Economic Principles and Overview of Valuation Methods for Environmental Impacts1

Valuing the services derived from the environment is important because it ‘works’ – i.e. it helps make the case for protecting the environment in an effective way. Indeed it can be, in many cases, a more effective instrument than other methods of protecting the environment – such as lobbying, undertaking direct action and so on. But to be successful it has to be carried out in a credible and professional manner. This chapter provides an overview of the different methods of valuing environmental impacts. Before it can do that, however, it has to provide the conceptual basis for such valuations.