Benefits Transfer and Low Flow Alleviation: What Lessons for Environmental Valuation in the UK?

Use of environmental valuation and benefits transfer in a recent legal ruling in the UK between Thames Water Utilities and the Environment Agency over water abstraction costs appeared to set an unfortunate precedent. In the first attempt to fulfil its statutory duties, the Agency was thwarted in its use and interpretation of non-market valuation techniques, in particular, the vexed issue of how to aggregate the results of valuation studies in original sites or those to where values might be transferred. The ruling has broader implications for water pricing and resource development by the industry. Far from being a blow for either cost-benefit analysis or environmental valuation, the decision highlights some of the research imperatives for the derivation of non-market values by economists and their translation for use in government decisions.     

A contingent valuation of the Mar Lodge Estate,Cairngorm Mountains,Scotland

The contingent valuation method is applied to the economic valuation of a significant environmental resource in the Scottish Highlands. Use and non‐use values are estimated. The results of such studies might be used to assist decision makers assess the case for public intervention to support the provision of environmental non‐market goods.     

Ethics and Environmental Attitudes With Implications for Economic Valuation

This paper tests the hypothesis that different ethical belief systems are unrelated to the attitude an individual takes towards the environment. More specifically, the neoclassical economic approach is seen to require a belief in utilitarianism while many individuals may operate on the basis of a deontological or rights-based approach to decision-making. The concern with this relationship arises from the use of the cost–benefit analysis approach to environmental policy and the specific application of the contingent valuation method. Evidence is found to support the view that environmentalists choose to operate on a rights-based approach which rejects the relative welfare arguments of economics and positively attributes compensation to future generations for environmental damages. This implies that the contingent valuation of environmental attributes will lead to values which are biased towards technocentric optimists and against the environmental movement. In terms of policy, environmental management on the basis of totalling economic values is liable to be undemocratic because of the systematic exclusion of a section of the general public.     

Exploring Values,Context and Perceptions in Contingent Valuation Studies: The CV Market Stall Technique and Willingness to Pay for Wildlife Conservation

Public preferences for conservation and environmental management may be identified in willingness to pay (WTP) studies. Normally part of a contingent valuation exercise, WTP studies elicit monetary estimates of non-market economic goods. This paper describes a new approach to WTP, the CV Market Stall, a technique that adds a discursive, qualitative dimension to contingent valuation. It is suggested that the CV Market Stall technique is a good method for exploring attitudes and responses to environmental project proposals. The flexible format, with an emphasis upon information provision, discussion and learning would also allow contingent valuation to be extended to much more complex and uncertain environmental issues.     

Integrating Wetland Management into Sustainable Water Resources Allocation: The Case of Akrotiri Wetland in Cyprus

This paper employs a contingent valuation (CV) study to estimate the value of the economic benefits generated by the Akrotiri wetland in Cyprus. It aims to show how CV estimation results can inform efficient, effective and sustainable wetland conservation policies, as required by the European Union's Water Framework Directive, and to suggest economic instruments that can facilitate the implementation of such policies. The results indicate that the design of these instruments require the capturing of both the use and non-use values generated by wetland services and functions.     

An Ecoregional Approach to the Economic Valuation of Land- and Water-Based Recreation in the United States

/ This paper describes a framework for estimating the economic value of outdoor recreation across different ecoregions. Ten ecoregions in the continental United States were defined based on similarly functioning ecosystem characters. The individual travel cost method was employed to estimate recreation demand functions for activities such as motor boating and waterskiing, developed and primitive camping, coldwater fishing, sightseeing and pleasure driving, and big game hunting for each ecoregion. While our ecoregional approach differs conceptually from previous work, our results appear consistent with the previous travel cost method valuation studies.KEY WORDS: Recreation; Ecoregion; Travel cost method; Truncated Poisson model     

Analysing Conflict between Cultural Heritage and Nature Conservation in the Australian Alps: A CVM Approach

The contingent valuation method (CVM) can be useful for assessing the non-market economic values associated with government land use decisions. A particular variant of CVM, which is based on dichotomous choice responses, has become widely used. Previous studies have employed a variety of techniques for analysing dichotomous choice CVM data to produce estimates of economic welfare changes. This paper summarizes these analytical options, and illustrates their application in a case study concerning cattle grazing on the Bogong High Plains in the Australian Alps. This case study is one of the few to assess the non-market economic value of cultural heritage conservation using contingent valuation, and is also unusual in that the competing values are both non-market in character. Nature conservation and heritage values were separately measured using two independent surveys. Mean willingness to pay for nature conservation and cultural heritage were estimated using a range of parametric and nonparametric methods.     

A Lifecycle Assessment and Economic Valuation of Recycling

The financial costs of recycling schemes fail to account for external costs and benefits such as environmental pollution, road congestion and accidents. This paper compares the environmental and social impacts of a kerbside collection scheme for recyclable household waste, with a bring scheme, using lifecycle assessment. Economic valuation is used to assign relative weights to these impacts. A second comparison examines the relative external costs of recycling and landfill disposal of waste. The results show that the kerbside collection scheme has a lower external cost than the bring scheme, but this is of less importance than the benefits to be gained within the manufacturing system by using secondary materials. It is concluded that the combination of lifecycle assessment and economic valuation is an effective means of evaluation to direct the sustainable development of waste management.     

Valuation of Ecological Resources and Functions

/ Ecological resources are natural resources that provide certain necessary but overlooked system maintenance functions within ecosystems. Environmental economics is in search of an appropriate analysis framework to determine economic values of such resources. This paper presents a framework that estimates and compiles the components of value for a natural ecosystem. The framework begins with the ecological processes involved, which provide functions within the ecosystem and services valued by humans. We discuss the additive or competive nature of these values, and estimate these values through conventional and unconventional techniques. We apply the framework to ecological resources in a shrub-steppe dryland habitat being displaced by development. We first determine which functions and services are mutually exclusive (e.g., farming vs soil stabilization) and which are complementary or products of joint production (e.g., soil stabilization and maintenance of species). We then apply benefit transfer principles with contingent valuation methodology (CVM), travel cost methodology (TCM), and hedonic damage pricing (HDP). Finally, we derive upper-limit values for more difficult-to-value functions through the use of human analogs, which we argue are the most appropriate method of valuation under some circumstances. The highest values of natural shrub-steppe habitat appear to be derived from soil stabilization.KEY WORDS: Natural resource economics; Ecological economics; Ecological resources; Shrub-steppe; Environmental valuation; Cost; Benefit; Value     

ECONOMIC VALUATION OF RIPARIAN BUFFER AND OPEN SPACE IN A SUBURBAN WATERSHED1

Abstract: This study evaluates the economic value of riparian buffers and open space in a suburban watershed through two nonmarket valuation methods. A contingent valuation survey was implemented in the Dardenne Creek watershed, a suburban watershed of the St. Louis metropolitan area in Missouri, to evaluate the residents' perceptions of and willingness to pay (WTP) for adopting riparian buffers and preserving farmland in a hypothetical real estate market. A hedonic pricing model based on actual sale prices of homes in the watershed was applied to estimate the market value of open space and other environmental conditions such as flood zone and stream proximity in the study area. The results showed that residents' WTP was consistent with the economic values of open space and proximity to streams embedded in existing home prices. Through a better understanding of residents' perceptions and values, riparian buffer and open space programs can be designed and promoted to achieve greater implementation success and environmental benefit.     

ASSESSING THE ECONOMIC BENEFITS OF GROUND WATER FOR ENVIRONMENTAL POLICY DECISIONS1

ABSTRACT: The full range of environmental and economic services of ground water need to be accounted for in policy decisions. Non-recognition of these services imputes a lower value for the ground water resource in establishing policies. We describe a conceptual framework for identifying and measuring the economic value of groundwater. The valuation framework links changes in physical characteristics of ground water to services provided by ground water and the economic effects of changes in ground water services. In addition to the framework, we develop a general protocol to follow for assessing the benefits of ground water policies. Application of the protocol will aid in establishing structure and consistency across policy assessments and improve the accuracy and completeness of benefit estimates, avoid double-counting problems, and eliminate duplication of ground water valuation efforts.     

Estimating the economic value of improvements in river ecology using choice experiments: an application to the water framework directive

The Water Framework Directive is a major regulatory reform of water resources management within the European Union. Integrated catchment management plans must be prepared for all river basins, in order to achieve 'good ecological status' in all EU waters. Ecological status is a broader measure of water quality than the chemical and biological measures that were previously dominant. The Directive calls for a consideration of the economic costs and benefits of improvements to ecological status. In this paper, we use the choice experiment method to estimate the value of improvements in three components of ecological status. Given the high resource cost of valuation studies, benefits transfer methods will be needed in implementing the Directive. We thus also test the ability of choice experiments for benefits transfer across two very similar rivers in the UK.     

The valuation of historical sites: a case study of Valdivia,Chile

The economic valuation of cultural heritage is an area of increasing interest and an important research topic in the emerging field of cultural economics. Many services and values associated with cultural heritage are not traded in markets, and their estimation requires methods developed for the valuation of non-market goods, such as those used in environmental economics. This paper applies the contingent valuation method with double dichotomous choice to estimate the value of historical sites in the city of Valdivia, Chile. The valuation exercise was implemented by designing a hypothetical guided walking tour to a cluster of historical sites in the city centre, and surveying tourists visiting the city during the summer of 2004. Parametric and non-parametric statistical methods were used to estimate the survival distribution and the mean and median estimates of the willingness-to-pay (WTP). The study emphasizes the importance of explicitly treating heterogeneous preferences and the sensitivity of the survival distribution to the estimation methods used.     

Considering Conservation Value in Economic Appraisals of Coastal Resources

Measuring the economic value of environmental quality is useful to evaluate policies that affect the use of natural resources. This paper presents the findings of a contingent valuation (CV) survey designed to measure non-use values for the natural coastal environment.This was attempted through evaluating public and scientific values of conservation quality. The results suggest that public perceptions of conservation quality are multidimensional,and that it may be difficult for some individuals to express their preferences for the conservation value of natural resources in monetary terms. Additionally, public and scientific judgments differ concerning some of the physical attributes imparting conservation value. These findings have important implications on efforts to consider environmental quality in land and coastal use decisions.     

A tool for building community resilience? A case study of the Lewes Pound

In the last decade, “resilience” has gained increasing recognition as a theoretical framework for understanding and managing change in complex social–ecological systems. Resilience assessments are increasingly used to inform sustainability initiatives, strategies, and policies. The Lewes Pound represents a new complementary currency model in the UK, aiming to build community resilience. However, there have been no empirical studies to date assessing the socio-economic impacts of this model. This article addresses the need to understand how such currencies function by measuring whether the Lewes Pound is capable of building resilience. This is done by developing a novel framework for estimating economic, social, and environmental outcomes, which uses a mixed-methods approach. Findings suggest that complementary currencies can enhance social-ecological resilience through awareness-raising and changes in consumption. Although economic localisation – a key indicator – is lacking, there is evidence that the Lewes Pound has developed social interactions and changed consumption patterns of its users.     

Reasonable creatures: rights and rationalities in valuing the countryside

Debate on the economic valuation of the countryside is typically polarized between absolutist critics who would deny it any valid role and equally fervid proponents who see its techniques as the only way of integrating the environment into policy making. Such debate is structured by conflicting notions of rights, responsibilities and values, rather than by consideration of the role of technique in practical policy‐making. This paper attempts to take the debate forward and begins by examining the ways in which rights, responsibilities and values have been historically created. The techniques of economic valuation rest on particular conceptions of these, making them irreducibly political, and at the same time their results are often used to justify political decisions. Yet the proper role of technique ought to be to explore options. Provided that the sort of clarification that economic valuation offers is understood, it may, along with other types of technique, be used to open up the decision making process.     

How Niagara Mohawk incorporates environmental factors into policies,plans, and procedures

Niagara Mohawk Power Corporation (NMPC), an investor-owned electric and gas utility operating in upstate New York, has incorporated environmental factors into several facets of its operations, including generation and transmission system planning and operations, system electric operations, and system gas operations. This article describes how NMPC has incorporated environmental considerations in its valuation of new and existing generation resources. What makes this effort unique is that not only are existing environmental regulatory requirements reflected in the planning process, but also prospective environmental requirements are incorporated. This article provides an overview of NMPC's generation valuation process and discusses how both existing and future environmental requirements are addressed.     

Economic Valuation of the Non-use Attributes of a Wetland: A Case-study for Lake Kerkini

Wetlands are an environmental feature which deliver a variety of market and non-market goods and services. Established environmental economic theory separates the value of these goods and services into direct-use values, indirect-use values and non-use values. Given appreciation of all three, measurements can be derived to demonstrate the amount of public money that it may be feasible to allocate to the sustainable management of wetlands. However, in many cases, non-use values are ignored and the total economic value of wetlands can be severely undervalued. As a result, inadequate resources are fed into their management and environmental degradation occurs due to inappropriate commercial exploitation of the natural resource. Lake Kerkini, in northern Greece, is one such wetland area threatened by undervaluation and overexploitation for commercial purposes, and a resource whose management would benefit from the realization of non-use values. This study therefore uses the contingent valuation method to place a value on the non-use attributes of Lake Kerkini. It also examines the relationship between the revealed non-use values and the distance people live from the lake, highlights the personal characteristics which appear important in determining total willingness to pay and breaks total non-use value down into its component parts to suggest the most important non-use elements. The paper concludes that sustainable management of the lake is justified and provides evidence that substantial public monies are potentially available to protect and enhance the environmental value of the resource.     

Estimating the value of improved wastewater treatment: The case of River Ganga,India

In this paper we employ a stated preference environmental valuation technique, namely the choice experiment method, to estimate local public’s willingness to pay (WTP) for improvements in the capacity and technology of a sewage treatment plant (STP) in Chandernagore municipality, located on the banks of the River Ganga in India. A pilot choice experiment study is administered to 150 randomly selected Chandernagore residents and the data are analysed using the conditional logit model with interactions. The results reveal that residents of this municipality are willing to pay significant amounts in terms of higher monthly municipality taxes to ensure the full capacity of the STP is used for primary treatment and the technology is upgraded to enable secondary treatment. Overall, the results reported in this paper support increased investments to improve the capacity and technology of STPs to reduce water pollution, and hence environmental and health risks that are currently threatening the sustainability of the economic, cultural and religious values this sacred river generates.     

Economic Value of Instream Flow for Non-Commercial Whitewater Boating Using Recreation Demand and Contingent Valuation Methods

Whitewater river kayaking and river rafting require adequate instream flows that are often adversely affected by upstream water diversions. However, there are very few studies in the USA of the economic value of instream flow to inform environmental managers. This study estimates the economic value of instream flow to non-commercial kayakers derived using a Travel Cost Method recreation demand model and Contingent Valuation Method (CVM), a type of Contingent Behavior Method (CBM). Data were obtained from a visitor survey administered along the Poudre River in Colorado. In the dichotomous choice CVM willingness to pay (WTP) question, visitors were asked if they would still visit the river if the cost of their trip was $Y higher, and the level of $Y was varied across the sample. The CVM yielded an estimate of WTP that was sensitive to flows ranging from $55 per person per day at 300 Cubic Feet per Second (CFS) to a maximum $97 per person per day at flows of 1900 CFS. The recreation demand model estimated a boater’s number of trips per season. We found the number of trips taken was also sensitive to flow, ranging from as little as 1.63 trips at 300 CFS to a maximum number of 14 trips over the season at 1900 CFS. Thus, there is consistency between peak benefits per trip and number of trips, respectively. With an average of about 100 non-commercial boaters per day, the maximum marginal values per acre foot averages about $220. This value exceeds irrigation water values in this area of Colorado.