The methodologies of
economic evaluation
“Put figures on the environment ...”
1. CRITICISM TO THE ECONOMIC
APPROACHES TO THE EVALUATION
1.1 Primary and secondary values
1.2 Values of indirect use
1.3 Values of general use
2. OPERATING APPROACHES TO
THE EVALUATION
3. METHODS NOT BASED ON THE
CURVE OF QUESTION
3.1 Answers to the dose
3.2 Cost of substitution
3.3 Reduction Behavior
3.4 Opportunity cost
CRITICISM TO THE ECONOMIC
APPROACHES TO THE EVALUATION
The ecosystem, away of the economic value of
use or non use of some single kind, it
possesses primary value
of production and supportive to life that is not
captured by the economic evaluation
The possibility of attribution of use or non
use values in the natural resources and that
subordinates the existence of the ecosystem
put aside from every human evaluation,
which is able to capture the so-called
secondary values of the natural
resources
The total economic value doesn't
include therefore the primary value of
the natural resources and it does not
even quantify adequately
the secondary value !
The ability of the economic evaluation of the
natural resources requires in fact a logical
control of their actual and potential uses,
inclusive those indirect.
But the evaluations of indirect use are
very difficult to analyze and to distinguish
from those of non use!
POSSIBLE SOLUTION
to bring back any economic
evaluation to a value of wide use,
transforming the value of
existence in value of passive use.
Difference between indirect use and non use
would be reduced in the new conceptual
system to an evaluation of the
“degree of interaction” between The
economic subjects and the environmental
resource
OPERATIONAL APPROACHES TO THE
ECONOMIC EVALUATION
- Methods based on the curve of
question
- Methods not based on the curve of
question
The construction of a curve of question as
a base of evaluation, permit a larger
severe conceptual and a more white
interpretation behavioural by choice.
Yet , the reasons for
practical feasibility can suggest the
recourse with more simple and
direct evaluation methods.
METHODS NOT BASED ON THE
CURVE OF QUESTION
Answer to the dose:
How can the human subjects and the
ecosystem respond to the more elevated
levels of pollution?
Particularly, how does the productivity of
the productive factors vary
(work, capital, earth)?
Appraising the variations of
productivity to the prices of
market will esteem some
economic cost of the pollution
Problems
The evaluation is so reduced :
they measured only the effects of the
pollution that influence the productivity in
recognizable way
... One of the principal effects of the
pollution on the human and the increase
of the risk of sickness and death:
but how to appraise
economically these areas?
COST OF SUBSTITUTION:
If a property is damaged by polluting
emission, it is possible to quantify the
damage in terms of cost that must be
supported for bringing the property to
its original conditions
PROBLEMS
What does it mean
“to bring the property to its
original conditions”
?
This has sense only in presence of a
binding standard
(for instance, an admissible level of
concentration of a polluting substance in
the considered environment)
of which can the respect be restored
But if the damage consists in the
irreversible destruction of a non
reproducible property, the method of
the substitution cost is clearly
deprived of sense!
REDUCTION BEHAVIOR
This method, that differs from the method of
the substitution cost, considers the sustained
expenses for preventing environmental
danger (rather than to neutralize the
consequences).
… The advantages and
disadvantages are therefore
similar to those of the previous
method .
OPPORTUNITY COST
This method concentrates on the
respect of the benefit of activity that
provokes the polluting emission.
Such value esteeming is also a
measure of the entity of the
environmental benefit that would be
in demand not to make convenient
polluting activity.
The method of the opportunity cost do not
furnish an evaluation of the damage, on the
contrary it is an easy applicable criterion for the
decision:
If the polluting activity brings a benefit
x, the value that i (the decision maker)
check to the environmental resource in
danger is superior to x or not?
If
Yes
The resource will be safeguarded
and the activity won't be
undertaken
It is known, in base of this approach,
that it is not important to know the
exact economic value of the
environmental resources