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date: 19 August 2017

Benefits Transfer for Ecosystem Services

This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Environmental Science. Please check back later for the full article.

Nonmarket valuation is a key tool of ecologists and environmental economists to advise policy. What makes nonmarket valuation so difficult is that, as its name suggests, environmental amenities and ecosystem services are not traded in traditional markets with price tags. Rather, the value of these objects must be inferred, either directly by asking consumers, or indirectly through the price of other goods that make use of these objects. Acquiring and analyzing these types of data can be costly and can impose time constraints on final decision making. When policy decisions hinge on the value of a specific ecosystem service, these costs and delays can inhibit sound decision making. It is in these instances that benefits transfer can be used.

Benefits transfer is the projection of benefits from one place and time to another to estimate the benefits of a proposed project or policy; this includes the adaptation of an original study to a new policy application at the same location. The appeal of a benefits transfer is that it can be cost effective, both monetarily and in time. Using previous studies, analysts can select existing results to construct a transferred value for the desired amenity influenced by the policy change. Benefits transfer practices are generally applicable to valuing ecosystem services as well as specific types of ecosystem services. An ideal benefits transfer will scale value estimates to both the ecosystem services and to the preferences of those who hold values; benefits transfers for many applications only do the latter.

Given the range and style of applications of benefits transfer across varied areas of ecosystem service valuation, it is important to detail and discuss the nuances of the various types of benefits transfer as well as how successful the method has been in practice. Myriad methodological improvements in benefits transfer have appeared in the environmental and ecological fields, and it is crucial to grasp a sound understanding of these methods before implementation. Whether the analyst uses a simple value transfer, or a more refined meta-analytic function transfer, issues with commodity consistency, data selection, and sorting behavior need to be attended to. As is the case in primary valuation studies, benefit transfers are difficult to do well and require patient, careful, and rigorous analysis. Following the recent developments in transfer methods, data selection, accommodating value uncertainty, and robustness checks of the transfer, benefits transfer can be used reliably to provide sound policy advice for decision making regarding ecosystems services.