Ecosystem services in infrastructure planning – a case study of the projected deepening of the Lower Weser river in Germany

Abstract

We consider how ecosystem services can be incorporated into water infrastructure planning by studying the projected deepening of the Lower Weser river channel in Germany. We recalculate the project's benefit–cost ratio by integrating the monetary value of changes in different ecosystem services, as follows: (1) the restoration costs of a mitigation measure for a loss in fresh water supply for agricultural production in the estuary region, (2) the costs of a loss in habitat services, transferring the willingness to pay from a contingent valuation study to the area assessed in the environmental impact assessment, and (3) the benefits of emissions savings induced by more efficient shipping, taking a marginal abatement cost approach. We find that including monetary values for ecosystem service changes leads to a substantial drop in the benefit–cost ratio. On this basis, we argue for a reform of the standard cost–benefit analysis to facilitate more complete welfare assessments.

Keywords:

• ecosystem services
• cost–benefit analysis
• infrastructure planning
• river deepening
• Weser estuary

Acknowledgements

We are grateful to Stefan Baumgärtner, Moritz Drupp, Klaus Eisenack, Bernd Klauer, Sean Nino Lotze, Martin Rode, Burkhard Schweppe-Kraft, Heinz Welsch, Martina Wernick, Ulrich Zabel, participants of the ISEE 2014 session T3 R4 1.3.O, Kathleen Cross for a language check, and especially three anonymous reviewers for helpful comments and suggestions on earlier drafts of this paper. Nils Droste is grateful for doctoral scholarship by the Heinrich-Böll Foundation (grant no. P118873).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Ecosystem services are ‘the benefits that people obtain from ecosystems’ (MEA 2005: preface) or, for a more precise definition, ‘[f]inal ecosystem services are components of nature, directly enjoyed, consumed, or used to yield human well-being’ (Boyd and Banzhaf 2007, 619).

2. For both the reasons and challenges of integrating ecosystem services into decision-making, see de Groot et al. (2010).

3. The Weser river in northwest Germany has been deepened several times (Franzius, Franzius, and Rudloff 2010; Wetzel 1988), leading to drastic alterations in the river flow regime (Schuchardt et al. 2007). The deepening project currently being planned (WSV 2011) has been challenged by environmental NGOs and farmers at the German Federal Administrative Court, where it was referred to the European Court of Justice with regard to the ‘no deterioration’ rule in the EU Water Framework Directive (Ekardt and Weyland 2014).

4. Traffic forecasts and the implicitly assumed development of demand constitute a key source of uncertainty (cf. Næss, Nicolaisen, and Strand 2012).

5. According to current legislation (BVWP 2003), costs and benefits are measured in present values with a base year and prices of 1998. The discount rate is 3%. For waterway infrastructure investments on river and canal beds, a use value of more than years is assumed (BMVBW 2003b, 99). For the Lower Weser deepening, the first year of operation is assumed to be 2015 (PLANCO 2002). The formula is simplified for constant flows (BVWP 2003).

6. The currently developed BVWP 2015 does not differ in this respect and will not explicitly include environmental costs (Intraplan, Planco, and TUBS 2015, Section 2.11).

7. The initial CBA for the Weser deepening was conducted (PLANCO 2002), before the environmental impact assessment (GfL, BioConsult, and KÜFOG 2006a) and the landscape conservation plan (GfL, BioConsult, and KÜFOG 2006b) existed and is therefore inevitably inaccurate in estimating environmental costs.

8. The willingness to pay is the amount of money an individual is willing to pay to obtain a certain good or service. Conversely, the willingness to accept is the amount of money an individual requires in order to go without a certain good or service.

9. There is an additional and partly revised CBA (PLANCO 2009). In comparison to the original CBA, it is even less explicit in its assumptions and methodology, which makes it harder to reproduce.

10. Monetary values are converted to €¹⁹⁹⁸ throughout the text using the annual consumer price indices for Germany (Statistisches Bundesamt 2014).

11. Very likely these are not the only effects. Potentially, the deepening would also have negative impacts on cultural ecosystem services such as amenity and recreational services, e.g. for biking and hiking along the Lower Weser, due to a more confined river (cf. Russi et al. 2013). Regulating services are also likely to be affected negatively, given that dredging and the associated loss of habitats affect the nutrient retention capacity of estuaries (cf. Dehnhardt 2002; Liekens, Broekx, and De Nocker 2013; Jacobs et al. 2013). Including such potential ecosystem service losses in monetary terms would further lower the benefit–cost ratio.

12. As noted in Section 2.3, cost-based methods are not necessarily a good measure of welfare since they do not contain information about individual and social preferences (and marginal WTP). In this case, preferences are revealed in the political process entailing negotiations over an actual compensation measure – the Generalplan Wesermarsch – which was not part of the initial planning.

13. The fact that the participants in Meyerhoff's (2002) WTP study also included households from the Weser region makes the transfer of their WTP to the area affected by a Weser deepening plausible: some of the stakeholders are the same, and although the affected river is different, it is geographically close by (cf. Brouwer 2000 for quality criteria of benefit transfers).

14. We scaled down the area from 15,000 ha of the Elbe floodplain as assessed in Meyerhoff (2002) to the area affected by the Weser river dredging (32.9, 61.16 or 109.8 ha, respectively) and adjusted the WTP from 8.6 million households in the Elbe catchment area to 4.2 million households in the Weser catchment area.

15. Lieken, Broekx, and De Nocker (2013) consider water quantity available for transportation as an ecosystem service. Deepening the channel may thus yield benefits through an increased water flow that allows for more efficient shipping.

16. Emissions are valued with the average abatement cost to reach 80% emission reduction in 2050, approximated as 205 and 365 €¹⁹⁹⁸/t for CO₂ and NO_X emissions, respectively (BMVBW 2003b). These estimates are based on studies by Jochem et al. (1997) and Masuhr et al. (1991).

17. In fact, not only the price, but also the quantity of emissions savings, appears to be highly uncertain. In the revised CBA from PLANCO (2009), the benefits from emissions reduction fall from the originally reported €¹⁹⁹⁸ 175.25 million to just €¹⁹⁹⁸ 21.4 million.

18. Note that the marginal abatement cost strongly depends on the stringency of the long-term political target (Edenhofer et al. 2014; Kuik, Brander, and Tol 2009) and results hence rest on the assumed stabilisation target with both nationally and globally less stringent climate goals resulting in substantially lower abatement costs.

19. However, recent studies have gathered more information on the value of ecosystem services on the basis of various water ecosystems (Russi et al. 2013), while Liekens, Broekx, and De Nocker (2013), in a regionally more specific study, identified values for individual ecosystem services in estuaries around the North Sea region.

20. See e.g. the EU directive on environmental impact assessment. Furthermore, there are attempts to integrate ecosystem services into strategic environmental assessments (Honrado et al. 2013; Karjalainen et al. 2013; Kumar, Esen, and Yashiro 2013; Partidario and Gomes 2013; Presnall, López-Hoffman, and Miller 2015) which might result in easier integration into CBAs.

Additional information

Funding

Heinrich Böll Stiftung