Framework Development:

While Miles and Huberman (1994) defined a conceptual framework as a process laying out the key factors, constructs, or variables, and presumes a relationship among them, Jabareen (2009) defines it as a network, or ‘a plane’, of interlinked concepts that together provide a comprehensive understanding of a phenomenon or phenomena, and gives seven phases for the development. These include- 1. Mapping the selected data sources, 2) extensive reading and categorising of selected data, (3) identifying and naming concepts, (4) deconstructing and categorising the concepts, (5) integrating concepts, (6) synthesis, resynthesis, and making it all make sense, and (7) validating the conceptual framework. This case study focuses on the phenomenon of valuation of a contaminated wetland. Aspects of the Valuation of land have been addressed in several studies, while wetlands as a constituent part of the ecosystem and its valuation have been researched into by ecologists and environmental scientists. The valuation process has been documented by many Valuation (Appraisal) organisations and the methods of ecosystem valuation well published. This indicates that valuation has been subject to multidisciplinary studies but a review of the multidisciplinary literature reveals the absence of a comprehensive framework integrating the valuation methods used by real property and ecosystem valuers. There is therefore no theoretical framework for the understanding of the complexities involved in the valuation of a contaminated wetland. Applying the process of a conceptual framework listed above, will explain what is required to integrate valuation methods drawn from multidiscipline. To do this, the established Valuation process for ecosystems and real property are first discussed.

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Figure 3.8: Framework for the Valuation of Ecosystem Goods/Services

Source: Cork et al (2001)

This framework defined ecosystem services in terms of three transformations: (1) transformations of natural assets into products valued economically in other ways by people in a catchment; (2) transformations of the by-product of Type 1 ecosystem services back into natural assets; and (3) internal transformations among natural assets to maintain those assets.

The interest of this study is the goods and services produced by the Niger Delta wetlands and destroyed by contamination. Wetlands constitute part of the ecosystem and the concept of ecosystem valuation has gained popularity in the last few years with several authors publishing literature on it (see (Barbier, 1993b, Costanza et al., 1989, de Groot et al., 2006, Carpenter et al., 2006). Pradhan et al. () contends that with the publication of the Millennium Ecosystem Assessment (MA) 2003, more than 1300 authors around the world contributed in assessing the state of different ecosystems and their capability to provide ecosystem services. None of the authors has a real property valuation orientation but some of the methods advocated, can be useful to the property valuer. This study will only detail the goods and services that exist on a wetland and their likely valuation methods as details of ecosystem valuation can be seen in the MA, 2003 publication

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Table 3.7: Wetlands Goods/Services and Functions

Wetland Services Wetland Functions Associated with

Services

Flood protection Surface water detention

Coastal storm surge detention

Recreation Provision of habitat for fish and other aquatic

animals

Provision of waterfowl and water bird habitat Provision of other wildlife habitat

Maintain drinking water quality Nutrient transformation

Retention of sediments and other particulates

Shoreline property protection Shoreline stabilization

Coastal storm surge detention

Maintain base flow in streams Stream flow maintenance

Wildlife habitat and biodiversity Provision of habitat for fish and other aquatic animals

Provision of waterfowl and water bird habitat Provision of other wildlife habitat

Provision of habitat for unique, uncommon, or highly diverse wetland plant communities

Commercial products from Provision of habitat for fish and other aquatic

animals

wetlands (e.g., peat, timber,

cranberries, rice, fish, shellfish)

Provision of waterfowl and water bird habitat Provision of other wildlife habitat

Provision of habitat for unique, uncommon, or highly diverse wetland plant communities

Reduce pollutants in streams and storm water

Reduce pollutants in streams and storm water Nutrient transformation

Retention of sediments and other particulates

Source: U. S. Centre for Watershed Protection, (2010).

Wetlands are highly productive and valuable ecosystems. The public-good characteristics of many of the goods and services they provide often results in wetlands being undervalued in decisions relating to their use and conservation. Partly as a response to this situation, there is now substantial literature on wetland valuation (Bardecki, 1998, Barbier, 1993b, Brander et al., 2006b, Kazmierczak, 2001). Value is the monetary

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measure of the change in human well-being brought about by a function or service, whether from a wetland or golf course (Taff, 1992). Wetland ecosystems, like all ecosystems, include biotic (living) and abiotic (non-living) components that interact dynamically over space and time and Wetland functions are the natural processes that occur in the ecosystem (Miller, 1975). Valuation as an economic measurement aims at valuing the goods and services derived from the ecosystem services which have been categorised by the M A (2005) as shown in Table 3.8 below.

Table 3.8: M A Categories of Ecosystem Services and Examples

Source: Department for Environment, Food and Rural Affairs, 2007, p.11.

Haines-Young R and Potschin (2009) states that valuation techniques provide a set of tools to help people compare the benefits and costs associated with different use options and usually, the techniques provide ways of expressing benefits and costs in a common framework so that comparisons can easily be made. While different valuation methods exist, only economic valuations (methods that express costs and benefits in monetary terms), are widely used. Haines-Young and Potschin (2009) contend that the task of economic valuation requires an understanding of what kinds of benefit people receive

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through ecosystem services, and how they prioritise them in monetary terms compared to other things and caution that valuation issues cannot be resolved by economists alone. This view indicates that environmental valuation is an interdisciplinary practice. In everyday economics, value is determined by the ‘market’. Mahan (1997) opine that for wetland services that are traded in a market, such as crop production and harvesting of commercial fish species, the economic value is the sum of the payments made for the commodities plus an appropriate estimate for consumer surplus. Markets disclose price and quantity information from which payments and consumer surplus can be derived and the consumer surplus measures the welfare gained from consuming a good/service which is measured by the difference between what consumers are willing and able to pay and what they actually pay. Market transactions involve the trading of property or ownership rights. For wetland services that represent collective goods, like recreation, waterfowl habitat, and amenity services, market exchanges do not capture consumers' preferences because property rights are not well defined (Mahan, 1997). In reviewing different valuation studies on wetland valuation, Mahan (1997) concludes that a variety of techniques have been used to value wetland service flows including techniques that do not measure benefits, but rather opportunity costs, as well as, some approaches that do not withstand economic scrutiny, such as wetland values based on prices paid by agencies. Also those different techniques tend to capture benefits from different services or sets of services and the value of services being measured tends to overlap with different techniques. He cautions that It is difficult to get a clear estimate of the total economic value of wetland resources and that measuring wetland services is, imperfect, although meaningful economic information has been obtained in some settings.

Damage assessment for destroyed natural resources on contaminated land, is usually valued with one of five techniques like 1) market-based techniques, which rely on historical information on market prices and transactions to determine resource values; 2) non-market techniques that rely on indirect estimates of resource values; 3) non-market techniques that are based on direct estimates of resource values; 4) cross-cutting valuation techniques which combine one or more of these methods; and 5) ecological valuation techniques used in the field of ecological economics (Ulibarri and Wellman, 1997). Damage assessments are conducted to determine the extent of injury to natural resources and to calculate compensatory monetary damages. This assessment is generally easy where a market exists for the good or service. The market provides information on the behaviour of market participants, in terms of their willingness to pay for a

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good/service and its existence, justifies the use of market based methods of valuation. These methods are the usual methods used by real property valuers, (that is market approach, appraisal method and the replacement cost method). The market approach assumes the demand for natural resources is measured on the assumption that many factors that might influence demand, such as personal income, the prices of related goods and services, and individual tastes and preferences, remain unchanged during the study period. The method adopts the estimates the consumer surplus for a good/service as a measure of the satisfaction derived from the good/service and thus what is damaged by contamination. Evaluating consumer surplus requires data of market transactions for varying prices and quantities, as well as information on personal income and the prices of related goods and services (Ulibarri and Wellman, 1997).

The appraisal method adopts the comparative method of valuation and involves selecting comparables from uncontaminated and contaminated properties in the neighbourhood. While this approach relies on the market and the valuer’s judgement about comparable sales, it may be difficult to identify ‘comparably’ contaminated properties and not all natural and environmental resources are traded in the market.

The replacement cost method determines damages for natural resources based on the cost to restore, rehabilitate, or replace the resource or resource service. To use the method, the valuer will collect samples of costs of replacements by substitutes from primary or secondary source information and based on the samples, estimates the likely replacement costs of the contaminated resource. The method requires data on costs to restore, rehabilitate, or replace injured or lost resources and resource services. The problem with the method is that the replacement cost may not cover the actual cost of restoration and it is argued that replacement costs may bear little relationship to the true social value of the resource/service.