TEEB Training Session 4: Criticisms of valuation

TEEB Training Outline The Process of Valuation –Assumptions –Does the process of eliciting values change our perceptions? –How the process affects outcomes –What negative changes might the process of valuation provoke? Valuation and time lags Drawing the boundary on what we can/should value How to choose how to value

TEEB Training Assumptions: the process of valuation When asking Willingness To Pay we assume that people: –Hold values in advance or can easily generate them –Have sufficient information and understanding of what they are valuing –Can decide (alone) on the values they attribute to ecosystems –Value consistently –Value according to individual rationality

TEEB Training Does the process of eliciting values change our perceptions? Valuation promotes a universal notion of the environment By placing values on nature we change existing concepts of ownership and property As values have not been previously defined the process of valuation changes how we appreciate nature –Individual preferences outweigh consensus building and collective decision making –Are we constructing markets that are set up to fail?

TEEB Training Does the process of eliciting values change our perceptions? cont… The psychological viewpoint considers that valuation assumes (and champions) rational choice over intuition: –Economics focuses on the outcome of decisions not the process –Empirical studies of behaviour do not back up economic theories of preference

TEEB Training What negative changes might the process of valuation provoke? On-going debate about attaching new forms of property rights to nature and culture –Linked to the granting of resource rights to traditional indigenous groups and rural populations –Often assumed that such groups have inherent knowledge that allows them to act as stewards of nature Such policies significantly change the relationships within and between groups over the rights to control, exclude and exploit resources

TEEB Training Valuation and time lags Potentially critical time-lag in the valuation feedback mechanism –As values are an outcome of existing, current institutional, cultural and social constructs then adaptation to environmental change is required (when the change occurs) –As ecosystems are degraded and biodiversity lost, attitudes and values towards nature will change, but the time-lag may be long

TEEB Training Drawing the boundary on what we can/should value OConnor and Frame (2008) propose two thresholds beyond which assessing trade-offs or monetary choice is inappropriate -Either estimation is scientifically difficult; or -The implied trade-off is deemed morally inappropriate

TEEB Training How to choose how to value The choice of valuation method will define the outcome of the valuation process (Vatn, 2005)

TEEB Training Module 4 Summary The TEEB tiered approach RECOGNISING VALUE Sometimes sufficient Often the case where cultural and spiritual values are strong DEMONSTRATING VALUE In economic terms, costs and benefits Useful to policy-makers and businesses Economic valuation exercises CAPTURING VALUE Putting ecosystem values into decision-making Through incentives and price signals Market-based solutions not necessarily best

TEEB Training Applying the tiered approach Step 1:Identify and assess the full range of ecosystem services affected and the implications for different groups in society Step 2:Estimate and demonstrate the value of ecosystem services using appropriate methods, including linkages over time and scale, local v global, current use v future use Step 3:Capture the value of ecosystem services and seek solutions to overcome their under-valuation through economic policy instruments (subsidies, fiscal incentives, charges for access and use, payments for ecosystem services, property rights, eco-labelling and certification etc.)

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