Limitations to Economic Environmental Valuation

* Article: The Limitations to Economic Environmental Valuation. BIOMOT Policy brief # 1, October 2013

URL = http://www.biomotivation.eu/docs/BIOMOT%20Policy%20Brief%201%20-%20official%20version.pdf

Description

"The explanation for environmental problems has long been claimed by environmental economists as lying in the fact that environmental goods are not priced in the market, and that therefore the solution to those problems is to bring environmental goods into the market. This can be done, it is argued, by either creating actual markets – such as the EU Emissions Trading System – or by using valuation methods to determine ‘shadow’ prices for environmental goods that are not included in actual markets. These prices can then be entered into cost benefit analyses. It is these latter economic environmental valuation (EEV) methods that are the subject of this policy brief."

Summary of the Key Arguments

1. EEV methods fail to secure ecosystem sustainability.

2. EEV methods mistakenly assume that money can be used as a neutral measuring rod of people’s preferences,

3. EEV methods are grounded in a misguided approach to decision making.

4. EEV methods misunderstand, and motivate policies which fail to respect, the way in which people value nature.

5. EEV methods may compromise intrinsic motivation for environmental protection.

6. EEV methods facilitate the troubling expansion of market norms into environmental valuation and decision making