Environmental Engineering Reference
In-Depth Information
This may be understood by noting that prices do then not signal the true scarcity of
the asset (Hanley et al.
1997)
.
So, in summary, conventional markets do not work very well for biological
assets. The market provides inadequate incentives for their provision because, due
to their non-excludability, individuals can benefit from these assets without paying
for them - the free-rider problem. However, the fact that a biological asset is not
fully captured in a market, and hence has no price does not mean that it is of no
value. Economic analysis can shed light on the value of biodiversity. To put it even
stronger, it is our view that economists can provide insights into the potentially high
benefits of biodiversity, and can reveal the economic and social pressures that
threaten it. Restated in terms of SEAMLESS: through monetary valuation and a
proper application of economic principles, economists can support debates on how
to integrate biodiversity conservation into agricultural activities. Moreover, and
perhaps more important, they can enhance knowledge of the value of biodiversity
within agricultural systems. Needless to say that policy makers in general and
SEAMLESS end-users in particular can make better choices if the valuation issue
is made as explicit as possible. So, the rationale of this chapter is to explore ways
to employ valuation methods to assess the economic impacts of agricultural and
environmental policies on biodiversity.
Based on this rationale, this chapter aims to bring an economics perspective
on the benefits of biodiversity in agriculture. It highlights key issues involved
in the notion and application of monetary valuation methods for the assessment
of biodiversity values in the agricultural landscape. This agricultural biodiversity,
or agro-biodiversity, is the variation in all living organisms that are related
(and important) to agriculture. It includes not only crop varieties and live-
stock breeds, but also non-domesticated resources within production systems,
such as fields and forests. Our treatment is guided by the following research
questions:
-
Which approaches and methods of monetary valuation are distinguished?
-
What insight do existing valuation studies provide toward monetary values of
changes in agro-biodiversity?
What role can monetary valuation play in agricultural policy impact assessment?
-
-
What is the potential use of monetary valuation methods in SEAMLESS?
These four questions are addressed individually in the succeeding four sections of
the chapter. A final section presents
Conclusions
.
One last comment before ending this section: there is a huge amount we can say
on each of the four research questions. The issue of valuation is well founded in the
current (very extensive) literature, and consequently we can dwell considerably
longer on this issue than space permits. However, the disadvantage of having lack
of space is outweighed by the advantage that the above raised questions are more
deserving of work, and probably this work would be challenging. To quote Piet
Hein, a Danish mathematician and poet: 'Problems worthy of attack prove their
worth by hitting back'.
