Environmental Engineering Reference
In-Depth Information
vulnerability with respect to different types of project activities or human influence. The
vulnerability may also change over time.
Considering Economic Values
From scenic beauty and recreational opportunities to direct use, environmental resources
provide a complex set of values and benefits to society. Coastal areas, for example, offer
scenic panoramas and radiant sunsets, and, as the ever-increasing number of sun-search-
ing tourists demonstrates, provide excellent recreational areas. Fish and other edible sea
life provide a rich and nutritious source of food. Other coastal values not directly tied to
use, include climate modulation. Both use and non-use benefits are relevant to economic
valuation of environmental resources.
Many people argue that environmental resources are priceless. Thus, they say, it is not
appropriate to consider them within the context of economic valuation. In a sense of abso-
lute purism, this stance equates to environmental conservation at any cost. Human history,
however, proves that we are unwilling to forgo all future economic activity to eliminate
all factors that cause environmental damage. We commonly sacrifice environmental assets
to generate economic gains. The value placed on environmental assets is illustrated in our
choices made for other competing economic needs.
We commonly sacrifi ce
environmental assets to generate
economic gains.
Willingness to Pay
Value in economics means exchange value. Since money is the medium of exchange, the
value of a benefit is determined by its price - that is, the quantity of money for which it
will be exchanged. However, the value of a benefit is not simply the price of that product
on the open market. It is, rather, the worth of that benefit to a potential buyer. The worth
can be quantified in terms of willingness to pay (WTP) for goods and services, including
environmental resources. True, in many cases we do not pay for the environmental ben-
efits we receive. However, our willingness to pay for these benefits can be derived from
surveys, observed behaviour, or through other methods. The WTP concept is central to
environmental valuation, providing a framework on which to examine and measure indi-
vidual preferences. Positive preferences for environmental resources translate into an
expressed or observed willingness to pay for them. Conversely, individuals are not willing
to pay for environmental resources that they do not value.
Fortunately for future generations, there is growing evidence of consumers' willing-
ness to pay for ecological benefits. Trends such as the growing demand for ecologically
renewable energy, certified wood products, organic foods, shade-grown coffee, non-toxic
cleaners, and other goods and services with a real or perceived environmental advantage,
as well as the increasing concern about global warming and society's willingness to pay for
carbon offsets, suggest that there is increasing market recognition of the economic value of
preserving natural areas and processes.
The increasing concern about
global warming and society's
willingness to pay for carbon
offsets, suggest that there is
increasing market recognition of
the economic value of preserving
natural areas and processes.
Willingness to Accept
In any real-world world situation, willingness to pay implies ability to pay. Especially in
developing countries, it is necessary to be sensitive to differences in income levels. Thus,
 
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