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Restoration Economics
Habitat Equivalency AnalysisIntroduction
Damages to coastal habitats can occur from oil spills, hazardous substance releases, vessel groundings, or other damaging actions (Figure 1). The damages cause a disruption to the services provided by the habitat until the habitat is able to recover to predisturbance conditions. Natural resource trustees, acting on behalf of the public, may seek to recover the damages to facilitate recovery of the injured area (primary restoration) and to compensate for the interim loss of services occurring prior to full recovery (compensatory restoration). The area required for compensatory restoration is related to whether primary restoration occurs or not. Figure 2 shows a depiction of the level of services lost at the injured site (Area X) and the recovery rates with or without primary restoration. If primary restoration occurs, the time for full recovery to baseline is lessened and the amount of area required for compensatory restoration would also be lessened. Regardless of whether or not primary restoration is conducted, the amount of compensation or replacement habitat that provides the biological functions and services equivalent to those that were lost must be determined (Area Y). In some cases, full restoration of the lost services may not be feasible, in which case the area required for compensation would be larger. Habitat equivalency analysis (HEA) provides a framework for determining the area required for compensatory restoration.
Habitat equivalency analysis is specifically designed to determine the compensation the public is due to reconcile injuries to the ecosystem and the lost services the ecosystem provides to the biotic component. According to the 1996 final rule of the Oil Pollution Act of 1990, "when injured resources and/or services are primarily of indirect human use (e.g., species habitat or biological natural resources for which human uses are primarily off-site) the appropriate basis for evaluating and scaling the restoration is Habitat Equivalency Analysis (HEA)" (King 1997). Man is inextricably linked to the ecosystem and can, therefore, be considered one of the benefactors of the services provided; however, human uses are not the focus of HEA. The Legal ContextThe National Oceanic and Atmospheric Administration (NOAA) acts as a federal trustee for natural resources under the following Acts:
In addition, state, local, and tribal governments can act as trustees for natural resources on public or tribal lands. When injury occurs to the natural resources, the process to assess the resulting damages from various actions is termed a natural resource damage assessment (NRDA). This process has three phases (NOAA 1997):
Within this process, HEA is used to determine the scale of restoration alternatives based on the injury assessment. The HEA FrameworkThe HEA method is specifically used in cases of habitat injury when the service of the injured area is ecologically equivalent to the service that will be provided by the replacement habitat. This is termed service-to-service approach and assumes the public is willing to accept a one-to-one trade-off between the service lost and the service gained by the restoration (NOAA 1997). When this approach is used for scaling losses of fish, birds, and other wildlife, the method is sometimes termed resource equivalency analysis (REA). Figure 3 shows a depiction of the loss in services caused by a spill and the replacement of those services provided through construction of new habitat.
To make past and future losses and gains comparable, a discount factor must be applied. The regulations and NOAA (1999) recommend using a 3 percent discount rate when scaling compensatory restoration for discounting interim service losses and restoration gains. The results of the discounting are sometimes stated in terms of discounted service acre-years (DSAYs). If the compensation project continues to provide services for a long period of time (300 years) and the interim loss of services is a relatively short period of time (15 years), then the area required for compensation of the lost services will be smaller than the original injured area, because the services accrue over time (Figure 3). Likewise, because the value of future benefits and costs must be discounted, restoration that occurs some time after an injury is worth less in present-value terms than are plantings conducted shortly after impact, and therefore, more restoration must be done as time elapses. For more information on discounting see Discounting and Time Preference. The four basic requirements needed for an HEA are the following (Fonseca and others, 2000; NOAA 2000):
The tractability of HEA is enhanced by the following assumptions (Dunford 2004):
Often in NRDA cases, restoring habitat that is the same as the injured habitat (e.g., bottom sediments of lakes, rivers, or coastal areas) may not be practical, feasible, or appropriate. However, creation of other habitats (e.g., wetlands) could provide other valuable, but different, services. The use of HEA can include services that are functionally equivalent, though not the same type and quality. The use of conversion factors can be used for equating dissimilar services, which could be calculated from ratios of functional or structural characteristics (Dunford 2004; NOAA 1997). The relative values of the habitat types should be based on measured or modeled attributes of the habitats; however, in many cases, professional judgment would be needed, resulting in an increase in uncertainty. Measuring ServicesMeasuring the service provided by a habitat is no easy task. Often the habitat functions are complex, with many services provided. A way to deal with the complexity is through the use of an attribute, or metric, that provides a measure of whether or not the restoration project has been successful. An appropriate metric is essential to the success of HEA. The metric must be able to capture relative differences in the quality and quantity of services provided by the baseline, injured, and compensatory habitats. In choosing a metric it is important to have a good knowledge of the ecosystem functions and to consider both the capacity and opportunity of the ecosystem to provide services (NOAA 2000). For example, for a salt marsh to trap sediment, the slope and elevation must be correct to maintain the vegetation (i.e., the capacity). The opportunity for the marsh to trap sediment depends on the landscape context. When choosing a metric for services, it is important to evaluate whether the metric encompasses the opportunity for the ecosystem to provide offsite and onsite services. Shoot density (the number of stems per acre or per square meter) is an attribute that has been used to measure the services provided by seagrass beds, because it is an easy, nondestructive measurement and because it represents the functional roles of seagrass habitat (e.g., food source, shelter, sediment stabilization, and nutrient cycling) (Fonseca and others, 2000). For salt marshes, Strange and others (2002) compared the results of several different scenarios in various hypothetical HEA calculations (Table 1). The various scenarios shown in Table 1 clearly indicate that the estimation of habitat equivalency is highly dependant on the assumptions used to determine the appropriate variable and the metrics chosen to quantify that variable. Table 1. Comparison of Results Using Various Metrics in HEA Calculation
In some cases, integrating multiple metrics may be the most appropriate approach for estimating service losses (Dunford and others, 2004). Using this approach, individual metrics may be averaged, with individual metrics weighted for relative importance. Such weighting factors may be based on empirical data, if available, or on best professional judgment. Weighting factors are often subjective because data on ecological services are not available.
The InputsThe inputs required to complete the HEA calculations are described in Table 2. The time (in years) when the following events occur is represented by t:
The EquationThe equation, while detailed and complex in appearance, merely says that the acres in the replacement project must be equal to
An ExampleIn May 1997, a pipeline discharged 6561 barrels of oil into Lake Barre, Louisiana. The trustees and the responsible party used HEA to determine the restoration needed for interim losses associated with the oil discharge (Penn and Tomasi 2002). The losses were assessed for oiled marshes and direct mortality to finfish, shellfish, and birds. The type of compensatory restoration decided on was to plant salt-marsh vegetation on an area of East Timbalier Island, where dredge material had recently been deposited to offset very high erosion rates. The vegetation would not only create salt-marsh habitat, but also slow erosion rates (Figure 4). The HEA process was conducted in two main steps: 1) injury quantification, and 2) restoration scaling. Step 1: Injury quantification. The interim losses associated with the marsh injury were quantified based on field measurements of vegetative species composition, percentage of cover, and stem density and height, as well as observations on the amount of oiling, condition of vegetation, and fauna observed. These data, along with professional judgment, were used to estimate the interim loss of marsh services. Four broad categories of injury were developed based on the field assessment and the initial response effort. The categories, level of service lost, and the recovery times are summarized in Table 3. For each category, there is a flow of interim lost services through time, which was discounted (using a discount rate of 3 percent) to calculate the services in hectare-years (ha-yr), then added to determine the total marsh service losses (30.6 ha-yrs). Table 3. Lake Barre Marsh Injury Quantification
In addition to the marsh injury quantification shown in Table 3, the injuries to birds, fish, and other aquatic animals were quantified. First, a model was used to estimate the mortality and loss of growth that resulted from direct exposure to oil. The model estimated 7465 kg of fish and invertebrates and 333 kg of birds were lost as a result of the discharge. To apply these injuries to the HEA, the losses were converted into habitat service losses (in hectare-years). The conversion calculated the equivalent salt-marsh biomass (i.e., weight of vegetation) required to support fish and birds using food web information (2,378,231 kg). Salt-marsh production rates for Louisiana were then applied to determine the equivalent habitat service losses (12.7 ha-yrs). Although the responsible party did not agree with the results of the model, they did offer an area for restoration that would generate 13.7 ha-yrs of services. Step 2: Restoration scaling. The next step in the HEA process is to determine the amount of restoration needed to compensate for a total of 44.3 ha-yrs of lost services (marsh injury of 30.6 ha-yrs plus animal injury of 13.7 ha-yrs). The scale of restoration was determined by calculating the benefit from salt-marsh plantings. The calculations were divided into two components: 1) strip plantings, and 2) gap areas. The planting configuration was such that the gaps would be colonized by the plants from the strips on either side of the gaps. Recovery rates were estimated for both components, and erosion rates with and without the project were also included in the calculations. See Table 4 for a description of the parameters included in the calculations. The total area to be planted was calculated to be 7.5 ha, with an additional 15.9 ha enhanced by faster colonization rates because of the plantings. While this amount may seem small relative to the original damaged area (1751 ha), the compensation area yields a stream of benefits that goes on for the life of the marsh. So, once established, even with discounting this long-term benefit is powerful in reducing the "equivalent" number of hectares required to compensate for a temporary damage to a much larger number of hectares. Table 4. The Parameters Used in the Lake Barre Oil Spill HEA
* Vegetative condition = species composition, cover, and density ConclusionIn summary, HEA is a method to determine the necessary restoration to compensate for interim loss of services. As shown in the example above, multiple types of injuries can be quantified in an equivalent manner through the use of HEA. The HEA method has been applied in many other situations such as Superfund sites (e.g., Commencement Bay Natural Resource Trustees 2002), vessel groundings in coral reefs (e.g., Milon and Dodge 2001), and in seagrass damage cases (e.g., Fonseca and others, 1998; Fonseca and others, 2000). One must remember that HEA results are only as good as the inputs and the assumptions used in the calculations. However, in situations where there is sufficient knowledge about the injured and restored systems, the HEA model can provide a useful framework for estimating lost services and determining restoration requirements. AcronymsCERCLA - Comprehensive Environmental Response, Compensation, and Liability ActDSAYs - discounted service acre-years HEA - Habitat Equivalency Analysis NOAA - National Oceanic and Atmospheric Administration NRDA - natural resource damage assessment REA - resource equivalency analysis GlossaryBaseline – the original level of services provided by either the injured habitat (pre-injury) or the compensatory habitat (pre-restoration). Compensatory restoration – the actions taken to enhance resources beyond baseline conditions to compensate for the loss of services at a damaged site. Discounting – an economic procedure that weights past and future benefits or costs such that they are comparable with present benefits and costs. Habitat Equivalency Analysis (HEA) – a framework for determining the area required for compensatory restoration, specifically used in cases of habitat injury when the service of the injured area is ecologically equivalent to the service that will be provided by the replacement habitat. Metric – an attribute that provides a means of measuring relative differences in the quality and quantity of services provided by baseline, injured, and compensatory habitats to evaluate whether or not a restoration project has been successful. Primary restoration – the actions taken to increase the recovery rate of the damaged site. Resource equivalency analysis (REA) – an HEA approach similar to the service-to-service approach that is specifically used for scaling losses of fish, birds, and other wildlife. Service-to-service approach – an HEA method used in cases of habitat injury when the service of the injured area is ecologically equivalent to the service that will be provided by the replacement habitat. Services – although there are many types of services, applicable to habitat equivalency analysis are ecological services, such as fish rearing areas, which in turn support human services, such as recreational fishing. Trustees – federal, state, or local agencies or Indian tribes acting on behalf of the public. References*Some of the documents below are in Adobe portable document format (PDF) and requires Adobe Acrobat Reader. Commencement Bay Natural Resource Trustees. 2002. Hylebos Waterway natural resource damage settlement proposal report. Review Draft. Available online at: http://www.darcnw.noaa.gov/hylsettl.htm Discounting and Time Preference. Dunford, R.W., T.C. Ginn, and W.H. Desvousges. 2004. "The use of habitat equivalency analysis in natural resource damage assessments." Ecological Economics. Volume 48. Pages 49 to 70. Fonseca, M.S., B.E. Julius, and W.J. Kenworthy. 2000. "Integrating biology and economics in seagrass restoration: How much is enough and why?" Ecological Engineering. Volume 15. Pages 227 to 237. Fonseca, M.S., W.J. Kenworthy, and G.W. Thayer. 1998. "Appendix E: Example Propeller and Mooring Scar Restoration Plan." In: Guidelines for the conservation and restoration of seagrasses in the Unites States and adjacent waters, Fonseca M.S., W.J. Kenworthy, and G.W. Thayer eds. National Oceanic and Atmospheric Administration, Coastal Ocean Office. Silver Spring, MD. King, D.M. 1997. Comparing Ecosystem Services and Values. National Oceanic and Atmospheric Administration. Silver Spring, MD. Available online at: http://www.darp.noaa.gov/pdf/kingpape.pdf Milon, J.W., and R.E. Dodge. 2001. "Applying habitat equivalency analysis for coral reef damage assessment and restoration." Bulletin of Marine Science. Volume 69, Number 2. Pages 975 to 988. NOAA (National Oceanic and Atmospheric Administration). 1995. "Habitat Equivalency Analysis: How Much Restoration is Enough?" Fact Sheet. Available online at: http://www.darp.noaa.gov/pdf/heagenl.pdf NOAA (National Oceanic and Atmospheric Administration). 1997. Natural Damage Assessment Guidance Document: Scaling Compensatory Restoration Actions (Oil Pollution Act of 1990). Damage Assessment and Restoration Program, NOAA. Silver Spring, MD. Available online at: http://www.darcnw.noaa.gov/scaling.pdf NOAA (National Oceanic and Atmospheric Administration). 1999. Discounting and the Treatment of Uncertainty in Natural Resource Damage Assessment: Technical Paper 99-1. Silver Spring, MD. Available online at: http://www.darp.noaa.gov/pdf/discpdf2.pdf NOAA (National Oceanic and Atmospheric Administration). 2000. Habitat Equivalency Analysis: An Overview. Damage Assessment and Restoration Program, National Oceanic and Atmospheric Administration. Silver Spring, MD. Available online at: http://www.darp.noaa.gov/pdf/heaoverv.pdf Penn, T., and T. Tomasi. 2002. "Calculating resource restoration for an oil discharge in Lake Barre, Louisiana, USA." Environmental Management. Volume 29, Number 5. Pages 691 to 702. Strange, E., and others. 2002. "Determining ecological equivalence in service-to-service scaling of salt marsh restoration." Environmental Management. Volume 29, Number 2. Pages 290 to 300. |
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Updated on July 24, 2007