ABSTRACT
The method of inclusion of environmental resources and ecosystem services in decision processes determines how far they are taken into account with results affecting the quality of our lives and those of future generations. A persistent argument has been that monetary valuation is essential if the ‘environment’ is to have any chance of being included in government and business decisions. Environmental cost-benefit analysis (CBA) was developed by environmental economists in order to achieve this monetisation of environmental entities so that the prices in market economies might be adjusted. A range of methods were developed including travel cost, hedonic pricing, production function analysis, contingent valuation and choice modelling (see Hanley and Spash 1993; Spash and Carter 2002). The overall aim has been to select project options on the basis of their welfare impacts and to support government taxes which reflect the social costs of environmental degradation. This approach has met with some success in that various national and international agencies have been interested in performing monetary valuation exercises as part of their overall assessment of projects. The idea of environmental taxation has also risen on the political agenda if remaining limited in practice.1
