Part IV
Valuation of the Puyallup River Watershed
Section Summary: The economic value of ecosystem services generated in the Puyallup Watershed was estimated using benefit transfer methodology. The results show that ecosystem goods and services within the Puyallup Watershed generate at least $526 million to $5 billion in economic value annually. If treated like a traditional economic asset, these ecosystem services would have a value of between $13 billion and $120 billion, calculated with a 4.125% discount rate over 100 years.
Overview The valuation of ecosystem services in the Puyallup Watershed can be divided into the following steps: • Quantification of Land Cover Classes: Geographic Information Systems (GIS) data is used to assess the acreage of each land cover class within the watershed. Examples of land cover classes include pasture, estuary, urban green space and riparian forest. Land cover classes were chosen based on the ability to derive ecosystem valuation data for that type of class.
• Identification of Ecosystem Services and Valuation of Land Cover Classes: The ecosystem services provided within the watershed are identified. Using a database of peer reviewed ecosystem service valuation studies, a range of studies for each specific land cover class is selected depending on the geographic and land-cover match to the site. These are like comparables used in a house or business appraisal. Each land cover class is assigned a total high and low annual per-acre value for its ecosystem services.
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• Valuation of the Puyallup Watershed: The total high and low annual value of ecosystem services for each land cover class is multiplied by the acreage of that land cover class within the watershed to arrive at total high and low annual value estimates. Land cover class values are summed to arrive at a total annual value for the Puyallup Watershed. Net present values are calculated for the watershed over 100 years at two discount rates: zero (no discount) and 4.125% (the U.S. Army Corps of Engineers 2011 discount rate).
Quantification of Land Cover Classes Geographic Information Systems (GIS) data is used to assess and categorize the land cover in the Puyallup Watershed. The GIS data is gathered through aerial and/or satellite photography and can be classified according to several classification systems or “layers.” Earth Economics maintains a database of peerreviewed valuation studies organized by land cover
The Puyallup River Watershed: An Ecological Economic Characterization