Natural Capital Asset Valuation of the Meewasin Northeast Swale for the Preservation of Saskatoon’s Natural Resources

Abstract

The Meewasin Northeast Swale (Swale) is an ecologically significant site in Saskatoon, Saskatchewan, featuring 310 ha of native grassland, woodland, and riparian wetland. Unimpacted grasslands and wetlands are endangered ecosystems with exceptional productivity, yet this unique channel scar is threatened by urban development. Threats from urban development include habitat fragmentation, alteration of hydrological conditions, increased chemical and physical contamination potential, propagation of exotic and invasive species, and noise and light pollution. Natural capital asset valuation (NCAV) is the process of determining the economic, environmental, and sociocultural value of a natural resource. The purpose of this thesis is to apply NCAV to the Swale to help inform environmental decision making and to develop suitable NCAV methodology for other natural resources in Saskatoon and other Canadian municipalities. Three valuation analyses were applied to the Swale: two benefit transfers and a hedonic regression. First, the Swale was delineated into its component ecosystems, showing that the Swale is predominantly wetland and grassland – 44% (138 ha) and 39% (122 ha) respectively – with the remaining components split between woodland, cropland, and manufactured features. The first benefit transfer used 36 ecosystem services from 20 studies to value four prioritised ecosystem services at $1.63 million per year. A follow-up to this benefit transfer used 186 values from 54 sources to value 17 ecosystem services at $7.36 million per year. Natural hazard mitigation was found to be the most valuable ecosystem service and wetland portions of the Swale are found to be the biggest contributor of value. Finally, a hedonic regression of the housing market surrounding the Swale indicated no statistically significant impacts from the Swale on nearby housing prices. However, despite the statistical insignificance, the model indicated that single-family detached homes within a 400 m walking distance of the Swale had an average increase to property value of $4,166; homes between a 400 and 800 m had an average decrease to property value of $5,689; and an unimpeded view of the Swale resulted in an average decrease of $636. Both methods considered in this thesis may be considered to be efficient methods for valuing Saskatoon’s natural capital. Benefit transfer is extremely efficient, despite its inherent uncertainty, while the hedonic pricing method is a strong site-specific method for valuing cultural ecosystem services, despite not providing significant results for the parameters of interest in this specific scenario. These analyses are not directly comparable, but their combined information allows for a greater understanding of the benefits provided by natural resources.