Environmental Engineering Reference
In-Depth Information
P 5R
C
(
W
0.7
L
0.2
A
0.1
)
2
C
(11.16)
The change in the value of crop production for changing levels of rainfall
can be identii ed for any given levels of rainfall, labour, area and costs. It
is important to note that these other variables must be held constant and
can be chosen to be at any level.
Thus, if
P
5 10,
W
5 1000,
L
5 800,
A
5 50 and
C
5 5000:
P 5
(
10 * 1000
0.7
* 800
0.2
* 50
0.1
)
2 5000
5 $2087
annum
21
But reducing the rainfall level by half to
W
5 500 mm per annum gives:
P 5
(
10 * 500
0.7
* 800
0.2
* 50
0.1
)
2 5000
5 $ 2 636
annum
21
Thus, the value of rainfall changing from 1000 mm per annum to 500 mm
per annum would be estimated as $−2723 ($−636 − $2087).
This example does not quantify a relationship between the amount of
forest cover in a region and the changes in crop productivity but simply
quantii es the relationship between rainfall levels and crop production.
Including the valuation of the area of forest cover in the region would
require a second production dei ning the relationship between forest cover
and average annual rainfall. If this relationship is known, it can be simply
incorporated into the original production function. For example, if:
W
5
F
0.5
(11.17)
Where:
W
5 average annual rainfall (millimetres of rainfall per year);
F
5 area of region with forest cover (hectares).
Substituting Equation 11.17 into Equation 11.16 will give Equation 11.18.
Exactly the same calculations can then be carried out as before but with
changing forest cover values rather than rainfall levels to provide a value of
the change in crop production for a change in forest levels in the region.
P 5
P
C
[ (
F
0.5
)
0.7
L
0.2
A
0.1
]
2
C
(11.18)
The above example demonstrates the technique of using a production
function approach to value indirect-use resources of an ecosystem. In this
