Estimated Value of Environmental Benefits from NRCS WRP easements.

1. Estimated Value of Environmental Benefits from NRCS WRP easements. Felix Spinelli and Greg Kidd Senior Economist and Wetland Specialist, respectively; USDA, NRCS, NHQ SWCS 67thAnnual International Conference July 22-25, 2012 Fort Worth, Texas

2. Disclaimer Thoughts and opinions presented today are those of the authors and do not represent those of USDA or the Natural Resources Conservation Service.

3. Outline Introduction to WRP and Program Objectives Program History and Level of Activity Analysis Procedure Estimated Quality of Environmental Benefits Estimates of Environmental Benefits in Monetary Units Conclusions and Policy Implications Further Research Needs

4. Wetlands Reserve Program Objectives: to protect, restore, and enhance the functions and values of wetland ecosystems to attain: -  Habitat for migratory birds and other wetland-dependent wildlife, including threatened and endangered species and species of concern. -  Protection and improvement of water quality. -  Attenuation of floodwater. -  Recharge of ground water. -  Protection and enhancement of open space and aesthetic quality. -  Protection of native flora and fauna contributing to the Nation's natural heritage. -  Contribution to educational and scientific scholarship. History:Pilot program in 1992; nationwide in 1994 Acreage:2,043,019 acres; 10,976 parcels

6. Analysis Procedure (1 of 2) • Divide the U.S. into major biological regions based on their dominant WRP easement types; • Describe the environmental outcomes expected by WRP easement type in each region; • For each WRP habitat type in each region, estimate their environmental goods and services (EGS) outcomes based on their condition; proximity to other wetlands or relative scarcity; and other factors based on the total acres by easement type in each region.

7. WRP Regional Areas with Representative State Prairie Pothole Region n=174,441 acres Northeast n=191,220 acres Minnesota New York California S. Carolina Southeast n=264,985 acres West n=170,957 acres Louisiana Mississippi Alluvial Valley n=588,151 acres

8. WRP – What are we restoring? Minnesota New York California S. Carolina Louisiana Source: NRCS National Easement Staging Tool Data

9. Environmental Benefits in Physical Units: Wetland Acres by Type • Greg’s experience in working with the WRP and his communications with those working in the field were the foundation of estimating the types of WRP wetlands and their level of attainment of program goals. • The availability of a quantitative tool to measure the condition of wetlands would greatly add confidence in these outcome measures. • At this point, results are illustrative and show how such measures could be incorporated into a future analysis for greater precision.

10. Environmental Benefits to Monetary Units: Wetland Acres by Type • Good WRP data and information exist for the Prairie Pothole Region, West, and Mississippi Alluvial Valley regions. These regions have 69 percent of all WRP easements. • Assuming that WRP easements could be rated as a percent of full status (0 to 100% of maximum possible increase for each characteristic), each region’s WRP were given a subjective evaluation to arrive at a “score”. • This “score” assumes that some characteristics may not exist in some regions. • The following assessments were produced:

11. Table 1. Relative Estimated Value of Grouped Ecosystem Services

12. The Benefit Transfer (BT) Function (1 of 2) • Borisova-Kidder (2004) conducted a meta-analysis covering 33 previous wetland studies producing over 72 observations for wetland values. • This analysis used a log-linear functional form and estimated what certain characteristics added to an estimated mean EBV of a wetland of $313 per acre. • Four characteristics were evaluated: water (quality and quantity), birds (watching and hunting), fishing (commercial and recreational), and flood control.

13. The Benefit Transfer (BT) Function (2 of 2) • Borisova-Kidder’s elasticities reflect the increase in EBV over the mean EBV due to a 100 percent change to full-performance with respect to water, its’ per acre EBV would be $993 plus $313 ($1,306). However, if its’ score for birds was also 100%, an additional $612 would be added to the $1,306. The same would be true for fishing (an additional $492) and flood ($89). The total EBV of a wetland, with all four factors at full status plus the EBV mean $313, would be $2,496. • If all attributes were fully functional, the total EBV would reflect water (40%), birds (24%), fishing (20%), and flood (3%).

14. How we employed the EBV BT Function • Based on the scores (ranging from 0 to 100%), the estimated percentage increase of attainment was multiplied by the maximum possible dollar increase for each characteristic (from Borisova-Kidder’s study) to estimate a dollar per acre EBV. • Per acre EBV estimates were multiplied by WRP wetland acreage in each region to estimate the total EBV of WRP easement per region and the aggregate for these regions.

15. Conclusions

16. The annual EBV of WRP easements in these regions, derived using this BT function method, is significant. We estimate that the EBV of the 69 percent of the WRP easements analyzed in this report is at least $2.5 billion or about $1,795 per acre on average. • Using this average EBV along with the total US WRP acreage produces an annual total EBV of US WRP easements at $3.7 billion. • To date, over the 20 years of WRP, a cumulative total of $6.6 billion have been spent on acquisition, restoration and technical assistance.

18. Policy Implications • Wetland losses in the US and around the world have been significant and represent a cost to society and future generations. • Market solutions tend to undervalue wetlands, like many natural resources, and thus they will face peril without non-market collective actions. • Wetland conservation easements offer a means to protect existing wetlands and restore previously converted ones so that they can provide valuable EGS for society and future generations. • Based on this analysis, given the significant EBV from WRP, it would appear that benefits exceed program and private costs.

19. Further Research Needs • Given the importance and vulnerability of wetlands in generating valuable EGS, further research should continue to: • Quantify their associated EGS by wetland type and location; • Develop regional or watershed models that could simulate the role of wetlands in providing valuable EGS and the importance of location-targeting ; • Develop environmental indices that captures their EGS values to better communicate their value to policy makers and the public.