Biodiversity metrics and biodiversity values for the public appraisal of biodiversity: synthesising and extending the evidence.

Lead Research Organisation: University of Exeter
Department Name: Economics


The world is facing a biodiversity crisis. Despite biodiversity's value, it is systematically ignored in economic decision making. This proposal will address this shortcoming by synthesising the lessons to date in valuing biodiversity, and establishing how these values can be mainstreamed in decision-making to positively affect biodiversity policy and outcomes. As numerous publications highlight, biodiversity contributes to people's wellbeing through multiple ecosystem services (e.g. pollination, climate regulation, flood prevention). Decades of research allows us to accurately estimate the relationship between land-use decisions and both biodiversity outcomes and ecosystem service values. Yet, people also derive well-being from simply knowing that biodiversity is there ("existence value"). This study will explore the two methods for incorporating these values within economic decision making: 1) via measuring people's Willingness-To-Pay (WTP) for biodiversity; 2) via the cost of meeting an agreed policy target (e.g. net-gain) for biodiversity: a cost-based approach.
The proposal will first critically review and synthesise the WTP approach. If consistent estimates of WTP exist, it is the economist's preferred approach - as it allows for the optimal allocation of resources across biodiversity outcomes and other goods (e.g. health, education) by weighing benefits against costs. However, there are well known inconsistencies in WTP estimates (e.g. WTP is unresponsive to increases in biodiversity provision, and is sensitive to framing), which arise because people struggle to interpret biodiversity-money trade-offs. We will therefore review how an alternative valuation procedure - the cost-based approach - could be operationalised.
In the UK the target in the 25-year Environment Plan is "nature-positive" or biodiversity net-gain. This can be used as the target for a cost-based approach. While the aim is clearly articulated, the net-gain ambition does not state which metric of biodiversity should be used to measure whether net-gain is achieved. This is problematic given biodiversity is multifaceted, and people's well-being is differently affected by different aspects. Orienting the cost-based approach around a biodiversity metric that reflects public preferences (what the public want in relation to biodiversity) requires establishing how well-being is affected by different aspects of biodiversity and how these tally with different metrics of biodiversity.
To achieve this aim, we shall synthesise the different metrics of biodiversity. We will couple this with an economic experiment specifically designed to tease apart the relationships between biodiversity metrics and people's preferences, and conduct this experiment with a representative sample to provide empirical evidence of which aspects of biodiversity people value, while avoiding asking them to perform difficult and controversial biodiversity-money trade-offs. Once an appropriate metric is established to assess achieving net-gain, the proposal will determine the cost meeting the target though the NEV modelling suite. This implied monetary value of biodiversity would then be used in policy appraisal and guide decisions away from harmful biodiversity impacts. Finally, the research will use the NEV modelling to demonstrate the land-use, welfare and biodiversity, implications of different policy approaches.
The research agenda is extremely timely given the recommendations of HMT's Dasgupta Review on the Economics of Biodiversity. It will have obvious ramifications for other metric-driven approaches (e.g. disclosure in the financial sector and the net-gain requirement for housing developments). Moreover, the research will act as a proof-of-principle for how biodiversity's value can be estimated and applied in policy appraisal, which will be of use globally given the reputation of the UK government guidelines on public investment appraisal that this research hopes to influence.
Description We have understood that the key aspects of biodiversity that people prefer in a conservation and non-use context are, in order of sensitivity: extinction risk, species number and genetic diversity/distinctiveness. We have found in subsequent research that financial decision makers have very similar preferences. We are now in the process of obtaining an expert survey.
Exploitation Route It provides evidence on what people prefer about biodiversity and therefore can be used to inform the metric for the government's biodiversity net gain strategy implementation.
Sectors Agriculture, Food and Drink,Environment,Financial Services, and Management Consultancy,Government, Democracy and Justice,Manufacturing, including Industrial Biotechology

Description Integrating finance and biodiversity for a nature positive future
Amount £133,650 (GBP)
Funding ID NE/X016560/1 
Organisation Natural Environment Research Council 
Sector Public
Country United Kingdom
Start 01/2023 
End 01/2024
Description Biodiversity Preference Experiments 
Organisation University of Oxford
Department Department of Zoology
Country United Kingdom 
Sector Academic/University 
PI Contribution We undertook experiments on biodiversity with the Oxford Biology department as an expert sample.
Collaborator Contribution Time completing the experiment and providing feedback in a workshop session.
Impact We have data on expert elicitations of preferences for biodiveristy.
Start Year 2023
Description HM Treasury Biodiversity Working Group 
Organisation HM Treasury
Country United Kingdom 
Sector Public 
PI Contribution The biodiversity working group is working on introducing guidance on the value of biodiversity using a cost based approach to valuation. This is precisely what WP1 of BIOADD is trying to, and we are using metrics influenced by the work of the NERC Synthesis project. We have provided the input for the potential guidance and coordinated the working group
Collaborator Contribution HMT have hosted the working group and are drafting the guidance.
Impact Guidance is being drafted for the Green Book
Start Year 2021
Description Kew Gardens Carbon Biodiversity collaboration 
Organisation Royal Botanic Gardens, Kew
Country United Kingdom 
Sector Charity/Non Profit 
PI Contribution Frank Venmans and Ben Groom have contributed to a paper coauthored with Alex Antonelli and other academics.
Collaborator Contribution We have an academic paper together which looks at how to combine biodiversity with carbon credits using eDNA.
Impact An academic paper submitted to the journal Plants, People, Planet.
Start Year 2022
Description Bank of France 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact Key note to the Bank of France on Biodiversity at an international workshop
Year(s) Of Engagement Activity 2022
Description Dragon Capital - ISPONRE conference on natural capital valuation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact ISPONRE is the Vietnamese Governments environmental ministry research group in environmental economics. Ben Groom as the keynote and provided an overview of the economic value of biodiversity.
Year(s) Of Engagement Activity 2022