Table of Contents

  • David N. Barton (NINA), Henrik Lindhjem (NINA), Kristin Magnussen (Sweco Norge) and Silje Holen (NIVA) have written the report. We would like to thank participants in the Nordic valuation experts’ workshop held the 21st of September 2011 in Oslo for their presentations and contribution to the discussion in the report. Nordic experts have assisted in checking the representativeness of literature reviews for each country and have in some cases also contributed text box/case study examples throughout the text:

  • Nordic countries have in common a large number of water bodies and a myriad of catchments. The Nordic Council of Ministers commissioned The Norwegian Institute for Nature Research (NINA), The Norwegian Institute of Water Research (NIVA) and Sweco Norge to prepare a synthesis report on economic valuation of ecosystem services from watersheds in the Nordic countries.

  • The VALUESHED report first discusses a definition of “watershed services” (Chapter 2), a review of valuation studies in Nordic countries in comparison to international experiences (Chapter 3); looks at detailed examples of valuation studies from two Nordic watersheds (Chapters 4 and 5); discusses methodological challenges and possibilities for policy application (Chapter 6), and finally makes recommendations for policy and further study (Chapter 7). The report also contains supporting material in Appendix 1 – providing further details on the stepwise approach to valuation based on the AQUAMONEY project, funded by the European Commission. Appendix 2 provides a more detailed explanation of economic valuation methods applied to watershed services for the reader unfamiliar with this literature.

  • The VALUESHED study was commissioned by the Nordic Council of Ministers early 2011, started in May and finished in November. It responds to a need for a Nordic synthesis of experiences with valuation of ecosystem services from watersheds, in light of the recent study “The Economics of Ecosystems and Biodiversity” (TEEB) (Kumar 2011) and the Millennium Ecosystem Assessment (MEA) before that. There is a need for Nordic references and cases of the value of ecosystem services in watersheds, to complement references compiled by MEA and TEEB valuation study databases. This report attempts to fill this gap.

  • Chapter 2 briefly provides a definition of our shorthand for “watershed services,” a justification for choosing to emphasise “flood reduction” and “water pollution reduction” services of ecosys-tems in watersheds, followed by a brief overview of economic valuation methods drawn from the TEEB report, and finally an overview of the stepwise approach we use to discuss our detailed examples for Nordic watersheds. Chapter 2 links to supporting material in Appendix 1 – providing further details on a stepwise approach to valuation based on the AQUAMONEY project. Appendix 2 provides a more detailed explanation of economic valuation methods applied to water-shed services for readers unfamiliar with this literature.

  • This chapter first gives a brief overview of a few central international watershed valuation studies, with emphasis on studies that have reviewed the literature.

  • Chapter 4 provides some detail from valuation studies selected in the Glomma-Lågen Water Region. We look at approaches to valuing reduction in flood damages in this river basin, improvement in the ecological status of lake water across the three catchments of the Glomma-Lågen Water Region. A detailed look at valuation studies at the river basin and local within-river basin scale serve as a source of discussion of methodological challenges and solutions for valuation methods applied to different watershed services across different geographical scales.

  • Chapter 5 provides a summary of a valuation study in the Odense River Basin, looking at the improvement in the ecological status of river water quality. A detailed look at the choice experiment valuation methodology at the river basin scale serves as a source of discussion of methodological challenges and solutions for valuation methods applied to different watershed services across different geographical scales.

  • Chapter 6 discusses the data gaps uncovered in the review of Nordic valuation studies, followed by a discussion different challenges to valuation methodology in the context of ES, challenges to increase the policy relevance of valuation of ES, and to dissemination of “ES” in public debate. This discussion provides additional support for recommendations for further research.

  • In this chapter we focus our conclusions on general recommendations to policy makers in using (or not using) valuation results in different contexts, data gaps and recommendations for further research, and some recommendations for national TEEB follow-ups in Nordic countries, based on our material from the literature review and case studies.

  • Private goods are both excludable and rival in consumption, while public goods are typically neither. Since the consumption of private goods by one individual reduces the amount of the good available for consumption by others, and people can be effectively excluded from using the good, private goods can be valued through market prices. Non-market valuation methods are needed for economic assessment of impacts on public goods like environmental quality, for example water quality. Nonmarket valuation methods try to elicit individuals’ (or households’) preferences for public goods through their behaviour in markets for private goods which are related to the public goods (i.e. revealed preferences – RP), or their behaviour in constructed, hypothetical markets (i.e. stated preferences – SP) for the public goods.

  • This report follows a “TEEB approach” while applying specific recommendations from the AQUAMONEY Technical Guidelines for Practitioners.