Agriculture Reference
In-Depth Information
Values (economic):
Direct current use
External, borne by others now and
in the future
Option and bequest values
Foregone benefits to future users
Existence values
Measures or standards:
Existing prices' inputs/outputs, proxy
demands (travel cost)
Cleanup costs, property value impacts
(hedonic prices), SMS
Private time preference for future
Social time preference/discount rate, MSY
Donations to preservation, surveys on
contingent values
Options:
Reduce throughput materials, energy
Recycle residuals
Treat residuals
Choose time and place of discharge
Augment assimilative capacity
Rotations
Reduces tillage
Biological control
Other
Instruments:
Voluntary action (self-interest)
Ta xes
Subsidies
Auction assim. capacity
Regulation
Directive
Private/public ownership
Other
Changes in
property
rights inc.
transaction
costs
MSY = Maximum sustainable yield
FIGURE 10.2
Monetizing environmental service flows and implementing change/reform.
agricultural pollution (externality) of a reservoir can be measured in lost fishing
revenues. However, any reduction in sport fishing in the same lake would require
assessment of any decrease in expenditures on goods and services related to boating
and sport fishing activity, that is, the development of a travel cost or proxy demand
function method (see Macgregor et al. 1991).
The value of an externality can also be conservatively estimated in some cases by
replacement, cleanup, or avoidance costs such as reservoir dredging and water treat-
ment related to soil sediments and agricultural chemicals. In addition, the impact
of an externality on private property values can frequently be estimated by hedonic
pricing, which is a method for statistically decomposing the sources of value or
demand in a property market to allow independent estimation of an environmental
amenity or disamenity (see Hitzhusen et al. 1997). Contingent valuation refers to a
survey method that estimates willingness to pay values directly from respondents
for some change in an environmental service flow (see Randall et al. 1996). This
method is the most comprehensive for simultaneously estimating all of the types of
economic value outlined in Figure 10.2, but it requires careful development to avoid
strategic behavior of respondents.
In cases of environmental service flows with a critical zone or threshold, it may
be necessary to establish a safe minimum standard (SMS) or maximum sustainable
yield (MSY) (Barbier et al. 1990). The objective is to avoid irreversible effects to
human health or ecosystems such as in the case of nitrate-nitrogen contamination
Search WWH ::




Custom Search