Beyond Monetary Measurement: Evaluating Projects & Policies Using Ecosystem Services (PDF)

environmental science & policy 32 (2013) 14–25 Available online at www.sciencedirect.com journal homepage: www.elsevier.com/locate/envsci Beyond monetary measurement: How to ev...

environmental science & policy 32 (2013) 14–25 Available online at www.sciencedirect.com journal homepage: www.elsevier.com/locate/envsci Beyond monetary measurement: How to evaluate projects and policies using the ecosystem services framework Frans J. Sijtsma a,*, C. Martijn van der Heide b,c,1, Arjen van Hinsberg d,2 a Faculty of Spatial Sciences, University of Groningen, P.O. Box 800, NL-9700 AV Groningen, The Netherlands b Natural Resources Division, LEI Wageningen UR, P.O. Box 29703, NL-2502 LS The Hague, The Netherlands c Van Hall Larenstein, University of Applied Sciences, P.O. Box 9001, NL-6880 GB Velp, The Netherlands d Netherlands Environmental Assessment Agency (PBL), P.O. Box 303, NL-3720 AH Bilthoven, The Netherlands article info abstract In this paper we focus on how to achieve better decision support when decision-makers use Published on line 24 August 2012 the ecosystem services (ESS) framework to broaden their evaluations. We contribute to the debate on valuation of ecosystem services by inquiring into how the ESS framework relates Key words: to the judgement and measurement provided by Cost-Benefit Analysis (CBA) and Multi- Evaluation Criteria Analysis (MCA) evaluation techniques. We argue that Multi-Criteria Cost-Benefit Ecosystem services Analysis (MCCBA), which is a carefully designed combination of CBA and MCA, provides a Endpoints good starting point for the evaluation of projects or policies involving changes in agricultural Well-being and natural ecosystem services. Cost-Benefit Analysis The main characteristic of this MCCBA approach linked to ESS framework is its threefold Multi-Criteria Analysis evaluative endpoint structure to account for (i) basic health, (ii) economic welfare, and (iii) higher well-being. The third endpoint includes concerns about the well-being of nature. The MCCBA approach utilises highly standardised cardinal or ratio scale measurements, in particular we use two existing measurements, known as Disability Adjusted Life Years for basic health, and monetary Net Present Values for economic welfare. We also introduce one new measurement: Threat weighted Ecological Quality Area to account for nature’s well- being. We argue that evaluation of projects or policies involving many different ecosystem services should use these three endpoint measurements. # 2012 Elsevier Ltd. All rights reserved. a socio-economic system ‘away from nature’ (Buijs et al., 1. Introduction 2010). And although high productivity increases in agriculture, as in forestry and fisheries, build on natural processes and Increased agricultural productivity has over time facilitated conditions, they too seem to shift agriculture ‘away from economic development in which larger and larger urban nature’, since agriculture faces an increasingly tense relation- concentrations play a pivotal role (McCann and Acs, 2011; ship with biodiversity and ecology (Björklund et al., 1999; Strijker, 2005). One could even say that increased Stoate et al., 2009). The ecosystem services (ESS) framework, as agricultural productivity has facilitated the development of highlighted by other contributions to this special issue, * Corresponding author. Tel.: +31 50 363 37 54. E-mail addresses: [email protected] (F.J. Sijtsma), [email protected] (C.M. van der Heide), [email protected] (A. van Hinsberg). 1 Tel.: +31 70 335 82 18. 2 Tel.: +31 302743062. 1462-9011/$ – see front matter # 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.envsci.2012.06.016  environmental science & policy 32 (2013) 14–25 15 Supporting services: Provisioning & cultural services: - Soil structure and fertility To From - Food - Nutrient cycling - Fiber - Water provision - Fuel - Genetic biodiversity - Recreation Regulating services: Other, non-marketed, services: - Soil retention - Water supply - Pollination - Soil conservation - Dung burial - Climate change mitigation - Natural control of plant pests Agricultural - Aesthetic landscapes - Food sources and habitat for ecosystems - Wildlife habitat beneficial insects - Cultural heritage values - Water purification - Atmospheric regulation Ecosystem disservices: Ecosystem disservices: - Habitat loss - Pest damage - Nutrient run-off - Competition for water from - Pesticide poisoning of non- other ecosystems target species - Competition for pollination Feedback effects of disservices from agriculture to agricultural input (e.g., removal of predator insect habitats can, for example, encourage pest outbreaks) Fig. 1 – Ecosystem services and disservices to and from agriculture. Source: Zhang et al. (2007). denotes the benefits that people derive, directly and indirectly, policy options, say, A, B, and C to X in Table 1 (Belton and from nature (Turner et al., 2010). In a way, the ESS framework Stewart, 2002). Deciding which option is best requires an can be seen as a means of reconnecting urban and agricultural evaluation of the different impacts of the policy options. systems to nature, by informing decision-makers of the many Basically, the ESS framework broadens the scope of evalua- and complex interrelations between these systems and tions by encouraging decision-makers to consider a wider nature. range of impacts and thus a larger number of impacts. If a The authoritative Millennium Ecosystem Assessment (MEA, decision-maker who would normally consider a certain set of 2005) distinguishes 30 ecosystem services3 which specify policy options (Table 1: A, B, and C, to X) and a certain set of these links between nature and human well-being and assigns impacts (1, 2, and 3 to Y), were to also use the ESS framework, them to four distinct categories: (i) provisioning services, such this implies that the set of Y impacts under scrutiny in the as the production of food, timber, fibre, and water; (ii) decision process is enlarged to Y plus the amount of ESS regulating services, such as the regulation of climate, floods, considered. For example, a farmer who needs to decide on a and disease; (iii) cultural services, such as knowledge, spiritual new crop might normally consider impacts on, say, his and recreational benefits; and (iv) supporting services, such as income, future market possibilities and daily workflow; nutrient cycles, soil formation and crop pollination. Zhang however, using the ESS framework would also alert him et al. (2007) depict a more detailed picture of 27 services related (see Zhang et al. (2007) to impacts on pollination, natural to agriculture that also includes six disservices (Fig. 1).4 If we control of plant pests, water purification, etc. Likewise, a consider farm level management options (Ribaudo, 2008), this regional agricultural policy maker deciding on a new subsidy picture becomes even further elaborated. scheme for small farmers might normally consider, say, Significantly in support of our aim is that the ecosystem number of farmers affected, impact on their living standard, service framework is designed to assist decision-making erosion impacts, and changes in land ownership; however, (Fisher et al., 2009; MEA, 2005). Decision-making typically using the ESS framework would stimulate him to consider, involves a choice between alternative project variants or with MEA, the impacts of the new scheme on a broader range of regulating services (i.e., climate regulation, waste treat- 3 ment, disease regulation, etc.) as well as cultural services Without claiming to be complete. We therefore sometimes speak of ‘30+’ ecosystem services. (impacts on cultural diversity, spiritual and religious values, 4 Zhang et al. limit cultural services to recreation and rank the aesthetic values, social relations, cultural heritage values, and others under the heading of other, non-marketed services. Like MEA, recreation). If the decision-maker follows Zhang et al. (2007), their list is more illustrative than complete. there may be 27 ESS; if the MEA is followed there may at least 16 environmental science & policy 32 (2013) 14–25 Table 1 – A basic decision-making scheme and the consequences of the ESS framework. be 30 ESS (see Table 1). The decision-maker has to take into we think that the ESS framework could produce confusion due account the ESSs that are relevant and new. Obviously not all to the interrelatedness of many impacts, and may generate an ecosystem services must be new to the decision-maker; there unwieldy multi-disciplinary research agenda due to many may be some overlap between the 1 to Y impacts and the ESS 1 new (but not yet) fully documented impacts, and therefore not to 30+ impacts. Nevertheless, due to the stance of the ESS improve on decision support (Wallace, 2008). framework of reconnecting to nature, the aim is to give greater In this paper we focus on how to achieve better decision attention to commonly under-represented or disregarded support when decision-makers use the ESS framework to links between nature and human well-being; the ESS broaden their evaluations. This topic has been under framework will generally imply a broader range of impacts considerable debate for some time (Carpenter et al., 2009), a to be considered. major issue being the amount of monetisation of ESS that is Evaluation first involves calculating scores to fill the cells achievable when we consider all ecosystem services (Braat (a1 to xess30+ in Table 1) measured in their natural units (tons, and ten Brink, 2008; Clark et al., 2000; Costanza et al., 1997; Euros, meters, etc.). Evaluation methods then support deci- Sukhdev, 2010), or mainly agricultural ones (Dale and Polasky, sion-making by somehow adding up scores of the considered 2007; Porter et al., 2009). This monetisation debate is strongly impacts into a more compact score, commonly often a single related to the use of Cost-Benefit Analysis, but decision score for each policy or project option (az to xz, in Table 1; see support using ESS is not limited to CBA. Multi-Criteria Analysis below for how CBA and MCA do this). In the process of (MCA) is also a very popular evaluation tool for ESS related reaching a more compact score, the natural unit measure- decision support (MEA, 2005; Slootweg and Van Beukering, ments have to be brought to a common measurement scale 2008). This paper in Section 2 considers the merits of both CBA (Sijtsma, 2006). and MCA in handling the added complexity due to the shaded Although the ESS framework has great potential for area of Table 1, and argues for the use of a mixed approach improved decision-making, in our view this potential can (MCCBA) to provide solid decision support in this setting. This only be realised if the evaluative structure is analytically MCCBA approach implies working with a threefold division in sound, and the accompanying empirics of decision support are well-being domains, and three essential standardised mea- standardised (Kontogianni et al., 2010) and easy to use and surements. Two of these measurements already exist, while understand (Cowling et al., 2008). In their absence, however, the third concerns a new measurement of nature well-being:  environmental science & policy 32 (2013) 14–25 17 Threat Weighted Ecological Quality Area (T-EQA), discussed in - Utilitarian CBA fits well with the ESS framework Section 3. Finally, Section 4 discusses key aspects related to - To work efficiently, CBA requires monetary measurement of the future research agenda. all impacts - Combined use of CBA and ESS framework provokes a very substantial monetisation research agenda, which is pres- 2. A sound evaluative basis ently under fierce methodological debate. 2.1. Introduction 2.3. MCA and ESS To facilitate the trade-off among (competing) goals and to Multi-Criteria Analysis (MCA) is also used to uncover the evaluate the wide ranging impacts project might have on trade-offs between agro-ecosystem services that people are ecosystem services, such as a change in cultural heritage willing to make (Carpenter et al., 2009; MEA, 2005; Slootweg values or changes in pollination, a variety of evaluation tools and Van Beukering, 2008). MCA takes as its starting point the can be used. Cost-Benefit Analysis (CBA) and forms of Multi- preferences of a decision maker or group of decision-makers Criteria Analysis (MCA) are the two most commonly employed or sometimes a broader group of stakeholders relevant to a tools capable of responding to this concern. project (Belton and Stewart, 2002; Gamper and Turcanu, 2007; Pomerol and Barba-Romero, 2000). As a project or policy 2.2. CBA and ESS decision will have various different impacts, MCA measures these impacts as separate criteria. The criteria structure for an Cost-Benefit Analysis takes as its starting point the prefer- MCA assessment has to meet a number of conflicting ences of individuals with regard to proposed changes demands (Keeney and Raiffa, 1976). On the basis of the scores (Boardman et al., 2011; Hanley and Barbier, 2009; Mishan on the different criteria, and the relative weights given to the and Quah, 2007; Pearce et al., 2006). Utilitarianism forms the criteria, the best choice can thereby be determined. foundation for CBA, which apparently does not conflict with At the measurement stage an important intermediate step in the ESS approach. As van Kooten (2000, p. 147) notes, any MCA is to make a so-called impact matrix, which shows the ‘‘[u]tilitarians consider only the instrumental values of scores on all the impacts for all the considered alternatives. But biodiversity...’’ and the ESS approach does just that. for many decision-making processes the impact matrix is far In its design, CBA is closely connected to what is known as too cumbersome. For instance, in the MEA study an unwieldy an ‘endpoint approach’ in the ESS debate (Chapman, 2008; table of four and a half pages is presented for changes in all ESS Kontogianni et al., 2010). In CBA all impacts are assessed with (MEA, 2005, pp. 41–45). An overly large impact matrix provides the welfare of the affected individuals as its aim. It is geared too little judgment; therefore as is common in MCA, it is made towards marginal changes in welfare from the given situation more compact (Belton and Stewart, 2002). (Cowling et al., 2008). In its function, CBA employs monetary An elaborate criteria table will normally have a tree-like Net Present Value (NPV) calculations to determine whether a hierarchical structure, with the massing of all criteria into certain decision or action will result in a net benefit or a net groups (branches) and sub-groups (twigs). Adding the scores of loss to society. Although focussed on individual preferences, different criteria requires scaling criteria and assigning weights the flexibility of CBA and the utilitarian ethics underlying it (Hermann et al., 2007). For instance, in The Millennium permit the suppression of individual preferences for the good Ecosystem Assessment the impact scores were scaled to +, 0 of the ‘collective’, that is, wider society, as long as the gain or ; whereas for the weights between criteria, a unitary weight exceeds the loss (van Kooten, 2000). – giving all criteria an equal weight – was chosen. The giving of In its measurement, CBA relies largely on the function of weights is very subtle yet essential to MCA. However, for what markets; this is where its monetary stance comes from. Using follows it is crucial to distinguish between higher and lower market outcomes facilitates the work of adding welfare order weights. Within a hierarchically ordered tree of criteria, changes because – provided that the market functions weights for sub-criteria are known as lower order weights, an efficiently – the market carries out much of the adding up example of which may be the relative weight of say methane for the evaluator. However, of the 30 ESS that we count in the and nitrous oxide, which are added up in a so-called CO2- MEA, only a mere 25% of them are measured readily in market- equivalents, a measurement commonly used to assess the related monetary terms. If the market cannot handle the ecosystem service of climate regulation (Hertwich et al., 1997). valuation, the CBA analyst needs to calculate comparable Weights for the near final-criteria, which are high in the values. Therefore, since lists of ecosystem services are always hierarchical order of criteria, are known as higher order weights; lengthy, and only about one-quarter of them are market- for example, the relative weight of employment versus biodiversi- related, the combined use of CBA and the ESS framework thus ty. One important lesson learned in MCA practice is that the calls for a Herculean monetisation effort, as can be observed in higher order weights are often easily contestable in public major ESS studies (Björklund et al., 1999; Braat and ten Brink, debate, while many lower order weights, which are frequently 2008; Costanza et al., 1997; Porter et al., 2009). In fact, economic provided by experts, may remain uncontested (Sijtsma, 2006). valuation has become the battleground for oppositional The following observations about MCA and ESS can now be notions of how economics should be practiced (Clark et al., stated: 2000; Sugden, 2005; Sijtsma, 2006). The following observations about CBA and ESS can now be - Using the MCA methodology for ESS assessment will easily set out: lead to an elaborate criteria structure of (over) 30 criteria 18 environmental science & policy 32 (2013) 14–25 Table 2 – The general valuation approach of CBA, MCA and MCCBA. CBA MCA MCCBA Judgement criterion Welfare changes of the population Preferences of decision makers Well-being changes of the experiencing effects: costs and benefits or stakeholders concerning the impact population(s) (as with CBA) to whomever they accrue. changes on different criteria. including non-monetary measurement of health and biodiversity concerns of the population (building on MCA). Measurement stance Preferably monetary measurement. Criteria measured in their own Consensus-based measurement Costs and benefits over time aggregated dimensions; aggregation (monetary and non-monetary), using social discount rate. requires scaling of criteria. thus avoiding easily contested Relative weighing of criteria higher order relative weighing. by decision-makers or stakeholders. - Adding these criteria requires scaling and weighting of the 2.5. A deeper understanding of the evaluation problems criteria. Scaling usually leads to measurement that follows the weakest form of quantification: most often +, 0 or The MCCBA approach (Sijtsma, 2006; Sijtsma et al., 2011) as a scores. mixed method approach has as its point of departure the - Giving weights for higher order criteria is a complicated and observation that CBA and MCA encounter continuous valua- thorny problem. tion and communication problems in providing formal decision support for projects or policies involving ESS. 2.4. MCCBA and ESS Straightforward CBA and MCA assessment results are there- fore never beyond dispute. We see at least two fundamental A mix of CBA and MCA may also be used. Some mixes loosely and shared reasons for the problems which we sketched above combine CBA and MCA, others are more developed and when discussing CBA and MCA separately. standardised. Cost-Utility Analysis (CUA), which is widely The first fundamental reason for the ongoing problems is used in health care evaluation, is an example of a developed indicated by the unclear mix of different spatial scales. As the and standardised combination (Drummond et al., 2005; MEA 30 ecosystem services form shows, environmental McPake et al., 2002, pp. 93–94).5 CUA combines the standar- functions may operate at local, regional, national or interna- dised measurement of health impacts using Disability tional scales, and the provisioning service may function Adjusted Life Years (DALYs)6 alongside monetised costs. likewise, but from an evaluation-oriented measurement However, Cost-Utility Analysis has been designed in particular perspective the actually relevant spatial scale when filling for health evaluations, not for the ecosystem service frame- the impact scores of Table 1 needs to be clear. work. As Slootweg and Van Beukering (2008) show in their The second fundamental reason relates to different interesting overview of ESS evaluation cases, thus far only concepts of well-being (Gasper, 2010). In our view the loose combinations of CBA and MCA are used in this field (in distinction of cultural services within the ESS framework conjunction with the separate use of each technique). makes this issue most pressing and we will therefore discuss For a broad-based technique in which CBA and MCA are cultural ecosystem services and well-being in some depth. combined in a standard and theoretically grounded way, we Apart from the well-known recreation and leisure activi- will turn to the MCCBA approach developed in Sijtsma (2006). ties, the cultural ecosystem services include spiritual, philo- Like Cost-Utility Analysis, the MCCBA approach uses standard sophical, religious contentment, aesthetics, knowledge, and measurements of health impacts alongside monetised costs education (Wallace, 2007). The cultural services distinction and benefits, but unlike Cost-Utility Analysis, it is not limited within the ecosystem services is strongly grounded on only to health assessments: it can be applied to a wide range of Maslow’s hierarchy of human needs (Maslow, 1948; Rowan, assessment problems. As we will show below, the use of 1998; Wallace, 2007) in which cultural services are situated in MCCBA for ESS assessments involves at the least adding non- the upper part of the needs hierarchy. The lower needs are, for monetary measurement of biodiversity impacts along with instance, requirements for food and safety. Lower needs are health impacts and monetised costs and benefits. known as deficiency-dominated needs in which individuals are Table 2 outlines the general evaluation approach of CBA, motivated to overcome the discrepancy between their actual MCA and MCCBA concerning the two essential dimensions: state and some optimal adequate state. For the higher needs, their judgement criterion and their measurement stance. known as growth needs, context and circumstances differ markedly, because at this stage individuals lack final targets or optimal states (Heylighen, 1992). 5 Cost-Utility Analysis can be seen as a specialised and standar- Heylighen argues convincingly that no Maslow-inspired dised form of cost-effectiveness analysis, and thus comes from hierarchy of needs can ever be absolute; any class may only be the cost-benefit tradition (Boardman et al., 2011). The utility part of it is, however, closely connected to Multi-Attribute Utility The- a rough approximation. Furthermore, Heylighen’s systems ory, which comes from, and may even be central to, the MCA approach is extremely useful since it links the personal/ tradition (Edwards and Newman, 1982; Jiménez et al., 2003). individual needs level to the regions and countries level. 6 Or Quality Adjusted Life Years (QALYs). Finally, and significantly to understanding CBA, MCA and  environmental science & policy 32 (2013) 14–25 19 MCCBA’s possibilities, Heylighen redefines Maslow’s hierar- decision-makers or stakeholders to give weights to criteria – to chy of needs in terms of the urgency of (potential) perturbations specify trade-off relations – without specifying just how much experienced by the system. Urgent perturbations have a high change in the criteria is at stake (Keeney, 1992, p. 147). probability of destruction and a short time horizon. Non- Accurate measurement of our separate concerns in a limited urgent perturbations have a weak probability of destruction, a set of information-rich indicators can therefore help decision- long time horizon and high potential for ‘growth’ (Heylighen, makers better realise their trade-off preferences; since they 1992). Using Heylighen’s interpretation, we may define a are ‘learning how to think’.9 tripartite division of well-being, which is defined by two extremes: with basic well-being as completely urgent and 2.6. MCCBA and ESS: synthesis higher well-being as completely non-urgent (see van Kooten’s high level ethical norms, 2000). For lack of a better word, we will Having achieved this deeper understanding of the issues we label the intermediate category between the two extremes as may now come to a synthesis. The CBA and MCA methodolo- ‘everyday’ well-being. From an evaluation and measurement gies have different evaluative strengths and weaknesses, but perspective, it is then fruitful to identify three well-being the MCCBA methodology combines the strengths of both domains: basic, everyday and higher well-being.7 This tripartite techniques. First, the judgement criterion of an MCCBA distinction is designated solely for the purpose of evaluation, criterion resembles that of CBA: it uses the costs and benefits i.e., in helping decision-makers cope with Table 1, since the of explicitly defined impact populations: ‘regardless to whom specification of these domains highlights crucial character- they may accrue’ within those populations. However, MCCBA istics of preferences, especially on the issue of possibilities for often works with at least two impact populations or spatial measurement and specifying judgement on trade-off relations levels. The first scale level stays close to the political or (compare Table 2). decision-making reality and thus is proximal to administra- Hunger, thirst and physical safety correspond to an tive borders.10 The second scale level uses the global or the individual’s basic health, and if they are deficient they will biggest spatial level on which impacts can be observed.11 have the highest urgency. In this context there are no trade- Analytically therefore, the impacts are divided between offs, just dominance. Thus those impacts in Table 1 that impacts in an ‘own’ region and ‘other’ or ‘all’ regions. directly affect basic needs will simply have a different priority Second, in so far as measurement is concerned, MCCBA than all others: a farmer struggling for survival will not care uses both CBA and MCA options. When choosing the best way too much for the educational services his situation may of measurement, MCCBA uses the theoretical notion of provide. In contrast, the higher well-being domain, that of consensus based aggregation, which implies that the procedure growth needs, is characterised by openness and learning. For to measure impacts should obtain broad consensus among higher order needs, there is less urgency to make clear those involved in the evaluation concerning: (1) the minimal distinctions, and what’s more, it is more difficult to do so. ‘‘The relevance of a criterion/effect measured and (2) the type of least ‘urgent needs’ correspond to completely ill-defined measurement, which should be both understandable and problems: if your goal is learning or exploration, then there important to measure it that way (Sijtsma, 2006). In practice, is no criterion which tells you when you have achieved your the use of monetised measurement is confined to more goal.’’8 market-economic and efficiency-related impacts and that, in For an ESS evaluation and MCCBA, opaqueness in the addition to these monetised impacts, only a limited number of definition of aims that characterise a higher well-being standardised impact measurement criteria are included. domain does not mean the absence of measurement options. Third, MCCBA, like CBA and MCA (but unlike the ESS Quite the contrary. The implication here is that it is harder to framework as presented in MEA) is endpoint-oriented. If we find fixed and clear-cut higher order weights, that is, trade-off examine the ESS framework with an endpoint view, we see relations between the 1, 2, and 3 to Y to MEA 30+ impacts of that it is unusual that biodiversity concerns, or nature’s well- Table 1 that relate to the higher well-being domain. For being concerns in general, are not directly measured. This is example, it will be hard to detect clear-cut trade-off relations odd for two reasons, first because the protection of nature is stating how much money people are willing to offer to relieve apparently the motive underlying the ESS framework. Second, world poverty or halt the loss of biodiversity (Turner and the intrinsic value of nature, according to CBA analysts, is a Fisher, 2008). Such are tough questions indeed. Nevertheless, separate concern, and is distinct from mere use values. The poverty and the protection of biodiversity are clear concerns, value of nature takes a significant position in the category of and to specify, that is, to measure, exactly how much world higher well-being, as we will see below. Surveys indicate that poverty or how much biodiversity is at stake when choosing preferences for biodiversity conservation are not (only) between policy options is important information. The major services-based; concerns about nature and biodiversity are, MCA thinker Ralph Keeney called it the most common and at the same time most critical mistake in evaluations to allow 9 Here is where the MCCBA approach differs strongly from a CBA approach in which preferences are considered as given. They may 7 be complex (or lexicographic) but they are nevertheless consid- Compare the tripartite Maslow-inspired scheme of Alderfer and comparable schemes (Rowan, 1998), and the composition of ered as given. 10 the Human Development Index (UNDP, 2009). This has a theoretical logic close to MCA, with its focus on the 8 decision-maker. Here, as elsewhere, there is a connection between higher and 11 lower. Stable low-order distinctions form the basis for flexible This logic is closely connected to CBA’s a-spatial market high-order distinctions (Heylighen, 1992, p. 54). stance. 20 environmental science & policy 32 (2013) 14–25 ESS framework M C C B A a p p ro a c h Intermediary Final Endpoint Essential Essential ESS ESS domains standardised standardised evaluative endpoint endpoints measurement Higher Biodiversity T-EQA Regulating Cultural well-being Health of others DALY services services Every day Economic Monetary well-being welfare NPV Support Provisioning services services Basic well- Own health DALY being Fig. 2 – The relations between agro-ecosystem services and the standardised cardinal endpoint measurements of MCCBA. first and foremost, moral preferences (The Gallup Organisa- The second endpoint, economic welfare, can be measured tion, 2007). In the MCCBA approach nature’s well-being is exclusively in monetary terms using a Cost-Benefit Analysis measured separately. approach to valuation. For every day well-being a Cost-Benefit Our combination of the ESS framework and MCCBA approach Analysis can capture a substantial amount of changes in well- gives rise to the evaluative framework presented in Fig. 2. being. The figure starts at the left with four groups of ecosystem Cummins (1996) carried out an impressive inventory of services. Moving from left to right, the figure leads us to the indicators for well-being and classified them as the following: essential standardised endpoint measurement. At the upper left the emotional well-being, community, intimacy, material well- two groups of intermediate ecosystem services (ESS) are shown. In being, productivity, safety domain, and health domain. Given an evaluation, impacts on these intermediate services should this list, it may be disingenuous to argue for completeness of preferably be assessed on the basis of their impact on the final CBA to capture all impacts, which is certainly one reason for ESS: cultural and provisioning services (Wallace, 2007). The specifying higher and basic well-being domains. However, procedure follows the CBA and MCA logic of avoiding double CBA clearly has much to offer in this intermediate ‘everyday’ counting and redundancy of criteria. Nevertheless, a well- level: on material well-being and productivity. founded evaluation requires that the impacts be better The third endpoint is higher well-being. This is part of the structured, and this is shown as such in the right side of Fig. 2. growth part of well-being. The higher the needs, the more the The final ESS impact on human well-being is divided in orientation of well-being of an individual or society (a system three endpoint well-being domains: basic well-being, every- in Heylighen’s terms) turns to the well-being beyond itself, day well-being and higher well-being. Within these encom- and in various ways becomes more dependent on it (Koltko- passing well-being domains, MCCBA is focused on essential Rivera, 2006). Fig. 2 shows two essential elements which may standardised evaluative endpoints and their possible mea- be recognised as recurring concerns in the debate on surements. As a standardised minimum, three endpoint biodiversity, sustainability and ecosystem services (Sijtsma, measurements using cardinal/ratio measurements are pre- 2006): the element of biodiversity (loss) and the element of the sented: DALY (own health and health of others), monetary Net basic needs of others (often extremely poor people). For the Present Value of a Cost-Benefit Analysis, and T-EQA (for latter, the health measurement of Disability/Quality Adjusted biodiversity). Life Years can be central. But how to measure biodiversity or, Basic health impacts can be measured in Disability Adjusted to mirror the human well-being term: nature’s well-being? Life Years (DALYs), which is the World Health Organisation’s The next section will discuss a more accurate measurement of standardised burden of disease measure (WHO, 2009).12 With the concerns for biodiversity and explicate a new measure- regard to hunger, lack of safety, changes in life expectancy, ment concept for nature well-being: Threat weighted Ecologi- poor living conditions, and poor health, the DALY measure- cal Quality Area (T-EQA). ment is accurate, information-rich and easily (dis)aggregated. However, although the measurement of health in DALY is the same for ‘own’ health and others’ (regions’) health, the trade- 3. T-EQAs in relation to agro-ecosystem off relations, i.e., the weight given to ‘own’ and ‘others’ DALYs, services may of course differ substantially. We now turn to how the well-being of nature can be measured 12 Or Qalys, with less standardised weights, but several standar- using Threat weighted Ecological Quality Area: T-EQA. dised ways to derive weights (Drummond et al., 2005). Ecologists often use the term biodiversity to describe the  environmental science & policy 32 (2013) 14–25 21 well-being of nature. Biological diversity, or biodiversity, is the abundance of threatened species within an ecosystem type, variety of life on earth, within species, between species and the higher the loss of such ecosystem should be valued. To put across ecosystems. The United Nations Convention on it another way, the impacts of a project on biodiversity can be Biodiversity (CBD) uses a large set of indicators to monitor measured meaningfully when the ‘local’ intactness of trends in biodiversity (EEA, 2010). The most commonly used ecosystem types is explicitly weighted with a value that indicators are the area of natural of semi-natural ecosystems indicates the influence of the EQA of a specific ecosystem type and the numbers of species living within them. We propose on the determination of the national or regional biodiversity. here to combine both, that is, to measure the area of The weights for each specific ecosystem type should, to stress ecosystems as the natural unit (in hectares, or square again, be based on objective systematic ecological data sets, kilometers), and then use species data to assess the quality such as the relative number of red list species within an of the area. ecosystem type. To that end we define Ecological Quality Area (EQA) as the The general procedure used to calculate a T-EQA score is basis of our nature value indicator. EQA is strongly related to to14: the concepts developed by ten Brink (2000) and comparable to (1) Determine the area of the different ecosystems – whether Strijker et al. (2000). The EQA combines two ecological natural, semi-natural, agricultural, or urban – relevant to aspects, namely the total area of an ecosystem or the the project under consideration. combination of ecosystem[s] and ecological quality. Ecologi- (2) Calculate the local intactness of the relevant ecosys- cal quality is measured from 0 to 100%, depending on the tems based on the presence or abundance of charac- quality level of an ecosystem compared to an ideal reference teristic species relative to the number or abundance of the same type. The ecological quality of terrestrial systems that would be present in an intact ecosystem. This can be based on the so-called mean species abundance (MSA) yields a percentage score ranging from 0 to 100%. (ten Brink, 2000; MEA, 2005; ten Brink et al., 2002). The MSA Rescale this ecological quality from 0 to 1 and multiply provides an indication of the impacted state of an area the scores for the different ecosystems by their area. relative to the pristine and un-impacted state of the This gives the EQA per ecosystem. ecosystem present in the area under consideration. From (3) Multiply the EQA of the ecosystems with a standardised an agro-biodiversity perspective, the point of reference varies weight factor indicating how much the ecosystem types per ecosystem. Natural ecosystems have a references set at a contribute to the national or regional MSA. The relative natural state before human influence (as in the global MSA for number of red list species in an ecosystem can be used biomes). More semi-natural or agricultural ecosystems have as a first proxy. The average weights of the eventual list their own reference referring to natural ecosystems or of ecosystems on which the ecological evaluation data systems with low-intensity farming. Modern high-intensive are based should be 1. Extremely threatened ecosystems agriculture does not measure up to this ‘ideal’ reference should have the highest weight, while the most point. If for example the Ecological Quality of an area with a commonly occurring ecosystem with common species specific ecosystem is 100%, then the health of the area’s should have the lowest weight. The multiplication factor biodiversity is similar to the natural or low-affected state of between the highest and lowest weight is what defines this specific ecosystem. As such, from the perspective of the Threat weight at a given spatial scale.15 individual ecosystems, the ecological quality can be regarded as an indicator of ecosystem intactness.13 This T-EQA measurement combines abundant ecological However, the EQA indicator does not provide information information in only one aggregated (cardinal) measure on the relative preferences for various ecosystems. A hectare (Sijtsma et al., 2011). From an evaluation point of view, the of intact semi-natural hayfield cannot be compared to a T-EQA indicator is intellectually sound as well as intuitive in hectare of natural woodland. It is exactly this point which is its measurement of nature impacts. It starts with the area of so often at stake in evaluation because not every ecosystem ecosystems (A); the bigger (or the more natural) an area is type, or the species within them, is of similar societal negatively (positively) affected by a project, the worse (better) concern, evidenced by the length of red lists of threatened the nature score of this project will be. Loss of high quality (EQ) species, the structure of many national and supra-national hectares, e.g., forests with myriad forest species, is more nature policies, and many (if not all) environmental impact costly than the loss of hectares with scant ecological forest assessments. As a general evaluation procedure it is therefore quality. Furthermore, the more threatened (T) species are in logical to apply weights to the different ecosystem types in the negatively (positively) impacted ecosystems, the worse is order to reflect their significance in protecting biodiversity at their loss (the greater the gain) in terms of T-EQA. All these a national or regional scale. To make this weight giving process uncontested, it should be based on objective 14 ecological data on the degree of threat of the ecosystems or See Sijtsma et al. (2009) for a detailed explanation in Dutch. See species under consideration. The larger the number or Sijtsma et al. (2011) for a re-evaluation with T-EQA of three Dutch CBA studies. 15 Note that this weighing differs per spatial level. In the 13 For a worldwide application, the use of a historic reference is Netherlands for terrestrial systems we are currently working with easiest due to data availability. One may also use other references a weight factor between the highest and lowest of 24: the weight than the historical pristine state. In targeting nature policies, use given for ‘‘Threat’’ ranges from 0.1 (highly common ecosystem) to is often made of well-developed ecosystems elsewhere, in undis- 2.4 (highly threatened ecosystem), around the median of 1.0 turbed or less disturbed contemporary conditions. (Sijtsma et al., 2009, 2011). 22 environmental science & policy 32 (2013) 14–25 elements are often measured separately in environmental always be measured16 as a minimum. For the interpretation of evaluations but not in one measurement, and not using impacts, a standardised and cardinal/ratio measurement is standardised cardinal/ratio measurement. essential since it eases comparison of the size of impacts across projects and policies. Lists of services from the ESS framework as in Table 1 should be assessed as to their impact 4. Discussion and research agenda on the three endpoint concerns. Obviously, this may still present a substantial quantification research agenda however, In our view, the MCCBA approach can be defined as an ample non-contested reference numbers exist at different integrated and hybrid methodology: integrated because it is geographical levels. characterised by the use of both ecological, health and To illustrate the relative ease of quantification, we present economic data, and hybrid because it is characterised by a the hypothetical, though not farfetched, numbers in Table 3b. multi-method use of alternative valuation methodologies that The table depicts ‘state’ indicators for ecological quality, go beyond monetary measures alone. In the remainder of this health (i.e., burden of disease) and economic well-being, for paper we will discuss essential characteristics of the approach three different types of countries and globally. These do not and the research agenda that it engenders. represent the change measurements that are pivotal to an evaluation; but rather these reference numbers show that for 4.1. Testing T-EQA use and understanding ecology, health and economic well-being, measureable infor- mation is available for all types of countries. To measure nature well-being we proposed T-EQA. If we The MCCBA approach has as its focus cardinal/ratio examine T-EQA from a more technical measurement perspec- indicators that can incorporate consensus-based weights in tive within MCCBA, its consensus-based quality has to be order to ‘add-up’ information within the value domains. At addressed, i.e., are the expert weights regarding the degree of present, we do not have international weights for the Threat threat of ecosystems indeed uncontestable? And is the weights of the T-EQA; this lack should be further developed in ecological quality measurement easy to understand by research. The good news is that, at the global level, it is not different stakeholders? actually the lack of data which complicates the setting of the We have shown above that measuring nature well-being is weights; the problem here is to figure out how to test the a criterion with enough minimum relevance, but is the weight factor in evaluation cases and also find a way to proposed measurement understandable, and is it widely seen standardise at the global level. as important to measure it in the way proposed? These issues Additional criteria covering impacts not measured by these should be tested in future research to ascertain how much its essentials may be added to individual evaluations, crucially by use helps decision-makers and stakeholders. This research is following the proper rules of non-double counting and non- now underway in the Netherlands. From limited Dutch redundancy. Further research is needed as to the extent of the experience thus far, it is clear that T-EQA is greeted with different dose–effect relations that can be established in substantial enthusiasm by both analysts and decision-makers different types of evaluations. (Wessels et al., 2011), but to CBA analysts its relation to welfare measurement is not always clear (De Blaeij and Verburg, 2011). 4.3. Beyond the monetary valuation battleground Moreover, EQAs have proven to be more easily calculated consensus-based assessments than T-EQAs, and that further What then does the combination of the ESS framework and experience and debate are needed to establish stable threat the MCCBA approach bring to the evaluation of (agricultural) weighing measurements for water and international biodi- policies and management? As we have seen, using CBA leads versity. to difficult monetisation efforts, while using MCA leads to many ordinal (+ or ) scores, and higher order weight 4.2. Empirical measurements and completeness assigning problems. MCCBA avoids monetisation where it is difficult and does not use weights for higher order value There is not an exhaustive set of standardised cardinal/ration judgments between, for instance, health and economic well- measurements to account for every aspect of the three being or between biodiversity and health. It only uses weights domains of well-being, but essential measurements within these endpoint domains. Therefore quantification, have been developed within these domains. In the present which is so essential to decision support, can be easier, more paper we focus on three essential measurements: health in standardised and more transparent. The MCCBA standpoint of DALY, economic welfare in monetary NPV and nature’s well- specifying the impacts consistently for different regions is being or ecological quality in T-EQA, which we think are essential to MCCBA quantification. fundamental to ESS-related evaluations, as illustrated in Table The scores in the three domains are not added up. They can 1. Table 3a depicts the impact of using MCCBA for project and be interpreted in an objective way using ratio analysis (like policy evaluations that involve ESS. Instead of leading to a cost-effectiveness analysis), which may help decision-mak- single score outcome for all policy options, Table 3a shows that ing (this is a formal stage in the MCCBA approach; the MCCBA approach generates separate scores in different Sijtsma, 2006). Still, the bottom line is that MCCBA avoids well-being domains. Establishing trade-off relations, i.e., the – commonly disputed – highest order weights, not because weights between these domains is not easy; it is far easier within one domain. The standardised impacts proposed in 16 Provided of course the project or policy alternatives differ on Table 3a are not complete, but they are essential. Each should the scores.  environmental science & policy 32 (2013) 14–25 23 Table 3a – The basic decision-making scheme (from Table 1) and the impact of the use of MCCBA as an evaluation method. Policy or project options considered by the decision-maker: A … X Impacts 1 a1 … x1 evaluated by 2 a2 … x2 the decision- … … … … maker: ESS 30+ aess30+ … xess30+ MCCBA evaluation method Well-being domains: Key indicators: Basic well- ‘Own’ basic health (in DALYown ) aDALYown … xDALYown being Every day Net monetary costs and benefits aNPV … xNPV well-being (in NPV) Higher well- Nature well-being (in T-EQA) aT-EQA … xT-EQA being Health of others (in DALYothers) aDALYother xDALYother Table 3b – Hypothetical though empirically inspired reference numbers quantifying the state of ecological quality, health (i.e., lack of health: the burden of disease) and economic welfare (for three different income levels of countries and the world). A low income A middle income A high income World country country country Reference values for key indicators DALY/1000 inhabitants 500 300 150 237 EQA/ha 0.75 0.65 0.40 0.72 GDP/capita 500 4000 18,000 9800 Source estimates: DALY from WHO (2009); EQA from NEAA (2008); GDP at www.indexmundi.com/. it is inconvenient or theoretically non-optimal for decision obvious example of higher well-being concerns, about support to provide the weights, but because in practice we which we are continuously ‘learning how to think’. Moving see that they are difficult to provide in a consensus-based up in the hierarchy of needs we tend to have increasing manner. MCCBA does, however, help interpret evaluation concern for the basic health and security of people other outcomes due to its standardisation and cardinal/ratio than ourselves. In line with this notion, the poor of the measurement; which will enable and enhance learning world suffering from famine and malnutrition increasingly and comparison options. As we have emphasised earlier, on depend on NGO actions in wealthy regions of the world the subject of higher order trade-offs and higher well-being, (Watts, 2000). we do not really know our preferences. We are learning how The same holds for the issue of intrinsic nature values, or the to think about them. The widely discussed distributional closely related non-use existence value as it is labelled in the impacts in CBA – ethical concerns – are commonly seen Total Economic Value concept (van der Heide et al., 2010; within CBA theory and practice as best treated descriptively Sukhdev, 2010). Unlike the utilitarian ESS standpoint, evidence without fixed trade-off weights. 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