Evaluating indicators of aquatic ecosystem health for valuation and policy analysis

The Water Quality Ladder (WQL) and its derivatives are the primary metrics used by environmental economists to value surface water quality changes for policy analysis.  Such metrics are convenient for valuation because they combine multiple chemical and physical measurements into a single metric that is benchmarked by suitability for specific use-values – e.g.  boating, fishing, swimming, and drinking.  People derive value from aquatic ecosystems via motivations other than uses such as those, however, so relying solely on the WQL for valuation may underestimate benefits from proposed policy.  The purpose of this study is to identify a metric of aquatic biological integrity to complement the WQL on valuation surveys to estimate the non-use value of water quality improvements. We identify a set of candidates and evaluate them using four criteria for environmental quality indicators: measurability, interpretability, applicability, and comprehensiveness.  Using the supporting documentation of the candidate indicators and extensive focus group research, we identify the ratio of observed taxonomic composition of the aquatic resource to the composition expected under reference conditions (O/E) as the most appropriate indicator to capture non-use value from aquatic biological integrity. The features of O/E that drive this judgement are its national availability and reporting consistency, the ability of the general public to accurately interpret changes in its value, and its cognitive separability with human use values. We intend to use O/E and the WQL on a forthcoming valuation survey to analyze the properties of use and non-use benefits from surface water quality improvements.

Impact/Purpose

The EPA currently uses the Water Quality Ladder (WQL) to estimate benefits associated with proposed policies under the Clean Water Act. The WQL is primarily designed to capture use-based values and may not fully capture all benefits associated with water quality improvements. Specifically, society’s value for environmental quality that is not driven by human uses is known as “existence value” and is derived from the satisfaction that people get from stewardship of the environment, even if they will never use the resource in question. Importantly, values held by nonusers of a resource can be small per household but potentially exceed use-based value when aggregated across many households. This research identified a biological metric that can be used in surveys of the public that can capture the value of improvements in biological integrity. Critically, focus groups were able to understand and describe the meaning of changes in the selected metric and keep it separate from use-based values captured by the WQL. 

Citation

Moore, Chris AND Ryan A Hill. Evaluating indicators of aquatic ecosystem health for valuation and policy analysis. Joint Aquatic Sciences Meeting, Grand Rapids, Michigan, May 14 - 20, 2022.