkages listed above will be useful for comparing changes in various types of benefits. However, comparing the overall benefits from investing in different projects or sites may require assigning preferences to different types of benefits. If fishing opportunities are rare and people consider increasing them to be twice as important as increasing already abundant bird-watching opportunities, for example, investments that increase fishing opportunities a little may be more beneficial than investments that increase bird-watching opportunities a lot.

Some of the conceptual and  technical aspects of developing indicators are dealt with in the Food for Thought section.  However,an indicator can be defined generally as a measure of anything that provide clues about  matters of greater importance. The matters of greater importance in our case are  the benefits expected from a conservation practice undertaken at a specific site. In practice this means that anything that reflects conditions that limit or enhance the likelihood of progressing from one stage to another in the following  chart is a good candidate for becoming the focus of an indicator. 

Stage

Indicator Type

Focus of Attention

15 Essential Questions About Relative Ecosystem Values

The first few stages depicted in the chart above deal with whether a "green payment" will provide incentives for landowners to undertake conservation practices that will change onsite features.  The rest of the stages address whether changing features at a particular site will affect  ecosystem functions, services and values.  The following questions provide a basis for developing indicators based on whether a conservation practice at a given site will result in ecosystem benefits. 

Functions

1. What environmental functions does this site have the capacity to provide? 

2. Does the site's landscape context allow it to provide these functions? If so, are there factors that will cause it to function below capacity? 

3. Are there factors that may cause it to function beyond its sustainable capacity? 

4. What services, products, and amenities will these ecosystem functions generate? 

5. Over what geographic area will people benefit from these services and products?

6. How scarce are these services, products, and amenities in the region? 

7. How many people benefit from them; what is their income, ethnicity, etc.? 

8. How much does it cost in money or time for people to enjoy these services? 

9. Are there near-perfect natural and man-made substitutes that exist or could be developed? 

10. How could the affected population adapt to having fewer of these services? 

11. How much would the affected population benefit from having more of these services?

12. Will demographic/land use change increase/decrease preferences or availability for these services? 

13. How might future development make the services provided here more/less important? More or less vulnerable?14. How vulnerable are services generated by this site to temporary/permanent disruptions? 

15. How restorable are these services in this region compared to other regions? 

Types of Ecosystem Values to Consider

Ecosystem values include "active use " values and "passive use" values as depicted in the figure below. Environmental investments at a particular site often generate active and passive values that accrue on or near the site as well as many miles away. In fact, the offsite passive use values associated with many environmental investments often far exceed their onsite active use values. Because of the difficulties in measuring offsite and nonuse values in terms of dollars, these values must be accessed and compared using indicators.

 

Five Sets of Landscape Characteristics to Consider  

1	Topographical	adjacent & nearby hydrological./geological features (e.g., upslope/downslope gradients, proximity to water bodies, floodplains)
2	Habitat	connection to fish, wildlife, fur-bearer habitats (e.g., flyways, wildlife corridors, other ecosystem areas)
3	Man-made	proximity to residential, commercial, industrial land uses, and to roads, parking lots, rights of way, and other property interests
4	Demographic	size/ age/ mobility/ ethnicity/ geographic distribution of local, regional population and others who benefit
5	Socioeconomic	income and asset characteristics of the population; ranking of preferences for various ecosystem services; ranking of concerns about public health and ecosystem risks

Five Categories of Ecosystem Value Indicators

These five categories of indicators may be combined to generate a single overall index of ecosystem value.
 

1	Functional Capacity	Indicators of site conditions that determine an ecosystems ability to provide various functions
2	Capacity Utilization	Indicators of landscape conditions that determine how much of the functional capacity of the site is likely to be used.
3	Service Capacity	Indicators of landscape conditions that limit or enhance the level of services expected per unit of function.
4	Service Value	Indicators of local, regional, and national supply and demand conditions, individual and community preferences, and the substitutability of the service, which reflect the expected value per unit service.
5	Service Risk	Indicators of the likelihood of future disruptions in service flows that affect the value of expected ecosystem services. These are related to the exposure and vulnerability of the site or other critical landscape features to such threats as floods, droughts, fire, disease, infestations, water diversion, pollution, and industrial development.

Click for a graph depicting flow of indicator development using the factors listed above.

Stage 1 - Develop the Tools

Tools are the analytical framework behind the indicators.
 

1.1 Identify critical links between conservation practices and resulting improvements in environmental functions, services, and values

1.2 Determine limiting or enhancing factors that affect these critical links and provide a basis for comparing the beneficial outcome of conservation practices

1.3 Identify useful indicators of those limiting and enhancing factors

1.4 Test and validate those indicators

Stage 2 - Organize the Data

The basis for applying the indicators 
 

2.1 Identify existing data sources

2.2 Identify data gaps sources of data to fill them

2.3 Assemble regional databases

2.4 Develop site-based and landscape-based indicators

Stage 3 - Prepare Guidance

How to estimate and apply the indicators as guidance for applying conservation benefit indicators cannot be developed until more is known about how the indicators will be developed. The indicators should not be developed until more is known about the types of information that are available to apply them. Table 3 below lists the types of landscape and demographic information that are available in most regions and might be used as a checklist for determining what types of data are available to NRCS field staff.
 

3.1 Illustrations and case studies

3.2 Background on indicator development and application

3.3 Sources of generic indicators and regional adjustment factors

3.4 Methods of applying and interpreting indicators

3.5 Using indicators to develop project eligibility and ranking criteria

3.6 Defending indicators as a basis for managing spending

The following chart provides an illustration of a six-step process for determining which linkages are most important and how differences in regional preferences might affect the development of indicators.
 

STEP 1	Determine natural resources at risk and likely causes of risk
Identify   Specific Populations - critical life requisites posing problems Specific Habitats - causes of loss or degradation Overall ecosystem health - critical trends and their cause	by answering . . .   What causes of risk are controllable/uncontrollable? At what geographic/ political scales can risks be addressed? How much will changes in agricultural practices affect overall risks? What is the payoff of lowering certain agricultural risks if other risks persist?

Step 2	Determine community preferences and values
General Preferences Relative weights on populations, habitats, risks Importance of specific land use/development patterns Significance of particular resources, areas, threats	Specific Benefits   Commercial - better commercial fishing, reduced dredging, soiling costs Recreational - better recreational fishing, hunting, bird watching, etc. Other - reduced ecological and public health risks, aesthetics, etc.

Step 3	Link services and values with the state of the environment
	Improved habitat for fish, birds, fur-bearing animals Increased water/air/soil quality; reduced sedimentation

Step 4	Link state of the environment to changing effects of agriculture
	Offsite effects of sediment, nutrient, contaminant runoff Onsite effects of changing seasonal/permanent ground cover

Step 5	Link specific effects to specific conservation practices
	Conservation tillage, wetland restoration, riparian buffers, noxious weed control, manure management, reduced fertilizer/pesticide use, irrigation practices, etc.

Step 6	Link changes in conservation practices to specific incentives
	Eligibility criteria, project ranking criteria, level of financial incentives, allocation of incentives, etc.