SDR Model landscape valuation

I’ve successfully run an SDR model for a watershed my organisation is interested in but we are hoping to use the outputs to do a high level valuation of the sediment retention services provided. We are looking at a watershed that is a water source for a rural community of ~400.

The SDR model overview indicates:
“The model can also value the landscape in terms of water quality maintenance or avoided reservoir sedimentation and determines how land use changes may impact the cost of sediment removal.”

Is this just indicating that the model output can be used to perform this type of valuation seprately or is there an actual model component that will provide this value? Does anyone have any experience with this?

Hi @CaityBrawn -

The SDR model itself does not provide valuation capabilities. A long time ago we did provide a very simple option involving net present value and several reservoir-specific parameters, but then our experience doing real-world economic analyses showed just how context-specific a proper valuation needs to be, how much detailed data is required, as is as a calibrated model, so we feel confident in the absolute values of sediment, which form the basis for valuation. So now we do this step separately, outside of the model.

I’m not an economist, so others who have more of this experience will have more input on how you could go about it. But I can point you to an analysis done by NatCappers in the Tana basin in Kenya, that used SWAT, not SDR, but it does give some information on how the economic valuation was done, that might provide some insight about what’s involved.

~ Stacie

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Thanks Stacie, I figured as much. Thanks for the direction!

In addition to the context importance Stacie mentioned, another main reason this model and the nutrient delivery ratio model do not include valuation modules is due to the wide variety of potential well-being end points and the wide array of methods necessary to characterize those. The below figure, from Keeler et al. (2012), depicts the issue for a variety of water contaminants, including sediment:

In your case, it sounds like drinking water might be the most important end point. Even that is a pretty wide case in terms of valuation as several different methods may be appropriate (averting expenditures, contingent valuation, hedonic analysis, benefit transfer). I’d refer you to the Keeler paper linked above for broad guidance and lit review.

The EPA is currently developing a R package to implement a benefit transfer valuation of recreational use benefits and non-use benefits from changes in water quality that is applicable throughout the U.S. This is the only tool I am aware of that is as extensible as the biophysical portion of the SDR and NDR models on the valuation side. A working paper can be seen here.