Valuing the Environment Information 2022
Added on 2022-09-06
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Valuing the Environment
Why Value the Environment
• Valuation can simply be defined “as an attempt to put monetary values or to
environmental goods and services or natural resources”.
• It is a key exercise in economic analysis and its results provide important
information about values of environmental goods and services.
• This information can be used to influence decisions about wise use and
conservation of forests and other ecosystems.
• The basic aim of valuation is to determine people’s preferences by gauging how
much they are willing to pay (WTP) for given benefits or certain environmental
attributes e.g. keep a forest ecosystem intact.
• In other words, valuation also tries to gauge how much worse off they would
consider themselves to be as a result of changes in the state of the environment
such as degradation of a forest.
• Valuation can simply be defined “as an attempt to put monetary values or to
environmental goods and services or natural resources”.
• It is a key exercise in economic analysis and its results provide important
information about values of environmental goods and services.
• This information can be used to influence decisions about wise use and
conservation of forests and other ecosystems.
• The basic aim of valuation is to determine people’s preferences by gauging how
much they are willing to pay (WTP) for given benefits or certain environmental
attributes e.g. keep a forest ecosystem intact.
• In other words, valuation also tries to gauge how much worse off they would
consider themselves to be as a result of changes in the state of the environment
such as degradation of a forest.
Abdur Rahim
7/7/2021, 6:20:55 amAbdur Rahim
7/7/2021, 6:19:43 amAbdur Rahim
6/7/2021, 5:45:12 pm
Why Value the Environment (Cont......)
• The policy relevance of valuation information is extensive, but might include:
– • demonstrating the value of biodiversity: awareness raising;
– • land use decisions: for conservation or other uses;
– • setting priorities for biodiversity conservation (within a limited budget);
– • limiting biodiversity attacks;
– • assessing biodiversity impacts of non-biodiversity investments;
– • determining damages for loss of biodiversity: liability regimes;
– • limiting or banning trade in endangered species;
– • choosing economic instruments for saving biodiversity (e.g. taxes, subsidies).
• The policy relevance of valuation information is extensive, but might include:
– • demonstrating the value of biodiversity: awareness raising;
– • land use decisions: for conservation or other uses;
– • setting priorities for biodiversity conservation (within a limited budget);
– • limiting biodiversity attacks;
– • assessing biodiversity impacts of non-biodiversity investments;
– • determining damages for loss of biodiversity: liability regimes;
– • limiting or banning trade in endangered species;
– • choosing economic instruments for saving biodiversity (e.g. taxes, subsidies).
Abdur Rahim
7/7/2021, 6:24:42 amAbdur Rahim
7/7/2021, 6:24:36 amAbdur Rahim
7/7/2021, 6:24:22 amAbdur Rahim
7/7/2021, 6:23:30 amAbdur Rahim
7/7/2021, 6:23:23 amAbdur Rahim
7/7/2021, 6:23:04 amAbdur Rahim
7/7/2021, 6:22:49 amAbdur Rahim
7/7/2021, 6:22:41 am
Why Value the Environment (Cont......)
• Why Cost-Benefit Analysis?
In some cases, however, governments must make specific decisions that have both
economic and environmental implications.
In such cases, decision makers use Cost-Benefit Analysis (CBA) to balance the
positive and the negative consequences of a proposed action
(Ex. construction of large Dam).
• Why Cost-Benefit Analysis?
In some cases, however, governments must make specific decisions that have both
economic and environmental implications.
In such cases, decision makers use Cost-Benefit Analysis (CBA) to balance the
positive and the negative consequences of a proposed action
(Ex. construction of large Dam).
Abdur Rahim
7/7/2021, 6:25:28 am
Why Value the Environment (Cont......)
CostBenefit
Farmland and wildlife habitat will be
flooded
Hydro.electric Power
Communities will have to relocateA Stable water supply for irrigation
Certain fish species may become
extinct
Flood control
Reduce scenic whitewater rafting and
hiking
Create new recreational opportunities
for lake boating and fishing
Othersothers
CBA for An Dam Construction
CostBenefit
Farmland and wildlife habitat will be
flooded
Hydro.electric Power
Communities will have to relocateA Stable water supply for irrigation
Certain fish species may become
extinct
Flood control
Reduce scenic whitewater rafting and
hiking
Create new recreational opportunities
for lake boating and fishing
Othersothers
CBA for An Dam Construction
Why Value the Environment (Cont......)
How can we evaluate whether or not to
build the dam?
How can we put a dollar value on the
social and ecological losses that will
result?
How can we evaluate whether or not to
build the dam?
How can we put a dollar value on the
social and ecological losses that will
result?
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