The absence of an economic value for biodiversity has meant that many biological resources have failed to compete with the forces that are damaging them. This OECD handbook is concerned with the ways in which value an be attached to biodiversity and, in particular, with the procedures and results of applying economic values.
Economic valuation has a sound theoretical foundation that can help clarify the trade-offs implicit in public policy, and can assess the biodiversity impacts of, say, investments in road building or a new factory or housing development. It can help determine legal damages, set charges, taxes and fines, help limit or ban trade in endangered species, and so on.
Valuation is not an easy task. Studies take time and cost money, and the number of possible values necessary for a complete understanding of the total economic valuation of biodiversity makes the work rather complex. A controversial but important response to this problem is examined in the handbook. By a practice known as benefits transfer, results are “borrowed” from existing studies and used in new studies to estimate the economic value of a similar environmental change. For example, the known benefits of a forest in Indonesia might be used to estimate the unknown benefits of a forest in Malaysia. This facilitates “rapid appraisals” of biodiversity worth, but introduces a range of methodological challenges.
Economic approaches do not answer all the questions. Some people want priorities for conservation sorted out by a legislature and a political process, based on what is morally justified. But economic approaches should play a prominent role in any policy mix. After all, economic forces are often the reason why biodiversity is severely threatened in the first place.
©OECD Observer No 234, October 2002