Benefits of
mitigating eutrophication
Background Paper
Havs- och vattenmyndighetens rapport 2013:4
Preface
BalticSTERN (Systems Tools and Ecological-economic evaluation – ­
a Research Network) is an international research network with partners in all
countries around the Baltic Sea. The research focuses on costs and benefits
of mitigating eutrophication and meeting environmental targets of the
­HELCOM Baltic Sea Action Plan. Case studies regarding fisheries management, oil spills and invasive species have also been made, as have long-term
scenarios regarding the development of the Baltic Sea ecosystem.
The BalticSTERN Secretariat at the Stockholm Resilience Centre has the task
to coordinate the network, communicate the results and to write a final report
targeted at Governments, Parliaments and other decision makers. This report
should also discuss the need for policy instruments and could be based also
on results from other available and relevant research.
The final report “The Baltic Sea – Our Common Treasure. Economics of Saving
the Sea” was published in March 2013. This Background Paper Benefits of miti­
gating Eutrophication is one of eight Background Papers, where methods and
­results from BalticSTERN research are described more in detail. In some of
the papers the BalticSTERN case studies are discussed in a wider perspective
based on other relevant research.
Contents
I. Introduction..................................................................... 4
2. Ecosystem services, values and economic valuation........ 5
2.1 Ecosystem services in the Baltic Sea.........................................5
Intermediate marine ecosystem services......................................................7
Final marine ecosystem services....................................................................7
2.2 Valuing ecosystem services – some foundations.......................8
Spatially explicit.............................................................................................. 8
Marginal changes............................................................................................ 8
Double counting............................................................................................. 8
Non-linearities and tipping points............................................................... 9
2.3 Total Economic Value (TEV).....................................................9
Use-values.......................................................................................................10
Non-use values...............................................................................................10
Option and quasi-option values..................................................................10
Total Economic Value and Total System Value...........................................11
2.4 Valuation methods....................................................................11
Pricing approaches........................................................................................ 12
Revealed preference methods...................................................................... 12
Stated preference methods........................................................................... 13
Deliberative valuation methods................................................................... 15
3. Method in BalticSTERN................................................. 16
3.1 Ecosystem services in focus.....................................................16
3.2. The studies.............................................................................18
BalticSurvey....................................................................................................18
BalticSUN.......................................................................................................18
3.3. Linking ecological and economic models to policy targets......19
3.4. Estimating willingness to pay..................................................21
4. Results......................................................................... 24
Attitudes towards the marine environment.............................................. 24
Actions for improvements............................................................................27
Willingness to pay for reduced eutrophication.........................................27
5. Discussion.................................................................... 30
References: ...................................................................... 31
I. Introduction
The research performed in the BalticSTERN network has provided new information on the benefits of improving the marine environment in the Baltic
Sea. Two major activities have been performed in the BalticSTERN network
to achieve this information:
•
Baltic Survey, which includes about 9,000 interviews carried out in 2010
with representative samples of the nine Baltic Sea countries. It has identified how people around the Baltic Sea and parts of the Skagerrak use the
Sea and what attitudes they have towards the marine environment, and
­towards various measures for improving the environment.
• BalticSUN (Survey of Use and Non-use values), which includes about
10 500 interviews carried out in 2011 with representative samples of the
nine Baltic Sea countries. It has allowed a monetary estimate of the benefits
of reaching the HELCOM Baltic Sea Action Plan (HELCOM, 2007) nutrient reduction targets.
Full reports of the studies are available in SEPA (2010b) (BalticSurvey) and
Ahtiainen et al. (2012) (BalticSUN). Some of the findings in BalticSurvey are
also forthcoming in a journal article (Ahtiainen et al., 2013). This chapter
­synthesizes the findings of these studies. In Section 2, we present some underlying theory on ecosystem services and economic valuation. This serves as a
foundation for the studies performed in the BalticSTERN network. In Section
3, we present more concretely the method used for studying benefits in BalticSurvey and BalticSUN. In Section 4, we present the results and in Section 5,
we discuss some of the most important findings.
4
Benefits of mitigating eutrophication
2. Ecosystem services, values and
economic valuation
This section provides a background on important terminology and method­o­
logy that has been used in our research. First, we describe the link between
benefits and ecosystem services of the Baltic Sea. Next, the concept of total
economic value is described, as this gives indications on the way human wellbeing is affected by changes in ecosystem services, together with different
(economic) methods to capture the total economic value.
2.1 Ecosystem services in the Baltic Sea
The Baltic Sea provides an array of ecosystem services. In reports by the
Swedish EPA (Swedish EPA, 2008a) 24 marine ecosystem services provided
by the Baltic Sea were identified. These include services such as primary production, biogeochemical cycling, food production, and waterways for transport and shipping, as well as maintenance of biodiversity and resilience
­(Figure 1). According to the report, only 10 of these identified services are
functioning properly and seven of the 24 services are severely threatened.
The threatened ones are: food web dynamics, biodiversity, habitats, food,
­genetic resources, aesthetic benefits and resilience (Swedish EPA, 2008a).
The main pressures causing threats on these ecosystem services are eutrophication, overfishing, physical disturbance (e.g. due to bottom trawling and
dredging), hazardous substances, oil spills and invasive species (HELCOM,
2010) (see also BG Paper State of the Baltic Sea).
Benefits of mitigating eutrophication
5
Energy
Aesthetic
value
Science and
education
O2 CO2
Legacy of
the sea
Sediment
retention
H2O
H2O CO2
Inspiration
Recreation
Space and
waterways
Food
Chemical
resources
Resilience
Nutrient
buffering
Genetic
resources
Ornamental
resources
Biological
diversity
Food webs
Biologic
regulation
Habitat
Inedible goods
Regulation of
environmental toxins
Cultural
heritage
Primary production
Figure 1: Ecosystem services provided by the Baltic Sea. (Illustration: J.Lokrantz/Azote)
There are many definitions and classification schemes of ecosystem services
(e.g. Costanza et al., 1997; Daily, 1997; Boyd & Banzhaf, 2007). The most commonly used definition and classification scheme is the one developed by the
Millennium Ecosystem Assessment (MA) presented in 2005. The MA
­describes ecosystem services as the “goods and services people obtain from
­ecosystems” and divides ecosystem services into four categories: provisioning,
cultural, supporting and regulating services. The Economics of Ecosystems
and Biodiversity (TEEB) series of studies further develop the MA framework
and makes a distinction between ecosystem functions, ecosystem services,
benefits and values, and tries to explain the link between ecosystems and
­human wellbeing in a conceptual model (see e.g. Kumar, 2010).
In BalticSTERN, the economic valuation of ecosystem services is central,
and the definition of ecosystem services is therefore based on the propositions described by Fisher et al. (2009). They distinguish between ecosystem
services and benefits, stating that “ecosystem services are the ecological pheno­
mena, and the benefit is the realisation of the direct impact on human welfare”,
as “ecosystem services are the aspects of ecosystem utilised (actively or passively)
to produce human wellbeing”. Ecosystem services are seen as the link between
ecosystems and things that human benefit from, not the benefit themselves.
Ecosystem processes and functions thereby only become services if there are
humans who (directly or indirectly) benefit from them. This is further
important for economic valuation purposes as will be described ahead.
Identification and quantification of ecosystem services are crucial in order
to make a socioeconomic assessment and valuation (Fisher et al., 2009;
Turner et al., 2010a). For economic valuation purposes the classification of
ecosystem services by MA (2005) is however somewhat general as it doesn’t
distinguish between ecosystem functions and processes. To illustrate this
issue Fisher et al. (2008) use the following example: “In the MA, nutrient
6
Benefits of mitigating eutrophication
cycling is a supporting service, water flow regulation is a regulating service, and
recreation is a cultural service. However, the first two can be seen as providing
the same service, usable water, and the third (recreation) can be seen as a
benefit, which is dependent on the usable water”. When trying to give economic
values to ecosystem services, using the MA alone can therefore lead to some
confusion (Fisher et al., 2008; Fisher & Turner, 2008). Consequently, for the
purpose of valuation of ecosystems, services are preferably divided into final
(or direct) and intermediate (or indirect) services with the purpose to differ
between ecosystem functions and processes (e.g. Boyd & Banzhaf, 2007;
Fisher et al., 2009; de Groot, 2006). This approach attempts to bridge between
ecology and economy by providing a transparent method for economic
valuation. In addition, it helps avoiding the issue of double counting.
Intermediate marine ecosystem services
Intermediate services, such as well functioning habitats and the sea’s
capacity to mitigate eutrophication, enable final services in a supporting or
regulating way and thereby influence human wellbeing indirectly. The
appropriate stock level (i.e. configurations of ecosystem structures and
processes) needed for delivering final services is however not always certain
in a given set of ­circumstances or context. Acknowledging the role of both
intermediate and final services in supporting human wellbeing is crucial.
Overlooking the ­fundamental role of intermediate services within economic
analysis such as cost-benefit analysis might lead to policy and management
failures. Such a failure could lead to the risk of over-exploitation of ecosystem
services and benefits with the risk of system change or collapse. Due to the
high uncertainty of the appropriate level needed to maintain ecosystem
resilience at
a sustainable level, it can be argued that a precautionary approach should
­always be taken (Fisher et al., 2008; Fisher et al., 2009; Turner et al., 2010a).
Final marine ecosystem services
Final services are those that directly generate a benefit to humans, such as
fish-stocks for fishing, water quality for bathing and raw materials for energy.
Changes in the supply of final services are therefore the appropriate basis for
monetary valuation. To also put a monetary value of those intermediate
services that serve as an input to final services would introduce double-counting. Turner et al. (2010a) highlight that a final service is often, but not always,
the same as a benefit. Final services are usually the easiest services to identify
since they link directly to benefits to humans, while intermediate services
capture the underlying services that affect the final services (e.g. climate
regulation, eutrophication mitigation and resilience) and will therefore
require a deeper understanding of the dynamics and interactions of the
marine eco­systems in order to be identified. The resilience of the ecosystem is
a service that might be particularly challenging to address. However, not
including ­resilience in the assessment can, in the worst case, cause irreversible
consequences.
The relationships are better seen in a specific context and also linked to the
Benefits of mitigating eutrophication
7
pressures on the services in question. Helin et al. (2010) show linkages
between intermediate services, final services and ecosystem benefits with
regard to some of the main pressures affecting the Baltic Sea; eutrophication,
oil spills and invasive species (pressures on the Baltic Sea ecosystem are also
described in BG Paper State of the Baltic Sea). Here, the final ecosystem
services in focus are clean water provision and stock of species. These services
in turn generate benefits in terms of recreation (e.g. bathing and recreational
fishing) and food (both for consumption and non-consumption). These
benefits both generate use values and non-use values that can be expressed in
monetary terms using different valuation methods (see Section 2.4).
2.2 Valuing ecosystem services – some foundations
Valuing ecosystem services in monetary terms is highly challenging and there
are a number of aspects that are critical for an appropriate economic valuation (see e.g. Mäler et.al., 2009 and Mäler et.al., 2010 regarding valuing regulating services). Turner et al. (2010b) point out a few aspects as essential to
take into consideration and address in the analyses when valuing ecosystem
services. These are described below.
Spatially explicit
Ecosystem services are context dependent in terms of their provision and
their associated benefits. It is therefore critical to first understand the underlying biophysical structure and processes before valuation assessments can be
performed. Models that are spatially explicit can be very helpful in this context. For example GIS (Geographical Information Systems) based techniques
can be a very useful tool for this purpose as they can help in understanding
the geographical context in which the ecosystem services need to be interpreted (Turner et al., 2010b).
Marginal changes
Policy-relevant valuation of ecosystem services is about incremental change
in the services, and such valuation performs better if the changes subject to
the valuation are marginal. An understanding of the drivers and pressures on
the studied ecosystem is therefore essential, as well as an understanding of
how the system is changing or might change from its current state. While incremental changes have been valued in the BalticSTERN studies, many other
valuation studies have focused on valuing the stock of ecosystem services.
The main reason is the difficulties linked to the quantification of changes in
flow of service provision (Turner et al., 2010b; Fisher et al., 2008). However,
if the purpose of the valuation is to connect the estimated benefits to costs of
taking action, a valuation of stocks may be problematic since by definition no
change of the state of the environment is involved in the estimations.
Double counting
The issue of double counting is common when for instance competing ecosystem services are valued separately and the values are then aggregated; or,
where an intermediate service is first valued separately, but also subsequently
through its contribution to a final service. The classification scheme described
8
Benefits of mitigating eutrophication
above with a clear distinction between intermediate services, final services
and benefits helps avoiding the risk of double counting (Turner et al., 2010b).
Non-linearities and tipping points
Many ecosystem services respond to disturbances in a non-linear fashion.
This can make it more complicated within cost-benefit assessments, as one
cannot make the assumption that marginal values are constant. Therefore
non-linarites need to be understood and reflected in the analysis, especially if
risks of tipping points may exist. A tipping point refers to a point at which an
ecosystem may change abruptly into an alternative steady state. The existence
of tipping points poses especially complex policy and analysis challenges, and
is also related to the uncertainty regarding the sustainability of the stock of
intermediate ecosystem services.
2.3 Total Economic Value (TEV)
When the ecosystem services of concern have been identified, the impact
these have on people’s wellbeing can be addressed. In assessing the impact of
ecosystem services on human welfare, it is critical to focus on the benefits
generated by the final services, as this is what affects human welfare directly.
It is, therefore, the benefits rather than the services per se that are to be valued.
These benefits can be described by identifying use and non-use values derived from final ecosystem services. Thereafter, stakeholders can be identified
by connecting benefits with different actors (e.g. tourism, fishing, households,
governments, public etc). One theoretical approach of capturing and describing
the value of the benefits derived from the different ecosystem services is the
Total Economic Value (TEV) framework. This is a common approach to
­valuing ecosystem services. The framework provides a systematic tool for
considering the full range of impacts the marine environment has on human
welfare. The concept of total economic value captures the value of those bene­
fits humans derive from different ecosystem services. The TEV of an ecosystem
service can be divided between use and non-use (or passive use) values, as
well as option and quasi-option values (Figure 2) (Pearce et al., 2006).
Benefits of mitigating eutrophication
9
Figure 2: Total Economic Value (Source: Adapted from Turner et al., 2010a)
Use-values
Use values (both direct and indirect) capture the direct link between ecosystem
services and human welfare. Direct use values includes the results of marketbased activities such as profits from fisheries, recreational sea angling operators and the oil and gas industry etc. It also includes wider benefits that are
more difficult to measure because they are not necessarily captured by market
interactions, for example recreational activities generating non-consumptive
values such as swimming and sailing, as well as the importance to local coastal
communities of maintaining their marine heritage. Indirect use values includes the benefits we derive from the environment’s provision of ecosystem
services, such as waste decomposition, carbon sequestration or nutrient
­recycling (Pearce et al., 2006).
Non-use values
Non-use values capture the benefits derived from knowing that an ecosystem
service simply exists (existence value) and/or is available for descendants to
be enjoyed in the future (bequest value), and/or the satisfaction from ensuring
resources are available to contemporaries of the current generations (altruistic
and bequest value) (Pearce et al., 2006).
Option and quasi-option values
Option values capture the value individuals derive from knowing that an ecosystem service will be available for future consumption for themselves. For
example, even though an individual does not presently use a coastal zone for
recreation s/he might value having the possibility to do so in the future.
­Quasi-option values are associated with the potential benefits of waiting for
improved information before giving up the possibility to preserve an ecosystem service for future use. It might be of significant importance when it
comes to avoiding irreversible changes that might turn out to be unwanted in
the light of improved information (Pearce et al., 2006).
10
Benefits of mitigating eutrophication
Total Economic Value and Total System Value
It is important to be aware that Total Economic Value (TEV) is not equivalent
to Total System Value (TSV) of ecosystem services. TEV captures the value of
final ecosystem services in terms of human welfare. However, some authors
argue that there are also, in addition to this value, ‘insurance’ values provided
by a healthy ecosystem, which can be sustained only if an adequate configuration of structure and process is present (see also section 2.1 on intermediate
services). TSV includes the notion that there is a role that ecosystem structure/process plays in terms of the maintenance of a stock of intermediate services that can potentially deliver final services over time and space. This then
is a value in itself. Therefore TSV will always be greater than TEV (Turner
et al., 2010a; Pearce et al., 2006).
In addition, some would argue that there are potential intrinsic values of nature, which are values residing in ecosystems regardless of human utilization
and welfare benefits. Such kinds of values are not addressed by the TEV
framework (Turner et al., 2010a; Pearce et al., 2006). It could, however (not
undisputable), be argued that some people’s willingness to pay (see section 2.4
on stated preference methods) for the conservation of an asset, independently
of any use they make of it, is influenced by their own judgements about such
intrinsic values. This may show up especially in notions of ‘rights to existence’
but also as a form of altruism. Clearly, the practice of both economic and environmental management would need to be changed radically in order to uphold such deep ecology rules as the notion of intrinsic values are built upon
(Turner et al., 2010a).
2.4 Valuation methods
There exist a number of valuation methods to capture the different values included in TEV. However, the non-market nature of many ecosystem services
introduces a challenge for valuation. This is in particular true in a case with
considerable non-use values, because most valuation methods are only able to
capture use values. However, a few methods exist that can capture also nonuse values. It is therefore of importance to have an idea regarding which of
these values that dominates when choosing between the different methods in
order to avoid underestimation of the benefits (see e.g. Pearce et al., 2006;
Turner et al., 2010a).
The objective of economic valuation is, as a basis, to measure the weight
and direction of individuals’ preferences and thereby the total economic value
of the benefits derived from an ecosystem service. Important to remember is
that it is the value of incremental change in ecosystem services that is of
interest (see marginal changes in Section 2.2). The methods to estimate a
monetary value of benefits provided by ecosystem goods and services all have
their different advantages and disadvantages. The economic methods can be
separated between:
Pricing approaches: in which market prices, damage cost avoided or
replacement costs are used to capture the values of the benefits provided by
different ecosystem services.
Benefits of mitigating eutrophication
11
evealed preference methods: where the value is obtained by looking at
R
costs of illness or loss of input, defensive expenditure or averting behaviours or by conducting travel cost or hedonic price studies.
Stated preferences methods: where individuals through various means are
asked to state their willingness-to-pay (or willingness-to-accept compensation) for an environmental improvement (degradation).
Which valuation method to prefer depends on the characteristics of the ecosystem service in question, how it is linked to human wellbeing, as well as on
which of the values described above that is likely to be dominating. Only stated preferences methods are able to fully capture non-use values, which suggests that those methods have an important advantage if such values are likely to be significant. A short overview of existing methods is given below. The
different methods’ main advantages and disadvantages are also highlighted in
Table 1 below. For a more in-depth description of each of these methods see
for example Pearce et al. (2006), Defra (2007) and Turner et.al. (2010a).
Pricing approaches
Pricing approaches, or cost based measures, are common techniques because
they usually require fewer resources compared to the other two approaches.
While pricing approaches typically only provide a partial estimate of actual
benefits, they can still be useful in order to give rough monetary estimates of
ecosystem services that otherwise may remain unvalued. Methods using market prices are often based on turnover, and methods using direct expenditures
are often based on clean-up costs. Methods include avoided damage costs,
­replacement costs and provision costs of ecosystem services (Turner et al., 2010a).
Revealed preference methods
Revealed preference methods make use of linkages between ecosystem services and one or more market goods. This means that all these methods are
based on data on peoples’ or firms’ actual market behaviour. The approaches
in this category observe individuals’ behaviour in markets in which a given
ecosystem service is indirectly bought (Turner et al., 2010a). The four most
relevant valuation methods within this category are: Production Function
Method (PFM), Travel Cost Method (TCM), Hedonic Price Method (property value method) (HPM) and Defensive Expenditure Methods (DE). These
methods all have somewhat different basis. The PFM method assumes that
the environmental quality is an input to the production of goods and services,
and uses this link to connect changes in environmental quality with changes
in profits and/or well-being. The TCM method enables obtaining economic
values of recreational use (an element of direct use values) through studying
the public’s costs in terms of time and money for travelling to a specific area.
The HPM method generally uses price data from the housing market, assuming
that property prices are a function of a number of characteristics including
environmental quality, and may be applied to the valuation of goods such as
landscape amenity, air quality, and noise. The DE methods are similar to TCM
and HPM, but employ data on people’s averting behaviour instead. For a further description of the different methods see for example Pearce et al. (2006).
12
Benefits of mitigating eutrophication
Stated preference methods
It is, however, not always the case that there are linkages between ecosystem
services that are to be valued economically, and some market goods, or the
linkages, might be weak or not well examined. People’s Willingness To Pay
(WTP) or Willingness To Accept compensation (WTA) can then be used, by
creating hypothetical market situations. These stated preference methods
­include Contingent Valuation (CV) and Choice Experiments (CE). The two
methods generally use questionnaires to estimate individual or household
preferences (and more specifically their WTP or WTA) for changes in the
provision of (non-market) goods. Choice Experiments (CE) offer the respondents choices between groups of attributes from which the analyst then
can estimate a WTP or WTA. Stated preference methods are particularly useful when impacts on non-market goods associated with significant non-use
values are to be assessed, as these values cannot be revealed using revealed
preference methods (Pearce et al., 2006; Turner et al., 2010a).1
A problem with stated preference methods may be that the results suffer from
hypothetical bias, that is the respondents say one thing but would not act
upon their responses should the market situation be a real one. Much research has been devoted to this issue, see List & Gallet (2001), Murphy et al.
(2005) and Swedish EPA (2010a) for reviews. This research has resulted in the
development of procedures to reduce this problem, such as accounting for respondent uncertainty by, for example, asking respondents explicitly about
how certain there are about their WTP/WTA, and providing so-called cheap
talk scripts where the respondents are, for example, told explicitly to consider
their household budgets and to respond as if the transaction would actually
take place.
It is only stated preference methods (CV and CE) that can capture all components of TEV including non-use values. Therefore these two methods play
a very useful role in cost-benefit analysis when such values are considered to be
high (Pearce et al., 2006; Turner et al., 2010a).
Survey studies like these can be time consuming and costly. One option can be to use benefit
transfers from earlier studies (see e.g. Pearce et al., 2006). There are, however, many difficulties
to overcome with transferring values from existing studies.
1
Benefits of mitigating eutrophication
13
Table 1: Pros and Cons with different valuation methods
(Source: Adapted from Pearce et al., 2006; Turner et al., 2010a)
Valuation method
Advantages
Disadvantages
Market based/turnover
(Pricing approach)
Practical
Relatively easy data collection
and analysis
Total turnover is not a welfare
measure; however change in profits is a better welfare measure
Cost of clean up
(Pricing approach)
Easy to carry out
Inexpensive, no analysis required
Frequently used
Not a pure welfare measure
of loss
Covers a very small portion of the
total social costs of an environmental degradation
Production Function Method
(Revealed preference)
Likely to have high acceptance
for use in policy and legal
­discussions
Only estimate a fraction of total
value.
Requires a lot, both of economic
and ecologic data.
Often very costly
Can be difficult to find data
Travel cost method
(Revealed preference)
Practical and well established
Based on actual observed
behaviour
Relatively easy if relevant data
exists
Can only estimate use-values
Applicable to specific sites only
(usually recreational sites)
Can be costly
Can require significant data
collection to obtain distance
­travelled by recreational users
Hedonic price method (property
value method)
(Revealed preference)
Well established method
Based on actual observed
behaviour and (usually) existing
data
Can estimate non-use values
but only captures values held by
home owners
Only applicable to attributes
capitalised into housing and/or
land pricing
Defensive expenditure method
(DE)
(Revealed preference)
Sound theoretical basis
Uses data on actual expenditure
so data can be easy to obtain
Not widely used
Only estimate use values
Appropriate data may be difficult
to obtain
Contingent valuation (CV)
(Stated preference)
Can estimate use and non-use
values
Widely used and much
­researched
Can be applied to a range of
ecosystem services
Controversial mainly due to
problems at survey design and
implementation stage
Can suffer from biases
­(questionnaire technique)
Can be very costly
Requires significant data
­collection
Choice experiments (CE)
(Stated preference)
Can estimate use and non-use
values
Can be applied to a range of
ecosystem services
Controversial (as CV)
Can be costly
Analysis can be complicated
Requires significant data
­collection
Non-monetary approaches (HEA/
REA)
(non-monetary method)
Fairly easy to undertake
Can capture non-use values but
capture intermediate rather than
final services
Cost is only an indicator of value,
therefore not a pure welfare
measure of loss as in WTP.
Data availability may be limited
Benefits transfer
Easy to carry out
Relatively inexpensive
Accepted method
Depends on quality and
­applicability of existing studies
Depends on primary study
method
14
Benefits of mitigating eutrophication
Deliberative valuation methods
The above described methods focus on individual preferences/value. However,
it is possible that ecosystem services may also have ‘collective’ significance. It
can be argued that citizens, in certain contexts, may hold ‘social/shared’ values
for ecosystem services (see e.g. Fish et al., 2011; MacMillan et al., 2003; Sagoff,
1998, 2007; Spash, 2007, 2008). These ‘shared’ values cannot be captured by the
methods explained above. An approach to elicit such values is via for example
group discussions, debate and learning between stakeholders. As explained by
Fish et al. (2011), techniques exist for deriving such shared values, either monetary or qualitatively (but most often qualitatively), and these are referred to
as Deliberative Valuation Methods (DMV). If the objective is to achieve a
monetary valuation, the value can be agreed upon by a group via consensus
or majority. However, the outcome does not necessarily have to be an agreedupon ‘shared’ value; that is, these techniques may also be used to elicit individual values that are informed through social learning and/or the dialogue
process itself. Important to note is that the choice is not of ­using either monetary or non-monetary valuation methods but, rather a combination in order
to take a holistic approach when analysing relationships between ecosystem
services and human wellbeing (see Fish et al. 2011).
Deliberative methods are perhaps most appropriate in contexts where so-called
cultural ecosystem services are being assessed (e.g. landscapes/seascapes of
symbolic and historical significance) but can be used for all types of ecosystem
services (Fish et al., 2011). A monetary or qualitative expression of ‘shared’
­values may also be used to complement conventional stated preference approaches (see e.g. Álvarez-Farizo et al., 2007 for a combined case study linked
to water quality). Some argue that the non-use benefit values that people
­associate with ecosystem services – bequest, existence and altruistic – are
closely associated with these citizen-type behaviours and motivations. See
Fish et al., 2011 for a further description of and use of deliberative methods
for valuation of value ecosystem services. See also Background Paper Shared
Values.
Benefits of mitigating eutrophication
15
3. Method in BalticSTERN
A few studies have been made previously on the benefits and thereby the
wellbeing people obtain from the Baltic Sea and its ecosystem services. Stated
preferences have been the main method used to value the benefit people receive from different ecosystem services, followed by revealed preferences
(Sandström, 1996), and these have mostly focused on impacts of eutrophication such as changes in Secchi depth, recreational fishing and occurrences of
­summer algal blooms (e.g. Söderqvist & Scharin, 2000; Soutukorva, 2005;
Vesterinen, et. al., 2010).
There still remain large gaps, however, regarding the value of the ecosystem
services provided by the Baltic Sea. There are, for example, few valuation
studies using the different pricing approaches (replacement costs, damage
costs and market prices) to address the value of different ecosystem services
(Swedish EPA, 2008b). So far, most studies have also been focusing on valuing
provisioning and cultural ecosystem services, while few have addressed the
value of regulating and supporting services. The supporting services “diversity” and “habitat” have been identified as needed for prioritization in future
research. However, a large need still exists for future studies regarding the
provisioning service “food” (e.g. fish) and many cultural services linked to
recreational, aesthetic, cultural heritage and cultural existence values (e.g.
legacy of the Sea) (Swedish EPA, 2008b).
Existing studies are in most cases related to specific scenarios and local
regions, which makes it difficult to draw any large quantitative conclusions
regarding benefits of an improved Baltic Sea environment and linking them
to existing policy targets. Also, existing quantifications from large-scale
studies are mainly based on benefit transfer from original studies with heavily
out-dated benefit estimates. The need for a large-scale study has therefore
been identified, valuing the benefits of decreased nutrient loads to the Baltic
Sea (Swedish EPA, 2008b).
3.1 Ecosystem services in focus
As eutrophication and overfishing are two of the most important threats to
the Baltic Sea ecosystem (HELCOM, 2010), studies performed within the
­BalticSTERN research network have mainly focused on environmental
­problems linked to these pressures. Eutrophication and overfishing have large
negative impacts on the identified threatened ecosystem services (Swedish
EPA, 2008a).
Benefits that can be linked to fish are for example commercial catch of fish,
aquaculture or recreational harvest of fish. The final ecosystem service linked
to these benefits is the fish biomass. Without any fish biomass we are unable
to receive the benefits of harvesting the fish. In order for the marine ecosystem to produce the fish biomass, several intermediate services are in turn
needed. Examples of main intermediate services needed are; regulation of
water quality and hazardous substances, maintenance of a well-functioning
food web structure, habitats and primary production (Table 2).
16
Benefits of mitigating eutrophication
Table 2: Examples of intermediate, final services and benefits linked to
­fisheries (Source: Adapted from Fisher et al., 2008)
Intermediate Services ➜
Final Services ➜
Benefits
Regulation of water quality
Fish biomass
Fish landings
Regulation of hazardous substances
Maintenance of food web structure and function
Maintenance of habitats
Primary production
Benefits from recreational activities can, for example, be the enjoyment
­experienced by people from swimming. Depending on the kind of recreational a­ ctivity, the main final services might be different. Taking ‘swimming’
as an example, one important final service needed to generate this benefit is
high/good water quality. Important intermediate services needed to generate
a sufficiently good water quality are for example; eutrophication control, retention storage of sediments, nutrients and contaminants, as well as regulation of hazardous substances (Table 3). Beneficiaries are for example the tourism sector and the general public.
Table 3: Examples of intermediate and final services linked to recreational
swimming (Source: Adapted from Fisher et al., 2008)
Intermediate Services ➜
Final Services ➜
Benefits
Eutrophication control
Water quality
Recreational swimming
Retention storage of sediments, nutrients and
contaminants
Regulation of hazardous substances
Primary production
In addition, recreational activities are to a varying degree dependent on the
state of different ecosystem services. Swimming is for example most likely
more dependent on the capacity to mitigate eutrophication, compared to
walking along the beach. Figure 3 illustrates to which degree some recreational
activities may depend on the intermediate service of eutrophication miti­
gation (Enveco et al., 2012).
High
Swimming
Diving
Fishing
Being at the beach
Boating
Going on a cruise
Low
Figure3: Degree of recreational activities’ dependency on eutrophication mitigation in the Baltic
Sea (Source: Enveco et al., 2012.).
Benefits of mitigating eutrophication
17
3.2. The studies
Within the BalticSTERN research network, two major activities have been
performed to identify and to capture benefits that people obtain from the
Baltic Sea; BalticSurvey and BalticSUN.
BalticSurvey
BalticSurvey was a study performed in 2010 in all the nine countries surrounding the Baltic Sea with the purpose to identify how people around the
Baltic Sea and parts of the Skagerrak use the Sea, what attitudes they have
­towards the marine environment and towards various responsibilities, as well
as ways to finance measures for improving the environment. The study further aimed at providing information that could be useful for the design of
forthcoming research on the value of benefits at risk because of marine
­environmental problems (See Swedish EPA, 2010b).
In all countries2, random sampling of the adult national population was
applied and about 1000 interviews were performed in each country. Tele­
phone interviews were used as the method for data collection in all countries
except in Estonia, Latvia and Lithuania, in which face-to-face interviews were
conducted. The questionnaire used in all interviews explained what the
survey was about and consisted of questions about the respondents’ general
use of the Sea and their attitudes related to the marine environment. Questions were asked about for example potential problems in the Sea, actors that
can take actions for improvements and payment modes for funding actions.
In most countries, there was an overrepresentation of females and relatively
old respondents. In order to achieve an improved representativeness, weighting was applied in the analysis with respect to gender and age (see Appendix
D in Swedish EPA, 2010b). In general, the findings from this survey about the
general public’s use of the Sea and attitudes about marine environmental
issues serve as a point of departure for further studies on their preferences for
improvements in the marine environment.
BalticSUN
To fill the research gap of a large-scale study that values the benefits of
­decreased nutrient loads to the Baltic Sea, and that also give indications of
­marginal benefits of reduction (see Swedish EPA, 2008b), the research network performed a valuation study called BalticSUN (Survey of Use and Nonuse values) in all nine littoral countries. The study is developed and based on
information received from BalticSurvey. A CV study was carried out in all
countries simultaneously in order to capture benefits linked to reduced
­eutrophication in the Sea. The overall aim with the study was to produce
­results that can be compared with the costs of specific scenarios of reducing
­eutrophication. Collecting new data from all countries made it possible to
2
For Russia, due to its large population and wide geographical extent, a separate sample was
made for the population living in the two Russian regions situated closest to the Baltic Sea, i.e.
the coastal regions of St. Petersburg and Kaliningrad. 500 interviews were also made among
the population in a number of cities situated in other parts of Russia (Swedish EPA, 2010).
18
Benefits of mitigating eutrophication
avoid the dependency on benefit transfer from previous studies when valuing
the benefits. This approach to estimate the benefits makes it the first primary
CV study made to cover all nine countries. It is also likely to be one of the
largest international CV studies on the marine environment conducted so far.
In the study, people in the nine littoral countries were asked what they
would be willing to pay for reduced eutrophication in the Sea. In addition,
people were also asked questions about their attitudes towards the Baltic Sea
and recreation in the area. Since it was indicated in BalticSurvey that non-use
values linked to eutrophication might be high, it was important to choose a
method for the valuation study that not only captured use-values. The use of
a stated preference approach allowed for capturing both use values and
non-use values of the ecosystem services affected by eutrophication (see
section 2.4 on methods for capturing TEV).
CV studies are most suited to valuation situations where coherent hypo­
thetical scenarios of environmental change are valued. CE, in turn, excels in
assessing the values of individual attributes (Haab & McConnell, 2002). In the
survey, eutrophication in the Baltic Sea was described using five effects, which
had five quality levels. While choice experiments might seem suitable for this
kind of setting, we chose the CV method over CE based on a number of
reasons. The valuation was conducted for a scenario-based cost-benefit
analysis, where the changes in eutrophication were determined with marine
biogeochemical modeling. Proper statistical analysis of in CE studies requires
the levels of the valued attributes to vary in choice situations presented to
respondents. As all the eutrophication effects are heavily correlated with each
other and the valuation scenarios needed to be credible, the choice experiment would not have provided additional information. Furthermore, as wide
geographical coverage and large samples of valuation data were needed in all
nine littoral countries, it was paramount for the survey to be easily and
similarly understood despite cultural differences. To maintain a simple
exposition, the change in eutrophication was shown in maps of the Baltic Sea
with a simple coloring scheme and identically translated explanations in the
surveys. In addition to the careful definition of the valuation problem and
question, the survey elicited information on attitudes, recreation behavior
and personal information. A CE format would have added to the burden of
response, risking reduced response rates.
3.3. Linking ecological and economic models to policy targets
The study elicited willingness to pay for two eutrophication scenarios related
to reaching the Baltic Sea Action Plan’s (BSAP; HELCOM, 2007) nutrient
­reduction targets. A business as usual (BAU) eutrophication scenario (nonaction scenario) was developed and described, predicting the expected
­development of nutrient loads and concentrations in the Sea if no additional
abatement actions are taken for the state of the Baltic Sea until 2050. The
BAU scenario was then compared with two different policy scenarios, one
scenario where the BSAP-targets regarding nutrient loads were fulfilled, and
one scenario where the nutrient load targets were met to 50 per cent. There­
after, the respondents of the survey were asked how much they would be
Benefits of mitigating eutrophication
19
­ illing to pay each year for obtaining a future in which the better scenario
w
had generated a healthier Baltic Sea compared to the BAU future. The two
policy scenarios can be said to represent a global storyline corresponding to
the optimistic “A world in balance” (see BG Paper Scenarios). Coloured maps
were used to illustrate the state of the Baltic Sea under the different scenarios.
Figure 4 shows the BAU scenario compared with the scenario corresponding
to full implementation of BSAP. All scenarios were carefully developed based
on experience from previous valuation studies and feedback from a thorough
pre-testing phase. The use of two scenarios with varying nutrient reductions
allow for interpolations of WTP estimations for different levels of abatement.
Figure 4: The Baltic Sea in 2050 without the BSAP (BAU scenario) (left) and the Baltic Sea in
2050 with BSAP (right) (Source. Ahtiainen et al., 2012)
The levels of eutrophication were described for different subbasins of the
­Baltic Sea, using a five-step water quality scale based on HELCOM’s Ecological Quality Ratio (EQR), which represents relationships between actual status
and a reference condition in the Baltic Sea (see HELCOM, 2009). Five eco­
system characteristics were used to describe the different status of water
­quality: levels of water clarity, extent of blue-green algal blooms, extent of
­underwater meadows, fish species composition and oxygen conditions in
deep-sea regions. The five-step scale using these characteristics is illustrated
in Table 4. Blue and green colours indicate acceptable levels of eutrophication, where blue is the best situation. Yellow, orange and red indicate unacceptable levels where red signifies the worst situation.
20
Benefits of mitigating eutrophication
Table 4: Five steps water quality scale to explain eutrophication ­
(Source: Ahtiainen et al., 2012)
Description of the effects of eutrophication
Water quality
Water clarity
Blue-green
­algal blooms
Underwater
meadows
Fish species
Deep sea
­bottoms
Best possible
water quality
Clear
Seldom
Excellent
condition
Good for fish
spawning and
feeding
Cod, herring
and perch
common
No oxygen
deficiency
Bottom animals
common
Mainly clear
Sometimes
Patchy
­vegetation
Good for fish
spawning and
feeding
Cod, herring
and perch
common
Oxygen
­ eficiency in
d
large areas
Bottom animals
common
Slightly turbid
In most
­summers
Cover a small
area
Less good for
fish spawning
Fewer cod, but
herring and
perch common
More roach,
carp and
bream
Oxygen shortages often in
large areas
Some bottom
animals rare
Turbid
Every summer
Cover a small
area
Bad for fish
spawning
Fewer cod,
herring and
perch
More roach,
carp and
bream
Oxygen shortages often in
large areas
Some bottom
animal groups
have disappeared
Worst possible
water quality
Very turbid
On large areas
every summer
Almost gone
Not suitable for
fish spawning
Almost no cod,
fewer herring
and perch
Lots of roach,
carp and
bream
Oxygen shortages always in
large areas
No bottom animals in many
areas
Three models were used to predict the future state of the Baltic Sea with
­regard to eutrophication under various nutrient reduction scenarios: a basinlevel long-term dynamic model, and two more specific three-dimensional
models (3D-models), the EIA-SYKE 3D model, and the Ecological Regional
Ocean Model (ERGOM). The dynamic marine model was used for projecting
the state of the Baltic Sea over the 40 years time horizon 2010-2050. This
model describes the exchange of water and nutrients across the seven basins
of the Baltic Sea, and projects the development of nutrient concentrations as
a consequence of the current state and exogenously given load projections.
The two more specific models are biogeochemical models used to translate
the predicted nutrient concentrations from the basin-level marine model into
phytoplankton biomass and other attributes of water quality at a spatially
­detailed level (see also BG Paper Costs of mitigating eutrophication).
3.4. Estimating willingness to pay
The “willingness-to-pay question” in the CV-study was two-staged. First the
­respondent was asked whether s/he would, in principle, be willing to pay for
reduced eutrophication in the Baltic Sea, and if the answer was yes or don’t
know, the maps illustrating the eutrophication scenarios and the willingnessto-pay question were presented together with a payment card. This question
Benefits of mitigating eutrophication
21
was formulated as follows: “What is the most you would be willing to pay
­every year to reduce eutrophication in the Baltic Sea as shown in the maps?
Please consider your disposable income carefully before answering the question.”
Based on findings from BalticSurvey, the payment vehicle chosen was a
special Baltic Sea tax, collected from each individual and firm in all Baltic Sea
countries, and earmarked for reducing eutrophication. The respondent also
received information regarding eutrophication reduction measures and that
they would have to pay each year for the rest of their lives (Ahtiainen et al., 2012).
In total 10564 interviews were conducted through face-to-face interviews
or Internet panels3. The smallest specific sample was 505 (Estonia) and the
largest 2029 (Poland). As shown in Table 5 the response rate was lower in
countries where an online survey was used compared to countries where
face-to-face interviews were conducted. In all countries except Russia, the
sample was drawn from the entire population. In Russia, two samples were
constructed separately: one for the Baltic coastal regions and another for the
rest of the country4. For aggregation of WTP estimates, the samples from
each country were adjusted to the relevant national population primarily due
to over-representativeness of larger households, higher income and higher
education compared to the national population (Ahtiainen et al., 2012).
Table 5: Survey mode and response rate in each Baltic Sea country
(Source: Ahtiainen et al., 2012)
Country
Survey mode
Denmark
Internet panel
Number of
­responses
Response
rate (%)
1061
38.2
Age of sampled
individuals
(years)
18–74
Estonia
Internet panel
506
42.1
1–74
Finland
Internet panel
1645
39.4
18–74
Germany
Internet panel
1463
32.5
18–70
Latvia
Face-to-face interviews
701
45.0
18–74
Lithuania
Face-to-face interviews
617
60.5
15–74
Poland
Face-to-face interviews, internet
panel
2029
n/a 36*
20–60
1508**
69.3
18–85
1003
34
18+
Russia
Face-to-face interviews
Sweden
Internet panel
*n/a for face-to-face interviews, 36 for internet panel
** (of which coastal: 1008; and non-coastal: 500)
Two econometric approaches were used to estimate mean and median
willing­ness to pay for each country; an interval regression model and a spike
model. The purpose of using two approaches was to compare results and verify
the robustness. Information was also collected in order to understand how
certain people are about their stated WTP, and hence whether the degree of
Previous empirical studies have provided evidence that internet surveys responses are of
similar quality to face-to-face interviews, and thus may be a reliable alternative (Ahtiainen
et al., 2012).
4
The coastal part included: Leningrad, Saint Petersburg and Kaliningrad Region. The other
parts were represented by Khabarovsk, Novosibirsk, Samara, Sverdlovsk, Rostov and Voronezh
Region (Ahtiainen et al., 2012).
3
22
Benefits of mitigating eutrophication
certainty affects WTP. It was further chosen to include protest respondents
when estimating the WTP, setting their WTP to zero. In general, protest responses are defined as the responses of persons who do not state their true
value for the good in question due to objecting to some component of the
survey. These objections may be directed towards the payment vehicle, distrust regarding the money being used to the purpose stated in the survey (c.f.
­Meyerhoff & Liebe 2010, Jorgensen & Syme 2000) or more general opposition
to the survey set-up.
In this study, protest responses were identified based on answers to debrief­
ing questions about the most important reason for not being willing to pay or
being uncertain about the willingness to pay. The share of protest responses
was much higher among uncertain respondents (54%) than among respondents not willing to pay (25%). The following responses were deemed as
protests: those who did not believe in the program to reduce eutrophication
or that the money would be used for the stated purpose; those who said they
did not receive enough information; and those who said they would be
prepared to pay for reducing eutrophication, but opposed the extra tax, thought
that polluters should pay more or that the payment should be dependent on
income. For these respondents, there are reasons to believe that their actual
WTP is greater than zero, despite that they have stated a zero WTP.
Based on a closer examination of the socio-economic characteristics of
protest respondents, protesters were typically male and had higher income.
In some countries, protest responses were also more likely among younger
respondents and those who had a lower education level.
Protest respondents were not excluded from the analysis, that is they were
considered being not willing to pay. The decision not to exclude these protest
answers produces a conservative estimate of the WTP.
See Ahtiainen et al., 2012 for a description of the models and the treatment of
uncertainty.
Benefits of mitigating eutrophication
23
4. Results
BalticSurvey has provided completely new and comparable insights to how
people in the Baltic Sea countries use the Sea and what attitudes they have
­towards marine environmental issues. The survey shows that while people’s
professional experience of the Sea is limited, most of the respondents have
been to the Sea to spend leisure time there. The proportion of respondents
saying that they have or have had an occupation that is dependent on the
Sea was less than or equal to about 10 per cent in all countries.
In all countries except coastal Russia, more than 80 per cent have been to
the Sea at least once. In coastal Russia, this number is about 50 per cent. The
highest percentage (98 %) is found in Sweden. The survey also included data
indicating how often people visit the Baltic Sea. Visits to the Sea are most
frequent in Sweden, Denmark and Finland and least frequent in Lithuania,
Germany, Latvia and Poland. The number of visit days was considerably
lower for all countries for the period between October 2009 and March 2010,
which is not surprising as people normally spend more time by the Sea
during the summer months. The frequency of visits was measured as the
number of days in which the respondents have spent at least some leisure
time at Sea. Two 6-month periods were included: April – September 2009
and October 2009 – March 2010 respectively.
The study further highlighted people’s preferences for how to use the Baltic
Sea. The most common activities people enjoy when spending time at the
Baltic Sea are swimming (in the Sea), being at the beach or seashore for
walking, sunbathing or similar, going on cruises or boat excursions and
recreational fishing. The results from BalticSUN confirm the findings of
BalticSurvey regarding recreational activities. In Finland, Latvia and Lithuania,
about 30 per cent further stated in BalticSUN that the recreational experience
they have at the Baltic Sea could not be found elsewhere. In Denmark,
Germany, Poland and Russia, around 90 per cent however felt that they could
have a similar recreational experience at some other water area, and in
Estonia all respondents could think of a substitute for the Baltic Sea. For
Denmark and Germany, this could be explained by the fact that they have
coastlines on the North Sea as well.
Attitudes towards the marine environment
BalticSurvey showed that many people in the region are worried about the
Baltic Sea environment and BalticSUN further confirms these findings.
­People in Finland are the most worried (77 per cent). Many are worried also
in coastal Russia (71 per cent), Estonia (69 per cent) and Sweden (63 per
cent). People in Poland and Germany are the least worried, but nevertheless
more than one third of the people in these countries are worried (37 and 39
per cent respectively) (Figure 5). Swedish respondents agreed most strongly
that the environmental problems in the Baltic Sea are among the most important environmental problems that the country faces. In Germany, Russia and
Denmark people are more indifferent (Swedish EPA, 2010b).
24
Benefits of mitigating eutrophication
Figure 5: Percentage of the population that agree or disagree to the statement “I am worried
about the Baltic Sea environment”. (Source: Swedish EPA, 2010b).
DK = Denmark, EE = Estonia, FI = Finland, DE = Germany, LV = Latvia, LT = Lithuania, PL = Poland,
RU = Russia, SE = Sweden
According to BalticSurvey, there is also a tendency in most countries to agree
that there is deterioration rather than improvement of the Baltic Sea environment. This tendency is particularly strong for coastal Russia. However, German
and Polish respondents are on average more prone to agree that an improvement has taken place. There is a slight tendency among the respondents in all
countries, except Poland and coastal Russia, to view the status of one’s own
country’s part of the Sea as being better than the status of the Baltic Sea as a
whole. Interestingly, not many feel that the Baltic Sea water quality at present
restricts their recreational opportunities.
Respondents in BalticSurvey were asked to state the extent to which they
view a number of different issues as being a problem in the Baltic Sea. Some
of the issues, such as “marine litter”, were stated as being a rather large
problem by a majority of the respondents. The same is true in at least seven
countries for “damage to flora and fauna in the sea”, “heavy metals and other
hazardous substances”, “small everyday oil leakages”, “possibility of major oil
spill” and “algal blooms” (Figure 6). People were also asked to answer whether
there are any other major problems in the Sea. Common responses to this
question included emissions and other disturbances caused by boating and
sea transports (Swedish EPA, 2010b).
Benefits of mitigating eutrophication
25
Figure 6: Environmental issues regarded as largest in the Baltic Sea (Layout: M.Nekoro,
­Copyright: Azote.se)
In addition to the findings in BalticSurvey regarding people’s attitudes, Baltic­
SUN, which focused on eutrophication, showed that half of the respondents
had at some point experienced the effects of eutrophication, and that people
are in general most familiar with blue-green algal blooms and water turbidity.
A large variation between countries can be seen when it comes to people’s
­familiarity with the effects. Swedes and Finns are for example also familiar
with less ‘visible’ effects, such as changes in fish species composition and lack
of oxygen (Table 6).
Table 6: Familiarity with effects from eutrophication (in %) (N=10540)
Country
DK
EE
FI
DE
LV
LT
PL
RU
SE
Water turbidity
45.6
55.1
94.5
41.5
49.1
49.4
41.2
45.8
82.6
Blue-green algal
blooms
60.9
74.7
97.6
57.9
59.2
57.1
50.1
45.6
94.5
Loss of underwater
meadows
44.4
53.3
56.4
57.9
36.1
47.8
24.9
35.4
65.9
Changes in fish
species composition
41.6
48.1
88.6
22.4
45.5
51.2
31.08
33.7
73.4
Lack of oxygen
66.6
51.1
91.7
33.0
45.1
49.8
37.7
31.0
90.9
Percentages in the table reflect the share of yes responses.
DK = Denmark, EE = Estonia, FI = Finland, DE = Germany, LV = Latvia, LT = Lithuania, PL = Poland,
RU = Russia, SE = Sweden
26
Benefits of mitigating eutrophication
Actions for improvements
In most countries, people do not feel that they are affecting the Baltic Sea
­environment themselves, as shown in BalticSurvey. Poland and Sweden were
however exceptions in the survey, despite the fact that these countries are
very different in terms of where the major part of the population lives; in
­Poland relatively far from the Sea and in Sweden relatively close to the Sea.
In Sweden and Poland, a majority also think that they themselves can play a
role in improving the Baltic Sea environment. This is different compared to
Germany, Latvia and Lithuania where a majority of the respondents do not
think they can play a role in improving the environment. Further, Poles and,
in particular, Swedes are those who most clearly tend to regard themselves
as currently contributing financially for funding actions to mitigate eutrophication through taxes or other types of payments.
Regarding actions to improve the Baltic Sea environment, BalticSurvey
indicates a widespread support for actions to be taken by wastewater treatment plants, farmers, professional fishermen, industry, sea transports and
ports in most countries. This implies that there is a widespread support for
the polluters to take actions in the Baltic Sea region. When it comes to funding
of actions, a majority of the respondents in all the countries considered
increased pollution emissions charges to be an acceptable way of funding
actions to improve the Baltic Sea environment. Increases in taxes or water
bills are not popular however, though people are in general less negative
towards making payments that are paid by all and are earmarked for funding
actions.
Willingness to pay for reduced eutrophication
BalticSUN captured people’s willingess-to-pay for reducing eutrophication in
the Baltic Sea. A monetary estimate was obtained of the value individuals
­attach to fully obtaining the nutrient load targets set up in the Baltic Sea
­Action Plan (BSAP), and also of achieving half the BSAP-targets. The study
shows that, overall, more than half of the respondents are willing to pay
something for reducing eutrophication in the Baltic Sea. The shares of
­respondents, who are willing to pay separately for the two different eutrophication reduction scenarios (full BSAP and half BSAP) in comparison to the
Business As Usual (BAU) scenario, were highest in Sweden and lowest in
­Russia as shown in Table 7.
Benefits of mitigating eutrophication
27
Table 7: Shares of respondents willing to pay per country (Source: Ahtiainen
et al., 2012)
Country
Share WTP for
½ BSAP (%)
Share WTP for
BSAP (%)
Share WTP for
­either or both
­programs (%)
N
1061
Denmark
54.0
53.7
54.9
Estonia
53.9
56.4
58.0
505
Finland
62.1
63.0
63.4
1645
Germany
54.7
56.2
56.5
1495
Latvia
49.1
49.8
50.1
701
Lithuania
54.1
55.1
55.1
617
2029
Poland
54.3
55.0
55.6
Russia
31.1
32.2
32.4
1508
Sweden
74.1
74.6
75.4
1003
Overall average
53.7
54.6
55.2
10564
Population figures corresponding to the sampled part of the population for
each country together with the WTP estimates are shown in Table 8. The
­aggregate willingness to pay for fulfilling the ‘half BSAP” and ‘full BSAP’
­scenarios amounts to 3000 million and 3800 million Euros, respectively.
­Notably, the differences between the WTP in various countries are large, with
mean WTP per person and year being highest in Sweden (about 111 Euros for
the ‘full BSAP’ scenario) and lowest in Latvia (about 4 Euros). If looking at
national WTP per year, it is highest in Germany followed by Sweden.
Naturally, the WTP estimates involve a certain level of uncertainty, which
is here mainly linked to sampling and models. To reduce uncertainty, the
samples were drawn to represent the entire country with best possible accuracy for all countries. Also, the use of two modelling methods to assess the
WTP (an interval regression model and a spike model) gave similar results,
providing confidence in using the results for the aggregation (see also section
3.4 on method). For Russia, the aggregate WTP presented below includes only
the Central, Southern, Northwestern and Volga Federal Districts, in order
to obtain a conservative estimate. Hence a slight difference compared to
­Ahtiainen et al. (2012).
28
Benefits of mitigating eutrophication
Table 8: Aggregate benefit estimates for the ½ BSAP and BSAP scenarios (in
2011 euros) (Source: Ahtiainen et al., 2012)
Country
Adult
­population
(in millions)
Annual mean
WTP per
­person for
half BSAP (€)
Annual mean
WTP per
­person for
full BSAP (€)
National WTP
per year for
half BSAP
(M€)
National WTP
per year for
full BSAP
(M€)
Denmark
3.958
49
52
195
205
Estonia
0.989
13
18
13
17
Finland
3.617
42
56
152
201
68.321
20
27
1367
1870
Latvia
1.690
4
4
6
7
Lithuania
2.516
5
6
12
16
Poland
24.624
7
9
170
211
Russia
81.476*
5
6
407
473
Germany
Sweden
Total
7.564
194.746
90
-
110
-
680
3002
838
3838
* Includes only the Central, Southern, Northwestern and Volga Federal Districts in Russia, in order to obtain a
conservative estimate. Hence a slight difference compared to Ahtiainen et al. (2012)
The study further showed that if people have experienced the effects of
­eutrophication, they are also more likely to be willing to pay something to
mitigate its effects. Also, if they believe that the environmental problems in
the Baltic Sea are amongst the three most important problems in their country,
the probability of being willing to pay increases. Concerning the size of WTP;
high income, certainty about the WTP response, frequent use and plans to
visit the Baltic Sea in the future increased the respondents WTP. Lack of
­substitutes to the Baltic Sea to receive the same experience elsewhere did,
however, not increase the level of WTP.
In the study, there are several indications that non-use values are of
particular importance. In general, respondents considered both coastal as well
as open-sea areas when stating their WTP, and a large share also considered
the whole Baltic Sea rather than specific areas. The distance between where
the respondent lives and the Baltic Sea did not affect the probability of being
willing to pay, implying that the Baltic Sea environment is important throughout the countries. That is – respondents who live further away from the Sea
also value an improved environment (somewhat surprisingly, in Germany,
those living further away from the Sea were more likely to be willing to pay
something compared to those living closer to it). This is an important finding,
and a possible explanation for this result could be a large share of non-use
values. In addition, all types of eutrophication effects are perceived as important and not only the most ‘visible’ effects such as algal blooms and water
turbidity. These results combined indicate that both use and non-use values
determine the WTP, but in particular that the share of non-use values in the
WTP estimates is likely to be substantial.
Benefits of mitigating eutrophication
29
5. Discussion
Compared to previous attempts to estimate the benefits of reducing eutrophication in the Baltic Sea, the aggregate WTP estimates is somewhat lower (see
e.g. Swedish EPA, 2008b). This is most likely due to the fact that present estimates are based on primary data for all countries instead of benefit transfer
from previous valuation studies. Also, unlike previous studies, the improvement in the state of the Baltic Sea is not attained everywhere in the Sea and
the time frame required to deliver the environmental change is longer.
The samples collected in each country exhibited similar properties in terms
of representativeness. Generally, respondents were characterized by larger
households, higher income and higher education levels compared to the
relevant national population. With representative data the sample mean WTP
can be multiplied with the population to estimate the aggregate national
benefits (Bateman et al. 2006). To assess the representativeness of the sample,
we examined the change in the probability of being willing to pay by replacing the variable sample means with the corresponding population statistics
(see e.g. Harrison & Lesley 1996). We used the population statistics for age,
percent female, household size, and the proportion of people with higher
level education, high income and low income for this correction.
The corrected figures for being willing to pay were generally slightly higher
than the raw sample averages. For Estonia and Russia, the estimate was lower
than the sample average, while for other countries the estimates are slightly
higher. The mean difference between sample average and the correction is
1.8 percentage points, where the largest differences are for Poland, which was
predicted to have a 5.3 percentage points higher share of people being willing
to pay, and Estonia, which has a 2.8 percentage points smaller share after the
correction. With the exception of Poland, the original sample shares (Table 7)
of those willing to pay were within the 95 per cent confidence interval of the
corrected figures.
Possible reasons for why the corrections giving higher shares are the
underrepresentation of young people, who were more likely willing to pay,
and also, to a lesser extent, the slight underrepresentation of women, who
were also more often willing to pay. These two variables seem to override the
effects from the overrepresentation of respondents with higher income and
education and larger households.
The presented benefit estimates are likely to be an underestimation for
several reasons. The treatment of protest and unsure respondents was con­
servative. We did not exclude protest zero responses from the analysis, thus
assuming that they were not willing to pay. We also assumed zero WTP for
respondents completely unsure about their willingness to pay.
In addition, the measures taken to reduce eutrophication in the Baltic Sea
improve also the state of inland waters, which is not captured in the contingent valuation study and people’s willingness to pay. Furthermore, the nutrient abatement measures were assumed to produce similar changes in
coastal and open sea areas, while in reality it is possible that the condition of
coastal waters may improve more rapidly than open sea areas.
30
Benefits of mitigating eutrophication
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