Environmental Context

Valuing the Environment

The Case Against Valuation

Valuing the

Measuring Social Welfare
Case for Valuation
Pricing the Environment
Case Against Valuation
Case Study: Biodiversity
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Assumptions and Agendas
Arguments Against
Difficulties with Surveys


Many of the problems associated cost-benefit analysis and valuation of the environment are generally conceded by those who promote it. They maintain however, that despite its faults, cost-benefit analysis is a useful tool. The real dispute lies over the philosophical and ethical issues surrounding the question of whether the environment should be give a price. Oscar Wilde described a cynic as 'one who knows the price of everything and the value of nothing'. E. F. Schumacher, who wrote the well-known book Small is Beautiful, said a similar thing about cost&endash;benefit analysis:

To press non-economic values into the framework of the economic calculus, economists use the method of cost/benefit analysis. This is generally thought to be an enlightened and progressive development, as it is at least an attempt to take account of costs and benefits which might otherwise be disregarded altogether. In fact, however, it is a procedure by which the higher is reduced to the level of the lower and the priceless is given a price. It can therefore never serve to clarify the situation and lead to an enlightened decision. All it can do is lead to self-deception or the deception of others; for to undertake to measure the immeasurable is absurd and constitutes but an elaborate method of moving from preconceived notions to forgone conclusions...what is worse, and destructive of civilisation, is the pretence that everything has a price or, in other words, that money is the highest of all values. (quoted in Pearce 1983, pp. 1&endash;2)

Economists and business people argue that unless the environment is valued in monetary terms it will be undervalued&emdash;because people (voters, politicians, bureaucrats) are used to dealing with monetary values and can more easily relate to them. Because other things are valued in money terms, environmental benefits can be compared with the benefits of other ways of spending money. For example, the benefits from preserving a wetland can be compared with the benefits of filling it in and building a housing estate.

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© 2001 Sharon Beder