Economic valuation of ecosystem services has become a dominant model for environmental management at local, regional and global scales. However, policy-makers at all scales take these value estimates with a pinch of salt. Their concerns are the uncertainties accompanying value estimates, which arise from a wide variety of methods and datasets involved, underlying assumptions to capture complex ecosystem processes, and use of less accurate valuation methods in the data-scarce regions. These challenges call for bracing up the valuation methodology to yield sufficiently rational, scientifically valid and politically-acceptable estimates. This thesis, on the one hand, addresses methodological inconsistencies in the valuation approach and, on the other, develops and demonstrates the techniques to make valuation results more appropriate for incorporation into decision-making processes.The first chapter of my thesis redefines ecosystem services, reviews valuation methods, and poses research questions. In Chapter 2, I present a comprehensive methodology for valuation of ecosystem services at watershed scale, and apply it to assess the value of four ecosystem services in response to long term land use changes in the Grand River watershed, Ontario, Canada. Unlike existing valuations of watersheds, my methodology takes into account the traditionally unvalued ecosystem services from agricultural land uses. The results show a decline in the total value of ecosystem services due to agricultural expansion, but that reforestation helps regain some of the lost value.To emphasize the use of different economic methods for valuation of consumptive and non-consumptive services, I demonstrate their different responses to the land use change in the watershed. My results suggest that locally-relevant unit values significantly reduce the variation in the total value of the watershed.In Chapter 3, I establish a framework to distinguish the value of ecosystem services provided by different wetland types. Using this framework, I develop wetland value functions for water filtration service and apply these to four major wetland types present in southern Ontario. The results of this study show that fens are the least valued type for water filtration; a bog, a marsh and a swamp are 1.72, 2.66 and 1.56 times more valuable, respectively, than an equal size fen. Further, the cost-effectiveness analysis for phosphorus removal shows that human-made infrastructures are very costly options to replace these wetlands.Chapter 4 determines the veracity of value estimates that are based on the value transfer method and different datasets. I use two global, one regional, and one local dataset on unit values ($/ha/year); the local dataset serves as a baseline. The findings show that the regional dataset gives a better estimate than the global datasets. Therefore, this study recommends developing and using regional datasets to better influence policy-making. In this chapter, I also assess the impact of land use resolution on the total value of a watershed. The results indicate that a higher resolution of land use data results in a higher value and vice-versa.In Chapter 5, I use a phenomenological model — Co$ting Nature — to capture the realized ecosystem services in southern Ontario, Canada. This model maps realized ecosystem services as scalar indices between 0 and 1. I rescale these indices locally and conform them for use in economic valuation. My results show that the value of realized ecosystem services is 50% of the value of potential ecosystem services in the selected region. Additionally, the resulting map can guide future investments in natural infrastructure to locate hotspots that matter for human well-being. Finally, Chapter 6 concludes research presented in this thesis, and sets directions for future research.
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Ecosystem Services: Linking ecohydrology with economic valuation
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