SAN FRANCISCO BAY SUBTIDAL HABITAT GOALS REPORT

Appendix 1-2: Economic Valuation of San Francisco 

Bay Natural Resources Services

Battelle Memorial Institute
San Francisco Bay Subtidal Habitat 

Goals Project: Economic Valuation of 

San Francisco Bay Natural Resource 

Services

Final Report

Battelle Memorial Institute

620 SW 5th Avenue, Suite 810

Portland, OR 97204

Submitted to:

National Oceanic and Atmospheric Administration

San Francisco, CA

July 2008
Disclaimer

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San Francisco Bay Subtidal Habitat 

Goals Project: Economic Valuation of 

San Francisco Bay Natural Resource 

Services

Final Report

Battelle Memorial Institute

620 SW 5th Avenue, Suite 810

Portland, OR 97204

Submitted to:

National Oceanic and Atmospheric Administration

San Francisco, CA

July 2008
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report iii July 31, 2008

Summary

The San Francisco Bay Estuary is the largest estuary on the Pacific Coast. Home to over 130 species of

fish and serving as the temporary home for over one million migratory birds each year, the San Francisco

Bay Estuary defines the region surrounding it, and the natural resource services it provides (e.g.,

commercial fishing, shipping, recreation, scenic amenities) collectively serve as the backbone for the

region’s economy.

This report supports the Subtidal Habitat Goals Project in San Francisco Bay. The project represents a

long-term plan for protection and restoration of the subtidal habitats of the San Francisco Bay. This

report was prepared because the economic benefits associated with the natural resource services offered

by the Bay are not well known to the Subtidal Habitat Goals Administrative Core Group or the Subtidal

Habitat Goals Work Groups.

This report effectively serves as an environmental values primer, which can be referenced when

considering the linkages between the environment and economy in the San Francisco Bay Area. It can

also be used to better understand the Bay’s environmental values that generate economic benefits to the

region. For some natural resource services, it documents the magnitude of the economic benefits, the

groups that benefit from the service, the ecological issues surrounding the service, and potential tradeoffs

between restoration and economic activity.

This report documents a broad range of environmental values and stratifies each according to the

components that collectively comprise total economic value – i.e., direct-use value, indirect-use value,

non-use value, and intrinsic value. Each value is identified in Table E-1. For each value, the table

summarizes the results of the qualitative, and in some cases quantitative, assessment presented in this

report.

The perspectives of selected stakeholders are also documented in this report. Stakeholders offered

numerous recommendations worthy of further consideration, including:

1) Benefits from restoration activities are cross-cutting; habitat restoration enhances several

natural resource services (e.g., commercial fishing, waterfowl hunting, swimming, boating)

2) One gain achieved through restoration can be offset by another environmental or economic

loss

3) Any measures taken by NOAA should involve close collaboration with key stakeholders and

follow an open public process

4) When considering protection goals within the context of economic impacts, it is important to

understand the full range of benefits and costs, including those related to employment, output,

local tax revenues, impacts on secondary industries, and multiplier effects

5) The issues being considered by the Core Group and Work Groups are complex with

overarching regulations and competing interests

6) While the setting of new goals and objectives was viewed positively, some of the

stakeholders argued that a good first step would be to enforce existing laws and regulations
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report iv July 31, 2008

7) More preservation, restoration, and protection activities are needed

8) The economic benefits from subtidal habitat restoration are not well documented and further

analysis is required to inform the Core Group and Working Groups’ decision-making process.

More detail regarding the stakeholder recommendations is provided in Section 1.5 of this report.

Table E- 1. Summary of Qualitative and Quantitative Assessment of Environmental Values

Offered by San Francisco Bay

Environmental

Value

Qualitative Assessment Quantitative Assessment

Commercial

Fishing

San Francisco Bay serves as a fishing

destination, a passageway for migrating species,

and a nursery for juvenile fish. Primary species

reported from Bay Area ports include:

Dungeness Crab, California Halibut, Chinook

Salmon, Pacific Herring, Sablefish, sole,

rockfish, Bay and Brine Shrimp.

The value of commercial fishery landings in

the San Francisco Bay Area were $12.2

million in 2006.

Sport Fishing Primary fish species caught by sport fisherman

in the San Francisco Bay Area include:

Jacksmelt, Shiner Perch, Northern Anchovy,

Pacific Herring, Striped Bass, California Halibut,

and Black Perch.

There were 327.5 thousand fish caught by

sport fisherman in 2007 in the San Francisco

Bay Estuary and Bodega Bay. Sport fishing

activities were estimated to be valued at

$65.5-$98.3 million in 2007.

Subsistence

Fishing

Subsistence fishing in San Francisco Bay is an

activity disproportionately undertaken by lowincome and otherwise disadvantaged groups that

rely on subsistence fishing as an important

portion of their food supply.

None.

Hunting Primary species hunted in San Francisco Bay

Estuary include: ducks, geese, doves, coots,

snipe, rabbits, quail, pheasants, wild pigs, and

elk.

In 2006, there were 1,786 hunters of dark

geese, 348 hunters of light geese, and 7,213

duck hunters in the nine county area

surrounding the San Francisco Bay Estuary.

The economic impact of these hunters was

estimated at $3.3-$4.1 million in

expenditures or $5.5-$6.7 million in output.

Recreation and

Eco Tourism

Popular recreation and eco tourism activities in

the San Francisco Bay Area include: boating and

sailing, hiking, kayaking, windsurfing,

swimming, beach use, photography, surfing,

scuba diving, and bicycling.

There are 40 marinas located in the central

San Francisco Bay Area with more than

11,000 boat slips. There are one million

birds traveling along the Pacific Flyway that

rest and feed in the Bay Area. There are

15,000 Gray Whales that migrate off the

cost of California, drawing interest from

whale watching tours.

Water

Transportation

San Francisco is a major port for cruise ships.

San Francisco Bay also supports seven

commuter ferry routes connecting San Francisco

to Alameda (two locations), Larkspur, Oakland,

Sausalito, Tiburon, and Vallejo.

In 2006, the number of cruise ship

passengers visiting San Francisco reached

262,000, with a total economic impact to the

region of $48.8 million. Average daily

ridership on San Francisco Bay ferries

totaled 9,594 in 2006.

Mineral

Extraction

Within the San Francisco Bay Estuary, sand

mining activities have been concentrated in the

Central Bay, Carquinez Strait, Middle Ground

Shoal, and Suisun Bay Channels. Cargill

operates salt production facilities in Newark and

Redwood City.

Annual sand mining estimated at 2 million

tons at a value of $20-$36 million. Annual

salt harvests are estimated at 650,000 tons

valued at an estimated $39.7 million

annually.

Oyster Shell

Mining

Historic oyster shell deposits are dredged from

San Francisco Bay for use in cement, cattle feed,

soil conditioner, and poultry grit.

Approximately 36,000 tons of oyster shell is

dredged up each year and sold for $5.4 -

$7.2 million.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report v July 31, 2008

Table E-1. Continued

Environmental

Value

Qualitative Assessment Quantitative Assessment

Shipping and

Ports

The Ports of San Francisco, Oakland, Richmond,

and Redwood City are all located within the San

Francisco Bay Estuary.

The annual economic impact of the Port of

San Francisco is estimated at $2.0 billion

(output) and 15,200 jobs. The economic

impact of Port of Oakland was estimated at

$2 billion in personal income and

consumption expenditures and 28,522 jobs.

Port of Redwood City generated $6 million

in revenue during fiscal year 2007. No

estimate of the economic impact of the Port

of Richmond.

Wastewater

Assimilation

San Francisco Bay serves as a waste sink to

industrial, municipal, and agricultural discharges

of effluent.

There are 46 publicly owned wastewater

treatment plants and 65 industrial points

discharging 40,000 tons of waste containing

at least 65 different types of contaminants

each year. Each day, San Francisco Bay

receives more than 800 million gallons of

municipal wastewater containing 60 tons of

nitrogen.

Residential and

Industrial Water

Supply

San Francisco Bay water is used in once-through

cooling systems at three Bay Area power plants:

Contra Costa, Pittsburg, and Potrero. The four

largest water supply agencies in the San

Francisco Bay Area are jointly exploring the

feasibility of developing regional desalination

plants.

Three power plants with a combined

generation capacity of 3,031 megawatts

draw 1.7 billion gallons of San Francisco

Bay water daily. The desalination plants

being explored by San Francisco Bay Area

water suppliers could deliver 120 million

gallons per day to San Francisco Bay Area

residents.

Scientific

Research

Scientific research in the Bay benefits the local

economy through the generation of high-paying

research positions and innovations that permeate

the region’s technology-based economy.

Research programs highlighted in this report

include the Regional Monitoring Program, the

Interagency Ecological Program, the CALFED

Bay-Delta Program, the San Francisco Bay

National Estuarine Research Reserve and the

U.S. Geological Survey Continuous Monitoring

Program.

None.

Education For San Francisco Bay, education values are

those associated with nature observance and the

conduct of science by students, teachers,

stakeholders, and the general public. Education

programs noted in this report include those

offered through the San Francisco Bay National

Estuarine Research Reserve, the Aquarium of the

Bay, the Headlands Institute, Save the Bay, and

the U.S. Fish and Wildlife Service.

None.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report vi July 31, 2008

Table E-1. Continued

Environmental

Value

Qualitative Assessment Quantitative Assessment

Amenity Values Amenity values are experienced through the

sights and sounds of the Bay and though they are

not directly quantifiable, housing prices and

tourism expenditures are indicative of the

amenity value of the Bay.

San Francisco drew nearly 16 million

visitors in 2006. These visitors spent $7.8

billion, supporting 68,652 jobs and

generating $1.83 billion in income.

Housing prices in the San FranciscoOakland-Freemont Metropolitan Area

ranked second among the most expensive

metro areas in the United States with a

median home price of $736,800. The price

of bayside property in San Francisco carries

a roughly 20 percent premium.

Indirect Use

Values

Indirect use values include the biological

support, nutrient cycling, climate regulation,

flood protection, water quality maintenance,

biodiversity and genetic maintenance, and

sediment transport benefits.

Climate regulation benefits the Napa Valley

wine industry. The total economic impact

of the Napa Valley wine industry was

estimated at $9.5 billion annually.

Non Use and

Intrinsic Values

Non-use values include the option, bequest, and

stewardship motives and are tied to our interest

in preserving a natural resource either for our

own potential future use or the use of others.

None.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report vii July 31, 2008

Contents

Summary.................................................................................................................................... iii

1.1 Introduction..................................................................................................................... 1

1.2 The Environment and Economy ..................................................................................... 1

1.3 Study Area ...................................................................................................................... 2

1.4 Methodology................................................................................................................... 3

1.5 Summary of Interviews................................................................................................... 5

2.1 Environmental Valuation of San Francisco Bay............................................................. 7

2.2 Direct Use Values........................................................................................................... 9

2.3 Indirect Use Values....................................................................................................... 21

2.4 Non-Use and Intrinsic Values....................................................................................... 22

3.1 Conclusions and Recommendations for Further Research........................................... 23

References................................................................................................................................. 25

Appendix A – Stakeholder Contact List................................................................................... 27

Appendix B - Subtidal Habitat Goals Project - Interview Protocol.......................................... 28
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report viii July 31, 2008

Figures

Figure 1. San Francisco Bay Subtidal Habitat Goals Study Area.............................................. 3

Figure 2. The Mines and Mineral Resource Producers in Seven Bay Area Counties (1997-

1998) and the Commodities Produced.......................................................................................... 15

Tables

Table E- 1. Summary of Qualitative and Quantitative Assessment of Environmental Values 

Offered by San Francisco Bay....................................................................................................... iv

Table 1. Interviewed Stakeholders................................................................................................ 4

Table 2. San Francisco Bay Environmental Values .................................................................... 8

Table 3. Value of Landings, San Francisco Bay Area and California (2000, 2006).................. 10

Table 4. Impacts of Fishing Activities in the Sacramento-San Joaquin Delta Region, 1995..... 11

Table 5. San Francisco Bay Area Average Daily Ferry Ridership............................................. 14

Table A- 1 Stakeholder Contact List ............................................................................................ 27

Table B- 1 Stakeholder Contact List............................................................................................. 29

Table B- 2 San Francisco Bay Environmental Values ................................................................ 31
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 1 July 31, 2008

1.1 Introduction

The Subtidal Habitat Goals Project in San Francisco Bay represents a long-term plan for the protection

and restoration of the subtidal habitats of the San Francisco Bay. The primary product of the Subtidal

Habitat Goals Project is a document that provides recommendations and goals for use, protection,

restoration, and research to improve subtidal habitat management in San Francisco Bay. Resource

managers will be able to use this document to make informed decisions, and researchers will be able to

prioritize activities and pursue funding for subtidal projects.

The economic benefits associated with subtidal habitats, however, are not well known to the Subtidal

Habitat Goals Administrative Core Group (Core Group) or the Subtidal Habitat Goals Work Groups

(Work Groups). Thus, understanding the economics associated with protecting resources represents an

important piece of information for managers who are responsible for implementing protection and

management measures. The ability to share a common knowledge of the expected economic changes,

both good and bad, that may result from management decisions will enhance the goals development

process. An understanding of which interests are likely to be affected by these changes will also broaden

the knowledge base during the selection and implementation of protection goals.

Before an economic assessment of protection and restoration goals associated with subtidal habitat can be

completed, this first report has been prepared to inform the Core Group and Work Groups as they

consider alternative policies and programs. It effectively serves as an environmental values primer, which

can be referenced when considering the linkages between the environment and economy in the San

Francisco Bay Area. This document can be used to better understand the Bay’s environmental values that

generate economic benefits to the region. For some natural resource services, this report also documents

the magnitude of the economic benefits, the groups that benefit from the service, the ecological issues

surrounding the service, and potential tradeoffs between restoration and economic activity.

To date, more detailed analysis of the economic benefits tied to subtidal habitat in San Francisco Bay has

not been prepared. Once protection and restoration goals have been defined, more detailed economic

assessments can be proposed and completed.

This report is divided into 10 sections, with the first being this introduction. The second section is a brief

note on the linkage between the environment and economy. The third section documents the geographic

area considered within this report. The fourth section presents the study methodology. The fifth section

documents input gathered during the stakeholder interviews. The sixth section identifies the natural

resource services or environmental values provided by San Francisco Bay. The seventh section examines

the direct use values or services offered by the Bay in more detail. The eighth section examines indirect

use values or services of the Bay. The ninth section examines the non-use and intrinsic values offered by

the Bay. The tenth, and final, section presents study conclusions and recommendations for further

research.

1.2 The Environment and Economy

The environment and economy of any region are directly linked. The environment supplies raw materials

and energy required to produce goods consumed by human populations, while the output of the

production and consumption process generates waste that is either recycled or dumped back into the

environment. The link between environment and economy represents a circular, closed system. As

environmental inputs cycle through the economy and are used to produce goods and services, the

environmental and economic systems work together to generate positive utility or satisfaction to

consumers.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 2 July 31, 2008

The San Francisco Bay defines the region surrounding it, and the natural resource services it provides

(e.g., commercial fishing, shipping, recreation, scenic amenities) form a backbone for the region’s

economy. There are a number of natural resource services provided by the San Francisco Bay that are

directly consumed by human populations or used as an input into a production process (e.g., commercial

fishing, sport fishing, hunting, sand mining, and salt production). These services, however, capture only a

small share of the overall value provided by the Bay to the region’s economy. From the impact of the

aesthetic value of the Bay to shipping and port activity at the Ports of San Francisco, Oakland, Richmond

or Redwood City, the Bay is an economic driver.

1.3 Study Area

The environmental values highlighted within this report are those found in the entire San Francisco Bay

Estuary (Figure 1). North of San Francisco Bay, the combined waters of the Sacramento and San Joaquin

Rivers flow south into Suisun Bay. The waters then flow through the Carquinez Strait into the San Pablo

Bay and Central and South San Francisco Bays. The San Francisco Bay Estuary is the largest estuary on

the Pacific Coast. The estuary is home to over 130 species of fish and serves as a temporary home for

over one million birds each year, while they rest and feed during migratory trips along the Pacific Flyway.

The San Francisco Bay Area is home to more than 6.9 million people (U.S. Census Bureau 2006). Local

human populations in the San Francisco Bay Area are spread throughout this densely populated region.

The largest population centers in the Bay Area are located in San Jose (916,220), San Francisco

(744,041), and Oakland (377,259).
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 3 July 31, 2008

Figure 1. San Francisco Bay Subtidal Habitat Goals Study Area

1.4 Methodology

The study team relied on data and other information acquired through interviews with stakeholders,

analysis of public sources of local natural resource and economic data, and through the review of

literature identified and collected for this study. In April through July of 2008, members of the research

team interviewed a number of key stakeholders. National Oceanic and Atmospheric Administration

(NOAA) Coastal Services Center (CSC) staff provided an initial list of stakeholder contacts. CSC staff

developed this list through internet searches and input gathered from CSC West Coast staff and members

of the Core Group. This list was later refined by the research team based on stakeholder input (Appendix

A).
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Bay Subtidal Habitat Goals Project: Final Report 4 July 31, 2008

The objectives and scope of the interview process were clearly defined, as were the topics covered during

the interviews. Participants were asked to discuss:

a) natural resource services provided by the San Francisco Bay

b) the link between ecological conditions in San Francisco Bay and local economic benefits

c) local industries and other stakeholders reliant on the Bay

d) classes of economic benefits derived from the Bay

e) sources of data that could be used to quantitatively examine the identified benefits

f) sources of literature that could be used to qualitatively examine the economic benefits tied to

the Bay

g) ecological threats to these natural resource services

h) thoughts concerning potential restoration activities.

Follow-up telephone contacts and information transfers completed the data collection process.

Table 1 lists the stakeholders interviewed for this report. It identifies the environmental value discussed

during the interview and the organization each interviewee represents. In some cases, the interviews were

abbreviated or focused on a sub-set of the topics outlined in the preceding paragraph. As shown, the

stakeholders contacted for this report include both public and private employees, as well as volunteers.

Table 1. Interviewed Stakeholders

Environmental Value Contact Organization

Commercial Fishing Zeke Grader Pacific Coast Federation of

Fisherman’s Association

Sport Fishing Roger Thomas Golden Gate Fisherman’s

Association

Hunting Larry Wyckoff California Department of Fish and

Game

Recreation Ray Murray National Park Service, Pacific West

Region

Sand Mining Brenda Goeden San Francisco Bay Conservation and

Development Commission (BCDC)

Sand Mining Chris Lind Jerico Products, Inc.

Boating and Sailing Ann Buehl Coastal Conservancy

Wildlife Viewing Barbara Salzman Marin Audubon Society

Water Transport John Sindzinski San Francisco Bay Area Water

Emergency Transportation

Authority

Shipping and Ports Tina Olsen Port of San Francisco

Salt Harvesting Steve Ritchie South Bay Salt Pond Restoration

Project

Education Sylvie Lee California Coastal Commission
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 5 July 31, 2008

For certain environmental values where there were no local studies to cite, the research team extrapolated

results from other relevant studies to define the economic value of the natural resource service to the

region. For instance, the findings a report that focused on angler expenditures in the State of California

was combined with San Francisco Bay Area sport fishing data to estimate the economic impact of sport

fishing on the Bay Area economy. While not ideal, this approach enabled the research team to report a

reasonable economic impact estimate.

It is important to note that the timeline and scope associated with this project did not allow for a more

detailed and statistically valid extrapolation procedure. Since environmental and economic conditions in

one location differ from those found in another, applying results of studies conducted in one location or

situation to another can be less than ideal. Thus, this report cites studies conducted in California and uses

sensitivity analysis to present a range of estimated impacts. Further, in the final section of this report,

which outlines next research steps, we recommend applying the benefit transfer method and meta analysis

to generate more precise estimates. In applying quantitative methods to the problem of comparing and

combining results from relevant individual studies into a single statistical analysis, meta analysis would

allow the research team to analyze findings from previous studies statistically and elicit from them the

weight of the evidence with greater accuracy and precision.

1.5 Summary of Interviews

The stakeholders interviewed for this study are viewed as subject matter experts in the natural resource

service areas listed in Table 2 by both NOAA CSC staff and the research team. Thus, the interviews were

viewed as a key component of the methodology detailed in Section 1.4. The input received from the

experts, along with the literature and data they pointed the research team towards, were used extensively

in framing the analysis presented in this report.

Because the information gathered from the stakeholders is presented throughout this report, this section

focuses only on the main themes and major points expressed by the stakeholders. The scope and

objectives of the interviews were presented in the preceding section, and the interview guide or protocol

is presented in Appendix B.

The stakeholders were very supportive of the San Francisco Bay Subtidal Habitat Goals Project. Views

differed, however, on the activities each expert would recommend be undertaken to enhance the positive

economic effects of the natural resources services offered by the Bay. With that noted, stakeholders

offered numerous recommendations the Core Group and Work Groups should consider:

1) Benefits from restoration activities are cross-cutting. For example, restoring habitat for

protected species enhances both boating and wildlife viewing experiences. Further, oyster

reef restoration would improve water quality and enhance the recreational experience for

boaters and swimmers. Enhancing local fisheries would generate economic benefits to

commercial and sport fisherman but would also grow local bird populations to the benefit of

hunters and eco tourists.

2) One gain achieved through restoration can be offset by another environmental or economic

loss. For example, curtailing sand mining activities would marginally reduce the

environmental effects of sediment suspension and entrainment but would result in more sand

being exported from British Columbia. Thus, the local gain would be at least partially offset

by the environmental impacts associated with diesel fuel consumption and mining activities

in Canada.
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Bay Subtidal Habitat Goals Project: Final Report 6 July 31, 2008

3) Any measures taken by NOAA should involve close collaboration with key stakeholders and

follow an open public process. Without buy-in from local stakeholders and the public, the

implementation of protection programs will be more difficult and the results not as effective.

To the extent the public can participate, it will enhance acceptance and develop a sense of

stewardship. Further, by bringing a broad group of interests to the table, it ensures that

results aren’t biased towards some predetermined outcome.

4) When considering protection goals within the context of economic impacts, it is important to

understand the full range of benefits and costs, including those related to employment, output,

local tax revenues, impacts on secondary industries, and multiplier effects.

5) The issues being considered by the Core Group and Work Groups are complex, with

overarching regulations and competing interests. For example, sand mining is regulated by

the Army Corps of Engineers, California State Lands Commission, Regional Water Quality

Board, and the BCDC. Further, sand and oyster shell mining activities are tied to multi-year

leases executed between private companies and public agencies. Thus, there are limits to

what can be explored when setting subtidal habitat goals, and these limitations should be

considered during the goal-setting process.

6) While the setting of new goals and objectives was viewed positively, some of the

stakeholders argued that a good first step would be to enforce existing laws and regulations.

For example, one stakeholder argued that the Clean Water Act was frequently violated

without consequence.

7) More preservation, restoration, and protection activities are needed. Effective management

activities highlighted by stakeholders included the South Bay Salt Pond Restoration Project,

hatcheries managed by the California Department of Fish and Game (CDFG), and wetlands

managed by the CDFG and Suisun Resource Conservation District (SRCD).

8) The economic benefits from subtidal habitat restoration are not well documented, and further

analysis is required to inform the Core Group and Working Groups’ decision-making process.

Potential next research steps are highlighted in the final section of this report.

Based on stakeholder input, the research team was able to narrow the focus of the literature search and

data collection efforts. Stakeholders were also helpful in extracting data and interpreting relevant

research findings.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 7 July 31, 2008

2.1 Environmental Valuation of San Francisco Bay

Table 2 documents and categorizes environmental values attributed to San Francisco Bay. These values

were developed using a three-step approach. First, the research team noted the values identified in an

annotated bibliography recently prepared for NOAA (Battelle 2007). Second, the research team

consulted public databases, websites dedicated to local environmental conditions in San Francisco, and

additional published and unpublished literature. Following this preliminary research, a draft table of

environmental values was presented to NOAA CSC staff members, who shared it with members of the

Core Group. After responding to comments provided by NOAA and members of the Core Group, the

table was shared with stakeholders and modified based on their comments.

The typology of environmental values identified in Table 2 demonstrates the components of total

economic value. Total economic value is presented in the following equation:

Total economic value = direct-use value + indirect-use value + non-use value + intrinsic value

When determining the total economic value of the San Francisco Bay, each of these components should

be considered. The environmental values identified for San Francisco Bay through this research effort are

examined in greater detail in the pages following Table 2.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 8 July 31, 2008

Table 2. San Francisco Bay Environmental Values

(a) Direct use values – goods and services directly consumed by users

- Commercial fishing

o Pacific Herring

o Salmon

o Dungeness Crab

o California Halibut

o Rockfish

o Brine and Grass Shrimp

o Sole (San Francisco Bay acts as a nursery)

o Sablefish (San Francisco Bay acts as a nursery)

o Starry Flounder (San Francisco Bay acts as a nursery)

o Crawfish

- Sport fishing

- Subsistence fishing

- Hunting

o Ducks

o Geese

- Recreation (boating and sailing, hiking, kayaking, windsurfing, swimming, beach use, photography,

surfing, scuba diving, bicycling, running)

- Eco tourism (wildlife viewing)

- Water transportation (ferry system, cruise lines)

- Mineral extraction (production of salt, sand mining)

- Mining of oyster shells

- Shipping and ports

- Wastewater assimilation (industrial and municipal sewage, urban and agricultural runoff)

- Residential and industrial water supply

- Scientific research

- Amenity values

- Education

(b) Indirect use values – indirect benefits arising from ecological and aquatic systems

- Biological support – links to other species and habitats (e.g., migratory birds, marine mammals)

- Nutrient cycling

- Climate regulation

- Flood protection

- Water quality maintenance

- Biodiversity and genetic maintenance

- Sediment transport

(c) Non-use values

-Option value (future knowledge and future economic uses)

-Existence value (cultural, aesthetic, spiritual)

-Bequest (stewardship, heritage, legacy)

(d) Intrinsic value – organisms have a worth of their own regardless of usefulness to humans
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 9 July 31, 2008

2.2 Direct Use Values

Direct use values, as identified within Table 2, are the goods and services produced by the Bay that are

consumed directly by users. These values can include those that produce physical products (e.g., fish,

ducks), as well as those that generate utility or value to humankind (e.g., sunsets on the Bay or scientific

research). Each direct use value highlighted in Table 2 is examined in more detail within the remainder

of this section of the report.

Commercial Fishing. San Francisco Bay serves local commercial fisherman in a multidimensional

capacity as a fishing destination, a passageway for migrating species, and a nursery for juvenile fish.

Primary fish species caught by commercial fisherman in San Francisco Bay include Pacific Herring,

Chinook Salmon, and California Halibut. Sole (Petrale, Dover and English) and Sablefish use the Bay in

a nursery capacity and are generally caught by commercial fisherman out at sea. Dungeness Crab, Bay

and Brine Shrimp, and crawfish are also harvested in the San Francisco Bay Estuary.

Table 3 presents the value of landings in the San Francisco Bay Area and the entire State of California for

2000 and 2006. All values are presented in 2006 dollars. The value of landings in the San Francisco

Area has remained fairly stable in the past 7 years in nominal terms, but declined by roughly 18.6 percent

in real terms to $12.2 million in 2006. The value of fish landings peaked in the Bay area in 2004 at $19.8

million, before falling back to 2006 levels (California Department of Fish and Game 2007a). The San

Francisco Bay data presented in Table 3 includes fish landings reported for the Ports of San Francisco,

Princeton-Half Moon, Sausalito, Alviso, Richmond, Berkeley, Alameda, Vallejo, Petaluma, China Camp,

Oakland, South San Francisco, Rodeo, and San Rafael. The decline in the value of the catch in the San

Francisco Bay Area is consistent with statewide declines over the same time period (18.3 percent).

Although the value of commercial landings in the San Francisco Bay Area has remained reasonably

consistent, a rapid increase in the value of Dungeness Crab landings has masked a steep decline in the

value of fish landings for nearly all species, including an 89.4 percent and 83.5 percent decline in the

value of landings for Chinook Salmon and Pacific Herring, respectively (California Department of Fish

and Game 2007a). In the San Francisco Bay Area, commercial fishing has also shifted towards California

Halibut while statewide, California Halibut landing values have declined in real terms. Some of the shift

towards California Halibut and Dungeness Crab has undoubtedly resulted due to the declines in other

species, particularly the Chinook Salmon.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 10 July 31, 2008

Table 3. Value of Landings, San Francisco Bay Area and California (2000, 2006)

2000 2006 Percent Change

Species SF Bay California SF Bay California SF Bay California

Dungeness Crab $2,436,933 $16,066,706 $7,525,106 $44,868,658 208.8% 179.3%

California Halibut $871,898 $2,858,872 $1,226,040 $2,712,829 40.6% -5.1%

Chinook Salmon $4,763,023 $12,021,370 $503,496 $5,255,417 -89.4% -56.3%

Pacific Herring $2,519,404 $2,672,092 $416,239 $427,219 -83.5% -84.0%

Sablefish $632,770 $6,150,819 $347,636 $4,890,167 -45.1% -20.5%

Sole $706,956 $5,251,809 $389,363 $3,549,989 -45.0% -32.4%

Rockfish $900,248 $4,737,569 $202,212 $1,973,898 -77.5% -58.3%

Bay and Brine

Shrimp

$319,281 $320,698 $74,344 $169,537 -76.7% -47.1%

All Other Species $1,785,384 $109,414,863 $1,472,003 $66,425,628 -17.6% -39.3%

Total $14,935,898 $159,494,797 $12,156,439 $130,273,342 -18.6% -18.3%

Source: California Department of Fish and Game (2007)

It is important to note that much of the landings reported from Bay Area ports are caught offshore. As

noted previously, however, the Bay does serve as a nursery for many of the species caught out at sea.

The commercial fishing fleet supports a range of secondary and ancillary industries, including fish

packing and shipping, fish supply industries (bait shops, fuel docks, gear stores), piers, marinas, local

restaurants, and tourism. Fisherman’s Wharf and Pier 39 serve as the home of San Francisco’s

commercial fishing fleet. Pier 39 is also San Francisco’s top tourist attraction, hosting an estimated 10.5

million visitors annually. Pier 39 is home to 110 shops and 11 full-service restaurants (Fisherman’s

Wharf Merchants Association 2008).

There are tradeoffs between water quality and water diversion in the San Francisco Bay Estuary. That is,

hydrology issues relating to the pumping of fresh water away from the estuary to locations to the south

impact fresh water flows and salt water intrusion. These issues, as well as those tied to agricultural

runoff, wastewater assimilation, residential and industrial water supply, and mineral extraction, all take a

toll on local fish populations and consequently, commercial, sport, and subsistence fishing interests.

Tradeoffs between these natural resource services are inevitable and should be considered when defining

subtidal habitat goals.

Sport Fishing. The economic value of sport fishing to a region is roughly equivalent to the willingness

to pay on the part of fishermen for the experience of landing fish. Angler expenditures in California in

2006 were estimated to top $2.4 billion, resulting in $1.3 billion in income and 43,130 in jobs. Of those

expenditures, $1.1 billion were associated with equipment, $0.4 billion with food and lodging, and $0.3

billion with transportation (Alkire 2008).

In a 1996 study of fishing activities in the Sacramento-San Joaquin Delta Region, total expenditures

associated with fishing trips to the Delta were estimated at $392 million, with $186.0 million of those

expenditures taking place in the Delta. The average fishing trip included 2.9 people with anglers

spending $111 within the Delta and $123 outside it (Goldman et al. 1998).

Table 4 shows the impacts of fishing activities in the Sacramento-San Joaquin Delta in 1995. The

impacts of the initial expenditures are magnified by multiplier effects. Regional economic impact

analysis divides economic impacts into three categories that collectively comprise the full range of

economic effects: direct, indirect, and induced effects. This framework can be better understood through

an illustration. As it relates to fishing trips, the direct effects would be tied to expenditures by anglers on
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 11 July 31, 2008

food and beverage, hotel and accommodations, and other purchases. The secondary effects are tied to

subsequent rounds of spending and include both indirect and induced effects. In our example, this could

include the changes in sales, income, and employment of businesses supplying goods and services to

sport fishing industries. These are considered indirect effects. Induced effects are those tied to household

spending of the income earned in the sport fishing industry and other linked industries.

When total effects (direct, indirect, and induced) are considered, expenditures by anglers in the

Sacramento-San Joaquin Delta were found to generate an estimated $336.1 million in output and $137.8

million in income, and support 6,152 local jobs (Goldman et al. 1998).

1

Table 4. Impacts of Fishing Activities in the Sacramento-San Joaquin Delta Region, 1995

Impacts on the Delta Region ($Millions)

Expenditure Category

Expenditure

in the Delta

($millions)

Output Income

Value

Added

Number of

Jobs

Overnight lodging,

including campgrounds $50.4 $94.2 $38.0 $57.3 1,572

Food and drinks at cafes

or snack stands $49.8 $89.9 $32.5 $48.3 1,838

Supplies, gas, repairs,

parking, gifts $52.0 $92.3 $40.1 $61.9 1,342

Recreation: equipment,

bought/rented, fees $33.8 $59.7 $27.2 $41.8 1,400

Total $186.0 $336.1 $137.8 $209.4 6,152

Source: Goldman et al. (1998)

Because sport fishing is a leisure activity with value determined according to an angler’s willingness to

pay for a fishing experience, the value placed on each fish caught generally exceeds its market value.

Based on the findings of a small number of studies conducted in California, one recent report (Alkire

2008) estimated that the total economic impact of expanded sport fish catches due to protection and

restoration efforts would equal $200-$300 per fish (2006 dollars). It is important to note that the studies

summarized in Alkire (2008) focused on the economic impacts associated with anglers targeting salmon

and steelhead.

CDFG estimates that 327.5 thousand fish were caught by sport fisherman in 2007 in the San Francisco

Bay Estuary and Bodega Bay.

2 Using the Alkire (2008) estimate of value placed on fish catches, sport

fishing in the San Francisco Bay Area would have been valued at $65.5-$98.3 million in 2007. It is

important to note that the CDFG data include fish caught in Bodega Bay and certain species (e.g., smelt,

Northern Anchovy) that might be caught for bait. With that noted, even if the value per fish was reduced

to $100, the total economic impact of sport fishing in the San Francisco Bay Area would still total $32.8

million annually.

 1 Output is the dollar value of goods sold. Income is the money earned from the sale of goods, including wage and

salary income, profits, and rents. Value added represents the sum of total income and indirect business tax revenue.

The value added measure avoids the double counting of intermediate sales. Thus, it captures only the value added to

final products by the region. 2 http://www.recfin.org/forms/est2004.html
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Bay Subtidal Habitat Goals Project: Final Report 12 July 31, 2008

Subsistence Fishing. Subsistence activities are the customary and traditional uses of wild resources,

including local fisheries, for food, clothing, fuel, and trade. Subsistence fishing in San Francisco Bay is

an activity disproportionately undertaken by low-income and otherwise disadvantaged groups (e.g.,

immigrant and native populations) that rely on subsistence fishing as an important portion of their food

supply.

In a survey of a Laotian community located along the eastside of San Francisco Bay, in West Contra

Costa County, Chiang (1998) calculated mean seafood consumption rates of 18 g/day. Of those surveyed,

87 percent reported consuming seafood at lease once each month. Chiang also reported that while only

50 percent of the surveyed community purchased fish at large markets, more than 54 percent consumed

fish caught by themselves, family members, or friends (Chiang 1998).

Because of high levels of mercury, PCBs and other chemicals in San Francisco Bay sport fish, the

California Office of Environmental Health Hazard Assessment has issued an advisory that recommends

limiting consumption for men and women beyond childbearing age to two meals per month (meal is

defined as 8 ounces). Other restrictions also apply. Based on the findings of Chiang (1998), who found

that consumption rates in the surveyed community were as high as 100-450 g/day, the presence of these

toxins in fish poses a significant health hazard to subsistence fisherman.

Hunting. The San Francisco Bay Area is a popular destination for waterfowl hunters who target

migratory duck and goose populations. There are also opportunities to hunt larger game, such as wild

pigs and elk on Grizzly Island. Other species hunted near San Francisco Bay include doves, coots, snipe,

rabbits, quail, and pheasants. Hunting is allowed on state and federal lands in the Bay Area, including

those in the Nappa-Sonoma Marshes Wildlife Area, Grizzly Island Wildlife Area, Don Edwards National

Wildlife Refuge, Petaluma March Wildlife Area, and San Pablo Bay Wildlife Area.

The Suisun Marsh Area is also a popular destination for hunters. Suisun March encompasses 116,000

acres, including 52,000 acres of managed wetlands. It is home to 221 bird species, 45 animal species, and

more than 40 fish species. The Suisun Marsh is also a resting and feeding ground for thousands of birds

migrating along the Pacific Flyway. It offers public waterfowl hunting and is home to 158 private duck

clubs (California Department of Water Resources 2008).

In 2006, there were 1,786 dark goose hunters, 348 light goose hunters, and 7,213 duck hunters in the nine

county area (Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and

Sonoma) surrounding the San Francisco Bay Estuary (California Department of Fish and Game 2007b).

The total number of days spent hunting waterfowl in the nine-county area totaled 105,184 in 2006.

The research team was unable to identify any studies of the economic impact of hunting in the San

Francisco Bay Area. The economic impact of waterfowl hunting in California, however, has been

studied. In 2001, there were 102,000 waterfowl hunters in the State of California, and these hunters spent

approximately $86.5 million on trip and equipment-related expenses. The national average expenditure

per waterfowl hunter was $541. The economic impact of waterfowl hunting in California in 2001 was

$143.7 million in output and $45.0 million in income. In total, industries supporting waterfowl hunters in

California generated 1,303 jobs, $8.4 million in state tax revenue and $12.5 million in federal revenue

(U.S. Fish and Wildlife Service 2005).

Extrapolating the results of the statewide analysis to the San Francisco Bay Area hunting total yields an

estimated economic impact to the nine-county area of $3.3-$4.1 million in expenditures and $5.5-$6.7

million in output. The range reflects the uncertainty surrounding the estimate, with the range established

at plus or minus 10 percentage points around the point estimate. Note that the expenditures reflect the

total amount spent by hunters residing in those counties. Some of these expenditures certainly took place
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Bay Subtidal Habitat Goals Project: Final Report 13 July 31, 2008

outside of the nine-county area, though most equipment-related expenditures likely took place within it.

With that noted, this estimate would not include expenditures by hunters residing outside the nine-county

area who travel to San Francisco Bay marshes to hunt.

The economic benefits of hunting are complex and cross-cutting in that many of the restoration actions

that benefit hunters would also benefit eco tourists, boaters, and fisherman. For example, water quality

maintenance goals would enhance local fisheries and bird populations that prey on fish. Whether the goal

is viewing wildlife or hunting it, improving subtidal habitat would enhance the value hunters and eco

tourists place on these activities. The value associated with both hunting and eco tourism is largely

dependent on species abundance and diversity.

Recreation and Eco Tourism. Recreational value is captured in both direct expenditures and the value

placed on recreational experiences by individuals. San Francisco Bay offers numerous recreational

opportunities in the form of boating and sailing, hiking, kayaking, windsurfing, swimming, beach use,

photography, surfing, scuba diving, and bicycling.

Boating and sailing are extremely popular recreational activities in San Francisco, with 40 marinas

located in the central San Francisco Bay Area, holding more than 11,000 boat slips. Boating and sailing

in San Francisco Bay supports numerous industries, including boat brokers, boat dealers, small boat

rentals, charters, boat builders, equipment and gear shops, maintenance and repair services, yacht clubs,

sailing schools, boat yards, marinas, fuel docks, and restaurants.

Human powered boats (e.g., kayaks, dragon boats, and canoes) are also popular in San Francisco. To

accommodate the needs of these boaters, a vision for a San Francisco Bay Area Water Trail was born.

The trail will ultimately be a network of launch and landing sites around the Bay that will enable

continuous, single- and multi-day trips on the Bay. The benefits of the Bay Area Water Trail will include

improved facilities located near boat launch sites, development of more launch sites, and more access to

accommodations along the Bay shoreline.

There are a number of other recreational activities enjoyed in San Francisco. Windsurfing, for example,

is popular in many locations in the Bay, including the Berkeley Marina, Alameda, Crissy Field, and

Coyote Point. There are also hundreds of hiking trails located around the Bay.

Eco tourists from around the US descend on San Francisco to take advantage of bird watching, whale

watching, and other wildlife viewing opportunities. San Francisco is located along the Pacific Flyway,

the major North-South corridor for migrating birds on the Pacific Coast. More than one million migrating

birds stop to feed and rest at San Francisco Bay annually, which affords bird watchers many viewing

opportunities.

Popular bird watching areas near San Francisco Bay include the Golden Gate National Recreation Area,

Golden Gate Park, Don Edwards San Francisco Bay National Wildlife Refuge, Pillar Point, Crissy Field

Marsh, Las Gallinas Salt Ponds, Arrowhead Marsh, East Shore State Park, Lake Merritt, and the Palo

Alto Baylands Nature Preserve. At these locations, bird watchers can view Osprey, Northern Harrier,

Red-tailed Hawks, Golden Eagles, Peregrine Falcons, Western Scrub-Jays, Chestnut-backed Chickadees,

Great and Snowy Egrets, Common Moorhen, Black-necked Stilt, American Avocet, sandpipers, terns,

pelicans, and herons.

The annual migration of Gray Whales from Arctic feeding grounds to Baja California also draws visitors

to San Francisco. Approximately 15,000 Gray Whales migrate off the California Coast annually.

Humpback Whales are also popular targets for whale watching cruises.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 14 July 31, 2008

Bird watching is an extremely popular activity in California. In 2005, 2.58 million individuals dedicated

65.76 million days to bird watching in California. Other wildlife viewing engaged 2.55 million

individuals for 38.58 million days (Pendleton 2006). Pendleton (2006) reviews literature estimating

expenditures on trips made for wildlife viewing and concludes that average per day expenditures vary

significantly based on the target species and location. The cost for whale watching trips ranged from $30

to $70 per person. Non-market values associated with rare or interesting species can also be significant.

Pendleton (2006) reported that non-market values for wildlife viewing trips in Alaska were estimated at

$143 to $229 per person per trip, while wildlife viewing in the Florida Keys generated non-market

benefits of $108 per person per trip.

Water Transportation. San Francisco is a major port for cruise ships traveling up and down the Pacific

Coast. In 1985, 102,000 passengers on cruise ships visited San Francisco. Following a period of decline,

where the number of passengers dipped to below 33,000 in 1991, the number of passengers passing

through the Port of San Francisco grew steadily to roughly 62,000 in 2002 before soaring to 262,000 by

2006 (Bay Area Economics 2008). The total economic impact of expenditures by passengers and crew,

as measured by output, is an estimated $31.2 million annually in San Francisco and $48.8 million

regionally. The cruise industry supports 302 jobs in San Francisco and 346 regionally (Bay Area

Economics 2008).

In addition to the cruise industry, San Francisco Bay supports seven commuter ferry routes connecting

San Francisco to Alameda (two locations), Larkspur, Oakland, Sausalito, Tiburon and Vallejo. Average

daily ferry ridership in San Francisco is presented in Table 5. As shown, ridership declined between 2000

and 2002 but rose by 14.6 percent between 2002 and 2006.

Table 5. San Francisco Bay Area Average Daily Ferry Ridership

Year

Alameda

Oakland Sausalito Larkspur

Vallejo

Baylink

Harbor

Bay Tiburon Total

2000 1,432 1,247 4,106 2,116 337 627 9,865

2001 1,447 1,026 3,652 1,900 365 537 8,927

2002 1,246 902 3,615 1,866 315 428 8,372

2003 1,119 950 3,384 1,709 310 395 7,868

2004 1,199 1,131 3,633 1,825 217 444 8,448

2005 1,126 1,199 3,695 1,916 334 429 8,699

2006 1,266 1,433 3,878 2,104 370 543 9,594

% Change 2000-2006 -2.8%

% Change 2003-2006 21.9%

Source: Bay Area Economics (2008).

Mineral Extraction (Salt Harvesting and Sand Mining). The San Francisco Bay Area is located in a

mineral-rich region, where ever since the first discovery of gold at Sutter’s Mill in Coloma, California,

mining operations have flourished. Today, mining operations continue in the Bay Area. Figure 2

identifies mines and mineral producers by commodity operating in the San Francisco Bay Area in 1997-

1998. Minerals mined in the San Francisco Bay Area, as highlighted in Figure 2, include stone/rock,

sand/gravel, specialty sand, silica, decomposed granite, fill, salt, limestone, shale, and clay. Minerals

mined in the Bay include sand and salt.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 15 July 31, 2008

Figure 2. The Mines and Mineral Resource Producers in Seven Bay Area Counties (1997-1998) and the

Commodities Produced (Source: Galloway, Weather and Frank 2001).

An average American uses over 1 million pounds of industrial minerals during their lifetime. Industrial

minerals include limestone, clays, cement, dimension stone, and aggregates. Uses for these industrial

minerals include roof shingles, ceiling and walls, home foundations, appliances, bricks, concrete,

computers, telephones, and construction sand and gravels. In 2006, the market value of minerals

extracted in California totaled $4.6 billion, with an estimated $1.5 billion generated through sand and

gravel operations. In 2006, there were 800 active mines producing non-fuel minerals, which collectively

employed 10,300 individuals (Kohler 2007).

Sand Mining. Sand, stone, and gravel are essential to the local construction industry and as expanding

housing and commercial developments have competed for land with local quarries, sand extraction has

moved offshore. Sand mined in the San Francisco Bay Area is used to support local commercial
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 16 July 31, 2008

construction activities, including those related to the construction of commercial buildings, construction

of freeway systems, and the reconstruction of bay bridges. Within the San Francisco Bay Estuary, sand

mining activities are concentrated in the Central Bay, Carquinez Strait, Middle Ground Shoal, and Suisun

Bay Channels. There are three companies that until recently, held sand mining leases in the estuary:

Hanson Aggregates, CEMEX (formerly RMC), and Jerico Products / Morris Tug and Barge (Jerico).

Production limits are set in the permits issued by the California State Lands Commission, U.S. Army

Corps of Engineers and BCDC. For the Central Bay, production limits are set at approximately 1.5

million cubic yards annually. Within the Carquinez Straits, production limits are 50,000 cubic yards per

year. Production limits in Suisun Bay are set at 1 million cubic yards annually. From March 2002 to

February 2003, sand mining activities were monitored as part of an evaluation of the effects of sand

mining on aquatic habitat and fish populations. The investigation monitored roughly 1.5 million cubic

yards of sand or 1.9 million tons being mined during 862 mining events (Hanson et al. 2004).

In an interview conducted in support of this study, Chris Lind of Jerico estimated annual sand mining

production in the estuary at around 2.0 million tons per year, a value well within the permitted limits.

3

Further, he noted that at an average sale price of $10-$18 per ton, annual revenue from sand mining

activities in the San Francisco Bay Estuary totaled roughly $20-$36 million.

4 It is important to note that

this value may decline in the future because CEMEX, which bought out RMC, has ended its sand mining

operations in San Francisco Bay. CEMEX was permitted to extract roughly 400,000 cubic yards of sand

annually.

Hanson et al. (2004) evaluated the potential environmental effects associated with sand mining in San

Francisco Bay focusing on:

∞ the direct impacts of suspended sediment concentrations and turbidity, entrainment in the

suction head, and physical disturbances of benthic organizations during sand mining activities;

and

∞ the indirect impacts of the depletion of bottom sediments resulting in increased water depths

and changes in the composition of the substrate.

The findings of the report suggest that the environmental impacts associated with sand mining are highly

localized, short in duration, small in magnitude, and occur intermittently. The study concluded that sand

mining activities did not have a significant environmental effect on subtidal habitat quality or habitat

function within the Bay-Delta Estuary (Hanson et al. 2004).

When considering the tradeoffs between subtidal habitat protection and the economic benefits of sand

mining, it is also important to note that in the absence of local sand mining activities, sand would need to

be transported from areas outside the region (e.g., British Columbia) at greater cost to the local

construction industry.

5 Moving the source of sand for local construction industries would also come at its

own price that would include greater cost to local construction industries and environmental impacts

associated with quarrying and transport over long distances.

 3 The weight of sand is estimated at 2,500 pounds per cubic yard. Permits allow 2.55 million cubic yards or roughly

3.2 million tons of sand to be extracted each year in San Francisco Bay. 4 Interview with Chris Lind of Jerico Products, Inc. July 11, 2008. 5 The price of sand imported from British Columbia was estimated at $20-$25 per ton by Mr. Chris Lind of Jerico

Products, Inc.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 17 July 31, 2008

Salt Harvesting. In 2006, the U.S. was the top salt producer in the world, with production topping 44.3

million metric tons. Salt is valuable in a wide variety of household, industrial, and commercial

applications, including: manufacture of chlorine, coproduct sodium hydroxide and synthetic soda ash;

application on roads during extreme weather conditions; additive to feed sold to farmers and ranchers;

food preservation and flavor enhancement; and industrial applications in the oil and gas industries,

textiles and dyeing, metal processing, pulp and paper, tanning and leather treatment, and rubber

manufacturing.

The first commercial salt operation in San Francisco Bay was launched by Captain John Johnson in 1854.

Cargill entered the market in 1979, when it bought out the Leslie Salt Company, and is currently the only

salt producer operating in San Francisco Bay. At its peak, Cargill salt pond operations produced 1.3

million tons of salt on an annual basis, with three plants operating in Napa, Redwood City, and Newark.

In recent years, salt production locally has been scaled back to 650,000 tons annually, with the Redwood

City plant recently being targeted for closure. Local salt production is harvested using the solar method.

At a price of $61.08 per ton for solar salt, local salt production would generate roughly $39.7 million

annually. It is important to note that the average price per ton of solar salt was generated using weighted

average prices for salt sold nationally, as estimated by the U.S. Geological Survey (U.S. Geological

Survey 2008a).

6 Local salt prices are proprietary and were not provided by Cargill and were not

determined by the research team.

In recent years, harvesting techniques have rendered salt operations less land-intensive, and this enhanced

efficiency, combined with scaled back operations, have allowed Cargill to donate or sell 16,500 acres of

land to state and federal governments for wildlife protection (EDAW et al. 2007). As noted previously,

salt is required for a large number of commercial, industrial, and household uses. To the extent that the

demand for salt continues to grow in the Bay Area, scaling back salt production locally would result in

more salt being transported to the region from other salt production centers (e.g., Salt Lake City).

Oyster Shell Mining. Historic oyster shell deposits are dredged from San Francisco Bay for use in

cement, cattle feed, soil conditioner, and poultry grit. Morris Tug and Barge holds a lease with the

California State Lands Commission to dredge up to 80,000 yards of historic oyster shell deposits annually

using a tug and barge on 1,560 acres in south San Francisco Bay, San Mateo and Alameda counties.

Morris Tug and Barge uses a hydraulic dredge that is inserted 12 to 36 inches beneath the Bay floor. The

shell material is washed and transported to Petaluma or Collinsville, where it is offloaded and processed

for sale. Historic oyster shell deposits in the Bay are estimated to exceed 60 million tons. Thus,

extraction levels called for in the most recent 10-year lease agreement total less than one-tenth of 1

percent of total deposits.

Approximately 36,000 tons of oyster shell is dredged each year in San Francisco Bay by Morris Tug and

Barge. Prior to sale, the oyster shell is sold to Jerico Products, Inc. where it is thoroughly cleaned, dried,

crushed, screened to a preferred size and stored. At an average price of $150-$200 per ton, the sale of

oyster shells dredged from San Francisco Bay generates approximately $5.4 - $7.2 million in revenue

annually.

7

Oyster shells are a local source of lime, a mineral necessary for cement production. The other primary

source of lime, limestone, is most closely located to the south in Santa Clara, Santa Cruz, and San Benito

 6 Price per ton was calculated by dividing the total value of all solar salt sold in the United States by the quantity

sold, as presented in Table 3 of U.S. Geological Survey 2008a. That value was then adjusted from a price per metric

ton ($67.33) to a price per ton ($61.08). 7 Interview with Chris Lind of Jerico Products, Inc. July 24, 2008.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 18 July 31, 2008

counties. It is extremely expensive to transport cement over large distances. Thus, the presence of a local

source of lime in the form of oyster shells is an important component to the booming local construction

industry and the Bay Area economy.

While negotiating the most recent lease agreement, concerns were expressed by NOAA Fisheries, BCDC,

CDFG, and the San Francisco Bay Regional Water Quality Board. The concerns centered on a number of

issues, including:

∞ the need to clarify the water depth at which mining is conducted

∞ the use of water jets to break up the substrate

∞ the need for additional information regarding sediment suspended during mining operations

∞ the need for bathymetric and benthic surveys

∞ the potential entrainment of endangered species and larval fish

∞ effects on native oyster populations

∞ benthic disturbance and recovery.

In response to these concerns, Morris Tug and Barge clarified that suction heads for oyster mining were

positioned 1 to 3 feet beneath the Bay floor (the dredging depth was previously thought to be 6 inches

beneath the Bay floor), and agreed to conduct a bathymetric survey every five years.

Shipping and Ports. The Ports of San Francisco, Oakland, Richmond, and Redwood City are all located

within the San Francisco Bay Estuary. The Ports of the San Francisco Bay serve as a key gateway to

eastern markets, destinations for cruise lines, and terminals for water transportation between communities

located on the Bay.

In an economic study recently completed for the Port of San Francisco by Bay Area Economics, the total

direct, indirect, and induced economic effects of the port were estimated at $1.7 billion. The study found

that the port supported 13,500 jobs just in the City of San Francisco. When expanded to the Northern

California region, the total economic impact expanded to $2.0 billion and 15,200 jobs. The annual

revenue generated by port activities to the City of San Francisco through sales, parking, stadium

admissions, possessory interest taxes, business taxes, utility user taxes, retail and non-retail sales and use

taxes, and transient occupancy taxes were estimated at $25 million annually (Bay Area Economics 2008).

The port also serves as an important destination for cruise lines and terminal site for commuter ferries.

The Port of Oakland serves as a nationally significant hub for international cargo transportation and

distribution. The port holds 10 container terminals and is served by 2 intermodal rail facilities. In 2007,

container throughput at the Port of Oakland totaled 2.4 million 20-foot equivalent units (TEUs). The port

handled 99 percent of the containers traversing through Northern California. In 2005, the port generated

$2 billion in personal income and consumption expenditures and 28,522 local jobs. Port activities also

generated $208 million in state and local taxes (Martin Associates 2006).

The Port of Richmond is located on 32 miles of shoreline along on the northeastern shores of San

Francisco Bay. The port includes five city-owned and ten privately-owned terminals. These terminals

handle bulk liquid, dry bulk materials, metals, break-bulk cargoes, and automobiles. No estimates of the

economic impact of the Port of Richmond were obtained by the research team.

The Port of Redwood City is located at the southwestern reaches of San Francisco Bay. In the most

recent fiscal year ending June 30, 1997, the port handled 1.44 metric tons of cargo largely consisting of

imported bulk commodities (e.g., cement, bauxite, gypsum) for the local construction industry and
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 19 July 31, 2008

exports of recycled metals. Marine port operations generated $6 million in that timeframe (Trans Systems

2008).

Wastewater Assimilation. In San Francisco, the Bay adds value to the local economy by serving as a

waste sink. In San Francisco, toxic contaminants from industrial, commercial and agricultural activities

are dumped into the Bay for assimilation. To the extent the waste exceeds the assimilative capacity of the

natural environment, damage will occur. Such is the case in San Francisco Bay, where 46 publicly owned

wastewater treatment plants and 65 industrial points discharge 40,000 tons containing at least 65 different

types of contaminants each year. These contaminants are in some cases toxic to plants and animals, and

impose health risks to humans. On a daily basis, San Francisco Bay receives more than 800 million

gallons of municipal wastewater, containing 60 tons of nitrogen (U.S. Geological Survey 2008b).

The research team was unable to identify any studies documenting the economic impacts of wastewater

assimilation for San Francisco Bay.

Residential and Industrial Water Supply. San Francisco Bay water is used to supply once-through

cooling systems at three Bay Area power plants: Contra Costa (natural gas), Pittsburg (natural gas), and

Potrero (natural gas and distillate). Once-through cooling technology draws water into the plant and runs

it one time only past condenser units before discharging the water back into the Bay. These three power

plants are permitted to intake a combined 1.6 billion gallons of water daily. The Pittsburg Power Plant is

the largest plant located on the Bay, and is permitted to intake nearly 1.1 billion gallons of water daily.

The Contra Costa Power Plant’s maximum permitted intake volume is 341 million gallons per day, and

the Potrero Power Plant is permitted to intake 226 million gallons per day. Together, these three power

plants have a generation capacity of more than 3,031 megawatts (Moss Landing Marine Laboratories

2008).

Power plants that use once-through cooling systems do not pollute directly, but do have negative

environmental impacts because of their intake systems entraining larval fish and invertebrates, and output

systems displacing polluted sediment when discharging water back into the Bay. Once-through cooling

systems also impinge marine life by trapping them in the intake flow and crushing them against screens.

Finally, there are thermal effects caused by the discharge of heated water into waterways at the

conclusion of the cooling cycle.

Desalination is the process by which salts are removed from ocean or otherwise salty waters to produce

fresh drinking water. Desalination has been used extensively around the world but has not been widely

applied in the U.S. because of its cost relative to the alternatives and the environmental impacts associated

with the disposal of brine, a waste product of the desalination process. As a result of technological

advancements in the desalination process, the four largest water supply agencies in the San Francisco Bay

Area (East Bay Municipal Utility District, San Francisco Public Utilities Commission, Contra Costa

Water District, and the San Clara Valley Water District), are jointly exploring the feasibility of

developing regional desalination plants that could deliver 120 million gallons per day to San Francisco

Bay Area residents.

Scientific Research. Scientific research in the Bay benefits the local economy through the generation of

high-paying research positions and the innovation and breakthroughs that permeate one of the most

dynamic and technology-oriented regional economies in the U.S. The complex San Francisco Bay

Estuary is one of the most studied ecosystems in the world. The 1993 Comprehensive Conservation and

Management Plan (CCMP) noted that there were over 70 monitoring programs identified in the estuary,

and many of those monitoring programs continue today.

The Regional Monitoring Program, which was created in 1992 by the San Francisco Regional Water

Quality Control Board, continues to monitor the effects of wastewater, urban runoff, and dredging
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 20 July 31, 2008

discharges on contaminant concentrations in water, sediments, and fish and shellfish tissue in San

Francisco Bay.

The Interagency Ecological Program involves the collaboration of 10 member agencies (California

Department of Water Resources, California Department of Fish and Game, California State Water

Resources Control Board, U.S. Fish and Wildlife Service, U.S. Bureau of Reclamation, U.S. Geological

Survey, Army Corps of Engineers, National Marine Fisheries Service, Environmental Protection Agency,

and the San Francisco Estuary Institute). These agencies work together to study the ecology of San

Francisco Bay and examine the effects of the State Water Project and Federal Central Valley Project on

the Bay’s physical, biological, and chemical conditions.

The CALFED Bay-Delta Program represents collaboration between 25 state and federal agencies. The

objective of the program is to improve the biological health of San Francisco Bay through the funding of

research designed to aid policymakers’ understanding of the complex ecological issues that persist in San

Francisco Bay.

The U.S. Geological Survey (USGS) Continuous Monitoring Program has studied and monitored Bay

temperature, salinity, water level, and suspended-solids concentrations at sites throughout the San

Francisco Bay Estuary since 1989.

Amenity Values. Amenity values are experienced when tourists and local citizens watch the sun set on

San Francisco Bay or when they walk along the Bay on a foggy fall morning. Amenity values are

experienced through the sights and sounds of the Bay and although they are not directly quantifiable,

housing prices and tourism expenditures are indicative of the amenity value of the Bay.

San Francisco Bay is an enormous tourism destination, with the Golden Gate Bridge, Pier 39, Alcatraz

Island, local ferries, and Fisherman’s Wharf drawing nearly 16 million visitors to San Francisco in 2006.

While in San Francisco, these visitors spent $7.8 billion, supporting 68,652 local jobs and generating

$1.83 billion in income. On an average day in San Francisco, visitors spend $21.26 million. Annually,

visitor spending generates $473 million in taxes to the City of San Francisco.

Housing prices are also indicative of the local amenities offered by a community. While economic and

topographic conditions also play a part in determining local housing prices, San Francisco consistently

ranks among the most expensive cities in the U.S. In 2007, the San Francisco-Oakland-Freemont,

California Metropolitan Area ranked second among the most expensive metro areas in the United States,

with a median home price of $736,800. Furthermore, in a study conducted by Kirshner and Moore

(1989), the price of bayside property in San Francisco was roughly 20 percent higher than other properties

with otherwise similar characteristics.

Education. For San Francisco Bay, education values are those associated with nature observance and the

conduct of science by students, teachers, stakeholders, and the general public. Similar to the value of

scientific research, education value is more general and is tied to its ability to inform local populations.

These values are not well defined, but are significant, as reflected through the many local education

programs run at the Bay, including those offered through the San Francisco Bay National Estuarine

Research Reserve, the Aquarium of the Bay, the Headlands Institute, Save the Bay, and the environmental

education programs of the U.S. Fish and Wildlife Service.

The San Francisco Bay National Estuarine Research Reserve (NERR) serves as an important laboratory

for scientists who use the stable environment to support long-term research studies and monitoring

activities. The reserve is also used as a reference site for comparative studies. There are a number of

research projects underway at the reserve covering a broad array of topics, including those related to
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 21 July 31, 2008

eelgrass restoration; habitat mapping and change; technologies used to monitor nutrients and nutrient

loading; channel geomorphology; and invasive species impacts.

Because San Francisco Bay offers the opportunity to monitor and examine natural systems, it presents

numerous research options for students attending local universities (Stanford, University of California

Berkeley, University of San Francisco, St. Mary’s College, Santa Clara University, San Francisco State

University) in numerous fields of study, including earth sciences, biological sciences, environmental

sciences, physical sciences, and social sciences.

2.3 Indirect Use Values

Indirect use values represent the indirect benefits of aquatic and ecological systems from which

humankind derives economic value or satisfaction. These values include the biological support, nutrient

cycling, climate regulation, flood protection, water quality maintenance, biodiversity and genetic

maintenance, and sediment transport benefits tied to marine environments.

Biological support values are tied to links with other species and habitat, such as the one million birds that

rest and feed in San Francisco Bay during migratory trips along the Pacific Flyway and the 15,000 Gray

Whales that migrate between Arctic feeding grounds and breeding grounds located off Baja California.

The biological support found at San Francisco Bay sustains migrating wildlife to the economic benefit of

bird watchers, whale watching tours, eco tourists, and hunters up and down the Pacific Coast.

San Francisco Bay serves a climate regulation function as the cool currents of the Pacific Ocean strongly

influence the San Francisco Bay Area climate. The Bay Area is characterized by mild, consistent

temperatures throughout the year (average high temperatures ranging from 56Υ in January to 70Υ in

September and average low temperatures ranging from 46Υ in February to 56Υ in October), negligible

snowfall, and limited rainfall in May through September (Weatherbase 2008). The mild climate supports

local wine growers and prevents freezing temperatures that can destroy food crops. The climate also

benefits local populations, improving local quality of life and significantly enhancing property values.

The climate regulation benefits of the Bay are evident when considering the case of the Napa Valley wine

industry. Napa Valley is located to the north of San Francisco and is far enough inland to escape most of

the fog coming of the Bay and Pacific Ocean yet benefits greatly from the cooling effects of the fog and

winds that do make their way north to Napa Valley. The Napa Valley economy is heavily reliant on the

local wine industry. The total economic impact of the Napa Valley wine industry was recently estimated

at $9.5 billion annually. In 2005, the Napa Valley wine industry accounted for only 4 percent of

California’s wine production by volume but represented 21 percent of the total economic impact of the

statewide wine industry (MKF Research 2005).

The wetland areas and adjacent floodplains located near San Francisco serve to store water during storms

and form natural floodways that enable water to transport easily downstream. These flood protection

benefits serve to lower flood peaks and protect the local population and property from damage

experienced during storms.

Other indirect use values include the water quality maintenance, nutrient cycling (removal of excess

nutrients and chemical contaminants), biodiversity and genetic maintenance benefits of San Francisco

Bay.

The research team was unable to locate any studies focusing on the water quality, nutrient cycling, or

genetic maintenance benefits of San Francisco Bay but did identify a report that examined the findings of
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 22 July 31, 2008

12 studies published in peer-reviewed journals focusing on the economic value associated with water

quality benefits of coastal wetlands. Mean and median water quality benefits for coastal wetlands in the

reviewed studies were estimated at $323.05 and $178.64 per acre per year, respectively. The study also

found that benefits varied greatly due to the assimilative capacity of the wetland area under consideration

and that coastal wetlands are undervalued by society because their benefits are largely unrecognized in

the marketplace (Kazmierczak 2001).

2.4 Non-Use and Intrinsic Values

Non-use values include the option, bequest, and stewardship motives. These values are tied to our

interest in preserving a natural resource either for our own potential future use or the use of others,

including future generations and other forms of life. Existence values include the option value, existence

value and bequest value. The option value is derived from the ability to take a future trip and enjoy the

benefits of a natural resource. That is, even if a person had no plans of visiting San Francisco Bay, the

Bay still has value inasmuch as that person would want to reserve the option of visiting it one day in the

future. The bequest value is the satisfaction gained by endowing a natural resource on future generations.

The intrinsic values that individuals place on the environment reflects the view that natural organisms and

environmental habitat is valuable regardless of the values placed on it by humans.

The annotated bibliography prepared by Battelle previously for NOAA in support of the San Francisco

Subtidal Habitat Goals Project documents a number of studies that stress the significance of non-use and

non-market benefits. The annotated bibliography concludes that the high value attached to non-use

benefits suggests that environmental values are multidimensional and more complex than most experts

and policymakers recognize (Battelle 2007).
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 23 July 31, 2008

3.1 Conclusions and Recommendations for Further Research

The San Francisco Bay Area economy is inextricably linked to the natural resource services (e.g.,

commercial fishing, shipping, recreation, scenic amenities) provided by the Bay. These services include

those that confer direct value to consumers: commercial fishing, sport fishing, subsistence fishing,

hunting, recreation, eco tourism, water transportation, mineral extraction, shipping and ports, wastewater

assimilation, residential and industrial water supply, scientific research, amenity value, and education.

There are also a number of indirect use values arising from the ecological and aquatic systems of the San

Francisco Bay: biological support, nutrient cycling, climate regulation, flood protection, water quality

maintenance, biodiversity and genetic maintenance, and sediment transport. There is also an intrinsic

value that society places on the Bay. Each of these value sets are examined in this report.

This report documents the economic impact of shipping and ports, sport fishing, hunting, cruise ships, and

amenity values on the San Francisco Bay Area. It presents estimates of revenue generated through

commercial fishing, sand mining, oyster shell mining, and salt harvesting activities. It defines the activity

associated with water transport, wastewater assimilation, and residential and industrial water supply but

does not produce estimates of their economic impact. It also performs a qualitative assessment of the

economics tied to subsistence fishing, recreation and eco tourism, scientific research, education, and

indirect and intrinsic values. For recreation, eco tourism, and some indirect values, the magnitude of

economic impacts are explored using studies performed outside the San Francisco Bay Area.

The perspectives of the stakeholders were also documented in this report. Stakeholders offered numerous

recommendations worthy of further consideration, including:

1) Benefits from restoration activities are cross-cutting

2) One gain achieved through restoration can be offset by another environmental or economic

loss

3) Any measures taken by NOAA should involve close collaboration with key stakeholders and

follow an open public process

4) When considering protection goals within the context of economic impacts, it is important to

understand the full range of benefits and costs, including those related to employment, output,

local tax revenues, impacts on secondary industries, and multiplier effects

5) The issues being considered by the Core Group and Work Groups are complex with

overarching regulations and competing interests

6) While the setting of new goals and objectives was viewed positively, some of the

stakeholders argued that a good first step would be to enforce existing laws and regulations.

7) More preservation, restoration, and protection activities are needed

8) The economic benefits from subtidal habitat restoration are not well documented and further

analysis is required to inform the Core Group and Working Groups’ decision-making process.

More detail regarding the stakeholder recommendations is provided in Section 1.5 of this report.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 24 July 31, 2008

The research team concurs with the 8thstakeholder recommendation. Once the Core Group and Work

Groups have defined subtidal habitat protection and management measures, there are a number of

additional research steps we recommend NOAA take to better understand the economic implications of

the measures. We recommend this research program follow a two-phase approach.

In the first phase of the research work plan, we recommend the research team construct a set of tables that

consider all direct, indirect, non-use, and intrinsic values that are likely to result from each protection and

management measure developed under the San Francisco Subtidal Habitat Goals project and study. The

examination should include a qualitative analysis of the economic impacts of protection and management

measures, and should identify stakeholders that will likely benefit or be harmed by protection and

management measures.

Under the first phase of the work plan, the research team should also document methods with potential

application for assessing the economic benefits associated with each protection and management

alternative. Each method should be examined in terms of its relevance for valuing the identified

economic impacts. For each economic impact, data required to support potential valuation methods

should be documented.

Once the research team has completed its preliminary analysis of the economic benefits applied to each

management and preservation measure, the research team should examine the type and relative magnitude

of economic impacts associated with the protection and management measures developed as a part of the

San Francisco Bay Subtidal Habitat Goals Project and Study. For each measure, the research team should

examine the impacts on the local economy within the nine-county region surrounding San Francisco Bay,

consisting of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and

Sonoma counties.

The scope of the benefits considered should include both direct, indirect, non-use, and intrinsic values, as

defined in Phase I of the work plan. The research team should consider the distributional impacts of the

measures, and examine the impacts over a short- (5 to 10 years) and long-term (50 years) planning

horizon. In performing this analysis, the research team should assess when benefits would be expected to

first accrue and how the stream of benefits would be expected to change over time.

Within the framework noted above, the research team could employ a number of accepted environmental

valuation techniques to measure the economic impacts of the management and protection measures.

Environmental economists have developed a number of market and non-market-based techniques to value

the environment. Some of these techniques, such as the contingent valuation and travel cost methods,

require extensive surveys. Others, such as the hedonic pricing method, require analysis of large property

value databases. There are a number of techniques, however, that do not require extensive data sets yet

could be employed to generate reasonable economic impact estimates. The methods we recommend for

the Phase II analysis include: the factor of production approach, defensive expenditures approach, benefit

transfer method, meta analysis, and qualitative assessments based on available data and expert opinion.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 25 July 31, 2008

References

Alkire, C. 2008. The Value of Recreational Fishing in California: Direct Financial Impacts. Submitted

to California Trout. San Francisco, California.

Battelle. 2007. Economic Support for the San Francisco Subtidal Habitat Goals Project: Annotated

Bibliography. Prepared for the National Oceanic and Atmospheric Administration, Coastal

Services Center. Columbus, Ohio.

Bay Area Economics. 2008. Port of San Francisco Economic Impact Study. Submitted to the Port of

San Francisco. Emeryville, California.

California Department of Fish and Game. 2007a. Final Commercial Landings for 2000, 2006. Table 17

– Poundage and Value of Landings by Port, San Francisco Area and Table 15 – Poundage and

Value of Landings of Commercial Fish into California by Area. Sacramento, California.

California Department of Fish and Game. 2007b. Report of the 2006 Game Take Hunter Survey.

Sacramento, California.

California Department of Water Resources. 2008. Website: Suisun Marsh Facts.

[http://www.iep.ca.gov/Suisun/facts/index.html, last accessed July 10, 2008]

Chiang, A. 1998. Seafood Consumption Survey of the Laotian Community of West Contra Costa County,

California. Prepared for the Asian Pacific Environmental Network. Oakland, California.

EDAW, Philip Williams and Associates, Ltd., H.T. Harvey and Associates, Brown and Caldwell, and

Geometrix. 2007. South Bay Salt Pond Restoration Project: Final Environmental Impact

Statement / Report Volume 1. Prepared for U.S. Fish and Wildlife Service and California

Department of Fish and Game. Newark, California.

Fisherman’s Wharf Merchants Association. Website: Pier 39.

[http://www.fishermanswharf.org/Pier39.htm, last accessed July 10, 2008]

Galloway, J, J. Weathers, and D. Frank. 2002. Consumer Uses of Industrial Minerals in the San

Francisco Bay Area – Houses to Interstates. Menlo Park, California.

Goldman, G., B. McWilliams, V. Pradhan, and C. Brown. 1998. The Economic Impact of Recreational

Boating and Fishing in the Delta. Prepared for the California Delta Protection Commission.

Berkeley, California.

Hanson, C., J. Coil, B. Keller, J. Johnson, J. Taplin, and J. Monroe. 2004. Assessment and Evaluation of

the Effects of Sand Mining on Aquatic Habitat and Fishery Populations of Central San Francisco

Bay and the Sacramento-San Joaquin Estuary. Prepared for Hanson Aggregates Mid-Pacific,

Inc., RMC Pacific Materials, Inc., and Jerico Products, Inc. / Morris Tug and Barge. Walnut

Creek, California

Kazmierczak, R. 2001. Economic linkages between coastal wetlands and hunting and fishing: a review

of value estimates reported in the published literature. Staff paper 2001-03. Natural Department

of Agricultural Economics and Agribusiness, Louisiana State University Agricultural Center.

Baton Rouge, Louisiana.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 26 July 31, 2008

Kirshner, D. and D. Moore. 1989. The Effect of San Francisco Bay Water Quality on Adjacent Property

Values. Journal of Environmental Management, 29 (3), pp. 263-274.

Kohler, S. 2007. California Non-Fuel Minerals 2006. Prepared for the California Geological Survey.

Martin Associates. 2006. The Economic Impact Study of Port of Oakland Maritime Operations: Final

Report. Prepared for the Port of Oakland. Oakland, California.

Moss Landing Marine Laboratories. 2008. Understanding Entrainment at Coastal Power Plants:

Informing a Program to Study Impacts and Their Reduction. Prepared for the California Energy

Commission. Sacramento, California.

MKF Research. 2005. Economic Impact of Wine and Vineyards in Napa County. Prepared for Jack L.

Davies Napa Valley Agricultural Land Preservation Fund and Napa Valley Vinters. St. Helena,

California.

Starratt, W. 2002. Sands of Time Running Out on Era of Plentiful Sand – Bay Economy Threatened.

Bay Crossings. San Francisco, California.

Pendleton, L. 2006. Working Paper. Understanding the Potential Economic Impact of Marine Wildlife

Viewing and Whale Watching in California. Los Angeles, California.

TransSystems. 2008. Strategic Assessment of Maritime Business: Final Report. Prepared for the Port of

Redwood City. Redwood City, California.

U.S. Census Bureau. 2006. 2006 American Community Survey. Washington, D.C.

U. S. Fish and Wildlife Service. 2005. Economic Impact of Waterfowl Hunting in the United States:

Addendum to the 2001 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation.

Report 2001-9. Arlington, Virginia.

U.S. Geological Survey. 2008a. 2006 Mineral Yearbook: Salt. Reston, Virginia.

U.S. Geological Survey. 2008b. Website: San Francisco Bay Program: Lessons Learned for Managing

Coastal Water Resources. [http://water.usgs.gov/wid/html/sfb.html, last accessed May 20, 2008]

Weatherbase. 2008 Website: Weather Database for San Francisco, California.

[http://www.weatherbase.com/weather/weather.php3?s=149427&refer=&units=us, last accessed

June 2, 2008]
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 27 July 31, 2008

Appendix A – Stakeholder Contact List

Table A- 1 Stakeholder Contact List

Environmental Value Contact Organization

Commercial Fishing Zeke Grader Pacific Coast Federation of

Fisherman’s Association

Sport Fishing Roger Thomas Golden Gate Fisherman’s

Association

Hunting Larry Wyckoff California Department of Fish and

Game

Recreation Ray Murray National Park Service, Pacific West

Region

Boating and Sailing Ann Buehl California Coastal Conservancy

Wildlife Viewing Barbara Salzman Marin Audubon Society

Water Transport John Sindzinski San Francisco Bay Area Water

Emergency Transportation

Authority

Shipping and Ports Tina Olsen Port of San Francisco

Salt Harvesting Steve Ritchie South Bay Salt Pond Restoration

Project

Sand Mining Brenda Goeden San Francisco Bay Conservation and

Development Commission (BCDC)

Sand Mining Chris Lind Jerico Products, Inc.

Scientific Research Drew Talley San Francisco Bay National

Estuarine Research Reserve

Education Sara Ferner San Francisco Bay National

Estuarine Research Reserve

Education Sandi Potter San Francisco Bay Regional Water

Board

Education Athena Honore Save the Bay

Education Miha Aida Headlands Institute

Education Sylvie Lee California Coastal Commission

General Economics Phil King San Francisco State University

Biological Support Jamie Kooser San Francisco Bay National

Estuarine Research Reserve

Bequest Amy Hutzel California Coastal Conservancy
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 28 July 31, 2008

Appendix B - Subtidal Habitat Goals Project - Interview Protocol

National Oceanic and Atmospheric Administration

May 19, 2008

The Subtidal Goals Project in San Francisco Bay represents a long-term plan for protection and

restoration of the subtidal habitats of the San Francisco Bay. The primary product of the Subtidal Goals

Project will be a document that provides recommendations and goals for use, protection, restoration, and

research to improve subtidal habitat management in San Francisco Bay. Resource managers will be able

to use this document to make informed decisions and researchers will be able to prioritize activities and

pursue funding for subtidal projects.

The economic benefits associated with subtidal habitats, however, are not well known to the Subtidal

Goals Administrative Core Group or the Subtidal Goals work groups. Thus, understanding the economics

associated with protecting resources represents an important piece of information for managers who are

responsible for implementing protection and management measures. The ability to share a common

knowledge of the expected economic changes, both good and bad, that may result from management

decisions and which interests will be affected by these changes will support the selection and

implementation of appropriate protection goals. The National Oceanic and Atmospheric Administration

(NOAA) has contracted with Battelle to address the economic components of the subtidal habitat of San

Francisco Bay that will in turn support the overall Subtidal Habitat Goals Project.

To support this project, Battelle will be conducting interviews with a number of stakeholders. The

objectives and scope of the interviews include:

a) natural resource services provided by the San Francisco Bay

b) the link between ecological conditions in San Francisco Bay and local economic benefits

c) local industries and other stakeholders reliant on the Bay

d) classes of economic benefits derived from the Bay

e) sources of data that could be used to quantitatively examine the identified benefits

f) sources of literature that could be used to qualitatively examine the economic benefits tied to

the Bay

g) ecological threats to these natural resource services

h) thoughts concerning potential preservation or restoration activities.

Table 1 lists the stakeholders targeted for interview. An original list of stakeholders was provided by

NOAA Coastal Service Center (CSC) staff, and that list was refined based on stakeholder input. It

identifies the environmental value to be discussed during the interview and the organization each potential

interviewee represents. A member of the research team will be contacting these stakeholders for

interviews. This protocol will be used to guide the interview. Once the interviews are completed, followup telephone contacts and information transfers will complete the data collection process.
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 29 July 31, 2008

Table B- 1 Stakeholder Contact List

Environmental Value Contact Organization

Commercial Fishing Zeke Grader Pacific Coast Federation of

Fisherman’s Association

Sport Fishing Roger Thomas Golden Gate Fisherman’s

Association

Hunting Larry Wyckoff California Department of Fish and

Game

Recreation Ray Murray National Park Service, Pacific West

Region

Boating and Sailing Ann Buehl California Coastal Conservancy

Wildlife Viewing Barbara Salzman Marin Audubon Society

Water Transport John Sindzinski San Francisco Bay Area Water

Emergency Transportation

Authority

Shipping and Ports Tina Olsen Port of San Francisco

Salt Harvesting Steve Ritchie South Bay Salt Pond Restoration

Project

Sand Mining Brenda Goeden San Francisco Bay Conservation and

Development Commission (BCDC)

Sand Mining Chris Lind Jerico Products, Inc.

Scientific Research Drew Talley San Francisco Bay National

Estuarine Research Reserve

Education Sara Ferner San Francisco Bay National

Estuarine Research Reserve

Education Sandi Potter San Francisco Bay Regional Water

Board

Education Athena Honore Save the Bay

Education Miha Aida Headlands Institute

Education Sylvie Lee California Coastal Commission

General Economics Phil King San Francisco State University

Biological Support Jamie Kooser San Francisco Bay National

Estuarine Research Reserve

Bequest Amy Hutzel California Coastal Conservancy
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 30 July 31, 2008

[BACKGROUND INFORMATION]

Name of Respondent

Date Survey was Completed

Employer of Respondent

Respondent Address

Job Title of Respondent

Phone Number(s) of Respondent

[QUESTIONS RELATING TO ENVIRONMENTAL VALUES OF SAN FRANCISCO 

BAY]

1. The table on the following page presents a list of the environmental values of the San Francisco

Bay that generate economic benefits to society. Please review this table and modify it, removing

values that you do not believe should be on the list, adding values not presently on the list, and

adding comments that you think are relevant to the list.

2. Please discuss what you consider to be the direct economic impacts of [the value or activity the

respondent is expert in]. Direct economic impacts could include the total value of sales, output,

tax contributions, jobs, or a more general overview of how the activity benefits the San Francisco

Bay Area economy. Please provide data or literature concerning the economic impacts of the

value in question.

3. Please list the ancillary services or secondary industries that indirectly benefit from those

supporting the [value or activity that you are expert in]? In addition to listing the industries,

please discuss the manner in which they support the activity or primary industry that is the focus

on this interview. Please provide data sources and literature to document these connections and

activity.

4. What sort of protection, restoration, preservation, or other related activity would you recommend

be undertaken in order to enhance the positive economic effects of the [value or activity that you

are expert in]?

5. Do you have any other comments you would like to provide at this time about the economic

valuation of the Bay, or any questions?

6. In our final report, could we include your name in a list of experts interviewed for this study?
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 31 July 31, 2008

Table B- 2 San Francisco Bay Environmental Values

(a) Direct use values – goods and services directly consumed by users

- Commercial fishing

o Pacific Herring

o Salmon

o Dungeness Crab

o California Halibut

o Rockfish

o Grass Shrimp

o English Sole (San Francisco Bay acts as a nursery)

o Starry Flounder (San Francisco Bay acts as a nursery)

o Crawfish

- Sport fishing

- Subsistence fishing

- Hunting

o Ducks

o Geese

- Recreation (boating and sailing, hiking, kayaking, windsurfing, swimming, beach use,

photography, surfing, scuba diving)

- Eco Tourism (wildlife viewing)

- Water transportation (ferry system, cruise lines)

- Aquaculture (oyster farming)

- Shipping and ports

- Production of salt, magnesium and magnesium compounds and bromine

- Mining oyster shells for cement and soil conditioner

- Sand mining

- Wastewater assimilation (industrial and municipal sewage, urban and agricultural runoff)

- Industrial water use – once through cooling

- Residential and industrial water supply

- Scientific research

- Amenity values

- Education

(b) Indirect use values – indirect benefits arising from ecological and aquatic systems

- Biological support – links to other species and habitats (e.g., migratory birds, marine mammals)

- Nutrient cycling

- Climate regulation

- Flood protection

- Water quality maintenance

- Biodiversity and genetic maintenance

- Sediment transport

(c) Non-use values

-Option value (future knowledge and future economic uses)

-Existence value (cultural, aesthetic, spiritual)

-Bequest (stewardship, heritage, legacy)

(d) Intrinsic value – organisms have a worth of their own regardless of usefulness to humans
Conceptual Benefits of Protection, San Francisco

Bay Subtidal Habitat Goals Project: Final Report 32 July 31, 2008

Thank you for taking time to address these questions. If you have any additional comments,

questions or information you would like to share with the research team, please contact Mr. Patrick

Balducci at the phone numbers and addresses listed below.

Patrick J. Balducci

Senior Economist

Battelle - Pacific Northwest National Laboratory

620 SW 5th Avenue, Suite 810

Portland, OR 97204

Office: (503) 417-7540

Cell: (503) 679-7316

Fax: (503) 417-2175

E-mail: patrick.balducci@pnl.gov
Economic Support for the San 

FranciscoSubtidal Habitat Goals 

Project: Annotated Bibliography

Prepared for

The Coastal Services Center

National Oceanic and Atmospheric Administration

September 17, 2007

Prepared by
Economic Support for San Francisco Subtidal

Habitat Goals Project – Annotated Bibliography Page ii September 17, 2007

Table of Contents

Page

1.0 INTRODUCTION ............................................................................................................... 1

2.0 SUMMARY OF INTERVIEWS ........................................................................................ 1

3.0 SUMMARY OF REVIEWED LITERATURE................................................................. 2

4.0 ANNOTATED REFERENCES.......................................................................................... 7

4.1 Ecological Benefits of Restoration ............................................................................... 7

4.2 Environmental Valuation Theory and Methods.......................................................... 17

4.3 Environmental Valuation Studies............................................................................... 21
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1.0 INTRODUCTION

The Subtidal Goals Project in San Francisco Bay represents a long-term plan for protection and

restoration of the subtidal habitats of the San Francisco Bay. The economic benefits associated with

subtidal habitations, however, are not well known to the Subtidal Goals Administrative Core Group or

the Subtidal Goals work groups. Thus, the goal of this report is to identify, summarize, and examine

literature relating to the economic benefits associated with subtidal habitats. This literature will

inform the working groups supporting the Subtidal Goals Project by the extent and economic methods

used to value the environmental goals and projects under consideration.

2.0 SUMMARY OF INTERVIEWS

In order to better understand the ecological benefits associated with subtidal habitat restoration,

including the potential benefits to San Francisco Bay, the research team attempted to contact members

of the following groups:

 Science Working Committee

 Restoration Working Committee Members

 Resource Management Working Committee Members

 Other Interested Stakeholders

Input from these groups assisted the research team in defining potential actions and associated

ecological benefits. This report represents one step in an iterative process. Through the working

group members’ evaluation of this draft report and response to a planned presentation, more input and

guidance are anticipated from these groups. This input will assist the research team in shaping the

final annotated bibliography.

The consensus among the working committee members contacted for this study was that although

there had been several studies published that deal with the benefits of wetlands, estuaries and other

aquatic environments, there were few studies that focused entirely on the benefits of subtidal habitat

restoration. Thus, the working committee members recommended that the research team adopt an

indirect analytical approach to constructing the annotated bibliography. A review of literature

conducted for this project led the research team to the same conclusion. Thus, the annotated

bibliography focuses on articles covering the benefits of specific marine habitat restoration efforts

(e.g., oyster reef restoration, eelgrass bed restoration) and the economics underpinning environmental

valuation of aquatic ecosystems, including estuaries, wetlands and other marine environments.
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The working committee members interviewed by the research team concluded that subtidal habitat

restoration would be vital to establishing habitat for native aquatic mammals (including harbor seals),

invertebrates (including oysters), birds, and fish species in historic decline. The focus of the input dealt

with restoration concepts and the ecological benefits of proposed subtidal habitat restoration actions.

More specifically, members pointed to a number of concepts and outcomes associated with subtidal

habitat restoration, including:

 Restoring eelgrass beds to provide nurseries for herring and other fish;

 Restoring mudflat and sandy habitat that could provide refuge for Dungeness crab;

 Restoring or constructing native oyster beds in order to provide habitat for juvenile fishes

and spawning herring;

 Restoring rocky reefs that could provide habitat for rockfish;

 Restoring benthic areas that have been trawled in order to enhance fish (particularly

halibut) populations;

 Restoring seagrass beds and oyster reefs in order to enhance benthic biodiversity and

water quality;

 Restoring subtidal habitat in order to promote algae growth, which could increase primary

productivity and enhance habitat for aquatic mammals, invertebrates, and fishes; and

 Restoring eelgrass, rocky and soft bottom in order to provide foraging habitat to harbor

seals.

Working committee members also noted that the benefits of habitat restoration extend beyond direct

benefits tied to enhanced catch rates and natural resource outputs. For example, sediment stabilization

from eelgrass beds and other restoration efforts could enhance fishing and kayaking opportunities and

provide better viewing for naturalists, thus enhancing the recreational and amenity value of San

Francisco Bay to local residents and eco tourists. Further, oyster reefs could also enhance eco tourism

by enhancing water quality and improving habitat for fish. Based on this input, the research team

considered a broad range of literature focusing on both direct and indirect benefits of aquatic

ecosystems.

3.0 SUMMARY OF REVIEWED LITERATURE

The literature review conducted for this project and documented in the annotated references section of

this report explored the benefits outlined by the working committee members and others identified and

in many cases quantified in the literature. The remainder of this section of the annotated bibliography

presents a scheme for categorizing environmental benefits, documents relevant studies falling within

each benefits category, and documents economic methods used to value the environmental benefits

falling within each category.
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The literature suggests that historically, environmental resources have been undervalued because

many of the ecological services they provide (e.g., climate regulation, water filtration, amenity values)

are not bought and sold in a market (Barbier 1997). In recent years, however, economists have

developed methods to evaluate a broader set of environmental values. The total economic value of a

natural resource is now considered to be the sum of its direct-use value, indirect-use value, non-use

value and its intrinsic value.

Table 1 presents a categorization of environmental values considered within the literature reviewed for

this report. These are the economic values of marine environments that could be enhanced through

subtidal habitat restoration. Direct use values would include the goods and services that are directly

consumed by users. Within the context of subtidal habitat restoration, direct use values could include

enhanced fish catches, oyster harvests and eco tourism resulting from oyster reef restoration and other

restoration projects. Indirect use values are the indirect benefits resulting from enhancements to

ecological systems. These values include the food web, climate regulation and global life support

benefits tied to marine environments. Non-use values include the option, bequest, and stewardship

motives. These values are tied to our interest in preserving a natural resource either for our own

potential future use or the use of others, including future generations and other forms of life. The

intrinsic values that individuals place on the environment reflects the view that natural organisms and

environmental habitat is valuable regardless of the values placed on it by humans.

The direct benefits of aquatic habitat restoration are well documented in the literature. The research

reviewed for this report examined the direct use values, as well as indirect use, non-use, and intrinsic

values of aquatic ecosystems. The direct use values reviewed in the literature were mainly tied to the

fishery and recreational impacts of restoration actions.

Anderson (1989) examined the impacts of seagrass restoration to the Virginia hard-shell blue crab

industry. Anderson found that seagrass beds served as a principle habitat for blue crabs and that

through restoration efforts, the net economic benefit to the hard-shell blue crab industry would total

$1.8 million per year, with an additional $2.4 million accruing to U.S. consumers. This study

employed the factor of production approach, which measures the value of a resource based on its role

as an input into the production of goods.

Patterson and Whitfield (2000) and Perkins-Visser et al. (1996) examined the benefits of seagrasses

tied to their ability to serve as nurseries for juvenile fish and crab species. Patterson and Whitfield

found that eelgrass beds offered refuge to juvenile fishes from predation by piscivorous fishes and that

this protection enhanced fish populations. Even in the absence of predators, Perkins-Visser et al.

(1996) found that enclosed blue crabs attained a significantly larger carapace volume and higher rates

of survival in enclosures with seagrass beds relative to those without them. Hovel (2005) examines the

complications with transplanted eelgrass beds in San Diego Bay, where no beds lasted more than six

months after transplant but also documented the potential effects of eelgrass on epifaunal diversity and

fish recruitment. Food web and other benefits of seagrass were explored in Opaluch et al. (1999),

Stewardship Centre for British Columbia (2005) and Wilbur (2004-2005).
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Table 1. Categories of Marine Environmental Values

(a) Direct use values – goods and services directly consumed by users

- Sport and commercial fishing

- Oyster and crab harvesting

- Mineral extraction

- Seaweed extraction

- Medicinal

- Recreation (beach use, swimming, boating) and eco tourism (wildlife viewing, hiking)

- Waste assimilation

- Scientific research

- Treatment of human and industrial wastes

- Education

- Amenity values

- Underwater photography

(b) Indirect use values – indirect benefits arising from ecological systems

- Biological support – links to other species and habitats

- Nutrient cycling

- Physical protection – coastal defense function

- Climate regulation

- Erosion protection and stabilization

- Water quality maintenance

- Biodiversity and genetic maintenance

- Global life support – functions that aid in supporting life on Earth

(c) Non-use values

-Option value (future knowledge and future economic uses)

-Existence value (cultural, aesthetic, spiritual)

-Bequest (stewardship, heritage, legacy)

(d) Intrinsic value – organisms have a worth of their own regardless of usefulness to humans

The benefits of oyster reef restoration are well documented. Brumbaugh et al. (2006) examines

benefits tied to water quality, habitat for benthic species, and sediment stabilization accruing due to

restoration of shellfish populations. It also examines how to optimize site selection for restoration

efforts. One restoration effort in Chesapeake Bay was examined in terms of its ability to enhance

value to sport fisherman who travel to the bay to take advantage of increased catch rates resulting

from the water filtration function of oysters (Hicks 2004). The study used a random utility model

(RUM) to determine that sites with relatively high concentrations of oyster bottom did correlate with

higher catch rates and that higher catch rates correlated with increased numbers of anglers and a

willingness to pay for enhanced catches. Using data collected through surveys distributed to

recreational users, RUMs are econometric models that can be used to attribute a willingness to pay for

a resource to an area based on its characteristics (e.g., location, accessibility, amenity value, water
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quality, presence and diversity of fish or bird species). Posey et al. (2004) also found that oyster reefs

served as primary fish habitat providing a structural refuge for small fish and invertebrates, enhanced

water quality through filtration, and enriched the local sediment enhancing growth of submerged

vegetation.

Henderson and O’Neil (2003), Breitburg et al. (2000), Ulanowicz (1992) and Soniat (2004) explored a

full range of benefits accruing through oyster reef restoration. Henderson and O’Neil (2003) found

that the environmental services of oyster reefs netted positive rates of return to the oyster industry

within 5 to 14 years but that the secondary impacts on fish and crab harvests, recreational fishing

(valued at $2.3 million in Chesapeake Bay), eco tourism, boating ($8 million in Chesapeake Bay),

beach use and swimming (valued at $7.20 to $23.29 per person for a 1 percent reduction in oil and

bacteria), erosion protection and stabilization and other benefits tied to oyster reef restoration far

exceeded the direct benefits to the oyster industry. Qiu (2003) found that some of these same benefits

could be realized through the development of artificial reefs. Qiu examined the ability of artificial

reefs to develop epibiotic communities (e.g., barnacles, green mussels, and tunicates) in Hong Kong.

Qiu found that the construction material (e.g., wood, steel, concrete) had little impact on the

characteristics of the climax community. Thus, the design of artificial reefs should focus more on

other physical and economic aspects, such as durability, flow dynamics, stability, cost, and effects on

the ambient environment.

There have been several studies that have placed a value on the recreational (including sport fishing)

and amenity values of wetland, estuaries and other marine environments. Kazmierczak (2001a)

reported that the private economic gains from wetland conversion had been historically overvalued

and that the non-market benefits, including impact on land values and amenity values, had been

undervalued when making decision to fill or preserve wetland areas. Kazmierczak (2001b) reviews

12 studies exploring the economic link between wetland restoration and hunting and fishing

opportunities. The studies referenced in Kazmierczak used a wide range of methods, including the

travel cost method, contingent valuation method, net factor income method, and hedonic pricing

method. The results of these studies suggest that the values that humans place on fishing and hunting

in wetlands is highly variable (ranging between $83.99 to $616.46 per respondent) and dependent

upon numerous factors, including: the target species, geographic location, type of hunting activity, and

the environmental valuation measurement technique.

The travel cost method documented in Kazmierczak (2001b) models the recreational value of a site

based on the economic costs incurred by travelers in order to access the site (e.g., time and travel

expenses). The travel cost method relates the cost and number of trips taken by visitors to

demographic and socioeconomic factors, including age, location of home, race and income levels.

Sample data collected through surveys are then blown up to the population to estimate the total

valuation. The travel costs are considered an indication of a traveler’s willingness to pay for the

benefits enjoyed at the site. The travel cost method is also used in Leeworthy (1997) and Farber

(1988).

The contingent valuation (CV) method reviewed in Kazmierczak (2001b) measures the non-market

benefits of a site based on preferences stated through surveys, questionnaires, and interviews. The CV

method can be used to measure multiple non-market benefits (e.g., recreational, bequest and existence
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values). When using the CV method, an examiner constructs scenarios designed to simulate markets

where environmental resources can be traded at a cost. For example, one scenario might measure an

individual’s willingness to pay for enhancements to local marine environments through an increase in

the local property tax while another may consider an individual’s willingness to accept monetary

compensation to offset damage to a local marine environment. The CV method is perhaps the most

flexible and widely used environmental valuation technique; however, the shortcomings of CV are

also well documented, including its inability to properly set budget constraints, its inability to set the

size of the market studied and the warm glow effect that individuals face when making value

judgments about the environment (Arrow 1993). The CV method was used as the basis of valuing

environmental resources in Kazmierczak (2001b), Farber (1998), Opaluch et al. (1999), Shorney

(2004) and Thibodeau (1981).

Shorney (2004) explored the economic contribution of sea angling at four locations in England –

Wymouth, Whitby, Hastings, and Anglessey. Shorney assessed the consumer surplus enjoyed by sea

anglers, as measured through surveys distributed to households. Environmental valuation is often

determined based on measures of consumer surplus. Consumer surplus is calculated as the difference

between what consumers are willing to pay for a good or service and what they actually pay. Thus, if

a hunter pays $200 for a hunting trip but was willing to pay $300, the $100 difference is considered

consumer surplus and is an additional benefit to the hunter. Shorney found that the annual consumer

surplus of those surveyed varied based on whether fishing took place on shore (£381 or $753 annually

per angler) or in personal watercraft (£886 or $1,752 annually per angler). The survey also found that

anglers were willing to pay more for larger species and also for greater diversity of catch. The annual

aggregate angler consumer surplus was measured at £594 million ($1.2 billion), which translated into

18,889 jobs, £71 million in suppliers’ income.

Leeworthy (1997) estimated the non-market economic values of tourism at the Florida Keys by using

the travel cost method. The weighted average cost of travel to the Florida Keys was estimated by all

summer and non-summer travelers at $740 and $561, respectively. The total annual value placed on

trips to the Florida Keys by tourists was estimated at $1.2 billion. Opaluch et al. (1999) also used the

travel cost method in examining the swimming, boating, fishing and bird watching values of the

Peconic Estuary System. The findings of the travel cost survey demonstrated that recreational users of

the estuary valued fishing at $22.4 million, viewing birds and wildlife at $49.3 million, boating at

$18.1 million, and swimming at $12.1 million. These values represent annual benefits presented in

1995 dollars. Opaluch also used a property valuation or hedonic pricing model to examine the impact

of proximity to open space and other environmental attributes on property values. Hedonic pricing

uses surrogate markets, often the housing market, to measure the impact of environmental conditions

on property values. Air, noise and sound pollution impact housing prices negatively while open spaces

and scenic vistas enhance value. The results of Opaluch et al. (1999) suggest that parcels of land near

open spaces were, on average, 12.83 percent more valuable than parcels with otherwise similar

characteristics.

There are other direct and indirect environmental services referenced in the literature, including water

transport, treatment of human wastes, treatment of industrial wastes, and future goods and services

(Fischer et al. 1986). Beaumont (2006) examined the impacts of marine environments on ecosystem

regulation, flood and storm protection, cultural services and climate regulation. Grigalunas and
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Opaluch (2002) examine the significance of non-market benefits tied to the bequest and existence

motives.

4.0 ANNOTATED REFERENCES

The annotated references presented in this section are stratified according to three categories: reports

that address ecological issues relevant to aquatic habitat restoration, reports that present theory and

methods for valuing environmental resources, and reports that use environmental valuation methods to

estimate the value of natural resources.

4.1 Ecological Benefits of Restoration

Anderson, E. A. 1989. Economic Benefits of Habitat Restoration: Seagrass and the Virginia HardShell Blue Crab Fishery. North American Journal of Fisheries Management NAJMDP Vol

9(2): 140-149.

Since the early 1960s, water pollution has caused the disappearance of much of the seagrass

(predominantly eelgrass Zostera marina) and other submerged aquatic vegetation in Chesapeake Bay.

Seagrass beds appear to serve as preferred habitat for the blue crab Callinectes sapidus during early

stages of its life, and there is a statistically significant relationship between the abundance of

submerged aquatic vegetation and catch per unit of effort in the Virginia hard-shell blue crab fishery.

Virginia seagrass beds might be partially or fully restored through a combination of pollution

abatement and replanting. A simple simulation model with minimal data requirements to generate

rough estimates of some of the economic benefits that would accrue from seagrass restoration was

developed. The estimated net economic benefit to Virginia hard-shell blue crab fishermen of full

seagrass restoration is about $1.8 million per year, and additional annual benefits of about $2.4 million

should accrue to United States hard-shell blue crab consumers. This study demonstrates the value in

both ecological and economic terms of seagrass beds in terms of providing habitat for hard-shell blue

crab.

The value of seagrasses as habitat for crab and other marine species is relevant to preservation and

restoration efforts in San Francisco Bay. Further, this article demonstrates the direct link between

seagrass restoration and crab recovery and illustrates methods for restoring seagrass beds. The

estimates presented in this report, however, are not directly applicable to San Francisco Bay and are

based on restoration of seagrass beds to their historic levels without a commensurate estimate of the

cost of pollution abatement and replanting.

Breitburg, D.L., L.D. Coen, M.W. Luckenbach, R. Mann, M. Posey and J. Wesson. 2000. Oyster

reef restoration: Convergence of harvest and conservation strategies. Journal of Shellfish

Research 19: 371-378.

This article serves as a detailed guide for supporting a sustainable harvest of oysters that meets both

fishery and conservation needs. It describes the detrimental effects harvesting oysters has on oyster

reef habitat and recommends ways to manage the reef system in order to compensate for this damage.

The act of harvesting oysters destroys reef substrate, thereby decreasing the area of available
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settlement ground for oyster recruits and preventing growth of the reef. Removing oysters also

reduces the reef’s vertical relief and structural complexity, which harms oyster recruitment, survival,

and growth rates, decreases niche habitat for other reef inhabitants, and reduces the ability of reefs to

provide a buffer to shorelines from wave energy. In addition, harvesting decreases oyster density,

which should remain high to maximize fertilization success and provide oyster shell for recruits to

settle on. In order to compensate for the harm caused to reefs by harvesting, the authors recommend

creating refuge reefs nearby harvested reefs. The refuge reefs maintain the ecological benefits of

unharvested sites while providing larvae to colonize the harvested sites. While the largest, healthiest

oysters are removed from the stock in the harvested sites, the refuge reefs maintain their hardiest

individuals, which remain to contribute to a stronger, more resistant gene pool within both the

harvested and unharvested sites. Hence, creating refuge reefs benefits both fishery and conservation

goals.

The article also describes the considerations that must be made when selecting sites for oyster reef

restoration or construction. Sites would optimally be located in waters where high phytoplankton

biomass is likely to occur, such as nutrient loaded areas. There, oysters will have access to a dense

food source and can maximize local water clarity. Reefs located near salt marshes help to reduce soil

erosion by dissipating wave energy. Furthermore, reefs constructed in areas where little structured

habitat is present can serve as “migration corridors” for species traveling from and between structured

habitats.

This article is instructive for the San Francisco Bay Subtidal Habitat goals project because it provides

a practical guide to conceptualizing oyster reef restoration and fishery management. While it does not

address concerns specific to projects in San Francisco Bay, it does supply general justification and

instruction for current and future restoration projects while specifying methods of creating a

sustainable harvest in the future.

Brown, L.R. 2003b. Will tidal wetland restoration enhance populations of native fishes? In: San

Francisco Estuary and Watershed Science, ed. L.R. Brown, 1 (1) (2).

This author examines the history of the tidal wetlands in San Francisco Bay and the Sacramento – San

Joaquin Delta, noting that as tidal wetlands have been lost (80 percent of San Francisco Bay and 95

percent of the Sacramento – San Joaquin Delta) during the past 150 years, the losses have coincided

with significant declines in the native fish populations. The author does not correlate the decline in

tidal wetlands with declining native fishes but does examine the possibility through a review of

relevant data sources and literature.

The report documents the benefits of wetland areas to fishes, including providing cover for smaller

organisms from larger predators and service as nurseries for young fish. Also, vegetation in wetland

areas provides important food resources for invertebrate species that serve as a food source for fish.

The author notes that since vegetative wetland areas also attract large predatory fish, it is unclear

whether the expansion of wetland areas would, indeed, enhance native fish populations.

The literature reviewed for this study concludes that some native fishes would be likely to benefit

from restored tidal wetlands but not all types of fishes would be expected to benefit, and the author is
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not sure how significant the benefits would be. The author also identifies several uncertainties

regarding these conclusions resulting from: the absence of large areas of tidal wetlands with the

characteristics viewed as desirable, the view that Egeria densa would invade restored areas and the

types of native and non-native species it would be expected to support would not be desirable, and the

lack of direct evidence concerning the predation impacts of wetland restoration.

Brumbaugh, R.D., M.W. Beck, L.D. Coen, L. Craig, and P. Hicks. 2006. A practitioner’s guide to the

design and monitoring of shellfish restoration projects. The Nature Conservancy and

National Oceanic and Atmospheric Administration.

This guide describes the causes of decline in shellfish populations and the benefits of shellfish

restoration, suggests approaches to managing restoration, and provides case studies of current

restoration projects. Shellfish populations have declined worldwide largely due to over harvesting,

declining estuary extent and health, and the introduction of shellfish diseases and parasites. The guide

describes the enhanced water quality, additional habitat for benthic species, and sediment stabilization

that is expected to accrue from restoring shellfish populations. It advises that local tidal current

patterns will affect the optimal site selection for shellfish restoration because the tides heavily

influence larval recruitment. In addition, different shellfish species prefer different types of settlement

substrate, so it is important to match the restored substrate to the targeted shellfish species.

This guide provides justification and practical guidance for restoring oyster reefs within the San

Francisco Bay. Unfortunately, none of the case studies used included San Francisco Bay, but the

underlying approach presented remains applicable.

Castel, J., P-J. Labourg, V. Escaravage, I. Auby and M.E. Garcia. 1989. Influence of seagrass beds

and oyster parks on the abundance and biomass patterns of meio- and macrobenthos in tidal

flats. Estuarine, Coastal and Shelf Science 28: 71-85.

This study measured the density and biomass of meiofauna and macrofauna in bare sandbanks, mud

flats occupied by the seagrass Zostera noltii, and oyster reefs to compare faunal abundance with

sediment structure and levels of seagrass debris and benthic chlorophyll in Archachon Bay, on the

coast of France. The ratio between macrofaunal and meifaunal biomass was also calculated for the

three examined habitats. The results suggest that nitrogen-rich oyster feces supply nutrients that

support meiofauna populations but also lead to anoxic conditions that drive down macrofauna

populations. In comparison, macrofauna biomass far exceeded meiofuana biomass in sandbanks,

because of oxygen availability for macrofauna and the relative scarcity of bionutrients present in the

sandbanks for meiofauna as compared to the oyster reefs. Of the three habitat types surveyed,

meiofaunal and macrofaunal abundance were both maximized in the seagrass beds. The seagrass beds

provided refuge and greater food resources for the macrofauna and decaying seagrass blades acted as

a significant food source for meiofuana.

This study is relevant to planning efforts for the San Francisco Bay because it describes factors that

support or decrease macrofaunal and meiofaunal abundance. Restoration projects attempting to

increase the overall abundance of macrofaunal or meiofaunal species might consider focusing on

restoring eelgrass beds instead of oyster reefs. The results must be interpreted with caution, however,
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because while the majority of macrofaunal species may be better supported by eelgrass beds than by

oyster reefs, it would be imprudent to assume that an individual species would show the same

preference. In addition, the water parameters, tidal patterns, and species present differ between

Arcachon Bay and San Francisco Bay.

Edyvane, K. S. 1999. Coastal and marine wetlands in Gulf St. Vincent, South Australia:

Understanding their loss and degradation. Wetlands Ecology and Management 7(1-2): 83-104.

Despite the vastness of South Australia's coastline, approximately 95 percent of the state's population

of 1.4 million is on the Adelaide metropolitan coast of Gulf St. Vincent. The concentration of human

activity around this shallow, sheltered gulf ecosystem has led to conflict and competition over the use

of marine and coastal resources. The gulf supports extensive areas of ecologically significant subtidal

and tidal coastal wetlands, comprising seagrass meadows, mangroves and salt marshes, with nine

wetlands having recognized national importance. The wetlands support economic activities such as

commercial and recreational fishing, tourism and aquaculture, and to a lesser extent, mineral and

petroleum exploration and shipping.

These environments and activities are threatened by the effects of land-based urbanization, coastal

development, storm water runoff effluent and industrial discharges, and the resultant decline in water

quality and food-chain contamination. Marine activities can also have adverse effects (i.e., dredging,

sea-dumping, over fishing, fishing methods, oil spills, anti-foulants, ballast water introductions),

including the developing aquaculture industry. The continued loss and degradation of marine and

coastal wetlands in the gulf is exacerbated by inadequate protection measures, lack of integrated

management structures and policies, and conflict between competing user groups. Strong policies and

integrated decision making based on sound information is required for the equitable and sustainable

use of these wetlands. Gulf-level management of multiple-uses would limit the cumulative impacts of

human use and coastal development. There is a particular need to protect areas with high conservation

value and for future research and marine conservation to focus on the coastal nearshore ecosystem.

High priorities are coastal and biodiversity inventories, understanding of ecological processes,

linkages between coastal and offshore habitats, and coastal spatial mapping and information systems.

The authors of this article reviewed the status of marine wetlands in the Gulf of St Vincent

(seagrasses, mangroves, and salt marshes) and the causes and effects of degradation (chemical,

physical, biological and fisheries). This article is relevant to the San Francisco Bay Subtidal Habitat

Goals project because it details the cause and effect relationship between pollution, coastal

development, dredging and other human activities and declining natural resource outputs. Further, it

defines restoration solutions, including integrated coastal and marine management, research, and

monitoring. Impacts can be inferred from the causes and effects of degradation to the ecosystem, but

the article did not assess the benefits of remediation actions.

Healy, T., S. Stephens, et al. 2002. Port redesign and planned beach re-nourishment in a high wave

energy sandy-muddy coastal environment, Port Gisborne, New Zealand. Geomorphology

[Geomorphology]. Vol. 48: 1-3.

Redesign of Port Gisborne for the 21st century has encompassed a broad interdisciplinary approach.

This procedure has taken into account the operational requirements of the port, effects of dredging and
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construction upon the benthic fauna, and wave activity within the port confines after the proposed

development. Added amenity value of the development to the local community is an important

ancillary redesign consideration. Initially, a major research project into the environmental impacts of

the developments has been undertaken. The project, which commenced in 1996 and is still continuing,

involves an iterative approach integrating the initial design and development options with the

operational feasibility, construction constraints, environmental constraints, social acceptability, and

economic practicality of the port; all of these require in-depth assessment to obtain the necessary

planning and development approvals. This requires close liaison between the professional

environmental research scientists, port management, port operation staff (pilots), construction

engineers, planners, and the community interest groups.

Numerical modeling of the hydrodynamics of Poverty Bay, simulating waves and current effects on

the various initial design options, and calibrated against data from a substantial field program, has

been a fundamental tool. It was applied experimentally to determine the best option for the port layout,

as well as to assess sedimentation impacts. Modeling results indicated a significant increase in

maintenance dredging expected as a result of deepening the navigation approach channel. Because

this may have an impact on the nearby sandy beach by inducing erosion, the best option for disposal

of the sandy dredged material was determined to be disposal in the surf zone for subtidal beach profile

re-nourishment. Textural analysis of the sediments trapped in the navigation channel demonstrated

that they were suitable for this purpose.

This report is useful to the San Francisco Bay Subtidal Habitat Goals project in that it demonstrates

methods for examining the economic benefits and costs associated with a project with aquatic

environmental impacts.

Hovel, K.A., T.W. Anderson. February 3, 2005. Evaluating eelgrass restoration: effects of habitat

structure on fish recruitment and epifaunal diversity in San Diego Bay. San Diego, CA: San

Diego Unified Port District.

This study examined the effects of eelgrass (Zostera marina L.) habitat structure and location on

epifaunal diversity and fish recruitment in San Diego Bay, California. Over a period of two years,

researchers monitored the success with which transplanted eelgrass beds served as habitat for

epifauana and the effects upon donor beds of harvesting eelgrass patches. The results indicated that

the location of the transplanted eelgrass bed within the San Diego Bay had a greater impact on the

density and type of epifaunal resident species than did the structure (e.g., shoot density, patch spacing

and patch size) of the bed. Furthermore, epifuanal diversity and density within donor eelgrass patches

that were part of large, contiguous beds did not decline until approximately 50 percent of the patch

was harvested. These results may provide guidance to eelgrass restoration projects within San

Francisco Bay. However, the transplanted beds in this study did not survive beyond a period of six

months at any site, and therefore caution must be used when determining the applicability of the

results.
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Josselyn, M.N. and J.A. West. 1985. The distribution and temporal dynamics of the estuarine

macroalgal community of San Francisco Bay. Hydrobiologia 129: 139-152.

This report documents the findings of a long-term study of intertidal macroalgae within San Francisco

Bay. The report identifies numerous ecological benefits associated with macroalgae, including

biomass accumulation, nutrient sinks, consumption by herbivores, and serving as an organic substrate

within the food web. Collections of macroalgae were taken at nine sites in San Francisco Bay from

1978 to 1983. Four sites were identified for more detailed measurement during the 1981 to 1983 time

period. At each site, macroalgae growth was taken and site physical characteristics were also

measured, including temperature, salinity, and a light coefficient.

The study identified 162 species of macroalgae in San Francisco Bay but registered a significant

decline in the number of species resulting from decreasing salinity and a lack of hard substrata in the

upsteam direction. The authors note the presence of seasonal variations in macroalgal abundance

resulting from changes in salinity, temperature, and light availability at the bottom. These findings

suggest the decline in a significant foundational element supporting the aquatic ecosystem and

document some of the potential sources of strain being placed on macroalgae in San Francisco Bay.

The study also examines factors that may be involved in the occurrence of macroalgal nuisance

blooms. The study, however, is dated and does not fully document the underlying causes for

continued decline in salinity and issues related to water temperature. Further, the study does not

consider the ecological or economic impacts of the decline in the conditions that support macroalgae.

This study is relevant to subtidal restoration efforts in San Francisco Bay in that it identifies and

documents the specific ecological benefits of macroalgae to the Bay and examines the how water

quality, temperature and light impact macroalgae growth.

Massachusetts Institute of Technology Sea Grant College Program. 2006. Why is eelgrass

important? Cambridge, MA: Massachusetts Institute of Technology.

This article details the importance of eelgrass as food for detritivores, as a habitat for many marine

species (including important prey for waterfowl), and as a sediment anchor that helps protect

shorelines from erosion. A sidebar lists some historical human uses of eelgrass, which range from

compost and roofing to medicine and cigars, and the article ends by listing the many commercial

fisheries that depend on eelgrass beds. The key strength of this non-technical summary as it related to

San Francisco Bay is that it stresses and characterizes the importance of eelgrass to commercial

fisheries, industrial processing, shoreline protection, and the marine food web.

Nichols, F.H., J. Cloern, S. Luoma, D. Peterson. 1986. The modification of an estuary. Science 231:

567-573.

This article, published in 1986, describes the history of factors that have altered the physical,

chemical, and biological features of San Francisco Bay and its tributaries. Some of the first

commercial fisheries in the Bay, such as those in salmon and sturgeon, crashed in the early 20th

century from water quality decline, over fishing, and essential habitat modification or elimination. In

addition, the offshore Dungeness crab (Cancer magister) fishery saw decline mid-century from
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pollution, increased ocean temperatures, and predation of crabs by hatchery-reared salmon. The water

chemistry of the Bay has been altered by reduced freshwater inflow caused by the diversion of

tributary water for industrial, agricultural, and residential usage. As a result, nontidal currents driven

by differences in salinity between South and Central Bay have decreased and the mean residence time

in the Bay of water contaminated by agricultural and industrial wastes has increased. Such wastes are

known to cause a decline in health among local birds and benthic invertebrates and evidence suggests

that trace metals cause significant physiological stress in oysters.

While the article contained no recent information, it described the factors that historically caused

detrimental changes to San Francisco Bay and which, if present today, likely harm the Bay as well.

Current and future restoration projects might tie species- or habitat-specific goals to the mitigation of

variables that have historically been harmful to those species or habitats.

Patterson, A.W. and A.K. Whitfield. 2000. Do shallow-water habitats function as refuge for juvenile

fishes? Estuarine and coastal shelf science 51: 359-364.

This study examined the role of shallow estuarine habitats as refuge for juvenile fish from piscivorous

fish predation. It discussed the dominance of young of the year marine transient species in the fish

community within North American and southern African salt marsh creeks and evidence that

piscivorous fish are largely absent from these areas. Researchers used gill nets to determine the

presence of piscivorous fish in a southern African salt marsh intertidal creek and the adjoining bay,

eelgrass beds, and main channel. Results showed a significant relationship between depth and the

number of piscivorous fish caught, with the majority of piscivorous fish caught in the channel, few in

the eelgrass beds and bay, and none caught in the creek.

This study provides evidence that eelgrass beds and bay habitat offer refuge to the young of marine

fish species from predation by piscivorous fishes. The refuge may serve to support fish populations,

which are an important resource both economically and environmentally in San Francisco Bay.

Therefore, protecting and restoring subtidal habitat in the bay may boost fish populations in the longrun. However, the results of the study should be interpreted with some caution because of the

differences in fish species and water chemistry between bay habitats in southern Africa and San

Francisco Bay (although the study did not find a correlation between the distribution of piscivorous

fish and water temperature, turbidity, and salinity). Furthermore, the study did not examine avian

predation of young fishes, which is likely greater in shallow subtidal habitats than in deeper waters. In

addition, while there are numerous studies to support the hypothesis that shallow water habitats serve

as refuge for young fishes, there also exist studies that suggest differently.

Qiu, J. W., V. Thiyagarajan, et al. 2003. Development of a marine subtidal epibiotic community in

Hong Kong: Implications for deployment of artificial reefs. Biofouling 19(1): 37-46.

A 2-year study was conducted in Hong Kong to examine the effects of substratum, season and length

of submersion on the development of a subtidal epibiotic community using four types of settlement

panels (concrete, steel, wood, and tyre). The season and length of submersion had a strong influence

on the total biomass and on community structure while the type of substratum had very little impact

on the total biomass or the structure of the epibiotic community. The season of submersion determined
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the species composition of the newly submerged surfaces. In the spring and summer, tubeworms were

the most abundant. In the autumn and winter, barnacles and tunicates dominated. Community

succession was not obvious in the first year of submersion as it was intermingled with strong seasonal

settlement, growth and death of barnacles and tunicates. In the second year of submersion, green

mussels and tunicates settled and grew to occupy most of the panel surfaces, forming an assemblage

that was characteristic of climax communities in the local subtidal waters. The results suggest that the

type of construction material has limited impact on the development of epibiotic communities on

artificial reefs deployed in Hong Kong; the season of submersion may affect community structure in

the early successional stage, but not the characteristics of the climax communities. This study

indicates that the type of substratum should not be of concern when deploying artificial reefs in the

subtidal waters in this region. The design of artificial reefs should focus more on other physical and

economical aspects such as durability, flow dynamics, stability, cost, and effects on the ambient

environment.

San Francisco Bay Area Wetlands Ecosystem Goals Project. 2000. Baylands ecosystem species and

community profiles: Life histories and environmental requirements of key plants, fish and

wildlife, ed. P.R. Olofson. Prepared for the San Francisco Bay Regional Water Quality

Control Board. Oakland, CA.

This report represents the scientific backbone of a 4-year project intended to establish goals for future

management of the baylands and adjacent habitat in the area of the San Francisco Bay-Delta Estuary,

downstream of the Sacramento – San-Joaquin Delta. The report represents the work of more than 50

scientists who donated their time to: generate a list of key species in the San Francisco Bay Area;

compile information regarding habitats, migration patters, and interactions with other plant and animal

species; and construct plant and animal species “profiles” that could be used to facilitate more

thorough and balanced recommendations for ecosystem management. Plant community profiles were

categorized accordingly:

 Plants and shallow and subtidal habitat and tidal flats,

 Tidal marsh plants,

 Plants and environments of diked baylands,

 Plants of the San Francisco Bay salt ponds, and

 Plant communities ecotonal to the baylands.

The report also constructed profiles for 27 types of estuarine fish and associated invertebrates,

including Dungeness crab, pacific herring, and Chinook salmon. The report profiles 15 types of

invertebrates, including Franciscan brine shrimp and tiger beetles. Profiles were also constructed for 9

types of amphibians and reptiles (e.g., pacific tree frog, western pond turtle), 13 types of waterfowl

and shorebirds (e.g., mallard, northern pintail), and 18 types of bayland birds (e.g., brown pelican,

snowy egret, California gull, song sparrow). This report effectively documents the most significant

plant and animal species to be considered when setting preservation and restoration goals related to

subtidal habitat in the San Francisco Bay.
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San Francisco Estuary Project & CALFED. 2005. State of the estuary: 2005. Oakland, CA.

This report briefly documents the evolution of the San Francisco Bay and the Delta from the early

1800s through the present, and in doing so frames the discussion of the ecological consequences

associated with hydraulic mining, sedimentation, the building of dams, massive pumping of

waterways, and the filling of tidal marsh by farmers and developers. It provides vital statistics that can

be used to better understand the conditions present within the San Francisco Bay, including the

analysis of trends in estuary conditions (e.g., freshwater flows, percent of inflow diverted) and the

magnitude of native and invasive species in the San Francisco Estuary since 1980. This report

effectively provides background material concerning the animal and plant species existing within the

San Francisco Estuary and documents the findings of a conference where numerous stakeholders (e.g.,

public officials, academics, environmental organizations, public agency technical staff members)

framed the discussion concerning the issues faced by planners and scientists attempting to protect and

restore habitat in the San Francisco Estuary, including those relating to inadequate funding, threats to

aquatic habitat in the estuary, and where best to dedicate resources.

Stewardship Centre for British Columbia. 2005. Protecting eelgrass. Vancouver, BC.

This pamphlet highlights some of the benefits of eelgrass, such as protecting coastline and supporting

biodiversity, and explains some of the reasons for eelgrass loss. The rest of the pamphlet suggests

ways in which shoreline residents and boaters can help to reduce eelgrass loss: minimize disruption to

the shoreline, protect a buffer of shoreline vegetation, share or restructure docks so that they do not

block sunlight to eelgrass meadows, and avoid dragging kayaks through eelgrass beds. Also provided

is a summary of Canada’s laws prohibiting projects that could harm fish habitats, which allow for

authorization of such projects only as a last recourse and only if the resulting habitat loss can be

balanced by a habitat gain elsewhere. The suggestions in this document can be useful for San

Francisco Bay residents, visitors, and developers who wish to prevent their own actions from resulting

in eelgrass loss, though local laws may be different from the Canadian legal constraints described.

Ulanowicz, R.E. and J.H. Tuttle. 1992. The trophic consequences of oyster stock rehabilitation in

Chesapeake Bay. Estuaries 15: 298-306.

This study used a quasi-equilibrium, mass action model to predict the effects of increasing oyster

(Crassostrea virginica) stocks in Chesapeake Bay on water quality, primary production, and species

abundance. The model predicts that as oyster stocks increase, phytoplankton productivity, particulate

organic carbon, and populations of pelagic microbes, ctenophores, and medusae will decrease.

Conversely, benthic primary production, mesozooplankton density, and fish populations are predicted

to increase. The researchers suggest that the increased level of water filtration that accompanies

enhanced oyster populations will lead to higher water clarity and increased benthic vegetation stocks

by mitigating the effects of eutrophication. Furthermore, the decrease in phytoplankton stocks due to

predation by oysters should decrease gelatinous zooplankton abundance. Planktivorous fishes would

thus face less competition from gelatinous zooplankton and fish stocks would increase.

This study is instructive for the San Francisco Bay Subtidal Habitat Goals project because it describes

some of the likely benefits of oyster reef restoration: enhanced water clarity and increases in fish and
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benthic vegetation stocks. The study’s findings (which are focused on the Chesapeake Bay), however,

cannot be directly applied to San Francisco Bay due to differences in species present and water

chemistry; specifically, the rates of eutrophication due to source inputs and the corresponding algal

growth differ between the two bays. While decreased algal density may benefit the Chesapeake, the

same may not be true for San Francisco Bay.

United States Environmental Protection Agency National Estuary Program. About Estuaries.

This article defines estuaries as coastal bodies of water where freshwater from streams and rivers

mixes with oceanic saltwater. It explains the importance of estuaries, with benefits ranging from

harboring wildlife, filtering out pollutants, and preventing erosion to serving as excellent locations for

recreation and scientific study. Estuaries’ significant economic value (especially to the fishing,

tourism, and coastal recreation industries) is placed in contrast with the ways in which human activity

threatens these natural resources. The report is no more than a summary and does not cite external

sources; however, it does provide a clear introduction to the environmental, economic, and aesthetic

value of America’s estuaries, underscoring the reasons to protect and restore them. This article is

relevant to the San Francisco Bay Subtidal Habitat Goals project only insomuch as it provides a

general understanding of the values humans place on coastal marine environments.

Wilbur, A.R. Winter 2004-2005. Spotlight on eelgrass: A species and habitat at risk. Boston, MA:

Massachusetts Office of Coastal Zone Management.

This article demonstrates eelgrass’ role as a keystone species and describes current threats to habitat.

The negative effects of the decline that eelgrass suffered in the 1930s are used to justify taking action

to prevent a similar decline in the future. Eelgrass provides vast ecological functions as a nursery,

refuge, and foraging area for many fish and invertebrates. Detached leaves sink and decompose to

sustain detritus feeders, or instead accumulate on beaches, harboring insect and amphipod

communities that become important prey for shorebirds. Eelgrass also produces oxygen, absorbs

nutrients, and stabilizes sediment. However, this normally-resilient plant is suffering a decline caused

by human activities including physical disturbance, degradation of water quality and global warming

and sea level rise. Although eelgrass is being monitored by the Massachusetts Department of

Environmental Protection and other groups, the article recommends that the state should follow the

lead of Australia and the Chesapeake Bay by implementing a conservation plan to protect and restore

eelgrass habitat.

This article’s description of the major ecological functions of, and human threats to, eelgrass is general

enough to apply to the San Francisco Bay as well, but the focus on Massachusetts means that it fails to

describe the state of San Francisco Bay’s eelgrass habitats or related conservation efforts in any

meaningful detail.

Williams, P.B. and P. Faber. 2001. Salt marsh restoration experience in San Francisco Bay. Journal

of Coastal Research, Special Issue No. 27: 203-311. Royal Palm Beach, FL.

This report provides a brief overview of the decline in salt marshes in the San Francisco Bay Estuary.

Over the past 150 years, the area of salt marshes ringing the San Francisco Bay has declined by
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approximately 90 percent, from its original 220,000 ha, including 80,000 ha of salt marshes.

Beginning in 1972, tidal marsh restoration began, initially resulting in the reclamation of some of the

lost wetland areas, with approximately 2,000 ha of land reclaimed in the 28 years following the

original project at Faber Tract. The San Francisco Bay Area Wetlands Ecosystem Goals Project has

recommended restoring an additional 24,000 ha of tidal salt marshes.

This report examines the effectiveness of past approaches for tidal wetland restoration, concluding that

restoring physical processes by encouraging rapid natural evolution of sites and other procedures is

more effective than the historic practices of planting native and non-native grass species, replicating

wetlands with man-made systems, and manipulating wetland areas through control gates and weirs.

The authors note that the first attempts at wetland restoration were not successful due to a lack of

planning and over-engineered approaches to encouraging natural processes. Numerous lessons

learned were presented in this report, including:

 vegetated salt marshes can be restored if prior to breaching, appropriate site templates are

designed,

 restoration science remains experimental and continues to evolve,

 restoration takes time and should be viewed in terms of restoring natural processes,

 planting is unnecessary for sites with large seed sources as is present in the San Francisco

Bay Estuary, and

 cumulative benefits and impacts need to be monitored and recognized.

The lessons and experience of tidal marsh restoration efforts in the San Francisco Bay Estuary could

prove useful to the San Francisco Bay Subtidal Habitat Goals Project.

4.2 Environmental Valuation Theory and Methods

Arrow, K., R. Solow, P. Portney, E. Leamer, R. Radner, and H. Schuman. 1993. Report of the

NOAA Panel on Contingent Valuation.

This unpublished work provides a detailed analysis of the contingent valuation (CV) method of

environmental valuation, and an extensive set of guidelines for CV survey construction,

administration, and analysis. NOAA established a panel of social scientists, chaired by two Nobel

laureates, to critically evaluate the validity of CV measures of nonuse values. This panel was

established in order to examine the issue concerning whether CV surveys could provide valid

economic measures of people’s values for environmental resources.

The panel identified several problems with the use of CV in determining non-use values associated

with environmental resources. One issue related to the inconsistency of CV results with rational

choice. That is, consumers would be expected to respond to price and budget constraints in

theoretically valid terms (i.e., price increases reduce quantity demanded); however, rational choice is

not always exhibited in CV surveys. Another issue with CV surveys cited by the panel was its

propensity to generate implausibly large estimates of willingness to pay. Also, respondents are not

faced with realistic and certain budget constraints. Establishing the extent of the market (i.e.,

statewide, regional, national) was also deemed problematic. Respondents were also viewed as having
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a “warm glow” concerning the environmental program they were asked to evaluate, leading to an

overstatement of its worth. Finally, respondents of CV surveys were found to alter their decisions

based on the manner in which information was presented to them. Based on the panel’s evaluation of

these issues, they provided recommendations for addressing these issues, including the design of

survey techniques.

This report is relevant to the San Francisco Subtidal Habitat Goals Project in that it defines the issues

relating to the CV techniques, which could be used to evaluate the non-market values associated with

San Francisco Bay subtidal habitat preservation, and documents methods to correct for shortcomings

inherent in the CV method.

Barbier, E.B., M. Acreman, D. Knowler. 1997. Economic Valuation of Wetlands: A Guide for Policy

Makers and Planners. Gland, Switzerland: Ramsar Convention Bureau.

This book provides guidance to policymakers and planners when conducting an economic valuation

of wetland areas. The authors argue that wetlands have been historically undervalued because many

of the ecological services they provide (e.g., climate regulation, water filtration, amenity values) are

not bought and sold in the marketplace. The book outlines total valuation techniques used to capture

the full range of environmental services provided by wetlands, including market, non-market and nonuse values. The book presents a three stage approach for total valuation: 1) determining the overall

objective or problem and choosing the correct economic assessment approach, 2) defining the scope

of the problem or project, and 3) selecting a valuation technique and collecting data required to

perform the analysis.

The book highlights several environmental valuation case studies, including the valuation of coastal

wetlands in the southeastern U.S. In this case study, the authors use travel cost, contingent valuation,

and direct valuation methods to quantify the economic impact of coastal wetlands in Louisiana.

Environmental services provided by the coastal wetland include the commercial fishery, trapping,

recreation, and storm protection. These services were valued at $2,429 per acre in present value terms

(1983 dollars), with nearly 80 percent of the value being attributed to storm protection. In 2006

dollars, the value of these environmental services would be $4,907.

This book is useful within the context of the San Francisco Bay Subtidal Habitat Goals Project in that

it presents a comprehensive approach to conducting the total economic valuation of wetlands and

demonstrates that non-use and non-market benefits often generate a considerable amount of the total

value. This lesson should be considered when assessing the economic value of environmental

services in the San Francisco Bay.

Cole, R., J. Loomis, T. Feather, and D. Capan. 1996. Linkages between Environmental Outputs and

Human Services. U.S. Army Corps of Engineers. Alexandria, VA.

This report identifies relevant use and nonuse values associated with environmental projects and also

improves the linkages between environmental output measures and necessary inputs for

socioeconomic evaluation. It answers the question: What are the possible changes in the ecosystem
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that may result from USACE environmental mitigation and restoration projects, and what outputs and

services do these changes provide society?

This report examines ecosystem processes from the basis of material and energy flows. It also

examines methods that can be used to simulate market pricing of environmental resources, including

the use of simulated demand curves for recreation, simulated markets using the CV method, and

replacement cost analysis. Further, it examines how ecological and economic valuation in tandem can

be an effective combined approach to making public policy decisions.

This report is useful to the San Francisco Subtidal Habitat Goals Project in that it presents and

examines methods for valuing environmental resources through analysis of market prices and the

establishment of surrogate markets, which can be used as a proxy to estimate economic values.

Farber, S., R. Costanza, and M. Wilson. 2002. Economic and ecological concepts for valuing

ecosystem service. Ecological Impacts. 41: 375-392.

This report examines the theory underpinning environmental valuation, including labor theory, how

goods are valued, how an individual’s willingness to pay for a non-market resource can be used to

establish value, and the difference between the willingness to pay and willingness to accept measures.

This report also examines the intersection between ecological and economic value, including the nonlinearity between ecosystem impacts and economic outcomes. That is, changes to an ecosystem can

sometimes be dramatic and irreversible. Thus, the marginal costs of ecosystem damage can often be

significantly non-linear. The paper discusses critical thresholds or tipping points where ecological

damage can have dramatic economic consequences. This paper also discusses conflicts between

economic and ecological values, noting that the manner in which economists value environmental

resources (i.e., aggregation of the value that humans place on the resources) does not properly address

the intrinsic value of nature, the values that other species place on the environment, the importance of

biodiversity, and critical thresholds and threats to irreversibility. Finally, the paper presents overviews

of numerous environmental valuation methods, including the avoided cost method (the costs that

society would incur in the absence of these natural resources), replacement cost method, factor income

(natural resource impacts on income), the travel cost method, hedonic pricing method, and CV

method.

This article is useful to the San Francisco Subtidal Habitat Goals Project in that it presents an

overview of the theoretical underpinning of environmental valuation, examines issues that should be

accounted for when preparing environmental valuation studies, and discusses methods used to value

environmental resources.

Goodman, S., W. Seabrooke, and S. Jaffry. Considering Conservation Value in Economic Appraisals

of Coastal Resources. Journal of Environmental Planning and Management. v41, n3:313-

336.

This paper presents the findings of a contingent valuation survey designed to measure non-use values

for the natural coastal environment. This was attempted through evaluating public and scientific

values of conservation quality. The results suggest that public perceptions of conservation quality are
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multidimensional, and that it may be difficult for some individuals to express their preferences for the

conservation value of natural resources in monetary terms. Additionally, public and scientific

judgments differ concerning some of the physical attributes imparting conservation value. These

findings have important implications for efforts to consider environmental quality in land and coastal

use decisions, including those in San Francisco Bay.

Harrington, K. and T. Feather. 1996. Evaluation of Environmental Investments Procedures: Interim

Overview Manual. U.S. Army Corps of Engineers. Alexandria, VA.

This report is intended to serve as a reference guide for Corps environmental planning. It is a

procedures manual that synthesizes the many products of the Evaluation of Environmental

Investments Research Program (EEIRP) and show how they can support environmental planning,

which is conducted in accordance with the six-step planning process. It provides an overview of

Corps environmental planning and identifies EEIRP products that support specific planning activities.

This report supports the San Francisco Subtidal Habitat Goals Project by serving as a reference

document for environmental planners, highlighting EEIRP products that can be applied to

environmental projects. The EEIRP presents a number of tools designed to assist environmental

planners, demonstrates how to integrate these tools and techniques into existing environmental

programs, and documents how to implement these tools and techniques in a manner that will address

ecological and economic issues.

Hartwick, J. and N. Olewiler. 1998. The Economics of Natural Resource Use: Second Edition.

Addison Wesley Longman. New York, NY.

This book provides an extensive examination of economic concepts used to analyze natural resource

use (welfare economics, property rights and time preference), sustainability and natural resource

scarcity, valuation of land and water, regulation of the fishery, environmental externalities and

pollution, non-renewable and renewable resource analysis, dynamic fishery models and the economics

of sustainability. It provides the basis for identifying and valuing the economic benefits associated

with aquatic ecosystem restoration but does not directly address subtidal habitat restoration or consider

the conditions present at San Francisco Bay.

Turner, R.K., Jeroen C.J.M van den Bergh, Tore Soderqvist, Aat Barendregt, Jan van der Straaten,

Edward Maltby, Ekko C. van Ierland. 2000. The Values of Wetlands: Landscape and

Institutional Perspectives. Ecological Economics 35 (2000) 7-23.

This special report highlights the causes of wetland degradation and loss (e.g., port expansion, urban

and industrial sprawl, urban and industrial pollution, hydrology changes, development, gas drilling

and exploration) and outlines a combined ecological and economic approach to environmental

valuation of wetlands. It identifies the key stakeholders in wetland function and valuation, including

direct users, direct exploiters of natural resources, agricultural producers, water abstractors, developers

of human settlements close to wetlands, indirect users, nature conservation and amenity groups, and

non users. It establishes a framework for conducting combined ecological and economic analyses

within the context of institutional realities. It establishes a more complex multi-criteria decision

analysis tool that considers both qualitative (classification of wetlands and comparison with similar
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sites) and quantitative tools, including input-output models, nonlinear dynamic systems models,

optimization models, land use models linked to geographical information systems (GIS), and mixed

models. The combined approach proposed within this paper that considers both qualitative ecological

benefits, and the total valuation of a broad range of economic benefits is valuable to the case in San

Francisco Bay. Further, the concepts presented within this report consider the institutional settings in

which decisions are made. This report does not, however, address subtidal habitat restoration or

preservation activities, and the models it discusses are presented within a theoretical framework.

4.3 Environmental Valuation Studies

Beaumont, N., Townsend, S, Mangi, M, Austen, C. 2006. Marine Biodiversity: An Economic

Valuation. Plymouth Marine Laboratory, Plymouth UK.

This report employs a goods and services approach to valuing biodiversity in marine habitat in the

United Kingdom (UK). The goods and services examined within the report include: production

services, regulating service or the benefits obtained through regulation of ecosystem processes,

cultural services, and supporting services that are required for production of other ecosystems. The

goods and services targeted for analysis were obtained through a stakeholder workshop. The authors

rely on the findings of previous research to monetize the value of the goods and services identified in

the workshop. Food provision is valued at £513 million. Marine organisms as raw materials were

valued at £81.5 million. Gas and climate regulation realized through carbon sequestration by

phytoplankton was valued at between £420 million and £8.47 billion. Disturbance prevention through

flood and storm protection offered through the wave dampening impact of biogenic structures was

valued at £17 to £32 million. The bioremediation of waste generated through storage, dilution,

transformation, detoxification, and burial was valued at £1,098.81 - £1,236.54 per acre, measured over

30 years and discounted at 9 percent. Education and research values were estimated at £317 million.

Leisure and recreation values were estimated at £11.77 billion. Non-use values (bequest and

existence) were valued at £0.5 million to £1.1 billion using the contingent valuation method. Nutrient

cycling achieved through the storage, cycling, and maintenance of nutrients by marine bio organisms

was viewed as nearly invaluable due to its ability to sustain marine habitat. With that noted, the

nutrient cycling function was estimated using the replacement cost method at £800 billion to £2.3

trillion.

This report demonstrates the broad range of values associated with marine biodiversity. The lessons

from the report regarding the value of biodiversity and the types of goods and services provided by

marine habitat can be applied in San Francisco Bay. The study, however, does not represent primary

research and, instead, relies on a series of reports prepared by other authors. The authors of this report

did not perform a meta analysis in order to systematically compare numerous reports prepared in each

category of good and service. Further, the values presented in this report cannot be applied in San

Francisco Bay due to the different scale, water conditions, and animal species present in the marine

habitat studied in the UK.
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Farber, S. 1988. The Value of Coastal Wetlands for Recreation: An Application of Travel Cost and

Contingent Valuation Methodologies. Journal of Environmental Management. 26:299-312.

This study reports on a survey of Louisiana coastal wetlands recreational users administered for the

purpose of estimating wetlands recreational value. The primary technique was the travel cost method.

The value estimates obtained using this method were of similar magnitude to those obtained using a

contingent valuation question in the surveys. Depending on the time cost value used, the average

capitalized value ranged from $36 to $111 per acre. This study provides an overview of the travel cost

method of environmental valuation and provides an application of its use. This study is relevant to the

subtidal habitat restoration goals of San Francisco Bay because it provides an assessment of the values

that consumers of coastal wetlands place on recreational value and demonstrates methods for

determining these values. These values, however, are not directly relevant to San Francisco Bay or to

the benefits of subtidal habitat restoration. Further, the travel cost method does not fully capture the

value that individuals place on environmental resources. That is, the method captures the marginal

additional cost the consumer is willing to pay to travel to the location but does not capture the benefits

associated with existence, bequest and other indirect values.

Fischer, A.C., M. Hannemann, J. Harte, A. Home, G. Ellis, and D. Von Hippel. October 1986.

Economic Valuation of aquatic ecosystems. Final report to the U.S. EPA, Cooperative

Agreement No. 811847. Berkeley, CA.

This report identifies and categorizes the direct and indirect services provided by aquatic ecosystems.

The goods and services provided by aquatic ecosystems that are used as inputs in a production process

include: fisheries products (e.g., fish, shellfish, crustacea, kelp, aquatic mammals), hydroelectric

power, transportation, treatment of human wastes, water purification, treatment of industrial wastes,

drinking water storage, and information produced through scientific research. The authors also

categorize goods and services that are considered a final good, including: direct recreational use of

water (e.g., boating, rafting, sailing, canoeing, swimming), recreational use of aquatic ecosystems

(e.g., fishing, waterfowl hunting, collection of shellfish and crustacea), waterfront recreational

activities (e.g., hiking, sunbathing, bird watching, recreational sports), amenities (e.g., scenic values,

modulation of local climates, education values, psychological benefit of pristine areas), and future

goods and services (e.g., preservation of genetic information and preservation of wild areas for future

generations). The authors also examine valuation techniques as applied to each category of benefit.

For valuing the environment as an input into the production process, such as the commercial

harvesting of fish, the authors recommend examining how enhanced environmental quality could

result in a shift in supply curves. When applied to fish harvests, enhanced water quality resulting in

improved habitat for fish would reduce the cost of harvesting fish. For valuing the recreation and

amenic values of aquatic habitats, the authors recommend employing the travel cost and hedonic

pricing methods, respectively. The authors recommend using the contingent valuation method for

valuing existence and bequest values.

This report is useful to valuing subtidal habitat restoration benefits in San Francisco Bay because it

provides an overview of the benefits typically associated with improved environmental conditions in

aquatic ecosystems, and provides a framework for categorizing and valuing the economic benefits

associated with environmental enhancement. Many of the benefits outlined within the report,
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however, are not directly applicable to San Francisco Bay and the analysis of the valuation methods

provided in the report, which was drafted more than 20 years ago, is now somewhat dated.

Grigalunas, T. and Opaluch, J. 2002. Proposed Delaware River Channel Deepening Project: Review

and Critique of Economic Analyses. Prepared for Wetlands and Subaqueous Lands Section,

Department of Natural Resources and Environmental Control.

The purpose of this report is to present a review and assessment of the numerous economic studies

completed in support of the proposed Delaware River channel deepening project. The study’s authors

explored the concepts used by the studies, the methods employed, the data underpinning each study,

the reasonableness of assumptions used, and the soundness of the conclusions drawn.

Through its analysis of previously conducted studies, this report identifies numerous marine benefits

and costs associated with dredging projects, including enhanced shipping opportunities, wetland

restoration and protection, use of dredged sand for beach renourishment, water quality issues,

groundwater contamination, and impacts on fish and wildlife habitat.

This study stresses the importance on non-market costs of dredging associated with habitat

destruction, resulting impacts on wildlife, and those impacts on eco tourism and other indirect benefits

tied to existence and bequest economic values. The study notes that these benefits are often ignored or

significantly understated.

The study examines the outcome of an input-output analysis associated with the dredging project’s

impact on the Delaware economy. This critique notes that this study provides little useful information

to public policy markers in that input-output analysis includes multiplier effects associated with

economic activity and does not properly capture the costs of dredging from a regional or societal

perspective. Thus, the usefulness of input-output analysis is limited.

This study is useful to the San Francisco Subtidal Habitat Goals Project in that it identifies and

examines the pitfalls associated with economic analyses conducted in support of marine projects.

Lessons learned through this assessment include: a) limiting the reliance of public policy decisions on

input-output analysis, b) consider assumptions in the economic analysis regarding markets in a nonstatic manner while accounting for current trends, c) do not examine impacts in a vacuum instead

considering ecosystem benefits, d) completing complex economic analyses of environmental projects

is extremely difficult and analysis results are not likely to receive unanimous agreement, e) historic

analysis of environmental project costs suggest that these costs are almost always understated in

economic analyses, and f) cost should be examined from a national (not just regional) perspective.

Henderson, J. and O’Neil J. 2003. Economic values associated with construction of oyster reefs by

the Corps of Engineers. EMRRP Technical Notes Collection (ERDC TN-EMRRP-ER-01),

U.S. Army Engineer Research and Development Center, Vicksburg, MS.

The authors of this technical note examine a broad spectrum of benefits that accrue as a result of

oyster reef restoration, and cite recent literature that quantifies the economic impacts associated with

oyster reef restoration. The environmental services of oyster reefs reviewed under this study include
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oyster production (restoration efforts in Virginia have netted positive returns on investment in 5 to 14

years), oyster reef impacts on harvest of fish and crabs (structure and water quality improvements

provided by oyster reefs enhanced fish catches such that the value of the catch exceeded the value of

oyster production in North Carolina’s Ocracoke Island), recreation (water quality benefits), increased

recreational fishing (valued at $2.3 million in Chesapeake Bay), boating ($8 million tied to water

quality benefits of oysters in Chesapeake Bay), beach use and swimming (valued at $7.20 to $23.39

per person for a 10 percent reduction in oil and bacteria), erosion protection and stabilization (reduced

need to construct structural and non-structural management measures for protecting shorelines), and

enhanced habitat for benthic organisms. The benefits of oyster reefs extend far beyond the

commercial harvest of oysters, though the commercial harvest did net positive returns on the initial

cost of establishing the oyster reefs. For San Francisco Bay, the oyster reefs may or may not generate

positive returns on investment from the standpoint of the commercial oyster harvest but experience

from around the U.S. suggests that the indirect benefits could easily surpass the direct harvest benefits.

Hicks, R.L. May 2004. Recreational fishing and the benefits of oyster reef restoration in Chesapeake

Bay. College of William & Mary. Williamsburg, Virginia.

This study examines the value that recreational fisherman place on improved trip quality when

improved catch rates are realized through the water filtration function and enhanced water quality

created by oyster reefs in the Chesapeake Bay. The study relies on surveys of recreational anglers and

employs a random utility model (RUM) to examine the anglers’ willingness to pay for enhanced catch

rates by examining the costs they incur when traveling to better fishing locations. Further, a model

was developed to assess the extent to which enhanced catch could be related back to the presence of

hard oyster bottom at the fishing site. Other variables used to model catch rates included the

fisherman’s years of experience, the log of hours fished, and historic site catch rates. The findings of

the study suggest that: a) sites with relatively high concentrations of oyster bottom did correlate with

higher catch rates, b) higher catch rates increase the probability that a fishing site will be chosen, and

c) anglers would be willing to pay $1.32 per trip to realize the restoration benefits that result in higher

catch rates modeled by the authors.

This study is instructive for the San Francisco Bay Subtidal Habitat Goals project because it outlines

two indirect benefits associated with oyster reef restoration: enhanced water quality and improved fish

catch rates. These benefits would be realized even if oyster harvests were not enhanced through

restoration efforts. Further, the study demonstrates how these values translate into enhanced

willingness to pay on the part of recreational fisherman. The study’s findings (which are focused on

the Chesapeake Bay fishery), however, cannot be directly applied in San Francisco Bay due to

differences in water chemistry, local incomes, preferences of local recreational fisherman, presence of

alternative fishing options, and the composition and quantity of fish available to anglers in the San

Francisco Bay Area.
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Kazmierczak, R.F. 2001a. Economic linkages between coastal wetlands and water quality: a review

of value estimates reported in the published literature. Staff paper 2001-02. Baton Rouge,

LA: Natural Department of Agricultural Economics and Agribusiness, Louisiana State

University Agricultural Centre.

This report documents the findings of 12 studies published in peer-reviewed journals that focus on the

economic value associated with the water quality benefits of coastal wetlands. The author notes that

the findings of the reviewed studies suggest that historically, private economic gains from wetland

conversion have been emphasized over the largely non-market environmental services (e.g., water

quality) associated with wetland habitat. The reviewed studies present a broad spectrum of estimated

water quality benefits from coastal wetlands, ranging from $2.85 per acre per year to $5,763.80 per

acre per year, with mean and median values of $825.04 per acre per year and $210.93 per acre per

year, respectively. The large variance between the mean and median values was due to the nonnormal distribution of the findings and the presence of significant outliers. Removing outliers results

in a new mean and median value of $323.05 per acre per year and $178.64 per acre per year,

respectively. Studies using the contingent valuation method to determine the willingness to pay for

the water quality benefits offered by coastal wetlands generated per respondent benefits estimates

ranging from $41.71 to $101.81, with mean and median values of $66.59 and $63.19, respectively.

The wide variation in benefits estimates reflects the importance of the type of water quality service

provided, geographic location, and whether the benefits were attributed to single or much larger

wetland areas. The studies reviewed by the author provided a few lessons relevant to restoration

efforts in San Francisco Bay. First, water quality benefits of coastal wetlands are significant but

largely not considered within the marketplace and are undervalued by society. Thus, more thoughtful

analysis is required to understand these benefits. Second, water quality benefits are largely tied to the

assimilative capacity of the wetland area under consideration. As larger concentration of pollutants

from industrial or human waste accumulates, nutrient cycling and wastewater assimilation benefits

erode. Last, water quality benefits vary widely based on a number of factors outlined previously.

Thus, the findings of these studies cannot be directly applied to the San Francisco Estuary.

Kazmierczak, R.F. 2001b. Economic linkages between coastal wetlands and hunting and fishing: a

review of value estimates reported in the published literature. Staff paper 2001-03. Baton

Rouge, LA: Natural Department of Agricultural Economics and Agribusiness, Louisiana State

University Agricultural Centre.

This report examines the findings of 12 studies linking the presence of coastal wetlands with hunting

and fishing opportunities. The author selected studies using methods that value wetlands within the

neoclassical framework of economics, focusing on studies that used the travel cost method, contingent

valuation method, the net factor income method, and the hedonic pricing method. The results of the

studies reviewed by the author suggest that results vary widely based on the type of hunting activity

considered, the target species of hunting activities, geographic location, and the measurement

technique. For single-target hunting (e.g., oysters), the value of wetlands across the studies ranged

from $1.05 per acre per year to $663.74 per acre per year, with a mean of $113.95 per acre per year

and a median of $10.03 per acre per year. When commercial and recreational hunting and fishing are

combined, values increase to between $16.76 per acre per year and $1,025.03 per acre per year,

respectively. Willingness to pay studies that focus on stated preferences without empirical data to
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support the conclusions produce a tighter range, with hunting and fishing at wetlands valued at $83.99

to $616.46 per respondent.

The findings of these studies suggest that the values that humans place on wetlands is highly variable

and dependent upon numerous factors, including: the target species of hunting activities, geographic

location, and the measurement technique. From the standpoint of valuing subtidal preservation and

restoration benefits in San Francisco Bay, the findings of these studies suggest that commercial and

recreational fishing and hunting opportunities may be highly prized, but the value placed on hunting

and fishing is highly variable and it would be difficult to apply the findings of this study to San

Francisco Bay without consideration of the variables driving individual estimates.

Leeworthy, V. and J. Bowker. 1997. Nonmarket Economic User Values of the Florida Keys / Key

West. National Oceanic and Atmospheric Administration. Silver Spring, MD.

This report provides estimates of the nonmarket economic user values for recreating visitors to the

Florida Keys/Key West that participated in natural resource-based activities. It is the fifth in a series

that is being developed as part of the project entitled “Linking the Economy and Environment of the

Florida Keys/Florida Bay.” The overall project objectives are to 1) estimate the market and nonmarket

economic values of recreation/tourism uses of the marine resources of the Florida Keys/Florida Bay

ecosystem; 2) provide a practical demonstration of how market and nonmarket economic values of an

ecosystem can be considered an integral component of the economy of a region when formulating

sustainable development objectives and policies; and 3) foster cooperative management processes.

The study relied on the travel cost method relating the number of trips made per year and the per-trip

value cost to socioeconomic factors, such as age, race and income level to estimate how tourists would

respond to changes in prices associated with travel to the Florida Keys. The weighted average travel

costs paid by all summer and non-summer visitors were $740 and $561, respectively. The total

annual value that tourists placed on travel to the Florida Keys was estimated at $1.2 billion and the

total non-market asset value of the resource, as represented by the future stream of benefits realized

through trips to the Florida Keys, totaled $24.1 billion using a 5 percent discount rate and $40.2 billion

when a 3 percent discount rate was applied.

This report demonstrates that in many cases, the non-market values associated with coastal habitat

restoration are significant and it uses methods that could be applied in the San Francisco Bay. Further,

it provides some indication of the enormity of the value that travelers place on the resource, and

presents a method for valuing non-market environmental resource benefits.

Lipton, D., K. Wellman, I. Sheifer, and R. Weiher. 1995. Economic Valuation of Coastal Resources:

A handbook for Coastal Resource Policymakers. NOAA Coastal Ocean Program Decision

Analysis Series No. 5.

This report is the outcome of COP-sponsored environmental valuation workshops. The handbook is a

blend of writings by experts in the field specifically tailored for the management community. The

report provides a background on the history and legislative mandates for environmental valuation,

including those relating to wetlands permitting, nonpoint source pollution control, fisheries

management, and other environmental regulations.
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The report outlines the theories underlying the economics of environmental valuation, including

consumer and produce surplus, how society uses environmental resources as an input into production

processes, nonuse values, and the manner in which humans value natural resources can be used to

derived value. This report documents numerous economic tools for use in coastal management

decisionmaking, including benefit-cost analysis, cost-effectiveness analysis, natural resource damage

assessment, and economic impact analysis. It also documents several techniques for measuring the

direct market value of natural resources (constructing demand curves and measuring consumer

surplus) and the non-market values associated with natural resources (e.g., travel cost model, random

utility models, hedonic pricing, contingent valuation method, benefit transfer).

This report also presents several case studies where these methods are used. The case studies in this

report include: oyster restoration in Chesapeake Bay, salmon habitat restoration in Alaska, the Florida

Keys National Marine Sanctuary, Coastal Barrier Island preservation in North Carolina, artificial reef

program in Lake Erie, wetland restoration in Louisiana, and nonpoint source pollution in California.

This report is useful to the San Francisco Bay Subtidal Habitat Goals Project in that it provides

historical context for environmental valuation in the U.S., methods for valuing natural resources, and

numerous case studies documenting how to apply the most common environmental valuation

techniques.

Mann, R. and M. Whittmann. March 2004. Aquatic Pesticide Monitoring Program: Determining

economic impacts of aquatic plant management in California waters. Oakland, CA: San

Francisco Estuary Institute.

This report presents a methodology for examining the economics of aquatic plant management. It

presents three approaches for weighing the benefits of various aquatic plant management plans,

ranging from a cost-effectiveness approach where only costs are weighed for different plans that meet

a specified objective to full benefit-cost analysis. The report provides detailed steps for conducting the

assessments, including specifying management alternatives, conducting feasibility tests, estimating the

cost of each management alternative, describing damage costs, and arranging data into a period of

analysis in order to compare costs. This report could be useful to planners considering alternative

aquatic plan management alternatives in San Francisco Bay.

Opaluch, J., Grigalunas, T., Diamantides, J., Mazzotta, M., and Johnson R. 1999. Recreational and

resource economic values for the Peconic Estuary System. Prepared for the Peconic Estuary

Program, Suffolk County Department of Health Services.

This study deploys four methods to measure the non-market benefits of the Peconic Estuary System.

The Peconic Estuary System and it natural assets (e.g., beaches, wetlands, parks, watershed lands)

generate both market benefits that can be directly measured in market transactions and non-market

benefits that are not directly measurable through market interactions such as those tied to property

values; outdoor recreational uses; economic value of eelgrass, intertidal marshes, and sand/mud

bottoms; and the desire for local residents and visitors to preserve the amenic value of the estuary.
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The research team developed a property value model to examine the impact of proximity to open

space and other environmental attributes on property values and found that parcels of land near open

spaces were, on average, 12.83 percent more valuable per acre than similar parcels located elsewhere.

A travel cost model was used to examine individuals’ willingness to pay in order to enjoy the

swimming, boating, fishing, and bird watching benefits of the estuary. The travel cost model

examined how much visitors pay to travel to the location. Travel cost represents the minimum value

that these individuals place on each trip. The findings of the travel cost survey demonstrates that

recreational users valued fishing at $22.4 million, viewing birds and wildlife at $49.3 million, boating

at $18.1 million, and swimming at $12.1 million. These are annual values in 1995 dollars.

The wetland productivity values associated with eelgrass, saltmarsh and intertidal mud bottoms were

valued for the habitat and food web they provide for fish, shell fish, waterfowl and birds. The research

team developed a food web model to determine the impacts of these natural assets on the productivity

of the local fishery and viewing values for birds. The results of the analysis estimate the per acre

benefits of eelgrass at $12,400, salt marshes at $4,300, and mudflats at $786 over 25 years using a 7

percent discount rate.

A survey was administered to 968 residents and second homeowners, and the results of the survey

found that the residents of the nearest population center valued the per acre benefits associated with

undeveloped land at $14,000, unpolluted shellfish grounds at $30,000, salt marshes at $56,700,

eelgrass at $70,000, and $74,500 for farmland, using a 25-year time horizon and 7 percent discount

rate.

This study is relevant to the Subtidal Habitat Goals Project in that it examines the non-market benefits

associated with marine resources similar to those found in San Francisco Bay and presents methods

for estimating their values.

Perkins-Visser, E., T. G. Wolcott, and D.L. Wolcott. 1996. Nursery role of seagrass beds: Growth of

juvenile blue crabs (Callinectes sapidus Rathbun). Journal of Experimental Marine Biology

and Ecology 198: 155-173.

This study examined the benefits, other than protection from predation, that accrue to blue crabs

(Callinectus sapidus Rathbun) by inhabiting seagrass beds (Zostera marina L.) in the lower York

River, Virginia. Crab survival and growth rates were compared between crabs in enclosures within

seagrass beds and those in enclosures in un-vegetated areas. Results showed that young blue crabs

attained a significantly larger carapace volume and higher rates of survival in the enclosures within the

beds than in un-vegetated enclosures. Because predators were excluded from all enclosures, the

greater benefits obtained by crabs living within vegetated areas were independent of reduced

predation. However, the precise mechanism for enhanced survival and growth rates in vegetated

enclosures was not determined.

This study has relevance for the San Francisco Bay Subtidal Habitat Goals project because it

documents the benefits that accrue to a crab species from the availability of seagrass habitat.

However, the results cannot be directly applied to San Francisco Bay. The water parameters and
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species present differ between the lower York River and San Francisco Bay. In addition, the study did

not determine the mechanism that enhanced survival and growth rates for blue crabs inhabiting

vegetated areas, so it is unknown whether the same mechanism would be present between San

Francisco Bay seagrass beds and crab species.

Posey, M.H., T.D. Alphin, H. Harwell, and B. Noller. 2004. Studies of oyster reefs in New Hanover

County tidal creeks. In: Environmental Quality of Wilmington and New Hanover County

Watersheds: 2002-2003, eds. M.A. Mallin, L.B. Cahoon, M.H. Posey, V.L. Johnson, T.D.

Alphin, D.C. Parsons, and J.F. Merritt. Wilmington, NC: Center for Marine Science,

University of North Carolina at Wilmington.

This study examined the structural complexity, uniformity, and oyster density of oyster reefs within

tidal creeks in New Hanover County, North Carolina. The results, which discuss the specific

characteristics (such as the amount of sedimentation present and the density of live oysters) of the

oyster reefs in those particular tidal creeks, are not applicable to the San Francisco Bay Subtidal

Habitat Goals project. However, the background of the report provides a useful summary of the

existing literature regarding the role of oyster reefs as providers of refuge and foraging area, crucial

habitat, and water filtration.

Oyster reefs provide a structural refuge from predation for small fish and invertebrates. Crab, fish,

and shrimp species utilize the living and broken oyster shells as places to hide. Predators also benefit

from the oyster reefs; fish species such as striped bass, bluefish, and weakfish use subtidal reefs as

foraging sites. Transient species benefit by using subtidal oyster reefs to travel between marsh,

seagrass, and other habitats. In addition, the hard substrate created by the reefs can serve as a place of

attachment for sponges. Oyster reefs contain the nitrogen-rich feces of oysters and enrich the local

sediment, which may enhance the growth of submerged vegetation. At the same time, oyster reefs

improve water quality by removing particulate matter from the water column.

Resources Agency for California. 1995. California’s Ocean Resources: An Agenda for the Future.

Sacramento, California.

This report identifies the conservation mission of the California Ocean Resources Management

Program and outlines key goals for realizing the mission. The report also estimates the economic

impacts, including multiplier effects, of seven key ocean-dependent industries in California. The

report examines coastal tourism, estimating that it contributes $9.9 billion annually to the state

economy. The report attributes $6.0 billion annually to water transportation, ship / boat building and

repair. It also identifies commercial fishing, mariculture, and kelp harvesting as key ocean-dependent

industries, and attributes $554 million in annual economic activity to them. Finally, offshore oil and

gas and coastal mineral production was estimated to contribute $852 million to California’s economy

annually. The report is important as it relates to subtidal habitat goals in San Francisco Bay because it

demonstrates the magnitude of the benefits associated with ocean-dependent industries in California.

This study, however, does not examine the full range of environmental services provided by coastal

areas and oceans, including non-use values, and it limits its analysis to seven of the most significant

industries to the exclusion of many others.
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Shorney, B. 2004. Research into the economic contribution of sea angling. Commissioned by the

Economics and Statistics Group of DEFRA and carried out by Drew Associates Ltd.

This report examines the economic contribution of sea angling as measured through an assessment of

consumer surplus identified through surveys distributed to households, anglers, and businesses

providing services to anglers in four case study locations in England – Weymouth, Whitby, Hastings,

and Anglessey.

The annual consumer surplus for sea anglers was found to equal £381 per shore angler and £886 per

own boat anglers. The annual aggregate consumer surplus estimate was £594 million. The survey

found that anglers were willing to pay more for larger species and also for greater diversity in the

catch. Spending by anglers translated into 18,889 jobs and £71 million in suppliers’ income.

Spending by anglers was estimated at approximately 1 percent of total income from tourism.

This study is useful to the San Francisco Bay Subtidal Habitat Goals project in that it estimates the

value of sea angling, examines the factors that contribute to that value, and presents a method for

estimating the consumer surplus enjoyed by sea anglers.

Soniat, T. M., C. M. Finelli, et al. 2004. Vertical structure and predator refuge mediate oyster reef

development and community dynamics. Journal of Experimental Marine Biology and

Ecology 310(2): 163-182.

The authors demonstrate in this article that in addition to their economic value, oysters supply a

number of critical ecosystem services such as controlling eutrophication, recycling nutrients, and

providing habitat for many invertebrates and fishes. Thus, the maintenance and restoration of oyster

reefs is vital for properly functioning estuarine ecosystems. The authors hypothesized that spatially

heterogeneous and refuge-rich reefs are superior habitats for oysters and associated invertebrates and

fishes. If this is the case, then vertical structure and refuge should be included in the design of newly

constructed oyster reefs and conserved in existing reefs.

The findings indicate the primary importance of settlement surface orientation (horizontal vs. vertical)

over predation refuge when predators are absent. In contrast, two field recruitment studies indicated

that the importance of surface orientation relative to predation refuge might depend on sedimentation

rates. When sedimentation was low, the number of oysters and barnacles (live, dead, and total) was

significantly higher on no-refuge models than on refuge models. This leads to a conclusion that

although fewer oysters may settle on refuge shells, those that do have a higher rate of survival. In a

year when sedimentation was high, recruitment and survival of oysters, barnacles, and bryozoans was

higher on vertical models regardless of refuge. In aggregate, the results of the analysis indicate that

both vertical orientation and predation refuge are critical to the early development of the oyster reef

community and should be included in restoration designs.
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Thibodeau, R.R. and B.D. Ostro. 1981. An economic analysis of wetland protection. Journal of

Environmental Management 12: 19-30.

This article examines the economic benefits of wetland areas (marsh and wooded swamps) in the

Charles River Basin in Massachusetts. The articles notes that historically, wetland areas have been

drained and filled nearly indiscriminately as housing demands have strained the supply of land

suitable for development. As the demand for housing has expanded in many areas surrounding

wetlands across the U.S., development decisions were largely made without consideration of the

broad range of economic benefits derived from the wetlands being drained and filled.

The study examines the benefits derived from wetland protection in the Charles River Basin through

an analysis of broad categories of benefits, including: increases in land value, pollution reduction,

water supply, recreation and aesthetics, preservation and research, vicarious consumption and option

demand, and undiscovered benefits.

The impacts of wetland areas on land value were examined from the standpoint of both flood control

and privacy values for land abutting the wetland areas. Using Corps of Engineer estimates of flood

damage, the benefits associated with flood protection were estimated at $33,000 per acre of wetland in

present value terms. Note that this article was published in 1981. Thus, these estimates would be

significantly higher today. Using a combined survey and econometric approach for examining land

value near wetland areas, the impact of wetland areas on land values was estimated at between $150

and $480 per acre.

The value of wetlands for reducing pollution and removing nutrients and biological oxygen demand

from sewage were estimated based on the costs to construct and maintain water treatment plants,

which was estimated at $16,960 per acre. The study also examines the value of wetlands derived from

municipal wells in Massachusetts, which are typically located in or adjacent to wetlands. Using a

study conducted in 1973, the average cost of obtaining well water in Atlantic States was estimated at

100,000 gallons per day at a cost of $7.44. When comparing the estimated cost of well water to that

of the Metropolitan District Commissions, which cost approximately $24 per 100,000 gallons, the

benefit was calculated based on the difference ($16.56 per day) between the two sources. The water

supply benefit was estimated at $6,044 per year or $100,730 per acre over the study time horizon.

Recreation and aesthetic values were evaluated. These values included small game hunting,

waterfowl hunting, trout fishing, warm water fishing, and nature study. The study relied on surveys

distributed by the Fish and Wildlife service to determine how much hunters, birdwatchers, fishermen,

and other eco tourists would be willing to pay to preserve wetland acreage. The study also computes a

demand curve to determine the consumer surplus experienced by current eco tourists. The recreation

and aesthetic values were estimated at $2,145 - $38,469 per acre.

Based on the findings outlined above, the benefit associated with one acre of Charles River Wetland

in 1981 was estimated at $153,535 - $190,009. This estimate did not include any benefits associated
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with preservation and research, vicarious consumption, or undiscovered benefits. These benefits were

examined qualitatively within the study.

This study is useful within the context of the San Francisco Bay Goals Project in that it documents

numerous classes of environmental benefits (e.g., increases in land value, pollution reduction, water

supply, recreation and aesthetics, preservation and research, vicarious consumption and option

demand, and undiscovered benefits) and explores several techniques used to quantify these benefits,

including contingent valuation, hedonic pricing, and construction of demand curves).

Wiley, P. August 2003. Valuing our National Marine Sanctuaries. Prepared for the National Oceanic

and Atmospheric Administration. Silver Spring, Maryland.

This report identifies and characterizes the 13 National Marine Sanctuaries in the U.S. that collectively

protect more than 18 thousand square miles of ocean and coasts. The report documents the missions

of the sanctuaries, ranging from the protection of coral reef ecosystems and kelp forests to protection

of the U.S.S. Monitor, which was sunk off the coast of North Carolina during the U.S. Civil War. It

documents the environmental services provided by coastal areas, including:

 market values, as determined through the impact of coastal resources on sales,

employment, and income;

 non-market values, including direct use, indirect use, option, and quasi-action; and

 non-use values, including bequest and existence values.

This report also examines the link between environmental quality and resource values, and provides

numerous methodologies for valuing those benefits, including the travel cost method for valuing

recreational values, the contingent valuation method for valuing recreation and existence values, the

hedonic price method for valuing amenity and other values that impact housing and commercial

development prices, benefit transfer method that uses previous studies’ estimates or models from

similar sites and applies them to the current site under evaluation, and the opportunity cost method that

evaluates the cost of a resource through the value of its next most preferred use.

This report provides a framework for valuing marine habitat in a manner that could be applied in San

Francisco Bay and outlines the benefits of establishing National Marine Sanctuaries and models that

can be used to monetize the benefits of doing so.