Economic value of the nutrient retention function of restored floodplain wetlands in the Elbe River basin

This paper presents an application of an indirect method, the alternative or replacement cost method to value a regulatory ecosystem service: the retention of river nutrient loads by floodplain wetlands. The paper presents a cost-minimisation model for nutrient abatement measures for the River Elbe. The model is applied to estimate the shadow price of phosphate and nitrogen nutrient retention services by restored floodplains. It is shown that the shadow price of restored floodplain area is a function of the nutrient load reduction target for the river basin. The scope of the floodplain restoration projects is shown to have a lesser impact on the estimated shadow price.In addition, this paper presents an empirical cost function for the costs of floodplain restoration measures in the Elbe Basin. In conjunction with the shadow prices, this allows for a rapid strategic assessment of the costs and benefits of 45 potential restoration sites along the Elbe trajectory. In spite of the large investment costs for dike realignments, the nutrient retention effects alone may in many cases generate sufficient benefits to generate an economic efficiency gain. Floodplain restoration may therefore, under advantageous circumstances, constitute a cost effective nutrient abatement measure. However the key thrust of the argument is that floodplain restoration projects have to be assessed as multifunctional projects, with the positive impacts on water quality being one of several benefit dimensions.

► Development of a cost-minimisation model for nutrient abatement for the Elbe River Basin. ► Estimation of the shadow price of phosphate and nitrogen nutrient retention ecosystem services of restored floodplains. ► Strategic assessment of potential restoration sites demonstrates that nutrient retention benefits may offset costs.