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Stephen K. Swallow, Professor Stephen Swallow earned a BS in applied ecology and natural resources from Cornell University and an MS and PhD in resource economics from Duke University. His research includes dynamic modeling of natural resource use as applied to land development, methods of nonmarket valuation, and economics of ecosystem management. He works with communities, non-profit organizations, town planners, and state officials on open space conservation. He is the 1999 Research Scientist of the Year in the URI College of the Environment and Life Sciences. |
As an environmental economist, I work to
educate both the public and business people that a valuable resource does
not have to be bought or sold. In fact, economic analysis or economic
value does not require buying or selling. Value can be demonstrated by
choice or a willingness to sacrifice something that is desirable in order
to obtain or maintain some other item that is also desirable. Consider
these ideas as they relate to watershed resources. Even though the commercial
economy is the cause of many environmental problems, economics can be
used in defense of the environment, whenever the environment contributes
to the quality of human life.
The value of watersheds to people includes
water quality (drinking water) and commercial resources, such as agricultural
or forest (wood) products. But watersheds also provide a foundation for
noncommercial (sometimes considered nonessential) environmental benefits.
Many times the noncommercial aspects of
a watershed are identified as components of environmental quality, sometimes
called aesthetic goods. These goods may include the plants, fish, and
wildlife that attract outdoor recreationists, bird watchers, ecotourists,
new residents, or expanding businesses whose employees prefer rural living.
These aesthetic goods are important and
valuable to the community. Fortunately, and unfortunately, these aesthetic
goods can benefit significant numbers of people simultaneously. The positives
are obvious. The negatives occur when the commercial economy undervalues,
or fails to recognize, the significant roles of a watershed. As a result,
there may be no way for an environmentally conscious investor who tries
to provide aesthetic goods to be compensated for good environmental decisions
such as protecting wildlife habitat or river waters. The investor, perhaps
a landowner, may provide a benefit to a public not required to cover the
costs or lost opportunities incurred by the landowner.
For example, I enjoy the rural, wooded
landscape and the clear water of the Wood-Pawcatuck watershed in southwestern
Rhode Island, where I live. (See map.) I benefit from the landowners who
maintain their woodlands in a natural state. Yet I do not have to pay
my neighbors for the aesthetic beauty of their land and its wildlife.
But this means that my neighbors, the watershed's landowners, do not have
a strong incentive to consider my values and the values of other neighbors
as they make land-use decisions. By contrast, the landowners can be paid
by the commercial economy to provide wood for construction or home heating,
and land for building. As the landscape changes character through changing
land use, the quality of life from rural living may change---it may diminish
as traffic increases or when woodland habitats and wildife are lost. The
commercial economy affords little or no reason for developers to recognize
their imposition on me.
Environmental and natural resource economists
specialize in helping society understand these issues. Watershed resources
can be economically valuable even if the commercial economy does not recognize
that value. Value is determined by individuals and their willingness to
give up something---perhaps some of their wealth or income---to maintain
a watershed resource. If individuals are willing to contribute time or
money to protect wooded and open spaces, to maintain the scenery, the
quality of water, or wildlife habitats, then they are demonstrating their
commitment to the value they place on the resource.
Economists estimate these noncommercial
values by using survey methods similar to those used in market research.
A carefully designed survey asks citizens what choices they would make
between environmental protection and development or use. Researchers at
URI have extensive experience with this type of valuation method, the
results of which need to be judged within the larger economic literature.
For example, one study focused on the value
of open space preservation in Richmond, Rhode Island, which lies within
the Wood-Pawcatuck watershed. Residents were asked whether they would
be willing to pay to preserve one of two parcels of undeveloped land in
town. The parcels were described in terms of the current land use (forested,
wetland, or agriculture), the location (along a river or along a road),
whether the parcel offered unique ecological or scenic qualities, and
whether preservation would accommodate public access.
This research showed that registered voters
in Richmond strongly preferred to preserve land with unique ecological
qualities, especially land located along rivers or waterways. Results
showed that registered voters were willing to pay about $27 per household
per year for five years to preserve a farm with unique ecological qualities
located along a river. If public access to the farm could be provided,
the willingness to pay increased by about one-third. Their willingness
to pay to preserve a non-farm parcel (a mixture of old fields, woodlands,
and wetlands) located along a river with unique ecological qualities was
about $35 per household per year. Public access would add about 20 percent
to the benefits that Richmond's voters would gain from that parcel.
It is interesting to note that, if we choose
not to use money as a measure of value, Richmond's voters would be willing
to give up public access to a parcel of preserved open space in exchange
for an otherwise equivalent parcel with unique ecological values. This
is a strong statement that watershed lands and open space lands, in particular,
do not need to work directly for the community. Rather, these open space
resources can be valued simply for maintaining ecological quality.
With results like these, one understands
that economics, especially environmental economics, is not focused solely
on the commercial economy. Watersheds provide direct benefits to citizens
who are willing to demonstrate the value they place on the environment
by sacrificing other things that are important to them, including income.