LAND JOURNAL

How to value cultural ecosystem services

Rural surveyors are uniquely positioned to account for the public benefits of ecosystem services, and by adopting innovative techniques can add distinctive value for clients

Author:

  • Samuel Nobbs

11 February 2021

Green Way bridleway, Letchworth

In his final Reith Lecture for the BBC, former Bank of England governor Dr Mark Carney discussed how market and human fragilities are leading to a "tragedy of the horizon", where a failure to value the natural world appropriately is destroying our one and only home.

Markets have historically failed to put an appropriate financial value on non-market goods, and nowhere is this more true than in the case of intangible natural resources. However, there are innovative valuation methods that could enable such valuations.

RICS and ecosystems services

RICS has been playing its role in developing and promoting the profession in the ecosystem services arena. The most recent publication Value of natural capital: the need for chartered surveyors featured 2 detailed case studies from rural chartered surveyors involving Culm Grasslands in north Devon and Gethin Forest in Wales. The paper reviewed the broad topic of environmental valuation from the perspective of a practising valuer, land manager or estate manager. 

A previous edition of RICS Land Journal March/April 2019 was dedicated to the subject of natural capital and ecosystem services with a diverse mix of articles both UK and international which will be of interest to anyone wishing to become more knowledgeable on this topic.

In both public discourse and policy, there is a growing appreciation for the value of the natural world, with research showing that this has increased during the pandemic. The University of Exeter, for instance, identified a large-scale transfer of leisure time to outdoor recreation during the first and second lockdowns in England.

Meanwhile, estate agency Hamptons has found that Londoners now account for 18% of potential home purchasers outside the capital, as city-dwellers express increased interest in open countryside.

Ecosystem services – a way of accounting for the benefits provided by the natural world – ranging from healthy soils to the mental health benefits of having accessible green spaces nearby. By identifying a natural resource's ecosystem services, land surveyors can produce a total economic value framework for the benefits humans derive from it.

Rural surveyors are well placed to value ecosystem services accurately. We can then use this information to help our clients make informed, fully costed decisions about land management strategies.

The contingent valuation technique

In 2019, I carried out a research project (see box, below) to quantify the public benefits of enjoying farmed landscapes. I wanted to see whether the vistas that are a by-product of land management strategies have value in and of themselves. In my research, I used the contingent valuation technique (CVT), a survey-based valuation method that allows researchers to calculate financial value for a non-market good by asking the public how much they would be willing to pay for different hypothetical scenarios.

My project focused on the agricultural estate retained by the Heritage Foundation established to improve the quality of life for the people of Letchworth, which was created in the early 20th century as the world's first garden city. The retained agricultural estate is roughly 1,011ha, farmed under tenancy by a local agricultural operator in a higher-level stewardship agreement, with the rent forming a portion of the town's annual budget.

A 21km bridleway, the Green Way, rings the estate and provides multi-use access to farmed countryside. The relationship between estate owner and urban population is a perfect subject for a CVT project, as there is a direct link between the cultural ecosystem service that the Green Way offers and the local residents it serves.

Surveyors have only carried out a limited number of CVT studies; but in doing so they are using an innovative valuation methodology for ecosystem services. For instance, the Culm Grasslands study in north Devon by rural surveyor Charles Cowap quantified a financial value of £33m for the cultural ecosystem services the area provided. Using CVT alongside other methods helped to produce a total economic value framework, and a model that could be applied across the country.

Mari Sibley's work on the valuation of Gethin Forest when principal surveyor for Natural Resources Wales, meanwhile, offers a blueprint for bringing together different countryside interest groups to value the benefits of natural resources for rural communities accurately.

In both cases, rural surveyors had the connections, knowledge and professional skills to help combine market and non-market-based valuation methods. This is an area where more rural surveyors can likely position themselves to work in the future.

"Using CVT alongside other methods helped to produce a total economic value framework, and a model that could be applied across the country"

Green Way survey

By approaching people exercising on the Green Way during the summer of 2019, I surveyed 48 participants. I showed them images of 4 landscape options, each a result of different land management strategies, as shown in Table 1, and asked them what they would pay to achieve each option.

Close

Table 1. Public value attributed to 4 landscape options

Landscape option Mean value per respondent Aggregate value for population of Letchworth
A: resembling the existing typical modern arable rotation and livestock farming on land £7.40 £246,420
B: intensified arable operation with singular focus on production £1.98 £65,934
C: holistic farming operation modelled on organic systems £19.64 £645,012
D: rewilding farm with return to native livestock breeds and light land use £8.28 £275,724
Close

Table 1. Public value attributed to 4 landscape options

Landscape option Mean value per respondent Aggregate value for population of Letchworth
A: resembling the existing typical modern arable rotation and livestock farming on land £7.40 £246,420
B: intensified arable operation with singular focus on production £1.98 £65,934
C: holistic farming operation modelled on organic systems £19.64 £645,012
D: rewilding farm with return to native livestock breeds and light land use £8.28 £275,724

Participants showed a clear preference for option C. The potential benefit of this was financially quantified by the population of Letchworth as more than double that of any other option. However, this should be contrasted with the reduced farming rent likely with the more constrained land management it would entail.

Option B, a form of intensified agriculture, seemed to offer little benefit for Letchworth's population. I would argue that option A may be undervalued, though; for participants, it was akin to what they saw in the countryside around them already, so it may have been taken for granted.

Option D was particularly pertinent in the summer of 2019, when rewilding was a hot topic. Interestingly, the public did not value this to anywhere near the degree I had expected. This could have been because of people’s innate connection with existing landscapes and a general reluctance for too significant a change.

Although my study of the public value of views from Letchworth’s Green Way was small in scale, had I been instructed by the Heritage Foundation to carry out this study on a more formal basis, the findings could be used to inform the organisation's land management strategies.

It may have decided that a lower agricultural rent could be justified if an holistic farm management plan were agreed, as this would create more cultural ecosystem service benefits for the people of Letchworth. With the foundation's responsibility for improving the local population's quality of life, the data I collected would have had real added value.

When I carried out the survey, COVID-19 was not yet an issue. If I carried out the research now, we might see higher values for all options except B, as they either retained or increased the biodiversity and landscape quality. Qualitative analysis of the data I did collect identified connecting with nature as the key to many people's willingness to pay.

CVT in practice

Although it is impossible to quantify definitively the importance of salmon runs in Scotland or the mental health benefits of walking in the Lake District, for instance, we live in a market-based economy where financial value is central to decision-making. Surveyors could be using these new measures of value to help clients make fully costed decisions about their assets, and rural surveyors are ideally suited to the valuation of non-market goods.

The rural surveyor is a uniquely British phenomenon: a link between clients and their landed assets, who understands the competing pressures of the modern world and aims to be first and foremost a trusted adviser.

"The rural surveyor is a uniquely British phenomenon: a link between clients and their landed assets, who understands the competing pressures of the modern world"

We should see valuation as a concept that expands beyond direct market mechanisms. To help our clients make fully informed decisions about appropriate land management strategies we should encourage them to view their assets in the context of a total economic value framework.

As government policy moves towards providing public money for public goods, this is sound advice. As well as our professional duties to clients as chartered surveyors, we have an imperative to expand our skill sets to help conserve the natural world because we derive our work directly from these landscapes.

Total economic value frameworks will become a useful tool in assessing new opportunities. If a client is approached for development opportunities on a greenfield site that has potential for enhanced ecosystem service benefits, then these need to be measured. This would not fall under the purview of market-based valuation models, but tools such as CVT would allow create accurate costings.

Many rural clients will be long-standing hereditary or institutional landowners who have an affinity for their local communities. CVT can be used to assess empirically the effect these clients have on those communities through the provision of ecosystem services. This value can then be used either in assessment of new or continuing land management policies, or as a starting metric for receiving public subsidies.

Agricultural transition plan

At the time of the Letchworth Green Way survey, we did not know much about the government's plans for agriculture after the UK's withdrawal from the EU and its Common Agricultural Policy. We arguably know little more now, except that farmers will be paid less and asked to do more.

With the publication of the government's agricultural transition plan for 2021–2024, we can see the rapid tailing-off in production-based subsidies. Innovative land managers and surveyors should use this time to identify alternate sources of income.

We know that the forthcoming Environmental Land Management Scheme (ELMS) will place value on farmers enhancing and conserving public goods. Alongside current ecosystem service valuations, my research supports the idea that farmed landscapes have value in and of themselves and can be public goods. At the very least, the cultural ecosystem services they provide should play some role in the public subsidies received by land managers.

The government should see these as benefits it can engineer policy to provide. If ELMS is to enable a more holistic approach to farming and nature, then it is likely that there will be an increase in cultural ecosystem services. This has a value and, if properly compensated for it, land managers will adopt practices accordingly.

Surveyors are already using total economic value frameworks alongside existing valuation models, but can be ahead of the game by adopting CVT. With rural landowners facing considerable change, innovative surveyors who can present rigorous assessments of ecosystem services will not only put their clients in a better position but also carve out a niche of new and exciting work for themselves and their firms.

samuel.nobbs@bidwells.co.uk

Related competencies include: Sustainability, Valuation

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