Cost-based methods - Preventive Expenditure

In this method the value of environmental benefit is taken to be the cost of mitigating the adverse impact of environmental degradation. We can cite several examples to explain the method: Farmers often increase the use of inputs (fertilizer, pesticides, seed, etc.) to neutralize the effect of falling land productivity. In order to avoid cough, breathlessness or irritation in the eye residents in an industrial area may take regular medicines. The expenditure on such counts can be added to obtain the total preventive cost, which will provide an estimate of the value of environment.

Given the nature of problems encountered and the enormous task involved few researchers have attempted to consider a comprehensive study on environmental functions. Usually studies have considered a particular environmental function (or a few of these functions) or a particular geographical area. Moreover, for valuation of a particular function there could be more than one valuation tools. The use of a technique (or a combination of these techniques) depends upon the nature of the problem apart from its objectives and the convenience of, the researcher.