Valuation Of Ecosystem Services [VES] (10) Flashcards
Why is monetary valuation important?(3)
- Planning process is influenced by economic analysis.
- Goods & services with quantities & prices can be considered in the decision-making process.
- Economic valuation helps to being environment into the decision-making process.
What are the categories of service values? Lay them out. (7)
Total Economic Value | Use value & Non-use value | (Use value)= Direct use value + Indirect use value. & (Non-use value) = Existence value.
- Total economic value+Use value+Non-use value = Option value.
Eg of Direct use value; Indirect use value; Option value; Existence value?
● Direct use value
- Timber.
- Recreation.
● Indirect use value
- Water purification.
- Carbon sequestration.
● Option value
- Soil fertility.
- Biodiversity.
● Existence value
- Rare species.
How would you assess the value of an ecosystem service? (6)
- Healthy soils.
- Clean water.
- Fresh air.
- Reduced CO2.
- Beautiful scenery.
- Effective nutrient cycles.
What are the 3 components/criteria to ES Assessment Tool? Criteria to estimating value of ES? Explain.
● Human element.
= benefits to humans from given ecosystem structure & level of function/provision of intermediate services.
● Ecological element.
= structure & function of ecosystem.
● Ability to evaluate trade-offs within & across categories.
What are the 3 common methods of the FESP?
- Revealed preference methods.
- Cost-based methods.
- Stated preference methods.
What are the 3 less common methods?
- Hedonic pricing.
- Conjoint analysis.
- Choice experiments.
Explain each of the 3 common methods.
● Revealed preference methods
= based on market prices, productivity and surrogate approaches.
● Cost-based methods
= based on replacement costs, costs of providing substitute services & damage cost avoided.
● Stated preference methods
= based on contingent valuation, choice experiments & conjoint analysis.
What are the 3 kinds of Revealed preference methods?
- Market price approach.
- Productivity approach.
- Surrogate market approach.
Explain the 3 kinds of revealed preference methods?
● Market price approach
= approach is based on market prices & people’s willingness to pay.
● Productivity approach
= based on the economic contribution of ecosystems to other production & consumption activities & market value as an input.
● Surrogate market approach
= based on travel costs & people’s implied willingness to pay.
Name the type of market price approach?
Market prices.
Type of Productivity approach?
Effect on production.
Types of Surrogate market approach? (2)
- Travel costs.
* Hedonic pricing.
Kinds of Cost-based methods? (3)
- Replacement costs.
- Cost of providing substitute services.
- Damage cost avoided.
Kinds of Stated preference methods? (3)
- Contingent valuation.
- Conjoint analysis.
- Choice experiments.
Explain the 3 less common methods in the FESP?
● Hedonic pricing
= difference in property/wage prices that can be ascribed to/blamed on the existence of nearby environmental goods & services.
● Conjoint analysis/Conjoint evaluation
= where the public is asked to make choices between alternative scenarios with different attributes & prices, in order to derive/get the marginal (minor) value of a service instead of the total value.
● Choice experiments/Choice modeling
= a survey approach where respondents are asked to choose their preferred option for a set of alternative scenarios.
