Geoscience Reference
In-Depth Information
decision makers data on regional and national performance of resources and
assets.
Traditionally, the cost-benefit analysis (CBA) framework has been used exten-
sively in program evaluation ( Figure 8.4) . CBA is an important informational tool
available to policy and decision makers when evaluating a project. The goal of an
economic CBA is to categorize and value all existing and future costs and benefits
to society. These monetary values of cost and benefit flows over time are then
discounted and compared, and a more informed decision can be made. An example
of an environmental CBA performed on Albuquerque's engineered wetlands can be
found in Holmes. 49
CBA has been criticized because of its emphasis on short-term economic effi-
ciency rather than considering the distribution of the welfare on present and future
generations. Another approach to evaluation, adopted by the U.S. Water Resources
Council and others, is the multiple accounts approach (MAF). The MAF recognizes
the existence of several criteria or indicators that should be considered in evaluating
a project, including monetary, social, and environmental data within the same frame-
work. This provides the decision maker the flexibility to weigh the various indicators,
but it also requires subjective judgments on the part of the decision maker. The MAF
has been used to allocate forestland in British Columbia and for old growth timber
conservation strategy evaluation. 30
A list of variables considered in that study were the net value of commercial
and noncommercial output and activities supported by the options, the environmental
attributes affected by the options not amenable to quantification in the net benefit
account, the direct employment generated by the options, and the government-related
taxes and other revenues less the expenditures associated with the options on both
local and regional levels.
In general, it has been easier to assign market values to NC stocks that are
being used. These are referred to as use values for which a corresponding market
value can be extrapolated. On the other hand, it has been more difficult to assign
nonuse values to the wide array of environmental assets for which no market values
can be extrapolated. It is critical to assess the value of all these assets in order to
approximate the value of the system as a whole.
There are two main approaches, both direct and indirect, to reveal individual
preferences for environmental assets, i.e., to estimate individuals' willingness to pay
or willingness to accept. Indirect approaches seek to assign a value to environmental
assets by observing people's behavior in related markets and by using date from these
markets. The main methods in indirect valuation are the hedonic pricing (HP) and
travel cost methods. The direct approach asks individuals directly about their willing-
ness to pay (WTP) or willingness to accept (WTA). These approaches are commonly
referred to as the contingent valuation method (CTV). 19,50 The many valuation methods
available to price natural and environmental goods by means of individual preferences
are summarized in Pearce and Turner. 50 One method estimates the costs necessary to
keep the NC intact. 51,52 Turner identified wetland ecosystem services to include flood
storage and protection, wildlife habitat, nutrient cycling and storage pollution control,
landscape value, shoreline protection from storm damage, recreation, extended food
web control, salinity balance mechanism, and commercial goods output. 53
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