Cost benefit analysis of diversified farming systems across Europe: Incorporating non-market benefits of ecosystem services.

Crop diversification can enhance farm economic sustainability while reducing the negative impact on the environment and ecosystem services related. Despite the market and non-market benefits of crop diversification, monocropping is a widely used dominant practice in Europe. In this context, this works aims to assess the overall economic impact of several crop diversification systems across Europe and compared it to the monocropping system. For this purpose, an economic valuation by integrating market and non-market values for eight case studies distributed across three different European pedoclimatic regions (Southern Mediterranean, Northern Mediterranean and Boreal) is proposed. The economic valuation was conducted both in the short and medium-long term. For the short-term we conducted a social gross margin analysis, while for the medium-long term a cost-benefit analysis is developed. The results show an improvement in social gross margins for most of the diversification scenarios assessed when environmental and socio-cultural benefits are considered in the short-term. In the medium and long-term the transformation of cropping towards a more diversified agriculture is encouraged by greater economic benefits. These results provide a first insight in global economic performance of diversified cropping systems, whose main contribution relies on the integration of market and non-market values of ecosystem services from crop diversification. They are expected to be useful for guiding policy makers to promote crop diversification practices as a key instrument for building resilience in farming systems for an adaptive management to climate change.

A comprehensive approach for agroecosystem services and disservices valuation.

The use of the ecosystem services approach for ecosystem management, including the valuation of ecosystem services, has grown in recent decades. Although a common framework is used, each ecosystem has its own characteristics. The agroecosystem, for example, is an anthropised ecosystem where ecosystem service flows are highly interrelated with the environment, positively or negatively. Therefore, agroecosystem services are usually accompanied by disservices. The valuation of agroecosystem services and disservices requires adaptation of existing ecosystem services paradigms to accommodate the innate agroecosystem idiosyncrasies. To this end, in this study, a comprehensive approach for valuation of agroecosystem services and disservices was proposed and validated in a semi-arid western Mediterranean agricultural area through stakeholder assessment, using a choice experiment. The results suggest that all categories of services (provisioning, regulating, and cultural) should be taken into account when valuing agroecosystem services and disservices. In particular, food provision (a provisioning service), water (a provisioning disservice), local climate regulation and biodiversity (regulating services), waste treatment and water purification (regulating disservices), and recreation and tourism (cultural services) are relevant for this purpose. Their relative importance in agroecosystems valuation reached 70% for agroecosystem services and 30% for disservices. Specifically, biodiversity (38%) emerged as the most relevant agroecosystem service to be valued, followed by recreation and tourism (20%), local climate regulation (7%), and food provision (5%). Among the agroecosystem disservices, water and waste treatment (15%), and water purification (15%) together contributed to 30% of the total importance. Agroecosystems should be valued considering their multifunctional character and the integration of agroecosystem services and disservices.

A participatory approach for selecting cost-effective measures in the WFD context: the Mar Menor (SE Spain).

Achieving a good ecological status in water bodies by 2015 is one of the objectives established in the European Water Framework Directive. Cost-effective analysis (CEA) has been applied for selecting measures to achieve this goal, but this appraisal technique requires technical and economic information that is not always available. In addition, there are often local insights that can only be identified by engaging multiple stakeholders in a participatory process. This paper proposes to combine CEA with the active involvement of stakeholders for selecting cost-effective measures. This approach has been applied to the case study of one of the main coastal lagoons in the European Mediterranean Sea, the Mar Menor, which presents eutrophication problems. Firstly, face-to-face interviews were conducted to estimate relative effectiveness and relative impacts of a set of measures by means of the pairwise comparison technique. Secondly, relative effectiveness was used to estimate cost-effectiveness ratios. The most cost-effective measures were the restoration of watercourses that drain into the lagoon and the treatment of polluted groundwater. Although in general the stakeholders approved the former, most of them stated that the latter involved some uncertainties, which must be addressed before implementing it. Stakeholders pointed out that the PoM would have a positive impact not only on water quality, but also on fishing, agriculture and tourism in the area. This approach can be useful to evaluate other programmes, plans or projects related to other European environmental strategies.

What weight should be assigned to future environmental impacts? A probabilistic cost benefit analysis using recent advances on discounting.

Cost-benefit analysis is a standard methodological platform for public investment evaluation. In high environmental impact projects, with a long-term effect on future generations, the choice of discount rate and time horizon is of particular relevance, because it can lead to very different profitability assessments. This paper describes some recent approaches to environmental discounting and applies them, together with a number of classical procedures, to the economic evaluation of a plant for the desalination of irrigation return water from intensive farming, aimed at halting the degradation of an area of great ecological value, the Mar Menor, in South Eastern Spain. A Monte Carlo procedure is used in four CBA approaches and three time horizons to carry out a probabilistic sensitivity analysis designed to integrate the views of an international panel of experts in environmental discounting with the uncertainty affecting the market price of the project's main output, i.e., irrigation water for a water-deprived area. The results show which discounting scenarios most accurately estimate the socio-environmental profitability of the project while also considering the risk associated with these two key parameters. The analysis also provides some methodological findings regarding ways of assessing financial and environmental profitability in decisions concerning public investment in the environment.