Ecological–Economic Analysis and Valuation of Biodiversity

1. Introduction: context and scope of the study In the spirit of the growing environmental awareness in the past decades, we witness nowadays an increasing interest in biodiversity, both locally and worldwide. Biodiversity requires our attention for two reasons. First, it provides a wide range of benefits to mankind and human activities. Second, many human activities have contributed to unprecedented rates of biodiversity loss, which threaten the stability and continuity of ecosystems as well as their provision of goods and services to mankind. Consequently, in recent years much attention has been directed towards the analysis and valuation of the (loss of) biodiversity. The valuation of biodiversity can be approached from an ecological, economic, or combined perspective. This contribution presents an overview of economic and ecological indicators of biodiversity, identifies the underlying valuation approaches, discusses basic concepts and theories, and reviews the respective applications. The organisation of this study is as follows. Section 2 starts with a concise review of the most important frameworks that focus on the conceptualisation of biodiversity and its role in ecological processes. It continues then with the identification and discussion of alternative ecological valuation approaches of biodiversity, including biotic-richness and ecosystem health approaches. Section 3 addresses the economic concepts and methods relevant to the valuation of biodiversity. It starts with a discussion of the reasons why economists are interested in pursuing monetary value assessment of biodiversity and why some scientists disagree with that. A survey of empirical valuation studies is presented. The distinction between 'resource valuation' and 'biodiversity valuation' is discussed. Finally, respective valuation results and measurement methods are discussed. Section 4 identifies a combined economic-ecological valuation perspective. According to this perspective, biodiversity is analysed, modelled and valued from an integrated point of view, combining natural and social-economic aspects, and thus can enable the construction of mutually consistent indicators of biodiversity. Finally, Section 5 presents conclusions and outlines some recommendations for use of valuation methods and findings in environmental policy.