Society needs to make difficult decisions regarding its use of biological resources in terms of habitat conservation, natural resources allocation, management of protected areas, etc. Environmental valuation techniques can provide useful tools to support such policies by quantifying the economic value associated with the protection of biological resources. Pearce (2001) argues that the measurement of the economic
value of biodiversity is a fundamental step in conserving this resource since ‘the pressures to reduce biodiversity are so large that the chances that we will introduce incentives [for the protection of biodiversity] without demonstrating the economic value of biodiversity are much less than if we do engage in valuation’ (in Valuing Biological Diversity: Issues and Overview". Valuation of Biodiversity Benefits: Selected Studies, OECD 2001, pp. 124).
The OECD (2001) also recognises the importance of measuring the economic value of biodiversity and identifies a wide range of uses for such values, including demonstrating the value of biodiversity, in targeting biodiversity protection within scarce budgets, and in determining damages for loss of biodiversity in liability regimes.
More generally, the role of environmental valuation methodologies in policy formulation is increasingly being recognised by policy makers. For example, the Convention of Biological Diversity’s Conference of the Parties decision IV/10 acknowledges that ‘economic valuation of biodiversity and biological resources is an important tool for well-targeted and calibrated economic incentive measures’ and encourages parties, governments and relevant organizations to ‘take into account economic, social, cultural and ethical valuation in the development of relevant incentive measures’ (Convention on Biological Diversity, 2004).
However, what concerns us here is not whether one should attempt to place economic values on changes in biodiversity, but rather in what the particular difficulties are in doing so. These include incommensurate values or lexicographic preference issues (Rekola, 2003) and the issue I focus on here people’s limited understanding of complex environmental goods (Limburg et al., 2002).
Stated preference valuation methods require survey respondents to make well-informed value judgements on the environmental good under investigation. This requires information on unfamiliar goods to be presented to respondents in a
meaningful and understandable format. Recent studies have found that members of the general public have a low awareness and poor understanding of the term biodiversity, and communicating relevant information within a stated preference study to be difficult (Spash and Hanley, 1995; Glanzig, 2002; Turpie, 2003).
Various surveys have examined the public’s understanding of the term
‘biodiversity’. A recent UK survey found that only 26% of respondents had heard of the term ‘biodiversity’ (DEFRA, 2002). Similar findings are also reported in Spash and Hanley (1995). The lack of public understanding of the term biodiversity will make the valuation exercise difficult; however, people can learn during a survey, and may have preferences for what biodiversity actually means, even if they are unaware of the term itself: the DEFRA (Department for Environment, Food and Rural Affairs) (2002) survey also found that 52% considered the protection of wildlife to be ‘very important’, even though they did not know what biodiversity itself meant.
A related complication is that biodiversity itself is not uniquely defined by conservation biologists. Scientists are in general agreement that the number of species per unit of area provides a useful starting point (Whittaker, 1977). Although such a measure appears to be relatively straightforward, issues such as what constitutes a species (Claridge and Boddy, 1994); and what size of area to count species over complicate this measure (Whittaker, 1977). Even if these questions were resolved, ecologists recognise that some species, such as keystone species, may be more important and/or make a greater contribution to biodiversity than others.
A further complicating factor relates to the extent to which the public is capable of understanding these ecological concepts. Ecologists also recognise that biodiversity may be described and measured in terms of species diversity within a community or habitat (Arts et al., 1990) and in terms of the diversity of ecological functions (Herrera et al., 1997). Finally, the public may have preferences for certain species that display charismatic features such as beauty or speed, or be locally significance, even though these features may not be considered ecologically important (May, 1995). The issues
highlighted above indicate that research that attempts to value changes in biodiversity using a direct elicitation of public preferences will be challenging, since it requires us to identify appropriate language in which complex biodiversity concepts can be meaningfully conveyed to members of the public in ways that are consistent with underlying ecological ideas on what biodiversity is (Christie et al., 2004).
Many of the goods and services provided by biodiversity and ecosystems are crucial, but not always quantifiable in monetary terms. Many of these goods and services are not traded in the market place and so do not have an obvious price or commercial value. The danger is that if these unpriced values are not included in the decision-making process, the final decision may favour outcomes which do have a commercial value. Hence decision makers may not have full awareness of the consequences for biodiversity conservation. People make a variety of claims on biodiversity and environmental resources. Deciding who should use environmental resources and how, where and when is complex. Decisions must weigh the values, variously perceived, of the range of potential uses of the resources. The environmental evaluation of these goods and services provides a useful information to assist the policy makers and to all expert who manage any types of public areas with high level of biodiversity. Valuing biodiversity using economic techniques and incorporating those values into the decision-making process can also be a powerful way to demonstrate the importance of biodiversity protection to the broader public.