Watersheds: Aesthetic Values are Economic Values
Stephen K. Swallow, Professor
Department of Environmental and Natural Resource Economics
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. 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.