Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Program (TÖB)
Eschborn, 1999
TÖB Publication No.: TÖB P-3e
For the majority of the world's population, tropical ecosystems are a vital life-
sustaining force. However, the progressive destruction and depletion of natural
resources in developing countries are jeopardising efforts aimed at achieving
sustainable development and effective poverty reduction.
The Flanking Program for Tropical Ecology is a supraregional service project
being run by the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ)
GmbH on behalf of the Federal German Ministry for Economic Cooperation
and Development (BMZ), its mandate being to help collect and process
experience in this sector, thus improving the information status.
On request, the program flanks specific projects with studies focusing on
issues relevant to tropical ecology. By so doing, it is aiming to further develop
concepts and approaches geared to protecting, conserving and ensuring the
sustainable use of tropical ecosystems. At the same time, this research work
provides the basis for designing innovative instruments that will facilitate more
ecologically-sound development cooperation in future.
By applying scientific results at grass-roots extension level, the program assists
other projects in the implementation of international agreements, in particular
Agenda 21 and the Biodiversity Convention, to which the BMZ attaches great
importance.
A key element of the program concept centres on a joint approach which
provides German and local scientists with a forum for discussion. The
Flanking Program for Tropical Ecology is thus making a valuable contribution
to the practice-oriented upgrading of counterpart experts and the consolidation
of tropical-ecology expertise in partner countries.
This series of publications has been produced in a generally comprehensible
form with the specific aim of presenting its results and recommendations to all
organisations and institutions active in development cooperation, and also to all
those members of the general public who are interested in environmental and
development-policy issues.
Table of Contents
LIST OF FIGURES..........................................................................IV
GLOSSARY ...................................................................................V
SUMMARY ...................................................................................IX
1 INTRODUCTION ......................................................................1
1.1 Description of the development cooperation project and
purpose of the project ................................................................. 1
1.2 Analysis of problems .................................................................. 2
1.3 Objectives................................................................................... 3
3 RECOMMENDATIONS ............................................................35
3.1 Valuation methods and techniques............................................ 35
3.1.1 Determining direct and passive use values on
simulated markets ......................................................... 38
3.1.2 Indirectly determining direct use values........................ 43
3.1.3 Determining indirect use values.................................... 45
I
The Economic Valuation of Biological Diversity
II
Contents
4 BIBLIOGRAPHY ....................................................................75
4.1 Cited references........................................................................ 75
4.2 Other references ....................................................................... 83
III
The Economic Valuation of Biological Diversity
List of figures
Fig. 1: Total economic value of a biological asset 13
List of tables
Table 1: Use values of genes and biochemicals 28
IV
Glossary
Glossary
V
The Economic Valuation of Biological Diversity
VI
Glossary
VII
The Economic Valuation of Biological Diversity
VIII
Summary
Summary
Biological diversity is decreasing at all levels of integration at an alarming
rate. The market prices of biological resources do not reflect their true
values because of a lack of internalisation of external costs and benefits.
This omission is an indication of market failure, based in particular on the
difference between private and social/ecological benefits, on the lack of
markets and on failed interventions.
This paper is based on the hypothesis that the failure to allocate economic
values to the respective components of biological diversity is one of the
causes of this decrease in diversity. Conversely, the allocation of the
appropriate economic values to these components should be able to halt
this trend and to reverse it.
The results of several studies carried out to assess genes and biochemicals,
species, ecosystems and landscapes in terms of the use values of the
respective components of biological diversity are highlighted.
X
Summary
In order to be able to be compared with use values and benefits, the costs
associated with the conservation, sustainable use and restoration of
biological diversity need to be determined. On the basis of the results of
this analysis, the alternative that is not chosen generates opportunity costs.
XI
The Economic Valuation of Biological Diversity
should also be those who profit from the benefits of these assets. This could
be attained by establishing property rights to those biological resources to
which vested titles do not yet exist and/or by transferring vested titles from
the State to landowners (including those not yet entitled to land tenure due
to pending reforms).
XII
Summary
XIII
Introduction
1 Introduction
After discussions had been held with those involved in the Deutsche
Gesellschaft für technische Zusammenarbeit (GTZ) GmbH's Tropical
Ecology Support Programme (TÖB), this preliminary study was developed
into a final study to be translated into English and laid out in accordance
with the guidelines for TÖB research projects. Above all, it was to be
revised to enable it to be used for practical purposes: How are valuation
studies on biological diversity carried out and what methods are available
to obtain adequate payment for the determined values?
First of all, the German version of the study was therefore revised to meet
comprehensibility criteria. In order to enable it to be put to practical use, it
was also supplemented by a description of the methods used to valuate
biological diversity, procedures used for cost-benefit analyses (CBAs),
recommendations regarding the organisation of markets with appropriate
prices and supplementary recommendations for development cooperation
(DC). Finally, the revised text was translated into English.
1
The Economic Valuation of Biological Diversity
• species and
• ecosystems.
2
Introduction
1.3 Objectives
This study is concerned with existing valuations of the components of
biological diversity, i.e. those to which market prices have been assigned,
either as raw materials or as refined products. In addition, the various
methods of direct and indirect valuation that are used to try to capture the
"real" value of biological resources over and above their actual market
prices are listed and classified.
Which methods are available to determine the direct and indirect use values
of biological resources? To what extent do biological resources contribute
directly or indirectly to the economic prosperity and the socio-economic
development of political economies? Or, put differently, what is the "real"
value that authors attach to commercially used and usable biological
resources? And how do they estimate the indirect value of biological
resources, most obvious in functions such as flood protection,
photosynthesis, climate stabilisation and soil protection?
3
The Economic Valuation of Biological Diversity
On the basis of the deficits that are identified, hypotheses of quality goals,
values and costs of biological diversity are derived. Scientific, political and
economic aspects are considered in order to establish which economic
and/or monetary preconditions need to be fulfilled in order to enable
biodiversity to be conserved and restored.
This also raises the question of financing instruments that could generate
the crucial incentive for the conservation, sustainable use or restoration of
4
Introduction
5
Results and Analysis
7
The Economic Valuation of Biological Diversity
and higher than competitive sources. In other words, if the yields from
investments that reduce the natural capital are higher than those that sustain
it, the consumption of natural capital is economically justified (Barbier et
al. 1994, pp. 53f.).
8
Results and Analysis
• Lack of markets: The problem is not only that only certain attributes of
the biological components that are traded on markets are included in
market prices, but that most biological resources and ecological services
are not traded on markets at all, while there are markets for alternative
uses. The market does not take into account anthropogenic influences on
biological diversity or the effects of biological diversity on humans.
Local and/or global markets for the relevant components of biological
diversity in which the market subjects could convert their value
conceptions of biological/ecological goods and services into purchases
and sales by aid of the price mechanism are lacking.
Despite these limitations, the ability of the market to bring private and
social benefits closer together and to contribute to a reduction of the threat
to biological diversity should not be underestimated. "Finally, the quality of
an allocation mechanism (= mechanism for the allocation of productive
factors or resources to certain goals) may not exclusively be judged on the
basis of a comparison of its results with ideal results, which are ultimately
not attainable by any allocation mechanism (the so-called Nirvana
approach). (...) Since in reality only incompletely functioning allocation
mechanisms are available, it is worth asking what the market may
contribute in pragmatic terms to taking care of natural resources" (Endres
and Querner 1993, p. 139). By setting prices that reflect the real economic
9
The Economic Valuation of Biological Diversity
Use-dependent values
11
The Economic Valuation of Biological Diversity
3. The option use value describes a use reserved for a later time. The option
to use biological resources at a later date is kept open by value
assignment. The quasi-option value refers to the delay of an irreversible
decision to wait for additional information to help in the decision-
making process. Because future information connected with the resource
in question may be valuable, this resource remains untouched for the
time being. Due to gaps in our knowledge, it can be difficult to assess
risks and uncertainties when carrying out an evaluation; together with
the partially irreversible consequences of the alternative use of the
components of biological diversity, this means that the concept of the
quasi-option value is becoming increasingly important.
Use-independent values
4. The passive use value of biological diversity results from the importance
attributed to it for us, our descendants or other species. It can be
12
Results and Analysis
subdivided into its bequest value (the value of keeping a resource intact
for future generations) and its existence value (the value conferred by
ensuring the survival of a resource). The non-use or passive use value of
biological resources is nearly completely determined by ethical
considerations and is of importance where individuals who do not intend
to use components of biological diversity would nevertheless feel a loss
if these disappeared (Brown 1990; Randall 1991).
The direct value, indirect value, option/quasi-option value and passive use
value of resources or resource systems add up to give their total economic
value (TEV, Fig. 1).
There is some overlap between the different types of values, which means
that there is a risk of the same value attributes being counted more than
13
The Economic Valuation of Biological Diversity
However, the explicit view of the direct use value shows that a value-
related consideration of non-monetised direct alternative uses is
14
Results and Analysis
necessary in order to give them a fair chance on the market. (On the
creation of markets by monetisation, see Sect. 3.3).
15
The Economic Valuation of Biological Diversity
ad 4.The bequest value is often included in the existence value, and the
user value is sometimes added to these two values, reflecting the
personal benefits of biological diversity. Since there is some overlap
between these value types, these value components should be
determined as a holistic non-use or passive use value.
The more aspects of use value that can be determined and integrated into
the TEV, the closer it comes to representing the "real" value of biological
goods or services. In particular, due to the aspects of passive use and option
value, the TEV is subject to group- and culture-dependent differences.
Above all, however, the TEV remains a theoretical variable unless it is
reflected by market prices.
In addition to the relativity of values and prices on the user level, further
limitations result from the usability of the respective resources. The use
value includes the following:
16
Results and Analysis
However, market prices are not only based on demand and the value
preferences of market subjects it indicates. The market prices of biological
resources are also determined by
Figure 2 shows the relation between the sustainability criterion (c) and the
supply aspect (d).
Use rights to biological resources that are privately owned are purely
exclusive. However, there is still some controversy over a whole range
of biological resources and their services as to whether the use rights
should be exclusively private or national. Vogel (1994) correctly
acknowledges that it is only through consistent privatisation of
biological resources that an interest in sustainability can become
generally accepted against alternative uses.
Before the CBD came into effect, those of the earth's biological
resources that are now subject to national sovereignty were treated as
the common heritage of mankind and thus as non-exclusively usable,
freely accessible resources. Now that the CBD has come into force,
the number of non-exclusive biological resources has decreased
considerably. Resources that are still non-exclusively usable include
marine biology resources outside national sovereignty zones.
Ecological services of biological diversity are usually also non-
exclusively usable (e.g. the production of oxygen by green plants).
18
Results and Analysis
19
The Economic Valuation of Biological Diversity
20
Results and Analysis
nature that cannot be understood, but of an economics that does not want to
know anything about it".
21
The Economic Valuation of Biological Diversity
It also requires not just snapshots of the value of ecosystem function, but
also time series that show how the value of such functions is changing. Not
only the ecological aspect, but also the evolutionary component is not taken
into consideration sufficiently in economic valuation approaches of
biological diversity, although awareness of the value of the genetic
resources of plants and their relatives in the wild has risen in economic
terms as well, implicitly acknowledging its importance (see e.g. Mooney
and Fowler 1991). However, it is only by regarding natural ecosystems in
economic terms as durable in situ production, experimentation and storage
sites of biodiversity evolution that conservationists' expectations linked to
bioprospecting strategies can have a chance of being realised.
are transient, and it may be more profitable not to make use of these
biotechnological options and to obtain certain natural products from
complete (cultivated or wild living) individuals of the species of origin.
The direct use value of genetic diversity results from delivering the raw
material with desirable properties for the pharmaceutical, agricultural and
food production industry. Modern biotechnology and genetic engineering
(with the potential for intra- and inter-species gene transfer they offer)
allow the use potential of genetic resources to be extended and therefore
lead economically to an increase and/or a supplementary effect to the direct
use value of genetic resources and their derivatives (natural products).
Like the existing and potential market prices specified in the following
examples, these are usually distorted by transfer components, and
corrections therefore have to be made for economic cost calculations (cf.
Hampicke 1991, pp. 180f.). Above all, however, the obtained or attainable
price for the respective biological resources is not determined ecologically,
but solely on the basis of market criteria.
23
The Economic Valuation of Biological Diversity
Some authors have published papers about the commercial value of genetic
resources. However, some of these data are questionable, because indirect
or passive use values were hardly integrated into these valuations and
TEVs are also lacking. As far as direct use options are concerned,
pharmacological or agricultural uses of genes and biochemicals have been
dealt with more intensely, whereas enzyme use or the genetic resources of
ornamental plants, for example, have been largely neglected.
24
Results and Analysis
The commercial value of medicines derived from species living in the wild
is estimated at more than US $40 billion p.a. world-wide, and the figure for
the United States in 1980 was US $8112 billion. The present share of the
genetic material used for pharmaceutical products originating from the
South amounts to about US $4.7 billion. The present hectare yields of
medicinal plants from the tropical rain forest are estimated to range from
$262 to $1000 (Pearce and Moran 1994).
25
The Economic Valuation of Biological Diversity
Mendelsohn and Balick (1995) are sceptical regarding the future economic
importance of bioprospecting. They estimate the entire social value of non-
discovered tropical pharmaceuticals at only approximately US $150 billion
or US $48 per hectare, and the market value for private enterprises at US
$3 billion or US $1 per hectare.
26
Results and Analysis
Calculations by the U.S. seed industry show that a genetic trait of a plant in
the Third World that can be used for breeding purposes may contribute
over $2 billion annually to the yields of U.S. wheat, rice and corn
producers. The U.S. Department of Agriculture estimates that genetic plant
material has led to an average increase in productivity of about 1% a year,
with an initial monetary value far exceeding US $1.billion.
27
The Economic Valuation of Biological Diversity
Use of plants
Of the approximately 250,000 higher plant species that have been described
world-wide, about one third probably has edible components, i.e. around
80,000 species. About 15,000 species (including spice plants, herbs, etc.)
28
Results and Analysis
According to Peters et al. (1989), the present net value of sustainably used
biological raw materials (rubber, fruits, wood) from the rain forest in Peru
amounts to $6330 per hectare, i.e. more than sixfold the value of utilisable
wood ($490/ha). In the German chemical industry, about 2 million tons of
renewable resources are utilised at present (i.e. 10% of the entire
consumption of raw materials).
29
The Economic Valuation of Biological Diversity
Ecological resources and services that can be derived from the production,
carrier and information functions of ecosystems produce economic yields
in the form of direct use values. Direct use values include timber and non-
wood products, medicinal plants, plant genes, hunting and fishery,
recreation and tourism, education and human living areas, since all these
products and services are the result of a direct use of forests. Direct use
presupposes access to forest resources, among other things.
In contrast, indirect use does not require access to forest resources. The
most important indirect use values of biological diversity include the
regulatory functions of ecosystems. Each ecosystem is composed of a
30
Results and Analysis
Immler (1989) assumes that roughly a third of GNP (based on the German
GNP) would be necessary to re-establish the disturbed non-human natural
services and processes.
Most studies assessing the economic value of forests only take account of
partial values and not the TEV (for a relevant review, see Perrings 1995,
pp. 886f.). Indirect and non-use values are usually completely neglected,
and direct use values are also frequently only incompletely considered.
The first attempt to estimate the TEV of tropical forest habitats was
undertaken by Castro (1994). Castro calculated an average net actual value
of $1278-$2871 per hectare for Costa Rica's game wilderness. Multiplied
by the total area of 1.3 million hectares, this gave a present total value of
$1.7-$3.7 billion, of which, according to this study, 34% benefits Costa
Rica and 66% the world community.
31
The Economic Valuation of Biological Diversity
Kaosard et al. (1994) evaluated not the total, but almost the total economic
value of the Khao Yai Park in Thailand (not including non-use values for
people who do not live in Thailand and estimations of carbon storage). The
comparative evaluation with agriculturally managed areas arrived at a
figure of $250 per hectare (see Table 3).
Barbier et al. (1991) showed that the direct use of the Hadejia Jama'are
floodplain in Nigeria for fishery, the production of firewood and migration
agriculture results in economic yields that are higher than alternative
irrigation projects upstream.
32
Results and Analysis
33
Recommendations
3 Recommendations
As Fig. 3 shows, the use value categories "direct use values", "indirect use
values", "option/quasi-option values" and "non-use values", which together
give the TEV, allow the application of various valuation methods. In the
following, these methods are presented and the range of effects to be
valued is considered.
35
The Economic Valuation of Biological Diversity
• on the basis of surrogate market prices (e.g. the travel cost approach and
hedonic price approach) and
Since, in the context of this study, we are interested in the external use
values of biological diversity that are not reflected by actual market prices,
the subsequent discussion is limited to valuation approaches for simulated
markets (Sect. 3.1), surrogate markets (Sect. 3.2) and the production-
function approach (Sect. 3.3). The common instrument of market analysis
is therefore not discussed here.
36
Recommendations
Direct use values Indirect use values Option values Existence values
(functional values) Quasi-option values Bequest values
<Replacement cost
approach etc.>
37
The Economic Valuation of Biological Diversity
The best way to apply the direct valuation method is to determine the
WTP/WTA of one environment-related use for the person being
interviewed or the one that corresponds to his or her personal opinion and
knowledge, e.g. recreation options. WTP analyses on the basis of losses of
environmental/biological diversity are more problematic. Moreover, we
still have some way to go before the psychological and cognitive processes
that influence the formulation of answers can be definitively assessed.
Even if the direct valuation method is not exact enough for carrying out
cost-benefit analyses or for legislative purposes, provided that specific
questions are asked, its results may nevertheless be used as a
supplementary public opinion poll to establish earmarking priorities
concerning the use and conservation of biodiversity, particularly because it
is the only method that is able to translate non-use values into market prices
(Blamey and Common 1993).
are not generally recognised as accepted methods, since the values that are
determined are seen as improbably high (Blamey 1996).
According to Pearce and Moran (1994), the CVM is the most important
method for the economic valuation of biodiversity, largely because it is the
only one that directly reflects the non-use-orientated (bequest and
existence) values of biodiversity. In addition to information retrieval and
information exchange during the interview process, verbatim minutes and
tape recordings allow the interviewer to analyse the biodiversity-related
knowledge and understanding of the interviewee ("think-aloud analysis").
Interest in this method has greatly increased over the last 10 years:
39
The Economic Valuation of Biological Diversity
In the third stage, a method has to be selected that allows the WTP or
willingness to renounce to be determined as accurately as possible. In an
open-ended approach, interviewees have to state the maximum amount that
they would be ready to pay or renounce. If a "dichotomous choice"
approach is used, the interviewee is confronted with a concrete amount that
is varied within a group of interviewees to come as close as possible to the
"real" value (see Perrings 1995, pp. 845f.; Hampicke 1991, pp. 118ff.;
Pearce and Moran 1994, pp. 58ff.).
40
Recommendations
1. Sample type and size - probability sampling is essential. The choice of sample
specific designs and size is a difficult technical question that requires the guidance
of a professional sampling statistician.
5. Reporting - every report of a CV study should make clear the definition of the
population sampled, the sampling frame used, the sample size, the overall sample
non-response rate and its components (e.g., refusals), and item non-responses on all
important questions. The report should also reproduce the exact wording and
sequence of the questionnaire and of other communications to respondents (e.g.,
advance letters). All data from the study should be archived and made available to
interested parties.
7. Conservative design - when aspects of the survey design and the analysis of the
responses are ambiguous, the option that tends to underestimate the willingness-to-
pay is generally preferred. A conservative design increases the reliability of the
41
The Economic Valuation of Biological Diversity
estimate by eliminating extreme responses that can enlarge estimated values wildly
and implausibly.
15. Yes/no follow-ups - yes and no responses should be followed-up by the open-ended
question: 'Why did you vote yes/no?'
16. Cross-tabulations - the survey should include a variety of other questions that help
interpret the responses to the primary valuation question. The final report should
include summaries of willingness-to-pay broken down by these categories (e.g.,
income, education, attitudes towards biodiversity).
17. Checks on understanding and acceptance - the survey instrument should not be so
complex that it poses tasks that are beyond the ability or interest level of many
participants.
42
Recommendations
The CRM is the stepsister of the CVM. The different feature in this
interview situation is that respondents are confronted with a set of options
that they are asked to rank according to their valuation scale. For each of
the options, the interviewer designates a set of characteristics and describes
how the options differ. The resulting costs should be delineated for each
option.
The indirect or surrogate market valuation methods are all based on the fact
that the commodities "nature" or "biological resources" are consumed
together with complementary private goods with well-known or easily
determinable prices. These indirect approaches are techniques that derive
preferences from actual market-based observations. Preferences for a
biodiversity commodity can be assumed if an individual buys a product that
is somehow related to the biodiversity commodity in question. The relevant
techniques are as follows:
43
The Economic Valuation of Biological Diversity
44
Recommendations
45
The Economic Valuation of Biological Diversity
The productivity change method can be used to determine the direct and
indirect use values of ecosystems within market prices. For instance, the
value of the ecological function of a forest in the catchment area of a
hydroelectric power plant can be measured by the net value of the
difference in water power production because of sedimentation in the
presence or absence (clearing) of forest or with a smaller (reduction) forest
stand.
46
Recommendations
reducing the percentage of sulphur dioxide and nitrogen oxide in the air to
approximately zero to conclude that the value of clean air corresponds to
the level of avoidance costs. An estimation of forest degradation by acid
rain or the loss of fishery resources by water pollution on the basis of
avoidance costs, for example, will be misleading unless those concerned
are willing to bear these costs. The final report by the German Ministry of
the Environment's research programme on the "Costs of Environmental
Pollution/Benefit of Environmental Protection" puts the relevant avoidance
costs at DM 130 million p.a. (Wicke 1986).
Production-function approach
47
The Economic Valuation of Biological Diversity
(1992), for instance, has carried out valuations in different scenarios. The
results of these valuation approaches are given in Sect. 2.3.
How much does it cost not to destroy nature? Since the pioneering work by
Krutilla and Fisher (1975), this question has been addressed by a number of
studies. Approaches such as that used by Bishop (1980) to estimate
conservation costs for individual species are still rare; other studies deal
48
Recommendations
Some studies, such as the ones by Turner et al. (1983) and Krutilla and
Fisher (1975), have established that maintaining a natural condition does
not cause economic costs, because large investment planning has proved to
be unprofitable. A study by Willis et al. (1988) elucidates the difference
between land use costs if distorted prices support a use that destroys nature
while lower opportunity costs are arrived at by correct calculations.
At this point, it would seem appropriate to step aside for a moment and
consider the actual and potential market values of the (minimum) goals and
costs of biodiversity. What are the ecological and biodiversity standards
that should be aimed at from a scientific point of view? And how can they
49
The Economic Valuation of Biological Diversity
"Market prices for products and factors partly reflect material scarcity and
thus opportunity costs, but they are usually distorted by transfer
components, and corrections therefore need to be made for calculations of
economic costs. A distinction should always be made between dynamic and
static sets of costs, and each has to be incorporated in the other" (Hampicke
1991, p. 180). Funds for the conservation of biological diversity should
always be spent according to defined priorities and as efficiently as
possible: certain goals can either be attained at minimum costs, or the
degree to which a given goal is realised should be maximised at a given
cost. The practical cost categories for the conservation of biological
diversity can be divided into investment, work and land use costs, and each
poses specific problems. A number of studies that have been undertaken
world-wide concerning conflicts of various sizes show that opportunity
costs for the conservation of biological diversity are often far lower than
expected. In those federal states that belonged to West Germany before
German reunification, for example, DM 1 billion would be sufficient to
implement a thorough nature protection programme.
50
Recommendations
Wells (1992) compared the costs and benefits of protected areas at the
local, regional and global level, qualitatively estimating the distribution of
costs and benefits on these different levels. His estimation of the benefit of
protected areas was based on the work of Dixon and Sherman (1990; cited
in Wells 1992). It was shown that the economic benefits of protected areas
are limited at a local level, are somewhat higher at regional and national
levels and become substantial at a global level. The related costs follow the
opposite trend: They are significant at a local level, moderate at a regional
and national level and small at a global level (e.g. contributions to
multilateral financing mechanisms, cf. Fig. 4).
51
The Economic Valuation of Biological Diversity
53
The Economic Valuation of Biological Diversity
• Thirdly, it also needs to be clarified what was not measured by the study
in question, on which level of the hierarchy the study was conducted
and whether the TEV or only elements thereof were determined.
Only with such specifically adapted instruments and the initial knowledge
they provide about the "real" economic value of the biological resources
and their use can the following central issue be addressed: What are the
54
Recommendations
referred to later. One way of correcting the price distortions caused by price
controls or national monopolies is to take internationally valid competitive
market prices as "shadow" prices (Ruck 1990, p. 220).
In an ideal free market, the market develops on its own such that private
use interests work to support social interests and correcting measures are
kept to a minimum. In order to at least come close to this ideal, private
users have be able to profit from the national or global yields of the
conservation and/or sustainable use of biodiversity. This could be achieved
by creating vested titles to those biological resources to which vested titles
do not yet exist and/or by transferring property rights from the State to
landowners (including those who should be entitled to such rights due to
pending land reforms).
Persson (1994) was able to show that the transferral of vested titles to
squatters causes them to stop clearing, in particular if discounting is lower
than the future value of the forest. These property rights could further be
licensed, e.g. as bioprospecting ratios, visitor ratios, harvest ratios,
emission rights, development rights, etc.
56
Recommendations
57
The Economic Valuation of Biological Diversity
Many regulatory instruments are available to bridge the gap between TEVs
and current market prices on the national market. The main distinction is
between regulatory and market-based instruments. While regulatory
instruments imply the direct control (reduction/limitation) of unwanted
actions in conjunction with legislative or politically agreed standards,
market-based instruments create economic incentives. "It is no accident
that 'command and control' concepts have dominated environmental policy
so far world-wide. The reasons for this are the sectoral organisation and
splintering of national competences, the minor political importance of
national environmental institutions and, last but not least, the insufficient
integration of environmental policy into public discussion in many
countries" (Paulus 1995).
58
Recommendations
59
The Economic Valuation of Biological Diversity
1. charges, taxes, fees or additional prices to be paid for the social costs
arising from damage,
60
Recommendations
In principle, the groups that damage biological resources should bear the
damage prevention costs and/or the social costs connected with the
damage. Otherwise, those who use biological resources would have to bear
the entire costs of using resources, including the costs of control and
prevention. Conversely, the incremental costs connected with the
mobilisation of non-marketed uses should be offset by the utilisation of
positive incentive systems. The latter could be implemented using market-
based control instruments, as clearly shown by Lippke (1996, p. 253).
However, if the country that owns the resources cannot derive monetary
benefit from these global external use values due to a lack of appropriate
markets, it will have no or little incentive to conserve the biological
resources in question.
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The Economic Valuation of Biological Diversity
62
Recommendations
63
The Economic Valuation of Biological Diversity
64
Recommendations
The first step towards establishing TDRs for the conservation of biological
diversity would be to differentiate between conservation and development
areas. Individuals owning land in the conservation areas would also receive
TDRs, but would not be allowed to implement these rights within the
conservation areas. Instead, they could sell these vested titles in
development areas in which there is assumed to be a high demand for
limited development rights. Full compensation should thus result for the
owners of the conservation areas by the sales of development rights.
65
The Economic Valuation of Biological Diversity
66
Recommendations
such programmes, and this issue will not be addressed in detail here.
Particular attention should be paid to rapid biodiversity assessment
techniques (discussed in the literature) and to close cooperation between
experts and parataxonomists, as has been documented particularly clearly
for the Instituto de la Biodiversidad (INBio) in Costa Rica. DC is required
to support and to participate in biodiversity inventories in the partner
countries by means of suitable training courses and infrastructure measures.
Not only should project planning be carried out in donor countries (cf.
Sect. 3.4.1), but the know-how for the application of valuation techniques
67
The Economic Valuation of Biological Diversity
68
Recommendations
on building national research capacities and that research results are put
into practice by means of environmental education.
69
The Economic Valuation of Biological Diversity
taxonomic research that provide the basis for our comparative analyses"
(Markl 1995).
In order to come closer to the goal of having prices that reflect social costs,
it is necessary both to eliminate subsidies that artificially lower private
costs and to implement suitable economic instruments or other regulatory
measures to ensure that harmful external effects are taken into account in
70
Recommendations
71
The Economic Valuation of Biological Diversity
72
Recommendations
73
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