Quantitative analysis of many conservation outcomes is challenging because effects on water quality and availability, air quality, and other ecosystem services is not straightforward, yet investments can produce a portfolio of socially valuable returns: cleaner air and water, healthier soils, reduced flooding risk and aesthetic, cultural, and recreational benefits.
There are five primary objectives for conducting an ROCI analysis for quantifying conservation’s benefits to human well-being:
- Identification of the return(s) to be considered.
- Empirical analysis of the relationship between investment and desired return. Examples include efforts to quantify relationships between land use and water quality, aquifer recharge, surface and groundwater availability, pollination, and flood risk reduction.
- Determine the risk and magnitude of biophysical losses if conservation investment does not occur. To do this, both biophysical and economic analyses of threats are necessary. Biophysical analysis can predict losses associated with such threats as invasive species, climate change, and drought. Economic analysis can predict losses associated with changes like population growth, land conversions to agriculture or urbanization, and road construction. Each return captured by an ROCI analysis is subject to its own, unique risks. Risks to biodiversity, for example, are not necessarily the same as the risks to water quality degradation.
- Translate biophysical returns into associated social benefits. The Institute’s strengths is the development and application of techniques to measure the benefits of nature’s ecosystem services. Many techniques associated with the basic valuation tools of environmental economics — hedonic analysis, travel cost studies, and stated preference methods. Other approaches are more practical, based on basic sociodemographic data and survey-based methods involving affected households and communities that target outcomes related to physical and human health, subjective well-being, and socioeconomic status.
- Develop ways to describe, communicate, and resolve trade-offs among the objectives. One way to resolve trade-offs is to assign returns different weights that reflect their importance. Non-market valuation studies can uncover relative social preferences and express them in constant dollars or present value dollars.
(Adapted from James Boyd’s “Measuring Conservation’s Return on Investment”)