How ecosystem benefits can make a difference in public decisions
Keywords:ecosystem valuation, national guideline, cost benefit analysis, goods and services, inundation area, estuary, functions of nature
‘Building with Nature’ solutions seem like a logical alternative to technical solutions. Working with nature instead of against it might save civil engineering costs. But will it also generate additional civil engineering benefits? Typical engineering benefits are related to flood prevention, transportation and sand mining. Both technical and natural solutions can produce these benefits. Natural solutions, however, may produce additional ecosystem benefits. These are rarely accounted for in investment decisions about engineering projects. This is not surprising as there are no rules stating that and how these benefits should be calculated. The Netherlands is the first country in Europe to install a national guideline for monetising ecosystem benefits within cost-benefit analyses in the public sector. This article shows how this guideline provides a systematic approach to prevent both over- and under-estimations of ecosystem benefits. The key to this approach is to make a distinction between goods and services that directly generate welfare while linking those to conditional functions that indirectly generate welfare. This approach is applied to flood defence in the Scheldt estuary in Belgium. It resulted in benefit estimates that were large enough to compensate for the extra cost of natural solutions. Taking ecosystem benefits into account influenced the flood protection decision of the national government: the natural ‘inundation areas’-solution was preferred to the technical solution of ‘dyke heightening’.