Valuation of Marine Ecosystems
Authors: Vassilopoulos Achilleas , Koundouri Phoebe 
Published: May 2018

Water accounts for more than 70% of Earth’s surface, making marine ecosystems the largest and most important ecosystems of the planet. However, the fact that a large part of these ecosystems and their potential contribution to humans remains unexplored has rendered them unattractive for valuation exercises. On the contrary, coastal zones, , being the interface between the land, the sea, and human activities competing for space and resources, have been extensively studied with the objective of marine ecosystem services valuation. Examples of marine and coastal ecosystems are open oceans, coral reefs, deep seas, hydrothermal vents, abyssal plains, wetlands, rocky and sandy shores, mangroves, kelp forests, estuaries, salt marshes, and mudflats. Although there are arguments that no classification can capture the ways in which ecosystems contribute to human well-being and support human life, very often policymakers have to decide upon alternative uses of such natural environments. Should a given wetland be preserved or converted to agricultural land? Should a mangrove be designated within the protected areas system or be used for shrimp farming? To answer these questions, one needs first to establish the philosophical basis of value within the ecosystems framework. To this end, two vastly different approaches have been proposed. On the one hand, the nonutilitarian (biocentric) approach relies on the notion of intrinsic value attached to the mere existence of a natural resource, independent of whether humans derive utility from its use (if any) or preservation. Albeit useful in philosophical terms, this approach is still far from providing unambiguous and generally accepted inputs to the tangible problem of ecosystem valuation. The utilitarian (anthropocentric) perspective, on the other hand, assumes that natural environments have value to the extent that humans derive utility from placing such value. According to the total economic value (TEV) approach, this value can be divided into “use” and “nonuse.” Use values involve some interaction with the resource, either directly or indirectly, while nonuse values are derived simply from the knowledge that natural resources and aspects of the natural environment are maintained. Existence and altruistic values fall within this latter category.

Not surprisingly, economists have long revealed a strong preference for the utilitarian approach. As a result, the valuation of marine ecosystems requires that we understand the ecosystem services they deliver and then attach a value to the services. But what tools are available to economists when valuing marine ecosystems? For the most part, ecosystem services are not traded in formal markets and thus actual prices are usually not available. Valuation techniques essentially seek different ways to estimate measures like Willingness To Pay (WTP), Willingness To Accept (WTA), or expenditures and costs. The techniques used for the valuation of ecosystem services can be divided into three main families: market-based, revealed preference, and stated preference. Finally, value-transfer methods are also used when estimates of value are available in similar contexts. All these methods have advantages and disadvantages, with different methods being suitable for different situations. Hence, extra caution is required during the design and implementation of valuation attempts.