GUARDIAN water towers
In this article the UIA expert Elsa Pastor digs into the ecosystem services’ valuation of La Vallesa forest to demonstrate the economic viability of the GUARDIAN project.

As promised in previous updates, in this article, we want to share the data and figures demonstrating that GUARDIAN is an economically viable project. We present the ecosystem services of La Vallesa forest, their prioritization in importance for the local population, and their economic value, which far outweighs the project costs!

La Vallesa Forest: a place of immeasurable wealth?

La Vallesa Forest is an enchanting protected natural area nestled within the Túria National Park, known for its significant ecological and scenic value (Figure 1). It is a typical Mediterranean forest dominated by Aleppo pine, olive, and carob trees, with a diverse shrub layer comprising plants like rosemary, thyme, mastic, kermes oak, and broom. As for fauna, the forest boasts a wide biodiversity, ranging from eagles, owls, and kestrels to frogs, toads, snakes, stone martens, weasels, genets, foxes, wild boars, and squirrels, among others.
Mediterranean forests, like any other ecosystem, possess invaluable natural assets that are difficult to replace through human activities. They not only provide raw materials such as timber, food, or medicinal resources that are tangible benefits for humans, but they also offer numerous other valuable services. These services include soil protection against erosion, carbon sequestration, climate regulation, air quality improvement, as well as support for biodiversity conservation and habitat provision for various plant and animal species. In addition to the environmental benefits, Mediterranean forests play a significant social role, contributing to cultural and emotional well-being, recreation, education, and research. For example, La Vallesa holds historical remnants from the neighbouring municipalities of Paterna and Riba-roja de Túria, showcasing the interplay between nature and humanity. The forest still preserves a network of trenches and bunkers constructed during the Spanish Civil War, along with agricultural fields, primarily citrus orchards, benefiting from the proximity to the Túria River and an irrigation system to secure the necessary water resources for production.
Therefore, we can assert that the environment and the pristine state of the ecosystems within this natural environment generate a flow of environmental goods and services (ecosystem services, as we described those in a previous web article) of considerable value to the residents of the municipalities of Riba-roja de Túria and Paterna, where GUARDIAN has been implemented.

La Vallesa forest
Figure 1: La Vallesa Forest

Over the years, numerous studies have been conducted to assess the social and environmental benefits associated with ecosystems and their management. It is widely recognized that forest management and conservation of forests and natural parks are economically viable when considering the collective social benefits of ecosystem services compared to the opportunity cost of development. However, justifying this economic viability is not always straightforward, as despite the countless benefits offered by Mediterranean forests, very few of them have explicit valuation. When it comes to goods or services that do not participate in the market, there is no indicator that can provide information about their scarcity or demand. Consequently, assigning a value to them becomes much more complex, and for this reason, they are often overlooked in decision-making processes. Within the framework of GUARDIAN, several methodologies have been assessed and applied to quantify the value of the entire set of ecosystem services.  And now I will give you a quick summary of what Professor Francesc Hernández and his team from the Universitat de València (UV) have found.

Quantifying ecosystem services in GUARDIAN

The initial phase before the monetary quantification of externalities is their identification. The framework that GUARDIAN has used to do so was provided by the Millennium Ecosystem Assessment (MEA), a major international initiative carried out more than one decade ago to assess state of the world's ecosystems and their impact on human well-being.

Using the general list of ecosystem services from the MEA as a reference, GUARDIAN created a panel of seven experts consisting of different professional profiles with particular involvement in La Vallesa (e.g. municipal technicians, tourism and heritage managers, park managers) to identify which ecosystem services are significant and which are not in the study area. According to the categories already mentioned in a previous web article, the services identified in La Vallesa environment are listed as follows:

  • Provisioning Services
    o    Agriculture
    o    Hunting and fishing
    o    Ethnobotanical resources

  •  Regulating Services
    o    Climate and air quality regulation
    o    Soil erosion and fertility
    o    Water flows and quality regulation
    o    Pest control and biological regulation
    o    Carbon absorption and storage
    o    Moderation of external phenomena
    o    Pollination

  • Cultural Services
    o    Recreational and tourism activities
    o    Educational and research activities
    o    Sense of belonging
    o    Aesthetic value
    o    Cultural values and diversity

Among all the methods explored in the initial phases of the project, the UV researchers ultimately chose the AMUVAM method (Analytic Multicriteria Valuation Method). This method aims to identify the environmental services that hold a direct market value and utilize them as "benchmark" values to estimate the monetary worth of those environmental services that lack a market value. In doing so, it provides a reference point for assigning a monetary value to these services.
The AMUVAM method involves a series of initial steps that rely on expert judgment to assess the relative significance of the identified services in the study area. To mitigate subjectivity and differences in expert opinions, advanced statistical techniques have to be also applied. As a result of this first phase, the ecosystem services that are relevant in La Vallesa are prioritized in terms of their importance, and represented as percentages in the Pareto diagram below (Figure 2).

Pareto Diagram
Figure 2: Pareto diagram with the relative importance of the identified ecosystem services

According to our panel of experts and following all the data treatment that goes with AMUVAM, the ecosystem services with the highest weighting are as follows: educational and research activities (15.7%), moderation of external phenomena (13.5%), cultural values and diversity (13%), recreational and tourism activities (11.8%), water flows and quality (10.7%), climate and air quality (10.1%), carbon absorption and storage (7.8%), aesthetic value (5.4%), soil erosion and fertility (3.6%), pests and biological control (3.2%), sense of belonging (2%), ethnobotanical resources (1.9%), agriculture (1%), pollination (0.3%), and finally hunting and fishing with 0.1%.

The majority of identified ecosystem services in the project area do not have a market value. Those that do, such as agriculture, hunting and fishing, and recreational, educational, and research activities, have very little economic impact in Riba-roja de Túria and Paterna. Regarding agriculture, the small agricultural land area primarily serves for personal consumption. On the other hand, hunting and fishing activities in the study area are of little relevance and are currently not being exploited for economic objectives. Finally, recreational, educational, and research activities, which have shown significant impact, do not have economic purposes.
However, one of the most relevant ecosystem services in Vallesa that could have a market value is carbon absorption and storage. Through the process of photosynthesis, trees and plants can absorb CO2, which they use for growth, effectively becoming carbon sinks or natural repositories capable of storing atmospheric carbon. This characteristic of trees has gained greater importance as the effects of global warming, primarily caused by the increasing concentration of greenhouse gases, have become more evident.
By assigning an economic value to CO2 through emission allowances (Figure 3), we can calculate the environmental benefit in economic terms that La Vallesa is generating by reducing CO2 in the atmosphere through its carbon sequestration capacity.

The EU Emissions Trading scheme
Figure 3. The European Union Emissions Trading Scheme. Background image adapted from KVUE (Local news broadcasting - Austin, USA)

To calculate this environmental benefit, it is necessary to determine the CO2 absorption capacity. Following methodologies developed in the scientific field, the researchers from UV have calculated the equivalent CO2 emissions in the event of a fire, estimated at 45.99 tons per hectare of CO2 equivalent. Considering that the CO2 emissions that would be released in case of a fire coincide with the amount that trees are capable of absorbing, and knowing that the forest area covered by GUARDIAN is approximately 400 hectares, we can estimate that the amount of CO2 equivalent absorbed by the forest mass of GUARDIAN is 18,396 tons!

Based on the average market value of CO2 emissions in 2021 and considering that the goods generated by environmental assets can last for a long period of time (e.g. 100 years), researchers from UV have calculated that the ecosystem service of carbon absorption and storage in Vallesa is valued at €32.8 million!
Taking into account the relevance of each ecosystem service in the project's environment (as shown in Figure 2) and using the economic value of the carbon absorption and storage service as a reference, we can hence quantify the value of the other ecosystem services provided by La Vallesa. However, this must be done considering a margin of tolerance or uncertainty, as the methodology used is somehow subjective. Therefore, the average economic value that can be assigned to all ecosystem services is summarized in the following table, highlighting a total value of €411.5 million!

Ecosystem services valuation at La Vallesa
Ecosystem services mean value (M€)
Educational and research activities 64.6
Moderation of external phenomena 55.6
Cultural values and diversity 53.5
Recreational and tourism activities 48.6
Water flows and quality regulation 44.0
Climate and air quality regulation 41.6
Carbon absorption and storage 32.1
Aesthetic value 22.2
Soil erosion and fertility 14.4
Pest control and biological regulation 13.2
Sense of belonging 8.2
Ethnobotanical resources 7.8
Agriculture 4.1
Pollination 1.2
Hunting and fishing 0.4

Final Cost-Benefit Analysis

Once the environmental and social benefits provided by La Vallesa have been quantified in monetary terms, and using the data from the economic analysis of the costs incurred by the fire protection system developed in the GUARDIAN project, we can assess the total benefit resulting from the project's implementation through Cost-Benefit Analysis (CBA).

It is important to note that the project's benefits are of a social and environmental nature, and we consider the project's lifespan to be long-term. Therefore, a time horizon of 100 years is used for the cost-benefit analysis (as done for the environmental benefits). To conduct the CBA study, it is necessary to estimate the investment, operation, and maintenance costs for a 100-year period. Regarding investment costs, GUARDIAN has infrastructures of different nature, which have different lifespans (for example, the water treatment plant has an estimated lifespan of 25 years, while the storage, distribution, and irrigation network has a lifespan of 50 years, as well as forest management works). Based on the above data, if we assume that the project's lifespan is 100 years, there will be infrastructures that need to be renewed two or four times depending on their lifespan. Therefore, it is necessary to estimate that every 25 or 50 years, a new investment will be required. Based on this assumption, calculations from the UV scientists conclude that the investment required to maintain the project's operation over a 100-year period is around €6.2 million.

It is hence evident that the benefits outweigh the costs significantly, primarily because the environmental and social benefits generated persist over a long period of time. Therefore, it can be demonstrated that the GUARDIAN project is more than viable, as the benefits far exceed the costs!

About this resource

Elsa Pastor
Riba-roja de Túria, Spain Small sized cities (50k > 250k)
About UIA
Urban Innovative Actions

The Urban Innovative Actions (UIA) is a European Union initiative that provided funding to urban areas across Europe to test new and unproven solutions to urban challenges. The initiative had a total ERDF budget of €372 million for 2014-2020.

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