Economic Valuation Bretagne

Description of valuation study conducted – DEMAND

Our aim was to value several public goods (PGs) provided jointly by the agricultural management of wetlands. We selected five PGs, namely water filtration, flood resilience, suitable fishing conditions (nursery and access to fishing resources), carbon sequestration and habitat for biodiversity (existence value), the three first PGs being local PGs while the two last ones being global PGs. We aimed to answer two question: (i) what is the total value of the environmental service provided by the agricultural management of wetlands and (ii) what is the total value for local PGs on one side and for global PGs on the other side. The answer to the first question indicates what is the willingness-to-pay (WTP) of the society while the answer to the second question indicates where are localized the agents who have the highest WTP. We use three methods to value these WTP.

First, we use cost accounting and transfer methods to value the five PGs in two situation “wetlands with agricultural management” and “abandoned wetlands” and in two different watersheds, the letter decreasing the provision of the five selected PGs. The difference of the sum of the five PG in the two situations give the value of the environmental service. Second, we use spatial hedonic pricing methods to value directly the capitalization of agricultural management of wetlands and other lands into Breton residents’ houses.

PG valuation results – DEMAND

We find that, in total, the environmental service provided by the farmers managing wetlands is at minimum 440€/ha/year in the Odet watershed and 290€/ha/year in the Elee-Isole-Laïta watershed. We find that the heterogeneous value is due to the heterogeneous value of the three local PGs in the two different watersheds, and in particular due to the heterogeneous demand for drinking water. In addition, we find that about 80 to 90% of the value was due to the provision of local PGs. It implies that the local demand for environmental services explains most of the level and heterogeneity of the WTP of the society. Interestingly, we find that the value of global PGs in the two watersheds is approximately equals to the European payments in the subsidies for the agro-environmental and climatic measure targeting agricultural management of the wetlands, which could indicate that the European Union has no interest to modify the agro-environmental subsidies. Our results from hedonic pricing method confirms that the value of local PGs is highly heterogeneous over Brittany. Overall, our results highlight the need to improve the incentives for local PGs provision, which should better integrate the heterogeneity of their value over space.

 

 

Description of valuation study conducted – SUPPLY

Our aim was to determine the supply function of the environmental service for the agricultural management of wetlands. For this purpose, we study the opportunity costs faced by the agricultural management of wetlands in two situations: (i) the wetlands that are managed and (ii) the wetlands that are abandoned, and thus less valuable for society. In the first situation, we determined the opportunity costs comparing statistically the profitability of agricultural wetlands and the profitability of regular agricultural lands. In the second situation, we conduct an exploring survey on 10 farmers to determine their willingness-to-accept (WTA) for managing one hectare of abandoned wetland. We also provided a GIS analysis using the recent wetland inventory from Finistère (NUTS 3 Brittany region) to determine the level of abandoned wetlands in Brittany, which is actually ignored.

PG valuation results – SUPPLY

First, we find that 46% of the wetlands that could be managed by farmers are in fact abandoned, notably around the main cities and close to the seacoast. Second, we find that the management of already managed wetlands is less profitable than usual agricultural lands by 100€/Ha/year to 120€/Ha/year on average, which is slightly smaller than the existing 120€/Ha/year of the AECM for wetland management in Brittany. This result confirms that farmers manage wetlands such that the cost of the last unit of managed wetlands equals the marginal profitability, here the agro-environmental payments. Based on the survey, we find that the minimal WTA is 100€/Ha/year and the maximal WTA is 600€/Ha/year. In particular, farmers 9 out of ten would agree to manage wetland for a payment of 440€/Ha/year, which is the minimal estimated WTP of the society. These results highlight that most of the abandoned wetlands could be managed if suitable schemes and governance were in place. Given the existing 120€/ha/year and the minimal WTP of the society (notably by the local residents), there is a large room for negotiations, which could take place thanks to a suitable Payment for Environmental Services. This is the purpose of the regional representatives for agriculture (“Chambre Régionale d’Agriculture de Bretagne”), who develop a PES scheme for agricultural management of wetlands based on the results of PROVIDE and those of the “Fermes de références en zone humide” project.