The measurement of environmental gains and losses can be made
in money terms, although it is recognised that these gains and
losses would not in reality be bought and sold on the market.
The use of money as a measure enables economists to make choices
and comparisons. Direct costs and benefits are the easiest to
estimate. These might include estimating the value of production
forgone because of environmental damage, the value of earnings
lost through health problems associated with air and water pollution,
health-care costs because of pollution, and the value of decreased
growth and lowered quality of crops because of soil degradation.
However, even these direct monetary costs tend to underestimate
the real costs and benefits provided by the environment. For example,
improved health resulting from a cleaner and safer environment
is worth more than just the medical bills saved. A clean beach
is worth more than just the value of having healthier beach-goers.
Direct costs do not measure the values that people put on the
environment. Economists differentiate between different types
of values. 'User' values cover benefits that individuals get from
the environment, including those from recreation, sport, or just
viewing pleasure. 'Option' values are potential user values&emdash;the
value to a person who might use the environment in the future.
'Existence' values, only recently recognised by economists, are
people's preferences that are outside 'use' values&emdash;such
things as 'concern for, sympathy with and respect for the rights
or welfare of non-human beings' (Pearce, Markandya & Barbie
1989, p. 61). For example, many people want to save endangered
species and wilderness areas that they themselves will never see,
nor hope to see. The economist's notion of 'existence' or 'intrinsic'
values is different from the environmentalist's idea of intrinsic
values, which are values that the environment might have quite
apart from humans and how they might benefit from it. The question
of whether birds, animals and ecosystems have any value outside
their use to humans is a philosophical question that environmentalists
and economists cannot agree on.
For most economists, the environment can be priced because option
and existence values can be translated into the preferences of
individuals for things like cleaner air and water, less noise
and protection of wildlife; and those preferences in turn can
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