ABSTRACT
The methodology developed for environmental economics and natural resources management is being transposed with all of its strengths and weaknesses, i.e. strong internal coherence and often fragile analytical assumptions. The two central issues of environmental economics – the determination of total economic value (TEV) and the development of economic management tools – are equally central to biodiversity management. Through redefining the concept of value and developing new monetary valuation techniques, economic theorists have attempted to propound a cohesive methodology for the determination of biodiversity's economic value. Given the uncertainty about substitutability and the relationship between biodiversity, resiliency, and ecosystem maintenance, the precautionary principle demands that any decrease in biodiversity should be contemplated with the utmost circumspection. Regarding economic incentive measures, economic theory teaches that if a flaw in the market prevents it from playing the role of optimal resource allocator, then the flaw must be corrected.
