Masters Thesis: Valuing Ecosystem Services in the Columbia River Treaty

Masters thesis recommending a mechanism through which the parties could price ecosystem services in a modern Columbia River Treaty

This thesis uses economic valuation methods to estimate the major costs to Canada and the major benefits to the US of the Treaty in terms of changes in ecosystem services between two scenarios: Treaty Terminates and Treaty Continues. It uses a jurisdictional scan to identify mechanisms from other “payment for ecosystem services” schemes around the world. Results suggest that US benefits from ecosystem services are worth at least US$225-667 million per year, and that Canada incurs costs from foregoing benefits from Canadian ecosystem services worth US$24-41 million annually. The jurisdictional scan provides additional insights into pricing mechanisms.

The study assesses three options based on their effectiveness in achieving the objective of maximizing net internal benefit and evaluates the options’ sustainability, stakeholder acceptance, and administrative ease. Conclusions recommend that Canada and the US maintain the status quo practice of calculating annual payments on the basis of potential incremental hydropower, and consider the difference between potential and actual hydropower as a proxy for the value of ecosystem services.