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Summary of Valuation of Environment
Environment has a vast array of functions out of which some are assumed to have a zero economic value, as these are available free to us. Some of these functions are non-tangible in nature and not marketable. However, these functions have important role in our production and consumption activities. As the value of all the functions are not taken into account in decision-making environment is always undervalued.
In recent years researchers have attempted to expand the product boundary of environment by considering the value of more and more functions of the environment. The problem however lies at two stages: identification of environmental functions, and valuation of these functions. Existing literature on environmental valuation provides a wide range of valuation tools, which we have discussed in this unit. The measurement procedures are quite different and are suitable for different functions and circumstances. While applying these techniques the appropriateness of these tools should be carefully judged.
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