Scuppernong River
Red Wolf Habitat Bordering The Scuppernong River (photo by Barrett Walker)
Project Report:
The Application of Ecosystem Service Markets to the Conservation of Red Wolf Habitat in North Carolina: A Local Effort with National Implications
Purpose
- Investigates the causes of economic imbalances.
- Investigates the effect of the global financial system and/or the monetary system in fostering a sustainable economy.
- Explores and develops market-based solutions.

Summary

The project centers on exploring and developing private market solutions to public wildlife conservation goods. Key project objectives are to
(1) identify specific ecosystem services associated with the conservation of red wolves and their habitat; (2) quantify the economic market and non-market benefits that may flow from the continued provision of these services; (3) identify private and/or public incentive or income transfer mechanisms that would allow landowners to capture the benefits of services provided from their land; (4) begin to link protection of red wolf habitat to national or state resource conservation programs that promote market approaches to conservation; and (5) provide a model for implementing ecosystem service payments for wildlife habitat that can be replicated in other areas of the country.

Red Wolf Recovery Area, North Carolina
Red Wolf Recovery and Project Area, North Carolina

Description

Phase I has centered on exploring and developing private market solutions to public wildlife conservation goods. The objectives of the project as a whole are to: (1) identify specific ecosystem services associated with the conservation of red wolves and their habitat; (2) to the extent possible, quantify the economic market and non-market benefits that may flow from the continued provision of these services; (3) identify private and/or public incentive or income transfer mechanisms that would allow landowners to capture the benefits of services provided from their private land; (4) begin to link protection of red wolf habitat to national or state resource conservation programs that promote market approaches to conservation; and (5) provide a model for implementing ecosystem service payments for wildlife habitat that can be replicated in other areas of the country. By identifying financial mechanisms through which rural landowners can capture the benefits of conserving red wolf habitat, two national public goals are achieved: (a) rural areas are in better economic balance with other parts of the country and (b) protecting the red wolf through market mechanisms can illustrate the potential benefits of monetizing environmental goods within a regulatory framework. This Phase I project has complemented Defenders ongoing and previous economic analysis and policy work throughout the United States in general, and in red wolf country specifically (with previous support from the Alex C. Walker Educational and Charitable Foundation). This project has built upon previous work associated with alleviating information gaps (through information kiosks) as a constraint to red wolf conservation and for promoting sustainable rural economic development through eco-tourism.

The original budget for completing the five Phase I tasks outlined above was estimated at $84,000, of which $42,000 was granted. Under the Phase I grant, we have focused on tasks (3), (4), and (5), described above. A major activity accomplished has been the development and implementation of a two-stage landowner survey process (discussed below) to gauge landowner interest and ability to participate in a payment-for-ecosystem-services (PES) program. Stage 1 consisted of the design and testing of a pilot landowner survey in one project area county. Stage 2 (now being implemented) is the conduct and analysis of a full landowner survey over the remainder of the project area, and subsequent policy formulation and outreach based on the results of the survey.

We have already submitted a Phase II grant proposal to complete the work outlined in Phase I. Phase II provides two budget estimates, depending on different scopes of work. One estimate is for estimating the value of ecosystem services, policy work, and outreach for the remaining $42,000 of the original proposal. The second estimate is to fund of a more comprehensive analysis, policy formulation, and private and public sector outreach effort to implement a PES program in the project area.

Summary of Phase I Results

Phase I of this project began in January 2008. Although Phase I funding was granted in July 2007, Phase I landowner survey work by Duke University was initiated in January 2008 because of the time required to finalize a contract between Defenders of Wildlife and Duke University, and the availability of students from the University’s research methods course. Phase I consisted of developing and conducting a survey of project area landowners and operators with respect to PES in general, and for providing red wolf habitat in particular. Faculty and students within Duke University’s Master of Environmental Management program have been implementing this activity in three stages: administering a test pilot survey, conducting key-informant focus groups, and conducting the final survey and analysis.

Stage 1 Pilot Survey

In order to thoroughly and accurately develop a landowner survey instrument it was decided to develop a pilot survey to pretest on a sub-sample of landowners in the project area. For the pilot survey, a 5-member student group designed and implemented a pilot version of the farm operator survey in the spring of 2008, as part of a Social Science Surveys course taught by Professor Randall Kramer. Prior to the design of the survey, project staff members from Defenders of Wildlife and faculty from Duke University conducted informational meetings with state and local agricultural extension and resource conservation agents, and with U.S. Fish and Wildlife Service personnel in the Manteo, NC office. These meetings were very useful in providing background information related to the content and the process by which the pilot survey would be conducted, making landowner contacts, and getting local buy-in from the agricultural and wildlife communities.

To obtain additional background information and refine the pilot survey instrument, the students conducted a focus group at the U.S. Fish and Wildlife Service office in Manteo, NC. This focus group consisted of seven members of the Fish and Wildlife Service’s Red Wolf Recovery Program, including the team leader, six wildlife biologists, and an educational outreach coordinator. A draft pilot survey was pretested with five farm operators. The final pilot survey (attached) was administered by phone to Beaufort County farm operators, whose contact information was provided by the Beaufort County Agricultural Extension. Phone calls to the 204 contact numbers yielded 41 completed surveys. Approximately 80% of respondents had participated in conservation programs in the past, with no till and nutrient management being the most frequent practice employed. About half of respondents indicated they would be willing to participate in a future PES program, while one-third were unsure. Many who were uncertain about participating expressed the need for more specific information about potential programs to make a decision. This means that there is a need for extensive landowner education on the notion of what ecosystem service markets are and how a PES program would work. Income appeared to influence respondents’ willingness to participate, as the majority of “yes” votes came from households earning $60,000 or more and all of the “no” votes came from households making less than $60,000. Lastly, when respondents were asked if they would be willing to participate in a conservation payment program associated with red wolves, 66% said “no”, 20% “yes”, and 15% “unsure”. The results of the pilot survey were presented by the five project students to their research methods class in May of 2008 and to a group of Defenders’ D.C. office staff at a brown bag seminar in August of 2008.

The final Pilot Project Report is attached, but we must emphasize that these preliminary results are only for one county in the project area that has little experience with the presence of red wolves. Therefore, the results may not be representative of the remaining four counties that have had red wolves for several years.

Stage 2. Final Survey, Policy Analysis and Outreach

Based on results of the pilot study, the research team designed a final revised mail survey (attached) to administer to a larger sample of individuals in the five-county red wolf program area. As part of this design work, a focus group of landowners with red wolves on their property was conducted to get feedback on a new version of the questionnaire. Within the focus group, the main topics of discussion were the local farming experience, government agricultural agencies, local development, conservation payment programs, ecosystem services, and red wolves. The principal factors driving conservation program participation were personal interests (usually in wildlife) and financial benefit with participants neutral as to who administers a program (government agency, NGO, or private firm). Although participants were not familiar with the term “ecosystem services”, several were familiar with the idea of carbon credits. Participants balked at estimating a payment level for a future PES program that they would be willing to accept because the scenario was too non-specific, lacking concrete details about contract length, whether land would be retired or remain in production, etc. The participants were not sure if farmers should receive financial compensation to help red wolves and felt that more information was needed about the relationship between farming activities and red wolf habitat.

The full-scale final survey is now underway. The first mailing of the survey went out to 950 individuals on August 26 and 27, followed by a reminder postcard mailed September 4. As of September 24, 183 surveys were received, of which 137 are complete and usable. The adjusted response rate is 20.4%. Surprisingly, there has been a better response from red wolf county recipients than from those in our comparison county, Bertie (adjacent to the restoration program counties). A follow-up mailing went out September 22 to those who had not yet replied. This mailing consisted of a new cover letter and another copy of the survey. The majority of responses are expected to be in by the second week of October.

There are two survey treatments, red wolf counties (Dare, Beaufort, Washington, Hyde, and Tyrrell) and non-red wolf county (Bertie), with 10 versions of a conjoint analysis section used in each treatment. In the red wolf counties, a contingent valuation question is used to ask respondents about their willingness to accept payment to enroll in a program to enhance red wolf habitat. In the non-red wolf county, they are asked a similar question about enhancing wildlife habitat. In both counties, the conjoint questions ask individuals to do pair wise comparisons of PES programs that differ by payment level ($40, $75, $140, $225), administering organization type (conservation organization, federal agency, private firm, state agency), and contract length (5, 15, 30 years).

The first step of the analysis consisted of the reporting and assessment of the basic statistics of the survey question responses for a sub-sample of respondents. A summary of results from the preliminary reported here and the full report is attached.

The results are based on data from 151 completed surveys, with the exception of the estimation of the values in Table 5. A subsequent final report will include the complete descriptive statistics and results from statistical models estimated using the conjoint analysis and contingent valuation data.

Summary information on key demographic variables is reported in Table 1. Nearly all respondents (97%) are male and the mean age is 62. Most are long term residents of the area and most have a private individual ownership structure for their farm. A little over one third have off-farm employment. The most common income class that was selected by respondents was $60,000-$79,000.

(Please see Table 1 Demographics in attached grant report.)

Some information about land management is summarized in Table 2. Nine out of ten of the respondents own some of the land they are operating, but there is a mix of tenure arrangements with 42% leasing out at least some of their land and 50% renting in land. The respondents report that on average, they derive 42% of their income from the land. Not surprisingly, nearly 80% indicate that agriculture is the primary land use. (Please see Table 2 Land Managment in attached grant report.)

There are a number of questions on the survey that related to current and past participation in conservation programs. Results for selected questions on conservation programs are reported in Table 3 (see attached). About one half of the land operators said they had participated in conservation programs in the past and one third indicated they are current participants.

Question 30 asked: If there were a conservation program that offered you a payment for improving the quantity and/or quality of ecosystem services your land provides, would you consider participating in such a program?

There was a positive reaction to such a program with 63% saying “Yes”, and only 5% saying “No”. Clearly there is a lot of uncertainty about this new type of program as indicated by the 28 percent who responded “Don’t Know”.

There was a series of questions that asked respondents to compare a number of different hypothetical conservation programs that varied by contract length, program administration, and payment level (the conjoint analysis section). The responses to these questions are still being analyzed, but question 33 gives some inkling of the relative importance of these 3 attributes in decision making about program participation. Not surprisingly, payment level was the most important program attribute followed by contract length and then program administration type.

Table 4 (see attached) reports the responses to two of the key questions that were posed about ecosystem services. Question 19 asked respondents about their degree of familiarity with the term “ecosystem services” and several more conventional terms for specific ecosystem services (using a scale of 1 to 5 with 5 indicating “very familiar”). Respondents were much less familiar with the term “ecosystem services” (mean of 2.35) than they were with “water quality” (mean of 3.91) and “wildlife habitat” (mean of 4.03), both of which have been part of the farm conservation lexicon for decades. Respondents were also relatively unfamiliar with “carbon storage” (mean of 2.09).

Question 31 asked for level of interest in a conservation program that provided different ecosystem services. Respondents showed a highest level of interest in a program that provided wildlife habitat, followed by water quality. Carbon storage received the lowest level of interest.

Preliminary results presented in Table 5 (see attached)are for an opinion question and contingent valuation (CV) question that were designed to gauge farm operators’ interest in enrolling in a PES for habitat protection. The wording of these questions is in Box 1. Because some of our respondents were in Bertie County, which is outside of the Red Wolf Program area, a different version of the two questions was posed that substituted “wildlife” for “wolves”. This alternate form of the wording allows us to test respondent sensitivity to wolf conservation given the controversy that surrounds the Red Wolf Management Program. The CV question elicits respondents’ willingness to participate in a program benefiting red wolves/wildlife given a specific payment level. This payment level was randomly varied across participants at $60, $120, $185, and $250.

The responses to opinion question 35 indicates that respondents are generally favorable about a PES for generic wildlife, but when the wording changes to red wolf, the overall view of the program is negative. This division of views is borne out in the contingent valuation question as well. Only 13% of respondents said they would participate in a red wolf program (across the different payment levels), while 42% of the Bertie County respondents said they would participate in a generic wildlife PES. The mean WTA was $100 in the program counties and $162 in the comparison Bertie County .

Discussion
These preliminary results should be read with caution as they reflect partial survey returns and preliminary analysis. Efforts to encourage a higher response rate continue, and we expect additional returns to be forthcoming. However, we also expect that the final results will reinforce the main findings reported here: (1) Area land operators are interested in PES type programs, especially those related to water quality and wildlife habitat. (2) Payment levels are an important factor in decisions to enroll, but so are other program attributes, particularly contract length. (3) A PES that is specific to red wolves does not have widespread support. However, given the reservoir of interest in wildlife habitat in general, a broader-based wildlife habitat program may be attractive to a significant portion of area farmers and foresters. Wildlife biologists tell us that cover strips of natural vegetation around crop fields benefit many kinds of wildlife, including wolves. Thus, those who wish to promote red wolf habitat through a PES may have an easier time marketing a more generic wildlife program that does not emphasize wolves as the target species. It is also likely that a targeted education program for landowners may improve chances for conservation success.

A subsequent final report will include a more complete set of descriptive statistics. It will also use multivariate analysis to explore how multiple factors influence operators’ conservation attitudes and program participation decisions. This will include logit regression models of the contingent valuation data and multinomial logit models of the conjoint analysis data. These models will provide additional insights for the design and implementation of PES approaches to improving the management of ecosystem services in eastern North Carolina. Finally, Box 2 provides some telling comments expressed by survey respondents about red wolf conservation.

The final version of our analysis will involve the use of statistical models (i.e., multinomial and binomial logit) to assess the conjoint analysis and contingent valuation responses in conjunction with covariates drawn from the other survey questions. The analysis of the conjoint questions will allow us to predict farm operators’ likely participation in PES programs with different design features and estimate tradeoffs across program attributes. The analysis of the contingent valuation question will enable us to determine the price sensitivity of farm operators to a PES program that is specific to red wolves, and to provide policy recommendations with respect to PES program design.

Results from this second step in the analysis will include data on land use patterns, participation in conservation programs, preferences about conservation programs, familiarity with ecosystem services, and willingness to participate in programs associated with ecosystem services. Other outcomes will be landowner attitudes toward a conservation program to benefit red wolves as well as willingness to accept estimates for participating in such a program. We will be able to compare these many variables between the two versions of the survey (red wolf versus non-red wolf counties) to enrich the analysis.

The final project report, to be submitted by the end of November 2008, will include the complete descriptive statistics and results from statistical models estimated using the conjoint and contingent valuation data, as well as a policy analysis for what the results mean for developing a PES program for landowners in the project area. Outreach to communicate Phase I findings to local landowners, community groups, agency personnel, conservation groups, and private ecosystem market entities will take place following the Foundation’s approval of the final report.

The second step in the analysis will involve the use of statistical models (i.e., multinomial and binomial logit) to assess the conjoint analysis and contingent valuation responses in conjunction with covariates drawn from the other survey questions. The analysis of the conjoint questions will allow us to predict farm operators’ likely participation in PES programs with different design features and estimate tradeoffs across program attributes. The analysis of the contingent valuation question will enable us to determine the price sensitivity of farm operators to a PES program that is specific to red wolves, and to provide policy recommendations with respect to PES program design.

Results from this second step in the analysis will include data on land use patterns, participation in conservation programs, preferences about conservation programs, familiarity with ecosystem services, and willingness to participate in programs associated with ecosystem services. Other outcomes will be landowner attitudes toward a conservation program to benefit red wolves as well as willingness to accept estimates for participating in such a program. We will be able to compare these many variables between the two version of the survey (red wolf versus non-red wolf counties) to enrich the analysis.

The final project report, to be submitted by the end of November 2008, will include the complete descriptive statistics and results from statistical models estimated using the conjoint and contingent valuation data, as well as a policy analysis for what the results mean for developing a PES program for landowners in the project area. Outreach to communicate Phase I findings to local landowners, community groups, agency personnel, conservation groups, and private ecosystem market entities will take place following the Foundation’s approval of the final report.

Material from Previous Update:
Defenders' Conservation Economics Program (Dr. Frank Casey) has been consulting with Dr. Randy Kramer, Professor of Resource and Environmental Economics at the Nicholas School of the Environment and Earth Sciences at Duke University, to develop a Scope of Work and contract to (1) survey landowners in the project area about their willingness to protect red wolf habitat and the types of economic incentives (including ecosystem service payments, linkages with federal conservation programs) that such landowners may require; and (2) develop estimates of carbon storage and water quality benefits that could be used to develop a program in payments for ecosystem services.

From January 28-30, 2008 Defenders' Conservation Economics and Red Wolf team (Dr. Frank Casey, Anna McMurray and Gina Schrader) met with several partners and federal, state and local agency officials to discuss the red wolf ecosystem project, including:

•Dr. Randall Kramer, Duke University Professor of Resource and
Environmental Economics
•Aaron Jenkins, Associate in Research for Economic Analysis at the Nicholas
Institute
•Duke University master candidates working on the red wolf ecosystem
surveys.
•North Carolina Natural Resources Conservation Service (NRCS) agents
•U.S. Fish and Wildlife Service Red Wolf Recovery Team
•County agricultural extension agents, local NRCS agents, local Farm
Service Agency agents, Executive Directors of the Eastern 4-H
Center and the Red Wolf Coalition

Defenders briefed all parties on our previous red wolf-related activities and research and discussed the scope of the latest project. The Duke University students plan to conduct a sample telephone survey on a smaller population of landowners in southern Beaufort County to determine current and potential involvement in land conservation incentive programs. In designing the survey, their questions to landowners will focus on five categories of information:

1. Assessing knowledge and interest in land conservation programs and ecosystem services
2. Determining current involvement in land conservation programs and ecosystem services
3. Willingness to participate in land conservation programs and ecosystem services
4. Preferred types of incentives for land conservation and ecosystem services
5. Gauging knowledge and interest in red wolf habitat conservation and ecosystem services

Landowners will be surveyed within the next few weeks. Results compiled from the survey will help to develop the comprehensive survey conducted by Kramer and Jenkins on landowners in the five counties of Beaufort, Hyde, Tyrrell, Washington and Dare. Local agents recommended conducting face-to-face surveys to guarantee participation, but we would need to find supplemental funding to the Walker grant to cover the added expenses of this type of survey approach. We will look to identify other potential funders for these efforts.

From our meetings, we discovered a huge focus on hunt clubs in this region. In fact, more than 60 hunting clubs are located in the area. Hunt clubs may dictate land use more than the land managers. For this reason, it is key for us to frame the message that conserving red wolf habitat will increase total wildlife and habitat diversity with the region. We also found that a lot of the land may already be invested in conservation programs, but landowners seem to be increasingly interested in carbon credits, biofuels and the dollar values in increasing water quality for recreational purposes in the region. Landowners may also need to be informed about the types of land use changes and steps that would help make their land more habitat friendly.

The extension agents advised us not to conduct any surveys between April and July 4 because it is a bad time for farmers. They tentatively offered to send out letters to landowners/farmers in their counties informing them about the pending survey, but only if they were offered the opportunity to review and approve the survey questionnaire. The extension agents recommended that we not emphasize the red wolf component of the project because landowners/ farmers fear the Endangered Species Act will negatively impact their farming practices and it may impact their survey responses.

The Red Wolf Recovery Team offered to provide contact information for the farmers/landowners with red wolves located on/near their land. The Fish and Wildlife Service expressed their interest in recruiting landowners to receive recognition for their participation in the conservation of red wolves and their habitat and welcomed our assistance in identifying them during our survey process. The Service also offered us the use of two kiosks for our educational outreach.

Defenders' Conservation Economics Program has also been involved in developing policy and securing funds for the new 2007/2008 national farm bill legislation that will allow for (1) providing conservation funding for predator deterrence and protection of riparian areas; (2) allowing tax incentives for landowners who protect habitat for species of concern; and (3) provides for the development of ecosystem service markets. This institutional work is crucial to providing a menu of incentives to project area landowners to protect red wolf habitat. We will apply these programs in cooperation with the USDA Natural Resources Conservation Service and Extension Services in the project area.

Defenders’ project team developed a GIS map to identify land cover/land use and land ownership in the project area to determine where the best red wolf habitat is on private lands that needs protection. This is serving as a basis for identifying which landowners to target in our survey work.

Defenders’ Conservation Economics Program has initiated contacts with county level land conservation and extension services about the red wolf project and has collected data on the number of agricultural producers, land cover (including natural areas), cropping patterns, and livestock production. This information served as a basis for profiling where habitat conservation efforts may be the most effective, and also as the basis of the landowner survey to take place in the spring of 2008.

Up-coming work through September 2008

Conduct and analyze the landowner survey with respect to protection of red wolf habitat.
Identify types of ecosystem services that landowners can provide and types of market mechanisms that can be used to reimburse landowners.
Conduct a visit to the project area (completed in January 2008) to inform landowners, interested state and federal agency representatives, and conservation group personnel about the red wolf study ecosystem services study.
Work with USDA personnel to apply new and existing conservation programs for landowners willing to protect red wolf habitat.

Purpose

This project is innovative in the sense that it takes a new concept, payments for ecosystem services, and applies it to a specific species and habitat. The purposes selected will be addressed by identifying mechanisms in which rural landowners can capture the benefits of conserving red wolf habitat, and will thereby achieve two national public goals: (1) rural areas are in better economic balance with other parts of the country; and (2) protecting the red wolf through market mechanisms can illustrate the potential benefits of monetizing environmental goods within a regulatory framework.

Scope

Although specific to red wolves in North Carolina, this project could serve as a model for similar efforts on a nationwide scale. Thus, the impact of the project can be applied broadly for an issue of national importance: the conservation and protection of at-risk species in the context of sustainable rural economies.

We believe this project will have lasting value not only from the standpoint of securing revenues for landowners to protect red wolves, but also for serving as a model for similar projects in other areas of the U.S. Because payments for protecting red wolf habitat constitute more or less a permanent market, funds for continued habitat conservation will be generated through a combination of future public funding, but more extensively by securing funds from the private market for the ecosystem services being supplied.

Amount Approved
$42,000.00 on 6/5/2007 (Check sent: 6/25/2007)


  Related Organizations
Defenders of Wildlife  


Red Wolf Sign
Until recently, the only information most tourists saw on the Red Wolf was this highway sign along Rt. 64

Attachments
Red Wolf Recovery Area, North Carolina
Red Wolf
Red Wolf Meeting
Red Wolf Sign
Scuppernong River
Phase I Interim Progress Report: Application of Ecosystem Service Markets to the Conservation of Red Wolf Habitat in North Carolina (Doc)

Address
1130 Seventeenth St NW
Washington, DC 200364604


Phone
(202) 682-9400 ext 105
(202) 682-1331 (fax)

Contacts


Nina Fascione
Vice-president, Species Conservation, Defenders of Wildlife

Posted 3/28/2007 10:03 AM
Updated   1/29/2012 5:02 PM



Red Wolf
Red Wolf (Photo - U.S. Fish and Wildlife Service)

Red Wolf Meeting
Stakeholder Meeting on Ecosystem Service Payments and Red Wolf Tourism at 4H Center

 
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