Benefit analysis of wetland restoration project based on ecosystem service value:a case study of Caijia River,Beijing

As one of the most important ecosystem types on the global land surface,wetlands provide the highest ecosystem service value per unit of all terrestrial ecosystems and play an increasingly important role in supporting livable environments for humans. However,human-induced wetland degradation and disappearance are leading to a significant reduction in wetlands' ecosystem service value. The major target of wetland restoration projects is to increase their ecosystem service value,and the traditional method of ecosystem service valuation has suggested that the economic benefits of wetland restoration can reasonably outweigh its cost. In the light of investment,the future value should be transformed to the net present value( NPV) by taking the currency time value into account. Unfortunately,the traditional method was obviously a static comparison,which can hardly be accepted by financial departments because it ignores the currency time value.Therefore,in order to offset the interval between the ecosystem service value and NPV,we evaluated and compared the ecosystem value before and after a wetland restoration project around Caijia River in Beijing by considering the currency time value. The wetland restoration project,implemented in the spring of 2013,reformed topography and planted native wetland plant species. The ecosystem service value of the research area was determined following a well-accepted methodthat multiplied each land use / cover area in this region with its unit area value according to the ecosystem services unit area of Chinese terrestrial ecosystems,then calculated their sum. Accurate land use / cover of the research area was measured by aerial photographs before the project and by field measurement after the project. Then,we calculated the ecosystem service values for before and after the project. The results showed that the ecosystem service value of the research area after restoration increased from 584478 RMB to 3579713 RMB. We also compared the changes in ecosystem service value for 9specific ecosystem service functions. Among these ecosystem service functions,waste treatment,climate regulation,and water conservation had relatively large contributions to the value change,while the contribution rates of food production and raw material were negative. Then,we selected two standard indices,the inner rate of return( IRR) and payback period,to analyze the financial benefit of the wetland restoration project. Ecosystem service values in the future were first transformed to NPV by dividing by the discount factor. The results suggested that the IRRs calculated by using return periods of 3,5,10,15,20,25,and 30 years were- 26. 81%,- 4. 67%,11. 43%,15. 32%,16. 47%,16. 94%,and 17. 14%,respectively. The payback period is the time in which the initial cash outflow of an investment is expected to be recovered from the cash inflows generated by the investment. The discount factor was an exponent of the discount rate by year,and the discount rate referred to the long- term treasury bill rate of 4. 2%. In that situation,the payback period was 14. 96 years,which means the wetland restoration project could obtain a profit within 15 years. The results indicated that wetland restoration should prolong project approval time for financial reasons rather than ecologic reasons. Furthermore,the wetland restoration project is potentially profitability under the current interest rate level.