Non-market values of agroforestry systems and implications for Pacific island agroforestry

In general, financial analysis of forestry and agroforestry investments does not take into account the broader social, environmental, cultural, traditional and other benefits of these systems. Hence, this paper examines methods of estimating non-market values to provide policy support. Such values would have relevance with respect to carbon sequestration, sea-level rise, watershed protection, preserving mangrove areas and coastal fisheries, improving the supply of healthy food products to improve public health, and in general, a wide range of policy areas. Under social cost–benefit analysis, if the overall benefits—private, social and environmental—are found to exceed the costs (or the benefit-to-cost ratio is greater than 1.0), a project is considered to be justified on economic grounds. Because some important benefits are not reflected in market transactions, various methods have been developed to estimate values of non-market goods and services. Among the better known methods are: travel cost method(TCM) for valuing recreation benefits; contingent valuation method (CVM) for estimating consumer willingingness to pay (WTP) for a wide package of benefits; and environmental choice modelling, which breaks WTP down into a number of components. The hedonic price method (HPM) is used to estimate values associated with market transactions, such as the values of attractive landscapes, low noise and proximity to public transport, with these estimated by their impact on property prices (i.e. as revealed rather than just stated preferences). In practice, the benefit transfer method (utilising values adopted from previous research rather than conducting new and costly evaluation efforts) is often used as a convenient expedient for non-market values. Many databases of environmental values have been developed, which allow values from a source site to be inferred for a target site. The importance of watershed protection or remediation is well recognised in Fiji and Vanuatu. Flooding is often associated with cyclones and can have serious impacts on tourism, cropping areas and watercourses. Various Pacific island tree species have wide-spreading root systems and are well suited for stream bank and coastal land stabilisation. Revegetation of these areas can have considerable non-market benefits. Estimation of values of such benefits—say by CVM or benefit transfer—could be used to place dollar values on riparian and coastal tree plantings and to guide government policy as to whether such investment would be justified on broad socio-economic grounds