IUCN / SSC Cat Specialist Group - Digital Cat Library |
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| Farrow, R.S.; Goldburg, C.B.; Small, M.J. | |
| Economic Valuation of the Environment: A Species Issue | |
| 2000 Environmental Science (34): 1381-1383 | |
How much would you pay to view the Grand Canyon with less smog? To prevent illness and death from fine particles? To protect outer space from becoming a garbage dump for old, inactive satellites? Such information is useful if your resources are limited and you are trying to put them to best use. It is also useful if you are trying to determine a surcharge for the activities that generate pollution, set the quantity and initial allocation of tradable emission permits, measure economic activity in terms that better reflect quality of life, or win damages in a court case involving natural resources. It is not so useful if you are trying to win friends. Indeed, you may be the target of criticism that economists often hear; that in seeking to determine a price for everything, you learn the value of nothing. Valuation and its application in cost-benefit-based management have a long history. Benjamin Franklin advocated a "moral or prudential algebra", while Abraham Lincoln supported the collection of statistics on "hindrances, delays, and losses of life and property during transportation" as part of transportation planning (1). To properly appreciate the complexities of valuing environmental services and goods, one must first understand the framework in which economists value standard goods and services. The standard economic framework is grounded in human self-interest and rational choice. Self-interest, defined in its broadest sense to include the full range of human motivations, mandates that actions be based on how much pleasure or pain their consequences bring an individual vis a` vis an alternative action. A few assumptions, a little calculus and algebra, and the desirability of competitive markets follows. What also follows is that competitive market prices represent both the additional cost to society and the subjective incremental value of goods to each individual, so that prices and values are equal at the margin. |
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