The Global Economic Value of the Climate Regulation of Inland Wetland Ecosystems

Introduction

Wetland ecosystems play a crucial role in sustaining both the environment and economies worldwide, providing a myriad of economic benefits. These ecosystems contribute significantly to global economic well-being through a wide range of ecological services. The economic value of wetland ecosystem services per hectare has been ranked first among all kinds of natural ecosystems (Dang et al., 2022). Yet the area of global wetlands reduced by about 35% between 1970 and 2015, indicating a need for increased conservation of these ecosystems. The economic value of wetland ecosystems lies in their capacity for water regulation and supply, waste management, food supply, biodiversity, fisheries, tourism, and most important to this short commentary, climate regulation (Dang et al., 2022; Sheergojri et al., 2023).

Economic Value of Wetlands

Wetlands act as natural buffers against floods and storms, protecting nearby communities and infrastructure (Dang et al., 2022; Sheergojri et al., 2023). This buffer reduces the need for disaster management, a known economic burden continuously growing as the impacts of climate change increase. Additionally, wetlands serve as effective water purifiers, increasing water quality by filtering out pollutants and excess nutrients (Mahlatini et al., 2020). This attribute reduces the expenses related to water treatment processes for municipalities and industries. Wetlands also play a vital role in supporting biodiversity, providing nurseries and habitats for various species (Mahlatini et al., 2020). This unique flora and fauna attract ecotourists such as bird watchers and reptile enthusiasts. These visitors generate substantial revenue for local economies through accommodations, recreation, and guided tours. Agriculture and fisheries (commercial and recreational) are some additional beneficiaries of wetland ecosystems and depend on the productivity of wetland ecosystems to function (Sheergojri et al., 2023). The cultivation of these lands contributes to global food security and provides livelihoods for millions (Mahlatini et al., 2020).

Calculating Economic Value

To evaluate the economic value of the climate regulation services provided by inland wetlands globally, we accessed the data within the Ecosystem Services Valuation Database (ESVD) (Brander et al., 2023). The ESVD provides monetary value for the global climate regulation services of the different earth’s biomes per hectare and per year. Filtering the data to solely retain the inland wetland biome resulted in 863 observations. With this filter, inland wetlands include peatlands, marshes, swamps, seasonal floodplain marshes, episodic arid floodplains, and groundwater-dependent wetlands (Brander et al., 2023). From these wetland observations, 16 valuations fell under the ecosystem service of “climate regulation” in the Economics of Ecosystem and Biodiversity (TEEB) classification. The average global climate regulation services value of wetlands is evaluated at 1,029 Int.$/hectare/year based on 2020 prices (Brander et al., 2023). Recent studies suggest that the global area of wetlands ranges from 1.2 to 1.6 e9 hectares, and the greatest global wetland area is inland natural wetlands, sitting around 1.29 e9 hectares. (Davidson et al., 2023). As stated above, Dang et al. (2022) state a loss of roughly 35% of global wetland areas since 1970. Table 1 provides the summary statistics based on the 16 wetland valuations from ESVD and the wetland loss.

Table 1: Global Climate Regulation Services Value of Wetlands

Note. Based on data from: 2020 price levels (Brander et al. 2023); Surface area of inland wetlands (Davidson et al. 2023); and Wetland loss since 1970 (Dang et al, 2022).

Wetlands as Carbon Storage & Sequestration

One of the global climate regulation services wetlands provide is the storage and sequestration of carbon. Wetlands are estimated to store 35% of global terrestrial carbon despite only covering ~6%–9% of the planet’s land surface, making healthy wetlands a positive externality on a global scale (Deng et al. 2022).  Since the global soil carbon stands around 1,500 petagrams (Pg C, 1015 g, 1 billion tons or 1 Gt), 35% represents 525 gigatons (Gt) of carbon, which is 1,926.8 Gt of carbon dioxide (CO₂) or 1.93 trillion tons (525 Gt C x  3.67 = 1,926.8 Gt CO₂, divided by 1,000 to get trillion tons) (Nahlik & Fennessy, 2016). The social cost of a ton of CO₂ varies, but a recent study estimates it at $100 a ton conservatively (Pindyck, 2019). Economists value CO₂ at $173.7 a ton, while climate scientists value it at $316.3 a ton (Pindyck, 2019). According to the conservative estimate, the value of storing carbon would sit at ~ $193 trillion while, according to climate scientists, the value would stand at ~$610 trillion, and adds Int$1.32 trillion a year to this valuation in terms of sequestration (see Table 1).

Conclusion

Wetlands, like many other ecosystems around the globe, are no strangers to threats such as habitat loss, pollution, and climate change despite their vast economic importance (Dang et al., 2022; Sheergojri et al., 2023). Recognizing the economic value of wetland ecosystems is crucial for implementing effective conservation measures that balance preservation with sustainable economic development. Preserving and restoring wetlands is a necessary investment in the long-term health of both ecosystems and economies worldwide.

Media Attribution

Figure 1: “Lac Paradis” by Cptcv (2008), via Wikimedia Commons, is used under a CC BY-SA 2.5 license.

References

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