Time is money: Valuing the benefits of nature-based solutions in a lower income context

Liselotte Catharina Hagedoorn

Research output: PhD ThesisPhD-Thesis - Research and graduation internal

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Abstract

Environmental change poses an enormous threat, especially in low and middle income countries (LMICs). In this context, nature-based solutions (NBS) are increasingly gaining interest. However, NBS face a number of barriers, of which the challenge of obtaining sufficient financial resources is a major one. To guide investments towards NBS, there is a demand for economic analyses on the welfare effects of NBS. Since many NBS benefits are non-market by nature, stated preference (SP) studies serve as the most suitable valuation method to value NBS benefits. In SP studies, respondents are asked to make trade-offs between positive changes in ecosystem services and a payment. This payment is necessary for the calculation of willingness to pay (WTP) and is usually monetary, which may complicate trade-offs in LMICs due to generally lower income levels. In response to this, SP studies in LMICs increasingly employ time payments, which seem like a suitable alternative, but challenges and questions related to the use of time payments remain. The aim of this dissertation is to support the decision-making on the implementation and financing of NBS in LMICs. Therefore, we focus on how we can better capture the values of ecosystem services in lower income contexts by investigating methodological challenges related to the use of time payments and by applying time-based values in economic and financing analyses. We do so via discrete choice experiments (DCE) with both time and money payments that were implemented in four sites across rural and urban Ghana and Vietnam. In Chapter 2 we investigate how to convert time to monetary values based on the Vietnam case studies. In this chapter we advance on current conversion practices by applying six different conversion rates, including generic and individual-specific rates as well as wage and leisure rates. We identify that WTP estimates based on the time payments are substantially higher. Furthermore, we identify that time-based WTP estimates differ significantly across the different conversion rates. In Chapter 3 we continue to work on the time-to-money conversion rate, in this case based on the Ghanaian case studies. In this chapter we trial a non-wage-based conversion rate, an average market wage value, and an average sample-based earnings value. We test the underlying implicit assumptions related to the use of an average (market) wage value or leisure rate, which we refute. WTP estimates are again substantially higher when based on the time payments. In this chapter we furthermore also identify that market integration levels may allow for the convergence of WTP estimates from the different payment types. In Chapter 4 we conduct a cost-benefit analysis (CBA) of both a nature-based and an engineering solution to coastal erosion in the rural Ghanaian study site. In this CBA, we calculate the benefits of erosion prevention either by using the money-based or time-based WTP estimates. We find overall negative welfare effects for both solutions when money payments are applied, but positive welfare effects when time payments are applied. In Chapter 5 we focus on an alternative application of the time-based values, namely as a source of NBS financing. The results indicate that time contributions from households for the implementation and maintenance of NBS, which are often labour intensive, are motivated by social capital and coping appraisal. Furthermore, based on examples of the Vietnamese case studies we calculate that time contributions could cover 29% and 44% of the financial needs of the specified NBS. Based on the results presented in this dissertation we provide recommendations to research, practice and policy as well as suggestions for future research within and beyond the research focus of this dissertation.
Original languageEnglish
QualificationPhD
Awarding Institution
  • Vrije Universiteit Amsterdam
Supervisors/Advisors
  • van Beukering, Pieter, Supervisor
  • Koetse, Mark, Co-supervisor
Award date2 Jun 2022
Place of Publications.n.
Publisher
Print ISBNs9789464217148
Electronic ISBNs9789464217148
Publication statusPublished - 2 Jun 2022

Keywords

  • Nature-based solutions
  • ecosystem services
  • stated preferences
  • discrete choice experiment
  • non-market valuation
  • willingness to contribute time
  • time payments
  • willingness-to-pay
  • cost-benefit analysis
  • finance gap.

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