Why Estimate Ecosystem Values?

Faced with tight budgets and growing needs for environmental actions, government agencies must make difficult decisions about allocating public investments to protect and restore the natural environment. In making such decisions, ecological program managers may consider many objectives, including environmental quality, threats to ecosystem integrity, and effects on people’s quality of life. This website will help those who need to make practical use of economics for these decisions.

Agencies must justify their decisions, not only in terms of benefits to the natural environment but also in terms of fiscal accountability and public support. Thus, they have to demonstrate the economic benefits of their investments, preferably in dollar terms. However, even if it is impossible or impractical to measure benefits in dollars, agency staff can often prove that they can manage their environmental investments to maximize ecological benefits per dollar spent. This site deals with both types of benefit estimation.

Economic considerations will be secondary for some decisions, such as those involving endangered species or serious public health or safety concerns. However, even in these situations, environmental managers will need to make decisions that affect trade-offs or allocations of natural resources—decisions that call for economic analysis.

Why are estimates of ecosystem benefits needed?

  1. To justify and decide how to allocate public spending on conservation, preservation, or restoration initiatives.
  2. To consider the public’s values, and encourage public participation and support for environmental initiatives.
  3. To compare the benefits of different projects or programs.
  4. To prioritize conservation or restoration projects.
  5. To maximize the environmental benefits per dollar spent.

Finding Appropriate and Practical Answers

The economic benefits of government spending raise legitimate and crucial public policy questions, but the answers are often ambiguous and difficult to justify. Agency staff may not always provide acceptable solutions – no matter how much money they spend on analysis. However, in the absence of objectively determined estimates of the benefits of environmental programs, spending decisions will be based on other factors.