Wetlands International

Socio-Economic Valuation of the Goods and Services of the Paraná Delta Wetland

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Courtesy of Courtesy of Wetlands International

Environmental problems can be analysed from different complementary points of view, from the perspectives of both the exact and natural sciences and the social sciences. From an economic point of view, one issue that often receives attention is the resource-allocation decisions that are taken by people, since these are what result in nature being cared for or damaged.

In order to make the environmental and natural resource management policy decision that will most benefit society whilst using the least possible resources, the consequences of such a decision and the resources it requires must be evaluated. To do so, a common unit of measurement is needed so that the different values that people assign to natural resources can be added up.

Indicating the value of a resource in monetary terms can help care for it by explicitly establishing the cost of carrying out activities which are incompatible with the conservation or preservation of said resource. With regard to ecosystems, the valuation of natural resources can influence policy decision-making despite the difficulties that characterize the valuation process, such as the uncertainty inherent in the way ecosystems function and that which originates in the incompleteness of the information available on the various processes involved.

It has been said that one of the reasons for the damage caused to wetlands is that there is no price on many of their functions, which therefore have no economic value for decision makers. This is the cause of what is called an information failure, that is, the value of wetlands is not properly understood because politicians and the general public are unaware of the role wetlands play and the consequences of the economic activities undertaken in them or nearby.

This is why the economic valuation of ecosystem goods and services has become more important in recent years. In the specific case of the Paraná Delta, the area’s value is also affected by the economic activities that take place there, some of which have a long history. Some of these activities – such as fishing, hunting, and recreational and tourismrelated activities – would suffer negative impacts if the wetland was not appropriately managed.

The objective of this study is to present an estimate of the value of the economic activities taking place in the Paraná Delta and of the ecosystem goods and services this wetland provides, in order to create a resource to inform public decisions about the use of the Delta, as such decisions often tend not to take environmental effects fully into account.

Such economic valuations of ecosystems are scarce, especially in Argentina. As such, both the description and the economic valuation of goods and services of the Delta contained in this study are an original research contribution.

They constitute an initial approach to information that will be of interest to various fields and may serve to ‘kick-start’ other related new challenges. Opening the way for people to look at the Delta differently is yet another way of contributing to its protection, and is an important first step that will enable further examination of those aspects that arouse most interest and most need to be developed.

While it is not the objective of this work to analyse the sustainability of economic activities that take place in the Delta, those that are in clear conflict with the conservation of the area have not been taken into account, as is the case with oilseed production, a characteristic agricultural activity of the Pampean region adjoining the Delta. However, the valuation process does consider activities such as cattle raising, which may or may not impinge on the conservation of the wetland, depending on the type of management practices that are followed.

The valuation task is relatively simple for those economic activities for which data is available on the characteristics of the relevant goods and services, the supply of these, and the prices paid for them. However, the quality and quantity of this information is not always sufficient for the necessary calculations to be made.

This problem is even greater for ecosystem goods and services, which are generally non-market goods. In this case, the scale of the goods and services provided by the wetland over a certain period of time is based on estimates, and the values of these were obtained using a range of methods that attempt to estimate the intensity of people’s preferences for these goods and services, as revealed by their behaviour or their answers to surveys, or by alternative means.

This valuation is more complex in the case of an ecosystem because of the multiple services it provides, the interrelationships between its components, and the uncertainty about the effects of human intervention on it.

The Paraná Delta provides multiple services and supplies a wide range of goods to those who live in or near it or who visit it frequently. However, the Delta also provides benefits for people who are not usually directly involved with it, as is the case with services such as climate regulation, flood control and storm buffering, the provision of habitat for wild flora and fauna, and the conservation of biodiversity.

Due to its size, the Paraná Delta includes areas with different supplies of ecological goods and services (wetland ecological units), which enable a range of productive activities to be carried out in the region. This makes the valuation process more complex than that of smaller, less diverse wetlands.

Any valuation relies on a prior assessment of the goods and services the area provides. In the case of the Paraná Delta, this study has compiled and summarized the information available on the main economic activities that take place there, such as apiculture, fishing, hunting, forestry, cattle raising, and recreation and tourism. In some cases, the existing data was supplemented by interviews with, or surveys of, the people who undertake these activities and the experts that study them.

In spite of this, a thorough characterization and valuation of the activities in question was prevented by the incomplete and biased nature of the data that it was possible to gather. Most of these activities were valued using the total income method, which consists of multiplying the quantity produced or extracted by the unit price of a product or service.

With regard to the ecosystem goods and services provided by the Delta, the benefit transfer method was used, which is based on estimates that have been made for other wetlands in order to obtain the value of the wetland to be studied. This procedure requires less time and resources than other more complex ones and is recommended for obtaining an initial approximation of the value of a resource, on the basis of which the appropriateness of an original valuation can then be assessed. Of the different benefit transfer options available, a meta-analysis function transfer was chosen, as this has been shown to provide better estimates than alternative methods.

The value that was estimated for the selected economic activities ranged from a minimum of USD 187/ha/year to a maximum of USD 372/ha/year. More than 80% of this value corresponds to cattle raising. In turn, the values obtained for the ecosystem goods and services provided by the Paraná Delta ranged from a minimum of USD 1,169/ha/year to a maximum of USD 1,277/ha/year. The sum of these two sets of values is the total economic value of these wetlands, which lies between USD 1,356/ha/year and USD 1,649. This is an initial approximation of the value of the Paraná Delta and constitutes the main original contribution of this study.

These results show the value of a set of economic activities and environmental goods and services provided by a single hectare of the Paraná Delta. Certain observations should be made regarding this. First, this calculation does not reveal the value of the modification of the study area through the loss or gain of a hectare of wetland, which is known as the marginal value and which may be higher or lower than the average value depending on the ecological and socio-economic characteristics of the area in which the hectare in question is located. Second, given the heterogeneity and size of the Delta, this average value for the region as a whole is likely to differ from the average per-hectare value within each of the ecological units the Delta is made up of. Third, this type of estimate is suitable for obtaining an initial approximation of the order or magnitude of the value in question, which makes it useful for decision-making regarding natural resource management policy, notably for land-use planning. However, it does not contribute to calculating the value of environmental damage such as the loss of a hectare of Delta due to an accident or an economic activity being undertaken that is incompatible with its conservation. This would require a site-specific valuation.

Given the importance of the goods and services of the Paraná Delta, it should be borne in mind that the information provided by this valuation is useful for decision-making on wetland management, but that it alone is not enough to ensure wetland conservation. Achieving this would require mechanisms that provide incentives to preserve these areas and maintain their supply of goods and services. This is what is known as internalization of externalities, but in more recent literature is referred to as capturing ecosystem benefits.

The valuation process carried out for this study has also revealed the shortage of the data that would be necessary to be able to value the services provided by the Delta more precisely. This is the cause of the ‘information failure’ mentioned at the start of this study, which is that those who make resource management decisions do not possess all the relevant information.

To correct this ‘failure’ it would be necessary, in the first place, to undertake a systematic survey of the available information on the production and subsistence activities that take place in the Delta, so as to reach a better understanding of them and estimate their value more rigorously. In particular, the statistical surveys carried out by government agencies would need to distinguish how much of each activity corresponds to the islands that form part of the Delta, which is not common practice.

On the other hand, in relation to ecosystem services, valuing the services of each ecological unit of the Delta would provide a more complete picture, as it is very likely that value per hectare differs according to which unit the land belongs to.

In conclusion, all of these issues relating to the valuation and use of this information contribute to the debate between the various stakeholders in the Paraná Delta, be they direct or indirect users of its goods and services, and whether or not they carry out activities that may be incompatible with care for the region, are interested in its conservation per se or are in charge of the design and implementation of policy measures that are instrumental to the care of the Delta and of sectoral policies relating to the economic activities that take place there.

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