Our Environment - Mining and the Environment: From Ore to Metal - page 324

an alternative approach of valuing environmental resources is to ask people how much
they would be willing to accept (WTA) to give up some environmental amenity. To value
better water quality, for instance, one could ask either how much people would be willing
to pay for a small improvement or how much they would have to receive to compensate
them for a small reduction in water quality. WTA is not constrained by one's income, as is
WTP. Environmental conservation and non-tangible environmental benefits, however, do
not stir the imagination of households in developing countries to the same extent as quality
of life, household income, and the prospects of children. It should therefore be no surprise
that willingness to accept some degree of environmental degradation is higher in develop-
ing countries than in developed countries.

Environmental conservation
and non-tangible environmental
benefi ts, however, do not stir
the imagination of households
in developing countries to the
same extent as quality of life,
household income, and the
prospects of children.

7.8 WHAT ARE NATURE'S ECONOMIC VALUES?

Economists posit that society's valuation of ecosystems is based on the benefits and services
that they provide (Pearce and Turner 1990). They differentiate various values. Total eco-
nomic value encompasses both use value and non-use value ( Figure 7.6 ).

Use and Non-use Values

Use values, not surprisingly, are those derived from the benefits people gain from using
the resource and environment. These are classified into direct and indirect use values.
Direct use values refer to ecosystem goods and services that are used directly by human
beings. They include the value of consumptive uses such as mineral exploitation, timber
harvesting, fish harvesting, or hunting of animals for consumption. Direct use values also
include the value of non-consumptive uses such as the enjoyment of recreational and cul-
tural activities that do not require harvesting of products. Direct use values are most often
enjoyed by people visiting or residing in the ecosystem itself.
Indirect use values refer to the functional or ecological service benefits generated
by the environment, benefits often felt outside the ecosystem itself. People benefit from
these but do not directly consume them. Examples include natural water filtration, which
often benefits people far downstream; the storm protection function of mangrove forests,
which benefits coastal properties and infrastructure; and carbon sequestration in forests,
which benefits the entire global community by abating climate change.

FIGURE 7.6
Categories of Ecosystem Services

Total Economic
Value (TEV)

Values represented by use value on
the left-hand side are more easily
derived and tangible. Direct use values
in particular are fairly easy to estimate.

Use Value Non-use Value

Direct Use Value
Consumptive
Non-consumptive

Option Value
Option
Bequest

Indirect Use
Value

Existence Value