TEEB Training Session 4: Criticisms of valuation.
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Transcript of TEEB Training Session 4: Criticisms of valuation.
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Session 4:Criticisms of valuation
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Outline
The Process of Valuation– Assumptions– Does the process of eliciting values change our
perceptions? – How the process affects outcomes– What negative changes might the process of valuation
provoke?Valuation and time lagsDrawing the boundary on what we can/should valueHow to choose how to value
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Assumptions: the process of valuation
When asking Willingness To Pay we assume that people:– Hold values in advance or can easily generate them
– Have sufficient information and understanding of what they are valuing
– Can decide (alone) on the values they attribute to ecosystems
– Value consistently
– Value according to individual rationality
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Does the process of eliciting values change our perceptions?
Valuation promotes a universal notion of the environmentBy placing values on nature we change existing concepts
of ownership and propertyAs values have not been previously defined the process of
valuation changes how we appreciate nature– Individual preferences outweigh consensus building and
collective decision making
– Are we constructing markets that are set up to fail?
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Does the process of eliciting values change our perceptions? cont…
The psychological viewpoint considers that valuation assumes (and champions) rational choice over intuition: – Economics focuses on the outcome of decisions not the
process
– Empirical studies of behaviour do not back up economic theories of preference
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
What negative changes might the process of valuation provoke?
On-going debate about attaching new forms of property rights to nature and culture– Linked to the granting of resource rights to ‘traditional’
indigenous groups and rural populations
– Often assumed that such groups have inherent knowledge that allows them to act as ‘stewards of nature’
Such policies significantly change the relationships within and between groups over the rights to control, exclude and exploit resources
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Valuation and time lags
Potentially critical time-lag in the valuation feedback mechanism– As values are an outcome of existing, current institutional,
cultural and social constructs then adaptation to environmental change is required (when the change occurs)
– As ecosystems are degraded and biodiversity lost, attitudes and values towards nature will change, but the time-lag may be long
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Drawing the boundary on what we can/should value
O’Connor and Frame (2008) propose two thresholds beyond which assessing trade-offs or monetary choice is inappropriate
- Either estimation is scientifically difficult; or
- The implied trade-off is deemed morally inappropriate
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
How to choose how to value
The choice of valuation method will define the outcome of the valuation process (Vatn, 2005)
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Module 4 SummaryThe TEEB tiered approach
• RECOGNISING VALUE Sometimes sufficient Often the case where cultural and spiritual values are strong
• DEMONSTRATING VALUE In economic terms, costs and benefits Useful to policy-makers and businesses Economic valuation exercises
• CAPTURING VALUE Putting ecosystem values into decision-making Through incentives and price signals Market-based solutions not necessarily best
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
Applying the tiered approach
Step 1: Identify and assess the full range of ecosystem services affected and the implications for different groups in society
Step 2: Estimate and demonstrate the value of ecosystem services using appropriate methods, including linkages over time and scale, local v global, current use v future use
Step 3: Capture the value of ecosystem services and seek solutions to overcome their under-valuation through economic policy instruments (subsidies, fiscal incentives, charges for access and use, payments for ecosystem services, property rights, eco-labelling and certification etc.)
The Economics of Ecosystems & BiodiversityThe Economics of Ecosystems & Biodiversity
TEEB Training
THANK YOU!