Valuing biodiversity using habitat types

The capacity to value biodiversity is important for governments facing the challenge of balancing the financial benefits from the construction of infrastructure, land clearing or agriculture against the benefits associated with the existence of diverse flora and fauna. A number of previous economic studies have sought to assess the financial value of species or specific ecosystem services. A limitation of these studies was the difficulty that the general public has with scientific concepts, in particular that of biodiversity. For policymakers, the economic value of species can be very useful information when combined with integrated systems modelling and ecological response functions. When this modelling is not available, an alternative approach to valuing biodiversity is to focus on habitat areas to produce dollar value estimates that can be used by policymakers. This habitat area approach also has the advantage of being a concept that helps broaden the perspective of policy-makers and the general public. In this study, choice experiments are used to elicit monetary values for three types of remnant vegetation: wetlands, scrublands and grassy woodlands. These estimates of the value of particular habitat areas can be used in cost-benefit analysis. The study focuses on a region in South Australia known as the Upper South East, where there are significant areas of habitat currently under threat of degradation and land clearance.