I. Wetlands valued for their products

Animals — harvesting animals from wetlands has taken place for millennia for food, fur, feathers, and skin. Beaver, for example, was hunted relentlessly in colonial North America for its fur. Commercially lucrative wetland animals nowadays include mink, alligator, and others.

Waterfowl and bird-breeding grounds — wetlands provide the necessary breeding grounds for migratory and resident waterfowl and bird species. In turn, these breeding grounds and migration sites attract recreational and other affiliated industry—hunting and bird watching, and contribute to local economies.

Fish — more than 95% of fish and shellfish harvested in the United States yearly are dependent in some form or another on wetlands either for spawning, nursery, or feeding areas.

Forestry — timber harvesting from wetland regions is used as fuel wood, or fermented into methane, or sold as merchantable timber. Peat is cut for fuel, litter and soil additives, as well as many other products.

II. Wetlands valued for their ecosystem contributions

Wetlands provide innumerable services to local, regional and global ecosystems. These include, improving water quality through the removal of toxins, organic and inorganic nutrients, enhancing groundwater recharge, lowering the impact of storms (hurricanes), stabilizing river banks and reducing erosion, lessening the impact of flood events, and storing floodwaters. Furthermore, wetlands also play significant roles in global biogeochemical cycles, such as the exchange and storage of nitrogen, sulfur, methane and carbon.

III. Quantifying an economic value for wetlands

Economic mechanisms exist whereby goods and services and in turn natural resources can be utilized, exchanged, and valued within society. In most cases the monetary value set by these mechanisms, is determined by the price of the goods or services.

Valuing any resource in economic terms is a tricky process. Yet, humans have been quite successful in doing so. Consider, for instance, that humans are willing to pay for umpteen number of goods and services from basic food and water, to police and fire protection, to cell phone service. Similarly, the economic value for wetlands can be arrived at employing different mechanisms to gauge how much society is willing to pay.

Generally one would imagine this to be fairly easy to do based on supply and demand (for a market economy). However, this process is sometimes further complicated when we try to set a price for the "quality" of the environment, or the aesthetic and/or intrinsic
value of resources such as wetlands. Examples show that we have managed
to do this relatively well. Think of the Clean Air Act, which includes
stipulations as to how much we can pollute, and then it taxes those industries
that go over the limit. Think of lead-free gasoline - same thing here
- setting pollution limits. Or think of the Clean Water Act, which
indirectly protects wetland environments from pollution. So, society
has discovered mechanisms whereby we can ensure that natural resources
are safe guarded.

How to determine a natural resource’s value

How exactly do environmental economists come up with ways by which to assign a value to resources? Two commonly used ways are noted below. When reading about these methods of valuation, think about how you might apply them to determine the value/cost of delineating a wetland region for protection.

Cost effectiveness - simply sum up what it costs to produce
a resource and then compare that to what you make as returns. Under
a capitalist system, if costs are greater than your returns, it would
obviously not be cost effective to exploit that resource. One would, hence, be interested in finding out the least costly way of
exploiting a resource so as to maximize the investment.

Cost-benefit analysis - this is the favored approach. A more
holistic approach that looks at the entirety of developing a particular
resource and asks questions such as who is going to benefit, and how
is it going to negatively impact the environment?

Cost-benefit analysis is a process that we also utilize in our every
day activities – consider for instance when you shop for something – you
weigh the cost against how you benefit from it. In addition, you
also bring intangibles into the equation. For instance, the cost
of buying organic products is higher than regular products, but you might
still buy organic because you consider it to be more environmentally friendly,
helping smaller farmers, or you might be thinking in terms of the long-term health benefits from eating organically grown foods, etc.

Economists are constantly undertaking similar, yet more formal, studies.
Say for example a dam is to be constructed within a defined region.
An environmental engineer would first undertake a cost-benefit analysis
for that dam. This would involve some sort of quantification of all
aspects of the dam proposed. Tally up the costs (in terms of dam
construction, land lost to reservoir, loss to farming, cutting down trees
that might exist there, harming animal life), and benefits (quantify how
many people are going to benefit from the dam - water and electricity generation,
maybe used as a tourist spot, etc.) and then consider its economic and/or environmental viability.

At times, however, it may be more difficult assess costs or assign a
price. For instance, how does one put a price on an area contributing
as a tourist/outdoor recreation spot. One possible way maybe by calculating
the potential number of people that will be visiting and using the area.
To simplify assigning a cost to something that is difficult to quantify,
environmental economists will often assign a shadow price to these incommensurables. These are effects—can be costs or benefits—that are difficult to translate into a monetary price. For example, an environmental economist might assign a shadow price to the loss of hunting privileges from people hunting in a wetland that is being drained for a golf course. There are two common ways of fixing a shadow price.

Willingness to pay - users asked how much they are willing
to pay to have access to a particular resource. For example, the
hunters and bird watchers of a wetland would be given a survey that asked them
to put a monetary value on how much they would be willing to pay as park
entrance fees or hunting fees to preserve the wetland. Their answer,
of course, would depend on how much they enjoyed this activity, whether
they had access to other wetlands, etc. Their answers would then
be averaged to come to a price (also termed an “avoidance” price) - or here
is how much the users are willing to pay/year to save the wetland - either
because they enjoy walking there or hunting there.

Replacement cost - similar to willingness to pay. How much
is a user willing to pay to replace something that is lost? How much
would a hunter or birder be willing to pay to replace a wetland that was drained?

Now that you have some sense of how resources are valued, let us consider different wetland restoration and management practices in greater detail.

The U.S. Migratory Bird Hunting and Conservation program is among the most successful wetland conservation efforts. Sales of "duck stamps" fund maintenance and expansion of the National Wildlife Refuge System. Vintage Kansas hunting and fishing license with 1956 duck stamp affixed. For more background, go to U.S. duck stamps.

Policy is a course of action (or a framework of goals) that is arrived at by governments, or institutions, or individuals. Public policy (in a democracy) is made by officials in government representing the ideals of larger society. The policy making process is a rather lengthy one, which starts with the recognition of an issue or problem and ends with evaluation and termination of a policy once the expressed goals are reached. The process contains the following stages.

Initiation: problem recognized, issue identified (who or what is affected; what are the goals or objectives; which agencies will work on the issue, etc.)

Analysis: conducting a cost-benefit analysis for the issue at hand, such as an Environmental Impact Statement (EIS).

Selection: presenting alternatives to tackle the issue at hand and selecting a course of action.

Implementation: a selected course of action is implemented to tackle the issue. Ideas transfer into management action plans. Naturally management plans will be most successful if clearly defined.

Evaluation: constant monitoring and evaluation of a course of action is necessary to ensure that it is on track and goal oriented.

Termination: once a course of action has achieved its goals then a policy might be terminated.

As Cutter and Renwick (1999) pointed out, there are several key participants in the policy making arena. These include resource managers, social agents and special interest groups among others. Each plays an important role in the entire process and while conflicts often arise between these different players, one generally observes compromise and cooperation before policies are implemented.

Legal protection efforts

In the United States primary legal protection of wetlands is contained in Section 404 of the Clean Water Act, the Swampbuster provision in the Food Security Act, and the no net loss policy. At the international level, Ramsar Convention is the key mechanism for identification and protection of wetland habitats.