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Executive Summary The Committee on Noneconomic and Economic Value of Biodiversity in the Board on Biology of the National Research Council's Commission on Life Sciences was charged with examining ''how current scientific knowledge about the economic and noneconomic value of biodiversity can best be applied in the management of biological resources''. This report reviews current understanding of the value of biodiversity and the methods that are useful in assessing that value in particular circumstances. It responds to a request to the National Research Council from the Deputy Undersecretary of Defense for Environmental Security, which recognized that many of the lands it owns or controls have potentially high value for protection and maintenance of biodiversity. The primary purposes for which these lands are managed requires that they be held in relatively large blocks and that they not be developed for commercial or residential uses. Other federal agencies and many state natural resource agencies also have lands held in large blocks where biodiversity can be protected and maintained. Taken together, the state and federal lands, including military reservations, collectively identify a developing national system of potential biodiversity reserves. Their importance aesthetically, economically, and biologically should not be undervalued. Conservation of biodiversity does not enter into resource-management decisions in only one way. It is a vital element in sustaining natural processes. But management of natural systems involves many tradeoffs between conservation of biodiversity and other management goals. The extent of the tradeoffs and the extent of a manager's ability to effect the conservation of biodiversity are limited by the extent of the manager's authority. Resource-management decisions in nearly all cases are incremental. A manager's decisions are limited in space by agency mandates and geographic constraints. They are usually limited in time by the ability to forecast conditions
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and human needs. But concerns with biodiversity extend beyond those boundaries. Although a manager's actions are local and immediate, the management perspective must be broad enough to recognize a range of values and the implications of decisions for survival of larger ecosystems. A series of decisions that individually do not have major effects can have major cumulative effects. This report differs from many recent ones that have focused solely on measures of the economic value of biodiversity in that it seeks to embrace the range of values that legitimately can be used to determine the merits of alternative courses of action regarding biodiversity. Recognizing that improved methods for assigning value can enhance the process of decision-making, we also provide a summary of state-of-the-art methods for establishing value. But we focus even greater attention on methods of weighing input from stakeholders who have different systems for determining the value of different actions so as to yield sound resource-management decisions. The intent of this report is to provide perspectives on biodiversity that resource managers can consider in making decisions. The different approaches to valuing biodiversity are discussed throughout the report. Case studies are used to show that no single list of tools can be used for management decisions on biodiversity. We suggest that managers consider in their deliberations a broad range of information on biodiversity, including differing views and values of biodiversity. We believe that managers can benefit from such information. The committee reviewed the relevant scientific literature on biodiversity, its values, concerns about its status, and its treatment in analyses of its value. Understanding the technical meaning of biodiversity and its implications is necessary if the values of conserving biodiversity are to be incorporated appropriately into resource-management decisions. The approach to providing such understanding used in this report is three-fold. First, we develop the basis for understanding the importance of the components of biodiversity and some of the ways in which biodiversity is measured. Recognition that diverse biological systems are essential for life on the planet is, obviously, important in managing resources. But such management requires a fuller understanding of biodiversity and its components. In chapter 2, we attempt to define these components and to describe some of the ways to measure them. Biodiversity includes not only the world's species with their unique evolutionary histories, but also genetic variability within and among populations of species and the distribution of species across local habitats, ecosystems, landscapes, and whole continents or oceans. Because biodiversity is such a broad concept, methods for its quantification are necessarily broad. Nonetheless, the available data indicate that a greater species diversity in an ecosystem tends to increase the likelihood that particular ecosystem services will be maintained in the face of changing ecological or climatic conditions. The committee concludes that, given the variation in missions of agencies, managers must consider both the mainte-
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nance of viable local populations of species of interest and the maintenance of biodiversity on larger scales as essential for the functioning of ecosystems. Second, we discuss how people derive value from biodiversity and how it contributes to the well-being of society. It contributes to various kinds of services that depend on functioning ecosystems, to social and cultural values and to human industries. Chapter 3 discusses how the many dimensions of biodiversity and its components contribute to decisions on management of biodiversity. The individual components of biodiversity—genes, species, and ecosystems—provide society with a wide array of goods and services. The components of biodiversity are interconnected. For example, genetic diversity provides the basis of continuing adaptation to changing conditions, and continued crop productivity rests on the diversity in crop species and on the variety of soil invertebrates and microorganisms that maintain soil fertility. Similarly, a change in the composition and abundance of the species that make up an ecosystem can alter the services that can be obtained from the system. Biodiversity contributes to our knowledge in ways that are both informative and transformative. Knowledge about biodiversity is valuable in stimulating technological innovation and in learning about human biology and ecology. Experiencing and increasing our knowledge about biodiversity transforms our values and beliefs. A fairly large literature characterizes nonextractive ecosystem services that have direct benefits to society, such as water purification, flood control, pollination, and pest control. Methods of analytically estimating economic and noneconomic values of biodiversity must be viewed in the broad context of people's different ways of thinking about values. In chapter 4, major Western philosophies of value are reviewed to provide a context for describing how the tools of economists can contribute to understanding how biodiversity values fit into the management of biological resources. The relevance of the different philosophies themselves to management decisions is also recognized. Generalized human responses to biodiversity can be grouped into three broad categories: We might need it. In this category are the claims concerning the actual or potential usefulness of biodiversity—genetic resources for medicine, pharmacy, and agriculture; ecosystem services; and, ultimately, the continuity of life on Earth. We like it. In this category are the claims that biodiversity is a direct source of pleasure and aesthetic satisfaction—its contribution to quality of life, outdoor recreation, and scenic enjoyment; to preserving a sense of place; and to preserving refuges of wildness (wildlands and wild habitats). We think we ought to. In this category are the claims that people have duties to preserve and protect biodiversity—duties based on higher moral principles or on rights that are attributed to biodiversity or its living components.
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It is reasonable for a person to hold views in all three categories simultaneously. Reasons for action must be based on both positive and normative premises, that is, on facts and on some concept of what is good. In the broad categories of reasons for caring about biodiversity, we have lumped motivations that derive from different understandings of the facts and different perceptions of the good. Utilitarianism, which judges the effectiveness of actions by how well they contribute to satisfying people's preferences, is the basis for most mainstream economic analyses of value. Where direct evidence of values is provided by prices in market transactions, the economist's usual tools (for example, marginal analysis—examining the effects of small incremental changes in prices and quantities) provide useful information for making decisions. Where for various reasons markets do not provide such evidence of value—the usual case for decisions about biodiversity—several techniques have been developed to substitute for market evidence. The economic value of biodiversity has its place in the policy-making process. Although biodiversity might well have substantial economic value, compared with alternative consumptive resource uses, economic value does not tell us everything we need to know about the value of biodiversity. Economic valuation is an attempt to provide an empirical account of the value of services and amenities or of the benefits and costs of proposed actions (projects or policies) that would modify the flow of services and amenities. Economic valuation provides a utilitarian account, that is, an account of contribution to the satisfaction of human preferences. Therefore, it provides a particular perspective on value—in this case, on the value of biodiversity. Utilitarians might object to some aspects of the economists' utilitarian account: to produce an economic account of contribution to preference satisfaction, a particular kind of structure has to be introduced into the analysis, and utilitarians will not always endorse the process or the results. Chapter 5 reviews the array of tools that economists have developed for estimating values when the lack of ordinary markets precludes use of their favored measure, market-determined prices. These are powerful tools for informing decisions involving biodiversity, but they have limitations. Estimates of value based on them should be treated with careful attention to the assumptions that have been used in obtaining them. Support for their veracity can be indicated by the degree to which results obtained from various estimates converge. Particular care should be taken as the scale of the decisions for which estimates of value are made diverges from the normal scale of market processes. The economist's usual view of market decisions as being made at the margin—that is, for small changes in quantities and prices—is a key assumption for most estimates of value. Results of both direct evidence and surrogate measures of value provide useful information for informing decisions about biodiversity. But both approaches provide only part of the needed information. Utilitarianism is only one valid way of looking at values, and the results of economic analysis are condi-
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tioned by fairly rigorous assumptions. In most cases, a process is needed to weigh the results of different approaches for valuing biodiversity and to validate the analyses used for estimating values. This report includes several case studies that involve aspects of biodiversity to illustrate a wide spectrum of resource-management situations. All involve ways in which recognition of the values of biodiversity could or did contribute to resource management. The message of the several case studies taken as a whole is that valuing biodiversity in real decisions is constrained by decision boundaries that are not consistent with the scale on which natural systems operate; by limits in the ability to describe how biodiversity will be affected by such decisions; and by disagreements over the weights to be assigned to different measures of value. Our intent has been to provide examples that embody an array of complications and challenges inherent in environmentally sensitive management decisions. We have purposely avoided such global issues as climate change and its potential consequences; although surely important in connection with the central themes of our report, these are beyond the capacity of local managers and decision-makers to influence significantly. Rather, we present and discuss scenarios ranging from specific local actions to regional problems that, although acknowledged, remain unsolved. These are intended to encapsulate the multiple dimensions of the management challenge; we do not intend them to be interpreted as specific instructions. Management flexibility and development of mutual trust and understanding are likely to achieve management objectives more effectively than rigid prescriptions. The usual processes for involving the public and other interested parties in government resource management and environmental decisions have been limited in their effectiveness. Alternatives are needed that will provide for input of both scientific information and people's values and for weighing these in an iterative process that allows testing of the scientific information and clarifying values. This report discusses the merits of analytic deliberation processes as a way of bringing value- and science-based information to bear on decisions involving biodiversity. Analytic deliberation is a class of discursive processes for dealing with conflicts that draws on the best features of both analysis and deliberation; these processes incorporate input from traditional public participation, from normal political processes, and from science in several ways. It also relies on sound analysis grounded in the best available science. It is a structured process tailored to match local circumstance and to fit the needs of managers to make decisions. Analytic deliberation processes are based on continuity and repetition involving a stable group of participants who are committed to the success of the endeavor. In a sense, they mirror the operation of ordinary markets, in which prices are set in a continuing series of negotiations among buyers and sellers. Each market decision provides additional information for agreeing on the price in the next situation. Resource managers are faced with the unenviable but necessary task of
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weighing the various consequences of their decisions in terms that are relevant to people and their values and with doing this in the absence of unambiguous measures of human values and in the absence of unambiguous supporting information on the potential effects of their decisions on biological processes, local and global. Decisions must and will be made. The dilemma for managers and society alike is that most of the decisions will be local and have mainly local effects that can be monitored and used to guide later decisions, but some will involve broader issues, major commitments of resources, and longer periods of adjustment. At whatever level decisions involving the recognition of the importance of conserving biodiversity are made, the following findings will help to guide action. That a broader understanding of the implications of biodiversity conservation is needed for resource-management decisions on the various scales at which they are made. That the available tools for estimating both economic and noneconomic values to management alternatives are limited in their usefulness in these decisions, in part because of the wide differences in philosophies of value held by the public, but also because of the nonmarket nature of so many of the values of biodiversity. No measure or calculus adequately provides for simultaneously weighing the full range of possible values in most such decisions. That reaching public consensus on decisions involving biodiversity is hindered, often by the lack of facts on which agreement can be reached, but also by public processes that fail to take full advantage of opportunities to develop consensus. The committee concludes the following: There is an urgent need for more information about biodiversity and its role in sustaining natural processes and for it to be gathered, organized, and presented on various scales and in ways most useful to those charged with managing natural resources. No simple models or approaches can adequately capture both market and nonmarket values of biodiversity in a simple, objective manner. Traditional and emerging benefit-cost approaches to valuing biodiversity can contribute important and relevant information to decision-making. But the wide ranges of values and value systems held by those affected by resource decisions and the inherent difficulties in quantifying nonmarket values place some limits on the role of models in these decisions. There is great power in using an analytic deliberative process, which is inherently qualitative, in making decisions about biodiversity, although the ultimate decisions themselves must be made by the managers or policy makers. This
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includes using the process to weigh the different kinds of values that are involved. Because most decisions affecting biodiversity will be made on a local scale, there is an urgent need for periodic regional assessments of the state of biodiversity so that managers can assess the consequences of their decisions in broader and more ecologically meaningful contexts.
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Representative terms from entire chapter: