According to the definition given by the Ramsar Convention Manual (2013) “wetlands are areas where water is the primary factor controlling the environment and the associated plant and animal life” and it recognizes the existences of five major types of wetlands (Ramsar, 2013):
1) marine(coastal wetlands including coastal lagoons, rocky shores, and coral reefs)
2) estuarine(including deltas, tidal marshes, and mangrove swamps)
3) lacustrine (wetlands associated with lakes)
4) riverine(wetlands along rivers and streams)
5) palustrine (meaning “marshy” – marshes, swamps and bogs)
Also, according to Ramsar (2013), wetlands are among the world’s most productive environments and its importance has being documented greatly in recent years. Since they are a fundamental piece for the development of the areas around them, it’s become important to properly value its environmental functions and services, and to acknowledge the benefits associated with their restoration and conservation.
Economic valuation gives us a basic tool for making decisions on environmental resources. The decision to protect and/or maintain these environments should be compared with the monetary results of alternative development to those spaces. The monetary valuation process is known as the attempt to assign a monetary value to goods and services provided by environmental resources (Barbier, 1997).
Since the goods and services provided by wetlands are not traded in markets, it is necessary to conduct a joint assessment by the following three methods proposed by the Ramsar Convention (Barbier, 1997):
1) Impact Analysis: measures the impact of damage to the wetland by specific external source.
2) Partial evaluation: evaluation of two more options for using wetlands
3) Overall evaluation: evaluation of the total economic contribution or net benefits to society of wetlands.
Some ecosystem services, biological resources and recreational values provided by wetlands possess the qualities of a public good, for which the assessment is hampered by being unable to market the service they provide.
The errors in the assessments are those that lead to the misallocation of environmental resources, since in many cases the assessments are related to potential outcomes (health effects, improving the environment ...) while private initiative shows immediate business results. The key concept in the valuation of wetlands is that these are of great value, according to the Ramsar Convention, the preservation of these will only be achieved if the test value is greater than those alternative uses proposed for the wetland (Barbier, 1997).
We can list these environmental functions and translate them into economic values, according to Schuyt, K., & Brander, L. (2004) these functions are:
Table X: Environmental Functions
Storage and recycling of nutrients
Storage and recycling of human waste
Storage and recycling of organic waste