Report from Arctic Games: The value of ecosystem services at risk from oil spills

May 24th, 2012 | Posted by Lize-Marié van der Watt in News | Publication

“The value of ecosystem services at risk from oil spills in the Barents Sea” is a new report from the research project Arctic Games.

The Arctic region supports a variety of globally valuable ecosystem services including climate regulation, provision of food, and aesthetic values that contribute to tourism and recreation. Although many ecosystem services are not directly priced in the global economic system, they provide value to society through their support of human well-being. Oil spills damage these ecosystem services leading to a loss of social well-being. The purpose of this paper is to consider the impacts of a future oil spill in the Lofoten-Barents Sea region by describing which ecosystem services are at risk, the types of social costs that may arise, and the possible economic values at stake.  This study suggests that the total costs to society of a future oil spill in the region may be significant.

This article will be presented at both the International Society for Ecological Economics (ISEE) in Rio de Janeiro (16-19 June 2012), as well as the Ecosystem Services Partnership Conference in Portland, Oregon, USA (1-4 August 2012). It is written by environmental economists from Enveco Ltd., EnviroEconomics Sweden Consultancy (EESweden), the Swedish Royal Institute of Technology (KTH), and the Centre for Economic and Financial Research in Russia (CEFIR). The study is a part of the “Arctic Games” project, funded through MISTRA’s “Arctic Futures in a Global Context” research programme.

Read more at the Arctic Games project webpage and download the report here.

Lofoten, Norway. Photo: Maria Noring

The Arctic is one of the most important oil-producing regions in the world, yet the area is particularly vulnerable to oil spill damages, leading to expensive and difficult clean-up and response, as well as slow ecological recovery. Rapidly melting Arctic ice leads to an increased risk of oil spills as both oil reserves and global transportation routes become more accessibility.

The potential loss in value attributable to public environmental assets like ecosystem services is important in order to guide key policy decisions related to (1) the social profitability of allowing extraction (2) the level and type of precautionary measures to avoid damages and (3) the level and type of spill response to reduce damages.

This report is the first to link oil spill impacts to the ecosystem services framework for the Lofoten- Barents Sea area. The framework underscores the importance of measuring environmental value when designing policy. Although spill prevention and response measures are costly, so is inaction. Information on the potential costs of an oil spill helps policy makers make sound economic trade-offs in determining appropriate measures.

The report finds that several ecosystem services are at risk from oil spills in the Barents Sea (e.g., biogeochemical cycling, habitat, food, recreation and scenery), but the exact impact is highly dependent on the type of oil, location, and time of year. Based on the economic activities in the area — in particular tourism and fishing — the social costs of an oil spill may be significant. (A parallel report produced by Arctic Games details the importance of the tourism and fishing sectors to the local economy, see Lofoten tourism futures; actors and strategies). Although oil spill impacts in other Arctic regions may vary, the risk is likely to increase as extraction and shipping activities increase across the region.

The ISEE conference at which this paper will be presented is held in connection to the Rio +20 Conference (20-22 June 2012). Rio +20 is organized by the United Nations Conference on Sustainable Development 20 years after the historic Earth Summit in Rio, where countries adopted Agenda 21, a blueprint for sustainable development. In 2012 the conference will focus on a range of measures that can reduce poverty while promoting sustainable use of resources.

The authors include Linus Hasselström (Enveco), Scott Cole (EESweden), Cecilia Håkansson (KTH), Yulia Khaleeva (CEFIR), Maria Noring (KTH), and Åsa Soutukorva (Enveco).

This study is part of the Arctic Games research project within the Mistra Arctic Futures in a Global Context research program, funded by the Foundation for Strategic Environmental Research (Mistra) and hosted by the Swedish Polar Research Secretariat. For more information about the programme, visit www.arcticfutures.se.

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