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Practical tools for value transfer in Denmark – guidelines and an example

Appendix C: Review of databases for environmental valuation studies

Environmental Valuation Reference Inventory (EVRI)

EVRI (www.evri.ca) is currently the most comprehensive database of valuation studies in terms of the number of valuation studies worldwide. EVRI was originally constructed by Ennvironment Canada, in co-operation with the US Protection Agency (EPA). Navrud and Vågnes (2000) evaluated the suitability of EVRI for European conditions. We concluded that overall the database worked well, but could learn from the Australian database ENVALUE to improve its search categories, and include more European valuation studies. At that time 56 studies or about 8 % of the 700 studies in EVRI were from Europe, while EVRI currently contains 1608 studies, out of which 370 (23 %) are from Europe. The two European EVRI Club members^[20] dominate the European input with 217 and 57 studies for UK and France, respectively. Sweden weighs in at third place with 45 studies^[21]. Thus, while EVRI contained about 9 % of the estimated 650 European valuation studies in 2000 (Navrud and Vågnes 2000), it now probably contains roughly 1/3 of the existing valuation studies in Europe (but much less of the total stock of valuation studies worldwide, which could easily exceed 5000 studies). EVRI currently contains 10 Danish studies, see appendix 2 for a list of these. Figure 1 shows that EVRI contains many studies that are very relevant to the priority environmental goods of this project.

Figure 1. Number of studies on different categories of environmental goods in EVRI (according to the classification used in EVRI)

ENVALUE

ENVALUE (www.epa.nsw.gov.au/envalue/) is the principal database for environmental valuation studies (and hence benefit transfer) in Australia. Hosted by the New South Wales (NSW) Government, it contains over 400 studies, one third of which are Australian, covering nine different environmental goods.

The aim of ENVALUE is to enhance decision-making by encouraging improved valuation of environmental resources, and improve the credibility of those valuations. However, Envalue has been affected by software problems and limited resources, and has remained substantially unmodified since 2001. Despite this, ENVALUE appears to be widely used in Australia due to the number of Australian studies it contains (White, 2005).

Benefit transfer in Australia varies in its level of sophistication, although simple transfer of mean values is probably the most common benefit transfer technique used. However, an increasing number of more sophisticated primary studies are being undertaken with an eye to their results being available for use in benefit transfer at later dates.  The NSW Department of Environment and Conservation (DEC) continues to use the data in ENVALUE but is increasingly relying on more recent Australian studies than those found in the database. The Department also searches the international literature to ensure that the most up-to-date valuations are available to it, and to locate studies relevant to specialised areas of DEC’s regulatory function that are not covered by the ENVALUE database. DEC is currently considering options for the future of the ENVALUE database (White, 2005).

Table 1 and 2 illustrate the distribution of studies geographically and on topics considered, respectively. Only 15 % of the studies are from Europe, including 3 % from Scandinavia, but none from Denmark. The environmental goods covered are, however, relevant for this report as natural areas, water and land quality studies makes up more than half of the studies.

Table 1: Source countries/regions for Envalue studies.

Source: White (2005)

Table 2: Topics of studies in ENVALUE database.

Source: White (2005)

ValueBase ^SWE

The Valuation Study Database for Environmental Change in Sweden (ValueBase^SWE) www.beijer.kva.se/valuebase.htm) was developed by Sundberg and Söderquist (2004) within a project funded by Naturvårdsverket. The database is the result of a survey of empirical economic valuation studies on environmental change in Sweden. ValueBase^SWE is a Microsoft Excel workbook with two spreadsheets. The first sheet contains data and the second sheet contains a list of abbreviations used in the database.

Other databases and bibliographies of studies

The New Zealand Non Market Valuation Database (NZ NMVD) (http://learn.lincoln.ac.nz/markval/ ) is developed and managed by Lincoln University in Christchurch, NZ. It is an easily searchable database of all valuation studies and value transfers undertaken in New Zealand only (studies from other countries are excluded). The information about each study is, however, more limited than for e.g. EVRI and ENVALUE. NZ NMVD reports only year of study, type of object, a more detailed description of valued item, method, and mean value estimate (but contains a useful list of authors/valuation practitioners). Thus, it lacks information critical for benefit transfer, and it is e.g. not possible to evaluate the quality of the study by the information provided.

Review of Externality Data (RED) (www.red-externalities.net/) was developed and managed by the Italian research institute ISIS (Institute of Studies for the Integration of Systems) for the EC DG Research. It is primarily a literature database, listing studies useful for environmental costing (from a life cycle perspective) of energy and other sectors, but contains too little details of each study to be used directly for value transfer. Mainly value transfer exercises, but also some primary valuation studies are listed.

The Benefits Table (BeTa) database was created for European Commission DG Environment by Netcen (part of AEA Technology in the UK), to provide a simple ready tool for estimation of the external costs of air pollution. BeTa presents average default values for marginal external costs for different air pollutants in different geographical areas based on the damage function approach (see figure 1) tool developed with the ExternE project series (i.e. the Impact pathway appoach and the Ecosense software). Value transfer in BeTA is based on unit value transfer.

The version presented at http://europa.eu.int/comm/environment/enveco/air/betaec02aforprinting.pdf is a pdf extract providing the main details of the database and default estimates of externalities, but lacking the facility for manipulation of functions etc. that is present in the full version of the database. Since BeTa focuses entirely on health (and some environmental) impacts from air pollutants, it is not relevant for the environmental goods considered in this report.

The UK Department of Environment, Food and Rural Affairs also has a bibliography of valuation studies; see Environmental Valuation Source List for the UK http://www.defra.gov.uk/environment/economics/evslist/. It was published in 2000 and was last updated in September 2001. Thus, it does not contain UK valuation studies for the last four years.

The Natural Resource Conservation Service (NRCS) of the US Department of Agricultural provides databases and lists of recreational unit day estimates for different activities at

http://www.economics.nrcs.usda.gov/technical/recreate/. For these use value transfer they recommend the value transfer guide developed by Rosenberg and Loomis.

Carson (forthcoming) provides an updated bibliography of Contingent valuation studies worldwide.

For coastal and marine resources, NOAA (National Oceanographic and Atmospheric Administrations) provides four annotated bibliographies (mainly focusing on Florida) and three benefit transfer databases, based partly on these bibliographies; see http://marineeconomics.noaa.gov/bibsbt/welcome.html

Recreation Values Database, 1998 (Microsoft Excel, 928 kb), was created by Randall Rosenberger at the University of West Virginia under contract to the U.S. Forest Service. The primary focus was on recreational uses of forests; however, a wider group of studies is included (that are also relevant to valuing recreational uses of coastal and ocean resources). The database and documentation can be downloaded from this site. The file is a Microsoft Excel workbook with two spreadsheets. One spreadsheet contains data and the other contains documentation of the data fields.

For coastal and marine resources NOAA (National Oceanographic and Atmospheric Administrations) provides four annotated bibliographies (mainly focusing on Florida) and three benefit transfer databases, based partly on these bibliographies see http://marineeconomics.noaa.gov/bibsbt/welcome.html; which provides the following information about the three databases:

Florida Values Digest (pdf, 28 kb) is not a true database but instead a report with summary tables of the values estimated in the studies included in the annotated bibliography SOCECONFL. The table includes bibliographic reference information, year of study, estimation methodology, type of resource, type of user (resident or visitor), and estimate of value. For recreational activities, values have been normalized to values per person per day. For other applications, such as wetlands, values are given per acre.

The second benefits transfer database is the recreation value database mentioned above, which also contains values for coastal and marine recreational activities. The third database is the Coral Reef Valuation database (Microsoft Access, 756 kb). This database includes all studies with estimated values from the annotated Coral bibliography. The file is in Microsoft Access format.

Evaluation and comparison of databases

Recently, Lantz and Slaney (2005) performed an evaluation and comparison of the environmental valuation databases EVRI, Envalue, NZNMDB, ValueBase^Swe and RED. Appendix G shows the criteria used, and how the different databases scored for each criterion. A summary of the evaluation is provided in table 3 (where all criteria areassumed to have the same weight).

Table 3 Summary evaluation of the environmental valuation databases EVRI, Envalue, NZNMDB, ValueBase^Swe and RED. Source: Lantz and Slaney (2005)

 Lantz and Slaney op. cit conclude their evaluation in this way:

The EVRI database was rated one of the two highest out of five databases reviewed. It contains a vast array of values, regions and evaluation methods that lend themselves to benefit and benefit function transfer. Its search functions allow easy retrieval of relevant studies and the content is up to date. It is comprehensive in content and is very user friendly due to its instructive tutorial.

The EVRI database requires a relatively large amount of information from users prior to access, and there is about a one-day wait for a user name and password. This might deter simple or extensive bibliography users due to the time required to access the database. Additionally the EVRI database requires a subscription fee for some users (non-EVRI club member countries). Researchers requiring brief access to the database might not subscribe due to a high access cost for limited use.

While the EVRI database shares the highest ranking among the five databases reviewed, improvements can be made. Automation of the subscription process would ensure quick access to the database. Additionally, the incorporation of more detailed validity test information would increase the applicability for this database to be used in benefit transfer.

The ENVALUE database was also rated one of the highest out of the five databases reviewed. It is fairly comprehensive in content with a straightforward and easy to use sort function. The conceptual studies section provides information on state of the art environmental valuation techniques while the annotated bibliography contains important characteristics identified for the majority of the use elements.

The ENVALUE database is relatively dated, as the newest entry found was for the year 2000. In addition, data fields are incomplete in some entries. This poses problems to researchers seeking complete and up to date studies. Additionally, this database does not include a typical search module. The addition of a key word search would allow users to search for relevant words that may not be included in the hierarchy based search.

The NZ NMDB was rated in the mid to low range of the five databases reviewed. The database comprises a comprehensive representation of environmental valuation studies in New Zealand. The search function is straightforward and easy to use. However, it lacks several critical aspects required for successful benefit transfer and benefit function transfer. Since this database is limited to studies conducted in New Zealand, its potential for benefit transfer is also limited. Additionally, the results page only includes a brief description of the study with limited information.

Expanding on the information contained in the results page would increase the applicability of this database for each use evaluated. This would require the addition of more detailed commodity, population, and location descriptions.

The ValueBase^Swe database was rated in the mid range of the five databases reviewed. This database comprises a comprehensive representation of environmental valuation studies in Sweden. It contains a wide array of values and includes information pertaining to validity tests and details of functions used in certain studies. The database download feature is advantageous due to its portability.

The ValueBase^Swe database, however, is limited by its spreadsheet design. The nature of a spreadsheet does not lend itself to substantial amounts of text within individual cell boxes. Searching this database is limited to built-in search tools found in spreadsheet software. Being limited to studies conducted in Sweden this database has limitations in benefit transfer applications.

Transferring this database from spreadsheet to searchable database format would allow for more efficient querying of studies in addition to the possibility for additional information not suitable to spreadsheet format (figures etc.).

The RED database was rated in last out of the five databases reviewed. This database contains a wide array of studies and values reported internationally. The guided search function contains detailed lists by which the user can query studies.

The RED database, however, is difficult to navigate and requires a great deal of time to grasp the guided search concept. The terminology within the guided search module is vague and confusing. This database does not take advantage of leading edge website design technology.

A glossary or more informative guided search module is needed to make this database more user-friendly. Descriptions of the environmental value in question are vague and need better explanation. Technical issues relating to internal errors need to be addressed as these were frequent and not results of the evaluator’s computer configuration as multiple computers were used with up to date web browsers.

In my view Lantz and Slaney op. cit. provide a fair evaluation of these databases, but a few additional comments are needed.

 First, the RED database is now being improved and more studies included as part of the EC research project MethodEx (www.methodex.org ). However, the main focus of this database is being an annotated bibliography of studies valuing externalities, both in original studies and in value transfer exercises, rather than providing unit values for different types of environmental goods. Thus, the database is aimed at providing literature as basis for environmental costing, rather than values from primary valuation studies to be used in value transfer exercises for all policy purposes.

Secondly, the evaluation is based on the suitability of these databases for international benefit transfer. However, since transfer errors are generally expected to be lower for transfers within a country than between countries, a good strategy would be to first try to utilize the national environmental valuation literature. Therefore, NZ NMBD and ValueBase^Swe, containing national studies only for New Zealand and Sweden, respectively would have fared better in the evaluation if this had been recognized as the goal of the databases, as they are much more comprehensive and detailed with regards to their goal, as opposed to EVRI and ENVALUE that seem to aim for an international collection of valuation studies (although ENVALUE was originally developed as a national database for Australian studies, but studies from other countries were added when they recognized the limited number of national studies for environmental and health impacts important to Australia).

Thirdly, the member countries of the EVRI club (Canada, USA, UK, and France) have made a large effort to include most of their national valuation studies in EVRI. Thus, the EVRI club countries also use EVRI as their “national” valuation database. E.g. France as a recent member of the EVRI club has included most of their limited number of valuation studies to increase benefit transfer within France, where there has been great scepticism towards transferring value estimates from Anglo-Saxon countries due to the negative results from a validity test of a value transfer of health impacts (Rozan 2005). DG Environment of the European Commission has also funded inclusion of studies in EVRI, as they see the database as a very useful tool for benefit transfer in the cost-benefit analyses they perform of new directives.

While ENVALUE now contains many studies from countries outside the Australia, NZ NMDB still contains valuation studies for New Zealand only. However, while ENVALUE was last updated in 2002, NZ NMDB is continuously updated to contain all national valuation studies. Thus, if the focus of the comparison of the databases (see appendix 1) had been comprehensiveness at the national level, NZ NMDB would have fared better.

Potential use of the databases for Denmark

EVRI seems to be the most useful database for Denmark due to its coverage both with regards to environmental gods and geographically, but it should be populated with more Danish studies. Denmark should aim for the development of a Nordic database of valuation studies (which the Nordic Council of Ministers has submitted a call for), which should also be included in EVRI. All Nordic countries should join the EVRI Club in order to secure access and use of the database. Meanwhile, ValueBase^Swe, the UK list of valuation studies and similar lists in other Nordic and European countries should be used to identify valuation studies that can be used for value transfer exercises.

Footnotes

^[20] Members of the EVRI Club provide financial support for the development and maintenance of EVRI. In return they get free access to EVRI for all their citizens. The EVRI club currently includes Canada, USA, UK and France, and negotiations with new member countries, most notably Spanish speaking countries, are planned.

^[21] Note that these numbers also contain value transfer studies where these countries are included. Thus, the number of primary national valuation studies is somewhat smaller. In a similar search Denmark comes up with 18 studies, but a closer look reveals only 10 primary valuation studies.

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Version 1.0 December 2007, © Danish Environmental Protection Agency