Economics is interested in how people use their limited resources to meet their needs and wants. In this way, it is also relevant to other disciplines also interested in how choices are made, and to support decision-making.
So economists have developed some methods to account for the non-market goods and services we all enjoy. These methods are sometimes misinterpreted as putting a price on the environment, selling it off, commodifying it, etc., when really the main aim is to understand some of the reasons why and how the environment is valuable to people. A better understanding of this can help people make decisions that place more of the due emphasis on the environment, facilitating policies and actions based on a more accurate indication of its value. Otherwise, there are many examples where the value of the environment is only realised when it’s gone – and then it’s too late.
To address these issues and to improve understanding of economic valuation, the Valuing Nature Network brought together over 100 volunteers from those who collate and analyse economic value evidence, those who use it and those who work in other disciplines who provide direct input economic valuation or use the results.
The resulting 12-page paper, Demystifying Economic Valuation, covers the main issues, questions, and principles surrounding economic valuation and is designed as an overview for those new to economic valuation.
The paper is the first of the Valuing Nature “Demystifying….” Series, and was funded as part of the Valuing Nature Programme, which aims to improve understanding of the value of nature both in economic and non-economic terms, and improve the use of these valuations in decision making.
If you are not a member of the Valuing Nature Network, you can sign up here: http://valuing-nature.net/network