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Ecosystem Services

Valuation of Wetland Ecosystem Services

Wetland values are often difficult to assess because they do not conform to our current system of economics. For the most part, wetlands are not seen to provide the same level of economic opportunity as other natural or semi-natural environments such as forests, agricultural and grazing lands. As a result, there are strong economic incentives to convert wetlands to more profitable uses of the land, which has contributed to a dramatic loss of wetlands in the last century. To help offset the impacts of converting wetlands to other uses, the Environmental Protection Agency and Oregon's Department of State Lands has created a framework for compensatory wetland mitigation. The framework includes a growing network of wetland mitigation banks. In exchange for impacts on wetlands, developers buy "credits" from mitigation banks, and the banks proceed to create or enhance wetlands within the confines of their boundaries. Measurements of both wetlands' biological functions and their social values are needed to prioritize wetlands and establish the proper acre-for-acre equivalence in trading. Otherwise, wetland restoration will occur on the cheapest, most cost-effective lands, which is neither ecologically nor socially desirable.

Wetland features such as size, geomorphic classification, amount and composition of vegetation are important biophysical indicators for determining the "functional-equivalence" of potential "compensation" sites. One such method for prioritizing wetlands by functions is provided by the interactive tools on the this website. However, the result of relying solely on functional-equivalence would be that wetland mitigation sites will likely be located far from areas where most of wetland damage and loss is occurring. Other indicators related to ecosystem services are required to determine "socio-economic-equivalence" of these sites. This socio-economic equivalence provides a crucial, negative feedback mechanism to those economic pressures which have cause the qualitative and quantitative loss of wetlands in the first place.

Ideally, assessment of the value of ecosystem services and prioritization of wetlands can be made with a common economic metric, a dollar value. There are numerous econometric techniques to this "monetization" of ecosystem service values, such as property hedonics, travel cost and contingent valuation. However, given the effort and expense, it is rare to see wetlands prioritization or trading based on these econometric techniques. An alternative approach uses non-monetary indicators of ecosystem service value.